JT’s DAILY BLOG for Month Of June 2013
Note: All previous month's posts are available in the archives, as noted above.
All postings for the month are available here, sorted in descending order - i.e. most recent at the top. For a time, the last week of the prior month will be retained here, for continuity.
All times are Eastern Time - same as the NYSE
1st Posting for Friday 06/28/2013 08:45 AM
Make it three days in a row for triple-digit gains on the Dow Industrial average, as the rally continued on Thursday. The economic readings continue to show the economy is moving in the right direction, although at an under whelming pace. Asian Markets posted solid gains overnight. Conversely, European markets are all trading with losses at this hour. U.S. futures are positive, with less than an hour to go to the open.
Only two upgrades / downgrades to report this morning, affecting stocks on my lists:
Williams Partners LP (WPZ) was downgraded from OutPerform to Neutral at Credit Suisse.
Vodafone (VOD) was upgraded from Hold to Buy at Deutsche Bank.
I think most market players are thinking what I’m thinking, which is TGIF. Still, thus far, it has not been a bad week for the bulls. After starting off Monday with a big sell off, stocks have gained handily for three days in a row. Most players (on the long side, anyway) would be happy with a neutral finish today, if that is the best that the market gods can offer.
1st Posting for Thursday 06/27/2013 09:00 AM
The stock rally continued on for another day Wednesday, as the Dow Industrial average notched another triple-digit gain, and the other major averages performed similarly. Gold did not rally, however, as the price closed at a new low of $1225 per ounce. Overnight, Asian markets mostly posted gains, with Shanghai as the lone exception, posting a tiny loss. European markets are likewise mostly trading with gains, with only Spain presenting a loss, at this hour. U.S. futures are positive. Today we have the usual weekly reading on Claims for Unemployment, plus Personal Income and Spending data for May.
None of my stocks have received any upgrades / downgrades so far today.
Yesterday morning, General Mills (GIS) reported FQ4 EPS of $0.53. in-line with estimates. Revenue was $4.31B, missing by $0.01B.
Then, last evening, Paychex (PAYX) reported FQ4 EPS of $0.34, missing by three cents. Revenue was $585.3M, up 6% Y/Y, missing by $0.66M.
Finally, this morning, ConAgra (CAG) reported FQ4 EPS of $0.60, beating by a penny. Revenue was $4.59B, missing by $0.02B.
During this market decline, I took advantage of the opportunity to re-establish positions in Realty Income (O), Health Care REIT (HCN), ConocoPhillips (COP), and Southern (SO), four quality names I should never have sold, or at least not sold when I did so. I was eagerly awaiting still lower prices, to add to these positions, when the current recovery rally began a couple of days ago. So right now, I am on hold, waiting to see what happens. If the market takes off from here, I will be glad I at least took advantage of the short-lived decline, to pick up some quality names at a decent price.
1st Posting for Wednesday 06/26/2013 09:00 AM
Stocks rallied on Tuesday, giving bulls hope that the decline may be ending. Overnight, Asian markets ended mixed, with Hong Kong and Singapore up, the rest down. European markets are positive at this hour. The third estimate of Q1 GDP just came out, at 1.8%, a bit shy of the 2.4% expected. U.S. futures are still positive, but not as strong as before the release.
Only two downgrades to report this AM, on a couple of my Tier3 speculative stocks, in the mining sector:
Pan American Silver (PAAS) was downgraded from OutPerform to Neutral at Credit Suisse.
Barrick Gold (ABX) was also downgraded from OutPerform to Neutral at Credit Suisse.
Jeff Reeves has a front page article on the miners this morning on MarketWatch, which makes for very sobering reading to start the day. I had ventured into the space, attracted by the apparent valuations and decent dividends. The stocks have continued to fall since my entry, and the dividends are probably toast, if not right away, soon. I have to admit that I now view this speculative play as a mistake. The only saving grace for me is I was aware of the risk, and I only took small positions. I am not selling out yet, but I am putting a hold on further purchases, even if the prices drop substantially from here. I am reminded of Ben Graham’s thoughts on speculation, that in the end the speculator usually loses more than he gains. I think I need to go read that section again in “The Intelligent Investor”.
