Stock Market News
Hedge fund manager Kyle Bass has been pushing a short Japanese bond trade for years, eventually he may be right.
Here are some stories today that caught my eye.
"A person familiar with Goldman's equities trading business said Taylor's trading position was significant - representing roughly 20 percent of e-mini trading volume the day it was established. The market moved against Taylor's position, leading to the loss, said the person, who declined to be named."
As I wrote in this weekend's monthly newsletter I think the US stock market at this point has very limited upside and for the short-term the risks are too the downside. I don't want to go through all of the reasons now as I outlined them in the newsletter, but the upside potential for the US stock market right now is like 1550 on the S&P 500, which would be a gain of about 3.3% from here. It's hard for me to justify trying to "play" the market at this point to try to make such a little return.
My view is a little different than Faber's - my guess is we get some sort of dip in February/March and then not much volatility in the US stock market after that. I don't think we are going to see some big crash this year or huge rally this summer once this move dies out. I think the market action will just fade out and we'll see rallies in commodities and world markets which diverge from the US. More on this in my next monthly newsletter.
I bought VIP back in August and it has been one of my best performing stocks. The Russian telecom company has gone up 26% since I bought it. Today it announced that it is going to pay an eighty cents dividend to shareholders of record at the end of the month. That's like a seven percent dividend.
Pretty nice. It's the largest telecom company in Russia and Eastern Europe.
I don't know what is going to happen with the "fiscal cliff." I don't know if Obama and the Republicans will come to a deal before the end of the year to prevent it from happening or not. If it does happen I don't think it will have a huge impact on the economy or the stock market - not in the big picture. However, it probably will cause some short-term selling. Really they don't seem to be to concerned about it.
Today the Fed is going to release a new FOMC statement at 12:30 PM. People are anticipating that they will announce a new QE money printing operation on top of the one they announced a few months ago. They are hoping for a new money pump that will force the stock market to go even higher. You see the US stock market is now fully valued so this is what it takes to make it go up nowadays.
The big news of the week caused a big upward movement in equity values. Despite economic announcements pointing toward a further slowdown at home and abroad, it was the announcement by EU leaders of an agreement to allow member countries to relax harsh austerity measures that flavored market moves.
Last week Comverse Technology, Inc. (CTI) (NASDAQ:CMVT) appeared to have arrested its downward trajectory by eking out a second consecutive weekly gain. Closing at $5.78 on Friday, the stock rose by 0.6% in the course of the week, providing a much welcomed respite from a decline which first began in late March when it peaked at $6.87. Since then, it has fallen by over 16%. CTI is also currently down 14.9% for the year.
Forest Oil Corporation (NYSE:FST) continued its downward trajectory since peaking above the $39 level in February 2011. Currently down 47.5% for the year, the stock witnessed a precipitous decline 47.8% since early May this year. The independent oil and gas production company, with a market cap of $820 million, has been trading around $6.22 - $7.00 in the past two weeks. The stock closed at $6.96 last Friday, marking a weekly decline of 4.5%.
Last Thursday, biopharmaceutical company Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) enjoyed a dramatic 44% single-day gain to close at $63.78. 23 million shares were traded that day, about 15 times the daily average. Topping off this stunning performance, the stock went on to gain another 3% on Friday to close at $65.67. During intra-day trading on Friday, Onyx even reached a 10-year high of $67.29, not bad for a stock that has been trading around $37 to $43 in the past three months.
The biggest maker of thin-film solar panels First Solar, Inc. (NASDAQ:FSLR) continued its upward trajectory last week after bottoming out at $11.43 on 4 June. Closing at $15.88 on Friday which represented a 13.8% weekly gain, the solar module manufacturer is now trying to reclaim lost ground after peaking at $49 in February. (The stock is currently down 51.7% for the year.)
Last week, Facebook (NASDAQ:FB) finally gained some respite from a spate of bad news and poor stock performance. The social network delivered a second consecutive weekly gain, by closing at $33.05 on Friday (a 10.1% gain). While this is still below its IPO price of $38, investors are now hoping that this could be the start of better things to come, after having the stock consistently trading below $30 for much of June. After all, the company also made some progress on its legal issues. It is reportedly in settlement talks with Yahoo Inc. over a patent dispute.
Fast food company Burger King Holdings, Inc. (NYSE:BKW) went public earlier last week, after going private in late 2010. Rather than going through the IPO route, the company was listed in the NYSE through a merger with an existing public stock, Justice Holdings, a UK investment firm that previously traded on the LSE. (3G Capital, which is Burger King’s private ownership group, received US$1.4 billion from Justice Holdings for a minority stake in BKW, while Justice Holdings suspends its stock and changes its name to Burger King Worldwide and then re-list in the NYSE.
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