JT’s DAILY BLOG for Month Of December 2012
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.
All times are Eastern Time - same as the NYSE
1st Posting Monday 12/31/2012 7:15 AM
Stocks tumbled Friday, as a resolution of the fiscal cliff crisis seemed to be slipping away amid partisan rancor. A deal seemed to be a sure thing in the halcyon days following the election, but now it is anything but. Even if an agreement is reached at the last moment, it is sure to be narrow in scope, and a disappointment to the markets.
Asian markets ended mixed to start the week, with Japan and Shanghai up, Hong Kong, India, and Singapore down. European markets are likewise trading in mixed fashion at this hour, with France and Spain up modestly, while Germany, Britain, and Italy are down.
There are no economic releases coming out on this last day of 2012, and effectively no upgrades/downgrades either. It is all about the U.S. fiscal situation at this point, and probably will be for weeks to come. My posture is I have raised a lot of cash from selling as opportunities have presented themselves over the past few weeks, and I am ready to take advantage of bargains as they come available. But I am cognizant of the fact that any bargain taken advantage of may come to be seen as not such a great bargain, if stocks go into a major, protracted sell-off. On the other hand, bargains could evaporate quickly if the politicians surprise us to the upside and a monster rally ensues. This is a time to keep one’s head and exercise caution, that’s for sure.
With the New Year Holiday upon us, it should be a slow session. But the news flow could cause that to change.
Happy New Year!
1st Posting Friday 12/28/2012 7:30 AM
Stocks tumbled initially on Thursday, with the Dow Industrials down over 150 points by midday, but then a rally ensued, which brought the major averages close to break-even. The turnaround was due to rumors of fiscal cliff negotiations resuming. Asian markets are buying the story, apparently, as they all closed up overnight. The more jaded Europeans, however, are not convinced, with all of the key European bourses posting losses at this hour. U.S. futures are negative, as the lateness of the hour is starting to weigh on the chances of averting the cliff.
Economic releases on tap for today are the Chicago PMI Index for December, and New Home Sales for November. The fiscal cliff news, or lack of news, is likely to dominate the headlines, however, and also will be the major determinate of market action. As has been the case all week, there is a dearth of activity, as far as new analyst stock ratings are concerned, with nothing new to report on any of my stocks, or on any stocks, for that matter.
I did make a small addition to an existing position in Spectra Energy (SE) yesterday, picking up shares at $26.65. SE had a secondary out earlier this month, which along with the headlines, provided a decline which I took as a buying opportunity. A secondary nearly always results in a short term decline, and can be an opportunity to add to a position. Of course, that assumes that management uses the funds raised wisely, a big assumption in a lot of cases.
1st Posting Thursday 12/27/2012 8:00 AM
Stocks muddled through a sleepy, low-volume session on the day after Christmas, with only minor declines being posted, as Obama returns to Washington, ostensibly in search of some kind of limited deal before the New Year. Asian markets posted mixed results, with Japan, Hong Kong, and Singapore up, Shanghai and India down. European markets are mostly trading in the green at this hour. A common thread expressed by most pundits, and apparently assumed by markets worldwide, is that something will get done re: the U.S. fiscal cliff; if not by year-end, at least early in the year, such that sequestration will be avoided. If nothing positive happens and the worst case scenario comes to pass, watch out, stocks will likely fall hard.
There are practically no analyst ratings out today, those rascally analysts are still on their holiday break, I guess.
One of my legacy holdings, a stock I don’t currently recommend but that I still hold, paid a special dividend today. I had missed the announcement, so I was totally surprised. The stock is Capital Source (CSE), a one-time major dividend payer reduced by the financial crisis to paying only a penny per quarter (other than the special dividend of $0.50), with a stock price to match. I had planned to sell soon, as the stock has recovered to near $8.00, yet until now had shown no signs of improving the payout for long-suffering shareholders. I’ll hold off for awhile now, and see if the regular payout is increased in 2013. I still do not recommend the stock, which has morphed into a bank in order to survive.
1st Posting Wednesday 12/26/2012 9:00 AM
Stocks declined modestly in the shortened Christmas Eve trading session, on extremely low volume. Asian markets posted modest gains overnight at worst, with Japan and India posting better than modest, up 1.5% and ,8%, respectively. European markets are mixed, with Britain and Spain up slightly at this hour, and Germany, France, and Italy down a bit. U.S. futures are positive at the moment.