1st Posting for Tuesday 06/25/2013 09:15 AM
Stocks dropped significantly at the open Monday, and continued to slide until around noon, at which time buyers began to show up. By 3:00 PM, about 75% of the lost ground had been recovered, after which a late day sell off occurred, which put the Dow Industrial average back down to a triple digit loss for the day, but still much better than it was at noon. Overnight, Asian markets ended mixed, with Hong Kong, India, and Singapore up slightly, Japan and Shanghai down slightly. European markets are all trading in the green at this moment, with only one exception, as Italy just turned red, by a tiny margin. U.S. futures are positive, indicating stocks will bounce back today, at least at the open.
Durable Orders for May came out this AM, slightly better than expected. Later on, Consumer Confidence will be released, along with several reads on the state of the housing market.
Upgrades / downgrades out this AM on my stocks were:
Plains All American Pipeline (PAA) was upgraded from Neutral to Buy at Ladenburg.
Pan American Silver (PAAS) was downgraded From OutPerform to Market Perform at Cowen.
Royal Dutch Shell (RDS.B) was upgraded from UnderPerform to Neutral at Exane BNP Paribas.
As expected, Walgreens (WAG) reported this morning, that FQ3 EPS was $0.85, missing by five cents. Revenue was $18.3B, missing by $0.14B.
It will be interesting to see if the positive mood holds, or if the sell off resumes today.
1st Posting for Monday 06/24/2013 09:00 AM
Stocks managed a tepid recovery Friday, at least as far as the blue chips were concerned. The NASDAQ still posted a tiny loss. For the week, all of the major averages posted significant declines, as the market experienced the largest weekly decline so far this year. Overnight, Asian markets declined sharply, with Shanghai leading the charge, down over 5%. European markets are likewise trading with sizeable losses at this hour. U.S. futures are indicating stocks will open here to the downside. It appears that a significant global sell off in stocks is indeed happening.
There are no economic releases scheduled for today. Upgrades / downgrades out on my stocks this morning are as follows:
Pfizer (PFE) had coverage resumed by JP Morgan, with an OverWeight rating.
Walgreen (WAG) was downgraded from Buy to Hold at Cantor Fitzgerald.
Digital Realty Trust (DLR) was upgraded from Sell to Neutral at UBS.
Coca Cola had coverage initiated at BUY at SunTrust.
Lost in all the market excitement was the report from Darden Restaurants (DRI) Friday morning, whereby FQ4 EPS was reported at $1.01, missing estimates by four cents. Revenue was $2.30B, beating by $0.03B. Business must not be too bad, as the firm announced a 10% dividend increase, to $0.55 per quarter, effective with the upcoming payout, with an ex-dividend date of 7/8/2013.
Several of my stocks will go ex-dividend this week:
Philip Morris (PM), 6/25/2013, yield 3.89%.
Kraft Foods (KRFT), 6/26/2013, yield 3.74%.
National Health Investors (NHI), 6/26/2013, yield 5.07%.
Nucor (NUE), 6/26/2013, yield 3.34%.
American Capital Agency (AGNC), 6/26/2013, yield 17.91%.
Windstream (WIN), 6/26/2013, yield 12.59%.
Prospect Capital (PSEC), 6/26/2013, yield 12.56%. PSEC pays monthly.
Annaly Capital Management (NLY), 6/27/2013, yield 12.64% at the current rate of $0.40 per quarter. Note that the rate varies each quarter for this high-yielding MREIT.
Also, as a warm-up to the next earnings season that will soon be upon us, four of my stocks are scheduled to report this week:
Walgreen (WAG), 6/25/2013, before market hours.
General Mills (GIS), 6/26/2013, before market hours.
Paychex (PAYX), 6/26/2013, after market hours. Perhaps we will learn also when the next dividend will be. Recall that PAYX accelerated some 2013 payouts into December 2012 before the dividend tax rate increased. Of course, with the year-end deal finally reached, it was unnecessary. Anyway, it is time for PAYX to resume payouts, I believe.
Conagra Foods (CAG), 6/27/2013, before market hours.
This week, barring a major uptick in the price to take it out of buy range, I plan to add to my recent starter position in Realty Income (O), which is now available at the best price seen in many months, and now yields over 5%. I say buy below $41 or better. Others I am watching are Southern (SO), Coca Cola (KO), and ConocoPhillips (COP), all near a buyable range. I may end up being too early in a case or two, but if this decline suddenly ends, these types of stocks will quickly move out of range, and the opportunity will be missed. If the sell off continues this week, I may be adding some stocks to my portfolio that have not been available at a reasonable price in many months, if not years.
