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 DJIMSTOCKS- since 2006 - Toronto, Canada/ London UK

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Entries in GWRE (5)

Sunday
Mar182012

Into the trading week, (March 19-  )

If the repetitive question here (economic recovery vs. QE) throughout March was getting tiresome, you missed what transpired and led to the largest weekly '12 gain (SP> 2.3%) and a 14% move in TSY’s (caused by ‘growth’ aspirations and not inflation), as the question was being answered.  The SP move is even more impressive considering there has been only been one negative week so far in '12.  

Simply, we saw seismic activity between asset classes as investors began showing belief in an economy sustaining recovery/growth path without a need for further QE additives.   It's also 'falling fears'/ reduced risk of economic downside that is just as important.  It’s hard to believe an investor can live with sub 2% GDP with QE expectations diminished, but for now that’s the signal as long as NFP# and other tier 1 data keep showing momentum.  You won’t need QE’s, if NFP#’s roll into 300K is the layman way to explain what has likely taken hold in the market mindset.  In this view, it could be a tricky game as volatility may loom ahead if hiccups in data over April begin to emerge.  Still, rather trade a market dependant on economic data than any (ie), European debt crisis to deal with over the coming months.  Also, consider this is likely not a full blown asset relocation, just an initial position not be left behind you could say.  There is no evidence (volumes) all those now gun shy investors coming out in droves to put money back into equities.

A few earnings of note this week in ORCL TIF FDX  ACN  will cover a broad look at how things were shaping up in February, notably for next season earnings ahead in April, (which are March Q end.) *Recall the first 2 names disappointed last Q.  Some reports from last week added to trading list include MIDD  BTH  JVA (back and crazy as ever, only if you can watch all day) and GWRE, which has the best potential to hang around through '12.

A whole lot of FED member chatter will garner attention due to QE.  On the US economic front it will be daily ‘Housing’ data.   Globally, it’s ‘flash” PMI’s later in the week.  All in, as noted last week… “…we will start to think about month end/ Q end soon enough to keep equities in further demand”

Tuesday
Mar272012

Ahead of the open, (27-03)

Today’s big rally of DJIA 160+,NASD +55 and SP +19 handles had all the markings of performance chasing as soon as investors caught on their heels were forced into covering and/or joining the buying melt up.  Fortunately, there was no being on your heels here, even prior to flash PMI’s taking the market down 3 trading days before,"All in, if risk off mentality is picked up once again, is it really all that bad as QE’s chatter will be the market back-up plan.  Also, more oppy ’if anything for dip buyers to pad books into Q end".  QE related chatter from Bernanke (basically reaffirming ZIP thru ’14), but nothing too clear on further QE, a positive Draghi all played a role, but with or without the CB’s words, the market still had Q end in a dip buying / resilient marketplace.

Unfortunately, the oversized move took all of one day and there is nothing left to say in this (‘Ahead of the open’) that wasn’t said since last Thursday for the week ahead.  If anything the move reaffirms the need to play catch up for some a little longer this week.  It's very likely market worries of last week pushed to April.

Even the one EPS stock (GWRE) initiated last week as one that may have legs through ’12 popped nearly 15% at days highs /or 5-6pts.

Wednesday
Jun062012

Ahead of the open, (06-06)

Although major indices (DJIA,NASD) seemed stagnant throughout the day, the underlying tape showed squeeze promise as an allocation switch into higher beta (RUT outperformed) was evident.  Many stocks off the Shadowlist confirmed such a move (ie IPGP, LVS, GWRE, SODA, MCP >5-7% gains).  Naturally, if playing a squeeze/bounce trade, you go after the most beaten down areas of the market (also fins’/banks today) and not the big caps.  Big cap loved techs did nothing today.(ie AAPL,IBM.)
 
The G7 turned into a non-event, but it was offset by more ‘policy intervention’ headlines ahead of ECB, Fed speak Yellen/Bernanke (dovish?) in the next few days and a few proposals of assistance to Spain the sovereign (not its banks directly).  Also, a step towards European ‘bank union’ was making the rounds.  In all, the “..wish ‘play’ now, a squeeze from oversold conditions off intervention speculation”, was winning out as the SP pushed 5 handles higher. (You know (cough, cough), if all these dreams come to fruition the market might be at SP 1400 this week, not just 1300.)
 
Now the actions to the speculation begin.  The morning will be interesting to see market reaction to ECB decisions and/or framework for later ( if any), in both directions.  Expectations are growing on all fronts setting up for disappointments. The view expressed recently here is the ECB doesn’t want to do anything material before elections so not to take pressure off politicians and the FED is unlikely to sound to dovish to drive stimuli hopes as it's not justified yet.(Bullard didn’t today).
 
Added to WPRT to list off CAT alliance, ULTA, GWRE off list put in good reports, but EPS trades are not in vogue this Q as growth stocks have been undergoing  ‘re-valuations’.

 

Wednesday
Jul182012

Ahead of the open, (18-07)

Bernanke’s prepared text took the market down, Bernanke’s Q&A took the market up.  Yep, that pretty well sums up the schizoid market today!.
  
In the end, equities might have gained, but USD/Gold/TSY’s signalled no conviction in the belief QE was coming in August (although odds went up for action in September).  Also, SP may have gained 10pts, but higher beta hardly participated as single stock action was lagging. 
 
Besides a few recent IPO’S like YELP, GWRE up 7 and 5% respectively, it is hard to find a beta stock up even 2% today.  R2K gains were half of SP’s. The SOX chart remains ugly and hit fresh multi-months lows today and 52w high list includes all the safest havens (REITs, utilities, Pharma).  This is hardly a strong rally into resistance in the low SP1360’s and so caution is needed.  Until this market narrative changes, it is best to concentrate on upcoming earnings surprises than chasing previous ‘growth’ winners at this point.

 

 

Friday
Jul202012

Ahead of the open, (20-07)

EZ summit highs were penetrated in the morning, rinsed back before finishing right on the SPY swing high from early July.  All in, an interesting day.  Why?.  Although small cap RUT was the only red finish amongst the indices many of our ‘higher beta’ Shadowed growth stocks outperformed substantially.  This smells of rotation, but at this point it’s just a lot of covering in tech linked stocks.(SOX up nearly 6% off lows).  Still, its possibly enough to reach SP1400 as long as bad eco’ data is ignored (Existing home sales -5% vs +1% expectation, Phily Fed today) and EZ stays quiet.  Financials stepping up would enhance the possibilities of a higher SP price.
  
MLNX  significant growth outlook followed up VMW slightly positive report to lead tech linked stocks , VFC  earnings led ‘retail’ growth names..(RL, COH, FOSL +5%).  FCX’s helped base metal linked stocks.  Other single stocks closings, BSFT +7%, YELP, LVS, GWRE +5%, FFIV WPRT, LNKD, LULU, CRM,  WYNN,  BIDU >3%.  FFIV  weak guidance is another example in tech/internet where…”Bad reports this Q are any that simply don’t beat the watered down consensus estimates”.  The stock climbed $10 off printed lows.  These reactions are especially prominant in tech, which ranks as the most beaten down sector recently as far as sentiment is concerned.