The only economic release scheduled for today is the Case Shiller 20 City Home Price Index, due out at 9:00 AM. The fiscal cliff situation will probably dominate the news flow for the remainder of this holiday week, and as we have seen, little to no progress is not a positive for stocks.
There are almost no upgrades/downgrades out so far today, as all of the analysts are apparently on a holiday break. I expect a very lackluster session today and throughout the remainder of this week. At this point, if any kind of political deal is even reached, it will be very modest in scope, and is not likely to ignite a huge rally. And that is the most optimistic scenario.
1st Posting Monday 12/24/2012 8:30 AM
Stocks took another tumble on Friday as the outlook for some type of deal on the fiscal cliff seemed to be slipping away. House Speaker Boehner cannot get enough of his own party to go along with a deal that Obama and the Democrats won’t accept anyway. As the old saying goes, it’s always darkest before it goes totally black!
To start the week, Asian markets posted modest gains except for Japan, which declined nearly 1%. European markets are trading mostly in the red at this hour. With more than two hours to go before the opening bell, U.S. futures are indicating stocks will swoon at the open, even as the MarketWatch headline reads “Boehner:Deal Still Possible”.
There are no economic releases scheduled for today, and the trading session will conclude early at 1:00 PM Eastern Time for the Christmas holiday. No upgrades/downgrades on my stocks have come out so far today, In fact, almost none have come out, period.
Several of my stocks will be going ex-dividend this week:
American Capital Agency Corp (AGNC), 12/24/2012, yield 16.05%.
MFA Mortgage (MFA), 12/26/2012, yield 9.64%.
Annaly Capital Management (NLY), 12/26/2012, yield 12.20%. NLY’s dividend varies frequently, but the $0.45 per share just announced is only slightly below where it has been recently, and is probably better than what was expected by most pundits.
National Health Investment (NHI), 12/27/2012, yield 4.71%.
Prospect Capital (PSEC), 12/27/2012, yield 12.03%. PSEC pays monthly.
Windstream Corp (WIN), 12/27/2012, yield 11.45%.
Nucor (NUE), 12/27/2012, yield 3.38%.
Kimco Realty (KIM), 12/28/2012, yield 4.32%.
Raytheon Co (RTN), 12/28/2012, yield 3.38%.
None of my stocks report earnings this week. Four of my stocks reported last week. In addition to General Mills (GIS), which I commented on Wednesday, three others reported, which I neglected to highlight. I guess I was too mesmerized by the fiscal cliff and such. Anyway, here they are:
Paychex (PAYX) reported after the bell Wednesday that FQ2 EPS was $0.41, in-line. Revenue of $559.4M, up 5% Y/Y, beat by $2M.
ConAgra Foods (CAG) reported Thursday before the bell that FQ2 EPS was $0.57, beating by a penny. Revenue was $3.73B, up 8.9% Y/Y, beating by $0.04B. CAG has really come to life the past few months.
Darden Restaurants (DRI) also reported Thursday before the bell, that FQ2 EPS was $0.26, missing by a penny. Revenue was$1.96B, up 7% Y/Y, beating by $0.01B. The mid level “formula” chain is struggling, with competition above and below fierce and financially stressed consumers resistant to pricier fare. I personally believe the country has too many restaurants of this genre, and I don’t see good times ahead for DRI anytime soon.
Today looks to be a sleepy session indeed. With all the key politicos breaking for the holiday, nothing much is likely to happen today, and that’s fine with me.
Merry Christmas to all.
1st Posting Friday 12/21/2012 8:30 AM
Stocks managed to post modest gains on Thursday. But, with the news that Speaker Boehner canceled a vote in the House on his so-called Plan B, it appears to all be coming undone as far as a fiscal cliff deal. The Repugnats cannot agree among themselves, and the Demogouges cannot agree with anything the Repugnats can pass. Asian markets posted hefty losses overnight on the news, and the European markets are trading likewise. U.S. futures are significantly down. The rally we have been seeing was based on the assumption that some kind of deal would get hammered out, but the hour is getting very late now. Some pundits are saying that a 10% to 15% correction could be in store if nothing happens on this front.