1st Posting for Friday 06/21/2013 09:15 AM
The Fed-induced sell off continued on Thursday, as the major averages registered the largest single day declines of 2013. The Dow Industrial average posted a 354 point decline, and the S & P 500 was down 41 points. Overnight, Asian markets ended mixed, with Japan and India posting gains, while Shanghai, Hong Kong, and Singapore posted modest declines. European markets are likewise trading in mixed fashion at this hour, with Britain and France positive, Germany, Italy, and Spain negative, with both ups and downs by modest amounts. U.S. futures are actually positive at the moment. There are no economic releases scheduled for release today.
I have a few upgrades / downgrades on my stocks to report:
Barrick Gold (ABX) was downgraded from Buy to Neutral at UBS.
Newmont Mining (NEM) was also downgraded from Buy to Neutral at UBS.
Kimberly Clark (KMB) was upgraded from UnderPerform to Market Perform at BMO Capital.
Southern Company (SO) was upgraded from Neutral to Buy at Citigroup.
It appears the panic selling may have run its course, but I would be surprised if there was any significant rebound today. At this point, I think traders / investors are exhausted, and just want to make it to the weekend.
1st Posting for Thursday 06/20/2013 09:30 AM
Well, the Fed announcement came out, hinting ever so gently that QE would be tapering off sometime in the near future, and stocks promptly gave back the gains from the previous two days. Overnight, Asian markets followed the U.S. lead, selling off handily, and European markets are performing similarly, all bourses down over 2%. It all seems like a pretty strong reaction to the most telegraphed Fed tightening sentiment in history. Who knew? Anyone paying attention, I would say.
The Weekly Claims for Unemployment came in a little above expectations, adding to the negative mood. U.S. futures are indicating the decline will continue when the market opens.
I have three upgrades / downgrades to report this AM:
Newmont Mining (NEM) was downgraded from OutPerform to Market Perform at Cowen.
Potlatch (PCH) was upgraded from UnderPerform to Neutral at DA Davidson.
Wal-Mart (WMT) was upgraded from Market Perform to OutPerform at Raymond James.
Fasten your seatbelts, it could be a wild and wooly ride today in the stock market.
1st Posting for Wednesday 06/19/2013 10:00 AM
Stocks managed a second rally day in a row Tuesday, with the Dow Industrials posting another triple-digit gain, and the other major averages performing similarly, in terms of percentage gains. Overnight, Asian markets finished mixed, with Japan and India up, Shanghai, Hong Kong, and Singapore down. European markets are exhibiting no such inconsistency, with all bourses trading in the red at this hour. U.S. markets have opened, with the major averages posting modest losses to start the day. All eyes are on the Fed, with an announcement expected around 2:00 PM.
The only analyst actions to report this AM, at least as far as my stocks are concerned, are the two major soft drink firms, CocaCola (KO) and Pepsico (PEP), both initiated into coverage by Credit Suisse. KO was initiated at OutPerform, while PEP was initiated at Neutral.
Still reflecting on the NBA finals from last night – it was an amazing comeback by Miami, no doubt. If the Spurs lose Game Seven, they will know they lost it when they let Miami escape from Game Six.
1st Posting for Tuesday 06/18/2013 10:15 AM
Stocks gained back on Monday almost exactly what they gave up on Friday, as the week started off with a mild rally. Actually, the open saw the averages shoot up even higher, while the rest of the day was mainly a holding action, trying not to give it all back, which ended up being reasonably successful. Overnight, Japan and India posted mild losses, Shanghai and Hong Kong were essentially flat, and Singapore posted a gain of more than 1%. At this hour, European markets are mostly trading in the green, with only France presenting a small decline. U.S. markets have opened, with the initial trading sending the averages higher by modest margins. The economic data for today has already come out, with the CPI for May showing a little trace of inflation, which was expected, and Housing Starts and Building Permit counts for May likewise about as expected, in the mid to upper 900 range.
Several of my stocks have received upgrades / downgrades this morning.
Statoil ASA (STO) was upgraded from Sector Perform to Sector OutPerform by Howard Weil.
