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1:00pm (EST)
When we shut our eyes this morning around 2am, the Dow futures were up 70 points and it appeared as though the bulls were going to have a huge day. However, when we woke up this morning and were doing the finishing touches to our 9am update, futures were slipping which lead to a muted open for the market.
The Nasdaq showed strength on the heels of Intel’s (INTC, $21.69, up $0.68) blowout quarter but the mood quickly soured after Wall Street got the latest Retail Sales numbers. The Commerce Department said June sales fell 0.5% which was worse than the expected 0.2% decline most economists had expected.
As a result, the market is hanging near the breakeven level but is showing positive results. The Dow is up 16 points to 10,381 while the Nasdaq is higher by 14 points to 2,256. The S&P 500 is up by 2 points to 1,097.
Although we listed higher targets for the Dow this morning, the index is still running into resistance at 10,400. We have also been a repeating parrot on the 1,100 level for the S&P and the 2,240-2,250 level for the Nasdaq but the momentum does not appear to be there from the bulls to take these levels out today. We aren’t saying they can’t, we are just pointing out the market is near the top of the ranges again and any stalled rally will likely lead to a retreat and more hair pulling.
The jobless claims number could be another catalyst for Thursday’s trading and we also get a look at the health of the Financial sector as JPMorgan (JPM, $40.21, down $0.27) will announce earnings before the bell.
Turning to IPO’s, there are a number of initial public offerings that will be coming to the market over the next few days as activity seems to be picking up.
The biggest of the bunch will be private equity firm Kohlberg Kravis Roberts (KKR) will make its debut on Thursday on the New York Stock Exchange. The offering is worth about $2 billion but KKR is a partnership not a corporation so this one is a little funky in the way it is being done. In any event, stay clear of this one as it has a checkered past.
RealD (RLD) is expected offer nearly 11 million shares in a range of $13-$15 apiece. The company is trying to capture a little of the magic in the 3D wave that has hit us over the last 6 months. RealD supplies projectors for 3-D cinema screens and glasses for viewers but is a sketchy offering because the company’s bottom line bleeds red.
SMART Technologies (SMT) is a Canadian company that makes interactive white boards that could replace the days of chalkboards (finally!) that many of us grew up with. It seems these new “smart boards” are catching on as they have the power of a computer and the ease of a whiteboard.
Users can share applications, access the internet and write in digital ink. The company also acquired NextWindow in April which makes touch screens for electronic displays. We haven’t seen a board, yet, but they sound pretty cool. The company plans to raise $600 million with 35 million shares being offered in the $16-$18 range.
Finally, Qlik Technologies (QLIK) is a provider of business intelligence software. Their software analyzes costs and organizes and finds information. Qlik supports an impressive client base and expects to bring in about $100 million with its offering.
We like SMART a lot and RealD could get a pop because of its brand name but finding the diamond in the rough is a little easier when you do a little research.
Although we are big fans of the 3-D rave that has been hot over the last six months, those stocks are starting to cool and we question how long people are going to pay an extra $3-$5 to watch a 3-D movie. [Update: Imax (IMAX, $13.50, down $0.20) is down from its 52-week high of $21.30.]
That leaves SMART as the one to watch going forward.
We have a lot to cover in our Members Area as we have added a couple of names to our Watch List. We are slowly setting up for the market’s next move and we think there are a number of great setups coming our way. Subscribers, check for the updates.
We will be back in the morning with another full update and hopefully some breaking news on Vivus (VVUS, $12.74, up $0.30) which could get some good news concerning its drug Qnexa. We also have Vivus on our Watch List so some of you could be setting up for a nice payday…
Market Set to Close Week Lower
Friday, August 13th, 2010
1:20pm (EST)
The market has traded in a tight range today but on both sides of the ledger. The bears are taking it easy as they have punished the major indexes for 3% losses across the board while the bulls are trying to close out the week on a positive note.
Much of the news this week has been a negative tone and as far as earnings, companies are pretty much matching or even beating expectations but are missing on their revenue numbers AND offering lower guidance going forward.
Today’s economic news was a mixed bag but two themes that have momentum right now are Retail and Tech which are both folding like a cheap lawn chain. We have a little exposure in each sector and we are playing the downside with some great results so far.
The IPO (initial public offering) market made a few new offerings to Wall Street this week. The biggest company to make a splash was MakeMyTrip (MMYT, $25.62, down $0.83) which raised $70 million by pricing 5 million shares at $14 yesterday. This was at the high end of its expected $12-$14 range but demand was strong and we now know why.
The stock surged $12.45, or 90%, to close at $26.45 in its IPO debut yesterday. MakeMyTrip is an India ADR and is in the travel industry.
General Motors delayed its filing for an IPO to early next week from the initial target date of today after the unexpected departure of its CEO. More on this at a later date.
The CBOE Market Volatility Index (VIX, 25.83, up 0.10) broke back above its 200-day moving average, after spiking nearly 20% this week. We will be watching this development going forward.
As we head to press, the Dow is up 20 points to 10,340 while the S&P 500 is higher by 2 points to 1,086. The Nasdaq is showing a loss of 4 points to 2,186.
Our subscribers had a great week, and we will be back Sunday afternoon with our Weekly Wrap.
We have updated the current trades one last time before we go, so until next time, have a GREAT weekend!
Tags: MakeMyTrip IPO, MMYT, option picks, stock options trading, VIX
Posted in Company Commentary, IPOs, Market Analysis | Comments Off