Economic news on tap today is plentiful, to include Personal Income and Spending, PCE Prices, and Durable Orders, all for November, and a final reading on the Michigan Sentiment Index for December. The political news will likely override any economic news today, however, as far as market impact is concerned.
Only a couple of analyst actions of interest to report this morning as far as my stocks are concerned:
McDonalds (MCD) had coverage resumed at Wells Fargo with an OutPerform rating.
Paychex (PAYX) was downgraded from OutPerform to Neutral at R.W. Baird.
This could be an exciting day. Also note that today is options expiration Friday.
1st Posting Thursday 12/20/2012 8:15 AM
Stocks faltered on Wednesday, ending the day with losses on all the major averages. The main reason given was an apparent stall in the fiscal cliff negotiations. Asian markets finished mixed, with Japan and India down, Hong Kong, Singapore, and Shanghai up. European markets are likewise trading mixed at this hour, with Britain, France, and Germany slightly up, Italy and Spain slightly down. U.S. futures are modestly positive.
A lot of economic data will be coming out today. The usual Weekly Initial Claims for Unemployment, a third estimate of Q3 GDP, Existing Home Sales for November, the Philadelphia Fed Business Index for October, the Leading Indicators Index for November, and the FHFA Housing Index for October. And of course, there are bound to be new headlines on the fiscal cliff negotiations.
Only one upgrade / downgrade / initiation has come out so far today on stocks I follow, as Molson Coors (TAP) was initiated at Neutral at Citigroup.
It will be interesting to see if the “Santa Claus Rally” resumes today, or if the stall continues, developing into a reversal of recent gains in the averages.
1st Posting Wednesday 12/19/2012 9:15 AM
Stocks logged yet another up day on Tuesday, which was similar to Monday. The day started right out of the gate with gains, and continued on from there, surging into the close. Again, hints that a deal might be possible in the U.S. fiscal situation fueled the rally. Overnight, Asian markets mostly posted gains, led by Japan with a 2.4% rise, and lagged by Shanghai with a flat finish. European markets are all trading with substantial gains at this hour.
U.S. economic news scheduled for today has already been released, as Housing Starts for November came in at 861K, a bit less than the consensus 875K expected, while Building Permits came in at 899K, a bit more than the 876K consensus expected.
None of my stocks have received any upgrades or downgrades so far today. I guess the rally looks to continue, as investors continue to emulate the Queen in Alice in Wonderland, believing six impossible things before breakfast.
General Mills (GIS) reported this morning as scheduled, that FQ2 EPS was $0.86, beating by seven cents. Revenue was $4.88B, up 6% Y/Y, in-line. Those results, along with improved guidance, were enough to lift shares up nearly 2% in pre-market trading.
I own GIS, and would like to add to my position if shares could be bought under $40. Not today, it appears.
1st Posting Tuesday 12/18/2012 8:00 AM
Stocks Monday popped up at the open, held those gains throughout the day, and then surged further into the close. The result was that all of the major averages finished with healthy gains. Overnight, Asian markets mostly posted gains, led by Japan and India, with Hong Kong and Singapore being the laggards, with tiny losses. European markets are likewise mostly showing gains at this hour, with only France exhibiting a fractional decline.
Economic releases on tap today are the Current U.S. Account Balance, sure to show a huge deficit, and the most recent reading of the NAHB Housing Index.
None of the stocks on my lists have received any upgrades or downgrades so far today. One stock in which I have a speculative position, Hewlett Packard (HPQ), received a downgrade from Hold to Sell at Topeka Capital Markets. Even though I have a position, I have recommended that readers avoid HPQ. As for the downgrade, all I can say is, where have these guys been? It is not exactly breaking news that Hewlett Packard is a lagging stock. Anyway, thanks for nothing, Topeka. Inquiring further, the downgrade is because of the recent rally in HPQ shares from the depths reached a few weeks ago. Of course, it is only a rally for those who bought in at those depths, which I did, at $11 and change. I took a quick one-day trading profit, unfortunately, it turned out, since I could have done much better if I had given it a couple or three weeks.
Time to get ready for another market day. U.S. futures are positive as the unexpected, and some would say unreal, considering the economic situation, “Santa Claus Rally” continues.
1st Posting Monday 12/17/2012 8:00 AM
Stocks gave ground on Friday, with all of the major averages posting losses, although not by huge margins. Overnight, Asian markets are showing mixed results, with Japan and Shanghai up, Hong Kong, India, and Singapore down. European markets are trading down for the most part at this hour, with only Italy managing to post a fractional gain.