ConocoPhillips (COP) was downgraded from Sector OutPerform to Sector Perform at Howard Weil.
Royal Dutch Shell (RDS.B) was upgraded from OutPerform to Focus List by Howard Weil. I have no idea what a “Focus List” rating means, but it must be good if it is above “OutPerform”.
Greif (GEF, GEF.B) was initiated at Neutral at Longbow.
Williams Partners LP (WPZ) was downgraded from Buy to Neutral at Goldman.
It appears that the pundits who predicted that gold was going to have another leg down may have been right. It will be interesting to see if the April lows are breached, if it even gets that low. I sold out of my trades in Newmont (NEM), Barrick (ABX), and Pan American (PAAS), while I still hold a trade in Freeport McMoran (FCX). I also have small long-term positions in NEM, ABX, and FCX that I plan to hold for a year or two, and I will add to them if they drop low enough. My thinking is that gold can certainly drop more, and stay there a long while, but eventually, it will rise again.
1st Posting for Monday 06/17/2013 09:15 AM
Stocks opened on a down note Friday, and never could catch a bid all day. By the end of the day, the Dow Industrials was sporting a triple-digit decline, although just barely, and the other major averages ended the day with similar results, percentage-wise. Overnight, Asian markets mostly ended with gains, with only Shanghai posting a small decline. European markets are all trading with gains at this hour. U.S. futures are indicating stocks will open towards the upside to start the week.
Several of my stocks have received upgrades / downgrades this morning:
Chevron (CVX) was downgraded from Buy to Hold at Jeffries.
Kimco Realty (KIM) was downgraded from Buy to Hold at Argus.
Spectra Energy Partners (SEP) was upgraded from Market Perform to OutPerform at Raymond James.
ENI S p A (E) was downgraded from Neutral to UnderPerform at Exane BNP Paribus.
Several stocks on my lists will be going ex-dividend this week:
Gladstone Investment (GAIN), 6/17/2013, yield 8.16%. GAIN pays monthly.
Greif (GEF.B), 6/18/2013, yield 4.47%.
Main Street Capital (MAIN), 6/18/2013, yield 6.69%. MAIN pays monthly.
Solar Capital (SLRC), 6/18/2013, yield 10.22%.
Total S A (TOT), 6/19/2013, yield 6.07%. The yield is before the 30% withholding that U.S. holders are subjected to.
PennantPark Investment (PNNT), 6/19/2013, yield 9.63%.
General Electric (GE), 6/20/2013, yield 3.23%. The industrial giant continues down the road towards redemption, as far as dividends are concerned. The firm has made strides to reduce reliance on GE Capital since the financial crisis.
One of my stocks will report this week; Darden Restaurants (DRI) on 6/21/2013, before market hours.
Last week saw the market lose ground on every day but Thursday. The positive futures notwithstanding, the near-term trend is down until it changes. My game plan remains the same – watch for buy or sell opportunities in my pre-qualified stocks, and do nothing if an opportunity is not there.
1st Posting for Friday 06/14/2013 10:30 AM
Stocks on Thursday gained back what they lost on Wednesday and more, as the economic data indicated the economy was holding its own, although not by much. The data reads this morning were a bit less reassuring, as Wholesale Prices jumped, and Industrial Production declined ever so slightly. As the 10:00 AM hour approaches, stocks are effectively trading flat, with a downward bias. Possibly following the U.S. lead from Thursday, Asian markets posted gains overnight, and European markets are likewise trading in the green at this hour.
Several of my stocks received notice from the analyst community this morning:
Eni SpA (E) was upgraded from Market Perform to OutPerform at Bernstein.
TICC Capital (TICC) was upgraded from UnderPerform to Market Perform at Wells Fargo.
Prospect Capital (PSEC) was also upgraded from UnderPerform to Market Perform at Wells Fargo.
Apollo Investment (AINV) was upgraded from UnderPerform to Market Perform at Wells Fargo. AINV is not on my current high-yield list (Tier3), but I still own it as a “legacy” holding. Recall, for me a “legacy” holding is a stock I bought back when I didn’t know what I didn’t know about investing in stocks. That said, at the current price, AINV is not that bad, it actually has kept paying through thick and thin the last several years.
I think I’m seeing a pattern here. Continuing on, Solar Capital (SLRC) was upgraded from Market Perform to OutPerform at Wells Fargo.
