Market Montage
Stock Market, Economics, Equity Analysis
Mar26
Barron's was out this past weekend with a negative article on Alexion Pharmaceuticals (ALXN), stating a lot of things that are already known – namely that the current situation is this is a "one drug" story. [Feb 12, 2012: Alexion Pharmaceuticals - One Drug is Enough When it Costs this Much] But of course they have a very large megaphone. Alexion was one of the few stocks in my watch list to actually open down today.
As with any high growth, high beta stock – eventually the super growth era ends, and "valuation once more matters". When it does, it's usually a dark and ugly point for the stock as you lose the momentum growth investors and the "value" investors won't be touching said stock until a much lower point. Barron's seems to be making a pre-emptive strike on ALXN in this regard.
Mar26
The last week of the month has already gotten off to a roaring start in futures as Bernanke is out this morning with a speech saying the labor market remains poor, which the market is translating to more easing. I am unclear why the market ever has gone off the more easing bandwagon, but they seem to be reassured today than Ben will continue full steam ahead and of course markets love easy money. …
Mar23
This is one of the few days of the year the NASDAQ, and especially QQQ ETF, is not leading the charge. Apple (AAPL) is actually down while the S&P 500 and DJIA are the stronger indexes; in fact quite a few leading technology names are in the red. Meanwhile, the most beaten of the "slowdown in China" names are rebounding a bit along with the energy complex which has had a rough week. The S&P 500 is making an attempt to recapture the quickly rising 10 day moving average at 1397.70… the pullback this morning did not go as far as to touch the 20 day down at 1381-ish. That is the level from which this leg of the breakout started, so its an important level to hold for sustained movement. …
Mar23
Ummm… wow. In case you have not been following the saga of this VIX related product, it's been an interesting few days. After yesterday's plunge of nearly 30% (on a day VIX itself rose), the VelocityShares Daily 2x VIX Short-Term ETN (TVIX) opened today down another 20% or so. This is a pretty shameful reflection on the ETF market in my view; and it's not the first time we've seen such a dislocation in the ETF sphere the past 3-4 years. …
Mar23
Nike (NKE) has not been a barn burner of late, but continues a slow and steady path upward and the business continues to be a leader within its niche. I've often called Apple the Nike of computers/gadgets as both are able to charge a premium for what is in essence a commodity business – the brands mean a ton. The company reported earnings last night and steady as she goes with 14% revenue growth and net income growth of 7%. Margins have been pressured – down 2% in the quarter on gross, which is similar to the previous quarter (-2.6%). This is definitely an issue, but the market has been kind in overlooking it at this point. The company also announced a small buyback of 2.5M shares for under $250M (keep in mind this is a $50B market cap). …
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