Economic reporting scheduled for today consists of the Empire Manufacturing Index at 8:30 AM, and Net Long-Term TIC Flows at 9:00 AM. U.S. futures are positive, as rumors are circulating that there is movement on the fiscal cliff stand-off.
Only two upgrades/downgrades/initiations have come out so far this morning on stocks I follow:
Amerigas Partners LP (APU) was initiated at Neutral at Credit Suisse.
Unilever (UL) was upgraded from UnderPerform to Neutral at Credit Suisse.
Stocks on my lists going ex-dividend this week are:
Gladstone Investment Corp (GAIN), 12/17/2012, yield 8.68%. GAIN pays monthly.
Paychex (PAYX), 12/18/2012, yield 3.92%. PAYX has announced that payment of dividends that would have been paid in February and May 2013 were being accelerated, to be paid before year-end 2012.
BlackRock Kelso (BKCC), 12/18/2012, yield 10.47%.
Main Street Capital (MAIN), 12/18/2012, yield 6.23%. MAIN pays monthly.
Solar Capital (SLRC), 12/18/2012, yield 10.39%.
PennantPark Investment Corp (PNNT), 12/19/2012, yield 10.28%.
General Electric (GE), 12/20/2012, yield 3.52%.
Also, several stocks on my lists are scheduled to report earnings this week:
General Mills(GIS), 12/19/2012, before market hours.
Paychex (PAYX), 12/19/2012, after market hours.
ConAgra Foods (CAG), 12/20/2012, before market hours.
Darden Restaurants (DRI), 12/20/2012, before market hours.
Activity may pick up this week, with several earnings reports of interest and the ever-present political wrangling becoming more intense, as year-end draws nearer.
My posture remains the same – I believe stocks are over-valued for the most part. The tempting high yields still available on mortgage REITs, BDCs, and a few other higher-risk sectors are high for a reason – these stocks are vulnerable if the economy deteriorates in 2013, as many pundits have predicted.
1st Posting Friday 12/14/2012 9:15 AM
Stocks posted declines across all of the major averages Thursday. Asian markets turned in a positive performance for the most part, with only Japan posing a fractional decline. European markets are mixed at this hour, with Germany, Italy, and Spain slightly positive, while Britain and France are slightly negative. U.S. futures are pointing up, at least for the NASDAQ.
The economic releases scheduled for today are CPI, which came out at 8:30 AM, with the result being prices declined in November, and still to come, Industrial Production and Capacity Utilization.
A number of upgrades/downgrades on my stocks have come out this morning:
Kimberly Clark (KMB) had coverage resumed at Neutral at Goldman.
Procter & Gamble likewise had coverage resumed at Neutral at Goldman.
MicroSoft (MSFT) was initiated at Neutral at Janney Capital.
Sanofi ADS (SNY) was upgraded from Hold to Buy at Jeffries.
Exterran Partners L.P. (EXLP) was initiated at Neutral at Citigroup.
Royal Dutch Shell (RDS.B) was upgraded from Neutral to OutPerform at Credit Suisse.
MicroSoft (MSFT) was initiated at Market Perform at BMO Capital Markets.
As much as I hate to repeat myself, I see very little to buy, and with the decline yesterday, very little to sell. As one great trader was reputed to have said, there is a time to go long, a time to go short, and a time to go fishing (i.e. for real fish, not stocks). I think my readers know which is my choice right now.
1st Posting Thursday 12/13/2012 8:00 AM
Stocks ended the trading day Wednesday with mixed results, as the Dow Industrials, the NASDAQ, and the Russell 2000 indices all posted small declines, while the S & P 500 and the New York Composite indices managed to eke out small gains. The Fed announcement was uninspiring, although loose monetary policy, putting it mildly, is still the game plan for now, and probably for a long time to come, The Treasury Budget release at mid-afternoon definitely put a damper on trading, as it brought home once again how unsustainable the U.S. Federal Budget situation really is.
Overnight, Asian markets were mixed, with Japan and Singapore posting gains, while Hong Kong, Shanghai, and India posted losses. European markets are mostly trading with small losses at this hour. U.S. futures are flat, but the bias is to the downside.