To summarize, Wells has upgraded four BDC’s, all of which I own. I had sold TICC and SLRC some months ago, but had just recently in the past few days bought back into each one as the next dividend cycle loomed.
Royal Dutch Shell (RDS.B) was upgraded from Sector Perform to OutPerform at RBC Capital.
Williams Partners (WPZ) was downgraded from Buy to Hold at Stifel.
I just bought more WPZ yesterday, at a recent low, and I was feeling pretty good about it, until this morning. The stock had recovered a bit since I bought early in the day, but this morning, it has gone back down. The company is issuing new units, which nearly always causes a drop, but in the case of an MLP, I don’t see it as a negative like I would for a regular stock being diluted. Since MLPs pay out most cash to unit holders, they only issue new units when there is a compelling investment to be made, and they need to raise funds to act on it, which will eventually increase the cash flows and hence the overall value of the firm.
Time to post, the market has turned positive ever so slightly.
1st Posting for Thursday 06/13/2013 10:00 AM
Stocks popped up at the open Wednesday, but it was all downhill from there. The Dow Industrials posted a triple-digit loss, with the other major averages performing similarly. Overnight, Asian markets tumbled again, with Japan down over 6%. European markets are mostly trading in the red at this hour, but the losses are modest at this point. U.S. futures were flat prior to the open, and indeed, in the first few minutes of trade, the major averages are showing only modest declines, so far.
There are several economic releases out this morning. First, the Weekly Claims for Unemployment came in at 334K, slightly less than the consensus prediction. Next, Retail Sales for May was about as expected overall, up 0.3%, but only because auto sales were robust. Finally, Import and Export Prices for May both showed percentage declines, of 0.3% and 0.7% respectively, indicating deflation is more of a concern than inflation at this juncture. The only remaining data point is Business Inventories for April, due out at 10:00 AM.
Medical Properties Trust (MPW) and Ventas (VTR) were both downgraded from Hold to UnderWeight at KeyBanc.
Health Care REIT (HCN) was downgraded from Buy to Hold at KeyBanc.
Waste Management (WM) was downgraded from Buy to Neutral at Goldman.
Ares Capital (ARCC) was upgraded from Market Perform to Outperform at Keefe Bruyette.
Stocks are holding the losses to modest margins as the 10:00 AM hour approaches. That will likely change as the day wears on. I bought a couple of quality names, just small starting positions, over the last few sessions, as prices retreated from the stratospheric heights. I will be watching for additional opportunities if the market decline continues. I just have to remember that, up to a point, declines are good, they allow for quality stocks to be purchased at reasonable prices.
1st Posting for Wednesday 06/13/2013 9:00 AM
So much for the positive Tuesday phenomenon, as the second Tuesday in a row failed to result in gains, this time with emphasis. The Dow Industrials posted a triple digit loss, and all of the stock averages posted similar percentage declines. Minimal data is due out today, just the Treasury Budget at 2:00 PM. Asian markets declined again overnight, but Japan did rebound from an earlier, larger decline, to close with only a .2% loss. European markets are mixed at this hour. U.S. futures are positive, indicating a rebound will occur, at the open. The question is, will it last throughout the day, or will the market roll over?
Spectra Energy Partners (SEP) and Spectra Energy (SE) were both upgraded by Tudor Pickering, from Hold to Accumulate in the case of SEP, and from Accumulate to Buy in the case of SE. SE was also upgraded by Morgan Stanley, from Equal Weight to OverWeight, and by Deutsche Bank, from Hold to Buy.
American Electric Power (AEP) was upgraded from Neutral to Buy at SunTrust.
Time to get ready for another exciting day.
1st Posting for Tuesday 06/11/2013 8:30 AM
Stocks essentially went nowhere on Monday, with all of the major averages ending with incremental gains or losses. Overnight, Asian markets dropped decisively, over 1% in most cases. European markets are trading at this hour with even higher losses, over 1.5% in most cases. U.S. futures are significantly negative, indicating the market here will open down, following the lead of the overseas markets. The only economic release scheduled for today is Wholesale Inventories at 10:00 AM, not usually a market moving data point.
None of my stocks have received any upgrades or downgrades so far today.
