The day after a blizzard walloped the Northeastern U.S., stock traders somehow managed to borough their way through to Wall Street. With a dearth of economic data, news from China, the BOJ and American corporates mostly moved the market.
Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.
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Market Movers – China Rates, Oil, AIG, TSLA, CALM, HRB, JTX
Markets remained closed for Christmas in Australia, Canada, the U.K. and Hong Kong, but even with the stymieing snowfall, the NYSE (NYSE: NYX) opened just fine below a buried Wall Street. The big market moving news originated from China today, where the government again raised its benchmark interest rate for the second time in a little more than two months. The announcement came on December 25th, setting the benchmark 1-year lending rate higher by 25 basis points, to 5.81%, and the deposit rate raised by the same amount, to 2.75%. China is dealing with its highest inflation in two years time.
The Bank of Japan published the minutes of its October and November meetings Monday. The BOJ minutes show some members' discontent with the US Fed's quantitative easing. The Bank of Israel kept its key rate steady at 2.0%, meeting the markets' expectation. Annual inflation in Israel in November was marked at 2.3%, falling within the Bank's target range of 1-3%. The government says housing activity slowed at the most recent check, easing some of the pressure on the bank to act.
Oil prices garnered some news Monday, rising to a fresh two-year high. Crude prices benefited from rumors that producing nations saw no need for any production boost in the near-term. However, prices fell from their high at $92, toward $91, on concern tied to the Chinese actions to curb inflation. Meanwhile, US and UK representatives expressed disdain with Russia, as Mikhail Khodorkovsky and his business partner Platon Lebedev were found guilty of theft and money laundering by a court in Moscow.
Gold shrugged off the Chinese bank action, with futures for February delivery rising to $1382.90, off some from the December 7 high of $1432.50.
Retail Snowed Out?
From boom to bust, a recently excited investor base has now shifted to concern. We caught a retail sector guru on CNBC calling the loss of the day after Christmas selling opportunity permanent to retailers. Retail stocks from Macy's (NYSE: M) to The Limited (NYSE: LTD), Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) showed only fractional variance today, though Nordstrom (NYSE: JWN) was off 1.6%. Many retailers will likely offer after-after-Christmas deals in order to make up the miss, in my view. Retail industry creativity is infinite.
The corporate wire was headed by news that AIG (NYSE: AIG) had secured $4.3 billion in credit facilities. The capital raising effort will help the insurance giant free itself from government grips, and the stock rose 11% on the news to a two-year high. This marks the first time AIG has been able to access credit markets since 2008. 36 banks came together to replace the Fed's rescue funding. The stock has doubled year-to-date, but after taking into account its reverse split, AIG still has far to come to return to pre-crisis levels.
Cal-Maine (Nasdaq: CALM) reported earnings today of $0.63, but missed the analysts' consensus peg at $0.72. CALM shares were anything but today, falling 3.6%. The nation's major egg producer exceeded expectations on the revenue line, but its profit margins slipped on higher feed costs. At first glance, I would not be a buyer on today's weakness, as I see agricultural prices only coming under more pressure over the long-term trend-line. Without the proper hedges against this, perhaps CALM is vulnerable to more misses.
Tesla Motors (Nasdaq: TSLA) shares fell 15%, as about 80% of the company's stock became tradable for the first time on the expiration of the IPO lock-up period. The electric carmaker is under pressure to get its products to the market, and IPO buyers clearly felt the heat to unload shares.
HSBC (NYSE: HBC) was told by bank regulators it can no longer continue a deal with H&R Block (NYSE: HRB), through which the two offered short-term loans to HRB's customers anticipating tax refunds. HBC was off a half point, while HRB dropped 7% on the loss of the important business draw. Jackson-Hewitt Tax Services (NYSE: JTX) is one beneficiary, with its shares up 30% today.
AmBev is splitting its shares 5-for-1 after the close of trading. IPO lockup restrictions expire on AutoNavi Holdings (Nasdaq: AMAP). The EPS schedule includes KV Pharmaceutical (NYSE: KV-A, NYSE: KV-B). SouFun (Nasdaq: SFUN) has a conference call scheduled.
Market movers on the upside included DARA Biosciences (Nasdaq: DARA), Repros Therapeutics (Nasdaq: RPRX), Gushan Environmental Energy (NYSE: GU), Avalon Rare Metals (AMEX: AVL), Capitol Bancorp Ltd. Trust Pfd. (NYSE: CBC-PB), Biosante Pharmaceuticals (Nasdaq: BPAX), Vermillion (Nasdaq: VRML), Private Media Group (Nasdaq: PRVT), Bioanalytical Systems (Nasdaq: BASI), Tofutti Brands (AMEX: TOF), Valence Technology (Nasdaq: VLNC), Eastern Light Capital (AMEX: ELC), Mastech (NYSE: MHH), Rare Element Resources (AMEX: REE), VirtualScopics (Nasdaq: VSCP), Lakes Entertainment (Nasdaq: LACO), Western Liberty Bancorp (Nasdaq: WLBC), Sport Chalet (Nasdaq: SPCHB), Sterling Financial (Nasdaq: STSA), Jones Soda (Nasdaq: JSDA), Adolor (Nasdaq: ADLR) and China Shen Zhou Mining and Resources (AMEX: SHZ). On the decline: pSividia (Nasdaq: PSDV), China Architectural Engineering (Nasdaq: CAEID), Tesla Motors (Nasdaq: TSLA), XOMA (Nasdaq: XOMA), Carolina Trust Bank (Nasdaq: CART), Arc Wireless Solutions (Nasdaq: ARCW), First Federal Bancshares of Ark (Nasdaq: FFBH), MBT Financial (Nasdaq: MBTF), Acadia Pharmaceuticals (Nasdaq: ACAD), Lentuo International (NYSE: LAS), Tengion (Nasdaq: TNGN), Subaye (Nasdaq: SBAY), Apricus Biosciences (Nasdaq: APRI), Kingold Jewelry (Nasdaq: KGJI), FX Energy (Nasdaq: FXEN), Kingtone Wireless Info (Nasdaq: KONE), Alimera Sciences (Nasdaq: ALIM), Dryships (Nasdaq: DRYS).
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