Quite a lot of economic data is on tap for today, to include Weekly Claims for Unemployment, Retail Sales for November, Producer Prices for November, and Business Inventories for October.
Three recent upgrades/downgrades of interest are:
Late yesterday, MicroSoft (MSFT) was upgraded from Hold to Buy at Standpoint Research.
Darden Restaurants (DRI) was downgraded this morning from Buy to Neutral at Goldman.
BreitBurn Energy (BBEP) was upgraded this morning from UnderPerform to Neutral at Credit Suisse.
I will watch the market for opportunities as usual today, but at this point I really do not expect any opportune buys or sells to come up on the radar. Thank goodness for dividends. At times like this, that is about all there is to look forward to, as far as stocks are concerned.
1st Posting Wednesday 12/12/2012 9:00 AM
Stocks managed to end Tuesday with decent gains on all of the major averages, a pretty good showing considering the Mayan "End of the World" is fast approaching. Overnight, Asian markets are similarly ignoring the prediction, as most bourses ended with solid but not huge gains. Only India lagged, posting a tiny decline. European markets are also following the script, trading into positive ground across the board at this hour.
Economic releases pick up the pace today, with Import and Export Prices for November due out at 8:30 AM, Oil Inventories at 10:30 AM, the FOMC Announcement at 12:30 PM, and finally the Treasury Budget figure for November at 2:00 PM. U.S. futures are tilting towards the positive at the moment.
None of my stocks have received any upgrades/downgrades so far today.
With the market again being up for an extended period, climbing the proverbial “wall of worry”, I start looking at my holdings for sell candidates, or covered call write candidates. I settled on Molson Coors (TAP) yesterday, selling a July 2013 call, strike price $45, for $2.25, with TAP trading in the $43.50 range. For most stocks, a strike more than $1.00 above the current trade level will seldom pay as much as $1.00, even going out several months. For some reason, TAP offers more than double the usual return. Don’t ask me why, I guess the options market makers either drink a lot of Molson or Coors beer, or they figure the rest of the country will do so. I had previously sold a January 2013 $45 strike call on 9/5/2012, also for $2.25, and bought it back on 11/9/2012, for $0.35, for a gross profit of $190.00, achieved in only two months. TAP was trading at $44.70 when the earlier call was sold, and at $41.33 when it was covered. TAP pays a decent but not great dividend of $0.32/share quarterly, yielding slightly under 3% at today’s trading level. While the stock makes the cut, barely, as a dividend payer, it really is only worth owning for the covered call income, at least as far as I’m concerned. Of course, this phenomenon likely is not permanent. If TAP drops again like it did last fall, the relatively generous call prices may not be forthcoming the next time around. On the other hand, it might go up over $50, in which case the options market would be proven smarter than I thought, and obviously, smarter than me. But while I undoubtedly will regret the forgone capital gain on the shares, I won’t cry too much over selling a dividend payer that is only yielding 2.6%, which would be the case at a share price of $50. Stay tuned to this blog for an update on how this second TAP covered call trade works out.
1st Posting Tuesday 12/11/2012 8:00 AM
Stocks went almost nowhere Monday, in a session characterized by low volatility and low volume. All of the major averages did manage to post small gains, however. Overnight, Asian markets posted mixed results, with both gains and losses of minimal size. European markets are showing decent gains at this hour across the board.
Economic releases on tap today are the October Trade Balance and Wholesale Inventories, also for October.
None of my stocks have received any upgrades/downgrades so far today.
I sold my position in Waste Management (WM) yesterday, taking advantage of a three day surge from the $31 to $32 range to over $34. The stock will not be paying another dividend for another three months. I may buy it back if it drops into the low $30 range again. I am in a mode where I’m raising cash, and waiting for better opportunities. Nearly all stocks I follow are over-priced now, some extremely so. The few exceptions, such a Intel (INTC) and MicroSoft (MSFT), have already been bought at attractive levels, with no appetite for more. I’m in a waiting mode.
1st Posting Monday 12/10/2012 8:00 AM
Friday was a pretty good day for the blue chips, as the Dow Industrials and the S & P 500 both posted decent gains. The NASDAQ and the small cap Russell 2000 indices did not fare as well, ending the day with modest declines. Overnight, Asian markets finished mostly with minor gains, except for India, which ended with a small loss. Europe, however, is trading in the red on all bourses, on news that Italy’s Prime Minister is stepping down. U.S. futures, reacting to the news, are negative at this hour, with nearly two hours to go before the opening bell.