It appears that the answer to the question I posed at the end of my Monday morning posting, which was, will the correction resume, is going to be answered in the affirmative, unless the day unfolds significantly different from what the overseas markets and the futures are indicating. I plan to add to my position in Freeport McMoran (FCX) today, which is the last day before the ex-dividend date, which is tomorrow. The stock has declined from a recent high over $42 last November, to barely $30 today, and sports a yield in excess of 4%. Plus, the 4% yield does not take into account a supplemental dividend of $1.00 per share to be paid this cycle, in addition to the regular dividend of $0.3125 per share. The ex-dividend adjustment of $1.3125 to be effected tomorrow will take the share price well below $30, after which I may add some more, for the next dividend cycle. FCX and a couple of other miners are a sector presenting value these days, unlike most other sectors. The market believes gold is going lower, which it very well might. But miners like FCX and Newmont (NEM) will survive, I believe, until gold makes a comeback.
2nd Posting for Monday 06/10/2013 9:15 PM
There is minimal new information to add to the posting since last night. Overnight, Asian markets all finished lower, except Japan, which managed a gain. European markets are trading up in Britain and Germany, and down in France, Italy, and Spain. There are no economic releases scheduled for today. There are two upgrades / downgrades of interest this morning:
AT&T (T) was upgraded from Hold to Buy at Argus.
Entergy (ETR) was also upgraded from Hold to Buy, by Deutsche Bank.
U.S. futures are flat, as we are minutes away from the open.
1st Posting for Monday 06/10/2013 posted on Sunday 7:15 PM
Well, my primary computer is still in the shop, but I have installed my web software on my backup computer, so life goes on.
Since my last posting early on Wednesday June 5, stocks went on a roller coaster ride, with the Dow Industrials down over 200 points on Wednesday, then up both Thursday and Friday, regaining the lost ground and then some. Considering Monday and Tuesday, added together, were also positive, the weekly result was a modest gain overall. Foreign markets did not fare as well, with most major markets in both Asia and Europe posting net losses for the week.
Several upgrades / downgrades of note occurred during my outage:
On Wednesday, June 5th, Barclays exchanged positions regarding their opinions on two oil majors, as ConocoPhillips (COP) was upgraded from EqualWeight to OverWeight, while Chevron (CVX) was downgraded from OverWeight to EqualWeight.
On Thursday, June 6th, Exane BNP Paribas downgraded Nestle (NSRGY) from OutPerform to Neutral.
Also on Thursday, Jeffries resumed coverage on Freeport McMoran (FCX), with a Buy rating.
As expected, Greif (GEF.B) reported earnings last week. Q1 EPS was $0.70, beating by a penny. Revenue was $1.09, missing by $0.02B. The stocks, both the regular shares (GEF) and the B shares (GEF.B), gained nearly two dollars on Thursday, and held the gains on Friday. So much for any thoughts of a buy opportunity.
Stocks on my lists going ex-dividend this week, by date, are:
Newmont Mining (NEM), yield 4.10%.
Triangle Capital (TCAP), yield 7.44%.
Mercury General (MCY), yield 5.58%.
Medical Property Trust (MPW), yield 5.26%.
Coca Cola (KO), yield 2.70%.
Altria (MO), yield 4.87%.
Vodafone (VOD), yield 5.28%. The dividend is a semi-annual payment.
Digital Realty (DLR), yield 5.17%.
Ares Capital (ARCC), yield 8.98%.
TICC Capital (TICC), yield 11.97%.
Merck (MRK), yield 3.57%.
Dr Pepper Snapple (DPS), yield 3.28%.
Blackrock Kelso (BKCC), yield 10.48%.
Now that the monthly Payroll report is behind us, it is time to see if the correction, such as it was, is over, or if there is to be another leg down. There is not much in the way of data coming out until Thursday, with May Retail Sales, Export and Import Prices, and then Friday, with PPI and Industrial Production / Capacity Utilization, also for May. Foreign markets, especially Japan, may affect U.S. stocks this week more than usual.
2nd Posting for Wednesday 06/05/2013 1:00 PM
I will be taking my computer in to the shop this afternoon, and barring a miracle turnaround, I will likely not be posting for the rest of the week. I have backup computers to watch the market with, as well as having my files backed up, but I don't have the web software on my backups. As of now, the sell-off has continued, accelerating as the day wears on. I bought a few shares of HCN just under $66, a price that has not been available for several months. But I'm being cautious about committing capital. This may be the beginning of a major sell-off, with prices slated to fall much further.
1st Posting for Wednesday 06/05/2013 8:45 AM
Stocks closed in the red Tuesday, ending the string of gains being realized on Tuesday that had gone unbroken for 20 weeks. Overnight, Asian markets mostly closed with losses, over 3% in the case of Japan. Only India managed to post a small gain. European markets are all trading in the red at this hour. U.S. futures are negative, as the ADP Employment Report, considered a precursor to the Friday Employment reading, came in worse than expected. Still on tap for today is a read on Productivity and Unit Labor Costs for Q1, the ISM Services Index for May, and April Factory Orders. Then, the weekly Oil Inventory data will come out, and finally, the Fed will release their Beige Book summary of current economic conditions.
Three of my stocks received upgrades / downgrades this morning:
Hercules Technology Growth Capital (HTGC) was initiated at Buy at Wunderlich.
Annaly Capital Management (NLY) was reinstated at Neutral by Credit Suisse.
Main Street Capital (MAIN) was initiated at Buy at Wunderlich.
With a deluge of economic data coming out today, much of it likely to be disappointing, and foreign markets selling off, it appears the correction is still on, with Monday being just a temporary pause. I am taking advantage of it to buy a little here and there, as some of my favorite companies pull back a little from the stratospheric heights.
1st Posting for Tuesday 06/04/2013 9:00 AM
Stocks on Monday popped up a bit at the open, gyrated in a range for several hours, then around 2:00 PM, rose sharply from that point until the close. All of the major averages ended with solid gains. Overnight, Asian markets rose in Japan and Hong Kong, fell in Shanghai and India, and stayed in place in Singapore. European markets are trading higher at this hour. The only economic release of the day has already come out, as the Trade Balance came in at a minus $40.3 Billion, slightly under the predicted minus $41 Billion. It will be interesting to see if the streak of gains on Tuesday extends to 21 weeks in a row.
None of my stocks have received any upgrades / downgrades so far today.
Yesterday I initiated a new position in the Southern Company (SO), a high-quality SouthEastern utility. I had a lo-ball bid in at $43.25, and early on I could see that the stock was taking off, so I gave up. However, at the end of the day, checking my orders, I was amazed to see that it had filled around 10:00 AM, in a situation that looked suspiciously like a “flash crash”. I checked, but found no mention of any such phenomenon, with SO or any other stock. Anyway, I’ll take a break like that when I can get it.
1st Posting for Monday 06/03/2013 9:30 AM
Stocks started off with gains on Friday until around 11:00 AM, then nosed over into a steep decline that did not end until the closing bell. By the time the dust settled, the Dow Industrials average had posted a 209 point decline, and all of the other major indexes ended with similar results. Even after a few down days here and there during the month, May ended with gains on all the major averages. But, the enthusiasm has to be tempered somewhat considering the sell-off that occurred on Wednesday and Friday of the final week in the month. Several pundits have suggested that a 10% or so correction may finally be getting started, after having been predicted for months, it seems.
Overnight, Asian markets all posted losses, Japan over 3%. European markets are mixed at this hour, with Britain and Italy down, Germany, France, and Spain up. U.S. futures are positive. At 10:00 AM, the latest survey results from Purchasing Managers, the ISM Index, will be released, along with Construction Spending.
Only one upgrade / downgrade of note has come out this morning, as Intel (INTC) was upgraded from Market Perform to OutPerform at FBR Capital.
Stocks on my lists going ex-dividend this week, by date, are as follows:
Ventas (VTR), yield 3.76%.
Kimberly Clark (KMB), yield 3.35%.
Public Service (PEG), yield 4.36%.
Pepsico (PEP), yield 2.81%.
Westar Energy (WR), yield 4.29%.
Waste Management (WM), yield 3.48%.
Potlatch (PCH), yield 2.73%.
Frontier Communications (FTR), yield 9.65%.
SCANA (SCG), yield 4.02%.
Reynolds American (RAI), yield 5.24%.
One of my stocks will be reporting earnings this week. Greif Inc. (GEF, GEF.B) will be reporting after market hours on Wednesday, June 5.
It will be interesting to see if the market slide continues this week, or if a rebound is in store. Either way, I’ll be ready.