Only one upgrade/downgrade on my stocks has come out so far today, as QR Energy LP (QRE) was upgraded from Neutral to Outperform at Credit Suisse.
While none of my stocks are scheduled to report this week, several will be going ex-dividend:
Triangle Capital (TCAP), 12/10/2012, yield 8.46%.
Mercury General (MCY), 12/11/2012, yield 5.71%.
Total S A (TOT), 12/12/2012, yield 5.96%, before 30% withholding. Don’t begrudge the withholding, France really needs the money, so they can retire at 60. Don’t you feel better about it now, just knowing that?
Digital Realty Trust (DLR), 12/12/2012, yield 4.43%. I wrote about DLR a couple of months ago, as I bought it around $65, at the time a big drop from where it had been. It proceeded on down below $60, where I added to my position, but has since recovered to nearly $66.
Greif Inc Class B (GEF.B), 12/12/2012, yield 5.37%. Another stock I wrote about, but sold after a couple of dividends. It was a profitable trade, I may buy it back this week.
Ares Capital (ARCC), 12/12/2012, yield 8.67%.
Fifth Street Finance (FSC), 12/12/2012, yield 10.79%. FSC pays monthly.
Merck, (MRK), 12/13/2012, yield 3.85%.
Dr Pepper Snapple (DPS), 12/13/2012, yield 2.99%.
Potlatch (PCH), 12/13/2012, yield 3.18%.
Ventas (VTR), 12/13/2012, yield 3.80%, which is not too enticing for a REIT.
TICC Capital (TICC), 12/13/2012, yield 11.65%.
Speaking of enticing yields, the BDCs on my Tier3 list, many of which are listed above, sure present some. I own or have owned all of them at one time or another. Just remember, these are leveraged firms investing in mostly second tier businesses, paying out significant portions of earnings. That’s all good, but if another severe downturn hits, it will be rough sailing for these firms and their holders. Owning some of these is OK, just don’t overweight a portfolio with them, be aware of the risk.
Time to get ready for another week.
1st Posting Friday 12/07/2012 9:15 AM
As predicted, Thursday was a dull day in the market, although all the major averages did manage to eke out small gains. Volatility was even lower than usual, with only one TICK reading below a minus 750, and none above a plus 750. Overnight, Asian markets posted mixed results, with Shanghai and Singapore achieving substantial gains, while Japan, Hong Kong, and India posted small declines. European markets are likewise trading mixed at this hour, with Britain, France, and Germany up, Italy and Spain down.
Today we have the first post-election Monthly Payrolls Report, which exceeded expectations on both the total gain in jobs (147K) and the unemployment rate (7.7%). Later on today we will have the latest University of Michigan Sentiment reading, and this afternoon, the latest read on Consumer Credit totals.
Only one stock on my lists has received any new analysts’ ratings today, as McDonalds (MCD) was upgraded from Neutral to Buy at Janney Capital.
My latest article on NuStar Energy (NS), published on Oilprice.com, and then on Seeking Alpha, continues to garner comments, on Seeking Alpha at least. As per the article, NS has been a disappointment as an investment, and is now into the speculative realm, but may yet pan out, if one can stand the stress of owning it through what promises to be a dicey period the next couple of years.
Happy Friday, or TGIF.
1st Posting Thursday 12/06/2012 9:00 AM
Wednesday was an up day for the blue chips, as both the Dow Industrials and the S and P 500 finished with gains, although somewhat off of the highs reached intraday. The NASDAQ and the small cap Russell 2000 indices, on the other hand, posted modest losses.
Overnight, Asian markets posted mixed results, with Japan, India, and Singapore up, Hong Kong and Shanghai down. European markets are mostly trading in the green at this hour, with only Italy showing a decline. U.S. futures are slightly negative.
Economic releases on tap for today are all about jobs – with the latest tally of Job Cuts by Challenger, for November, and the usual Thursday weekly reading on Claims for Unemployment.
Only one upgrade/downgrade has come out so far today on my stocks, as Chevron (CVX) was upgraded from Hold to Buy at Dahlman Rose.
The political stand-off continues to put a damper on the market, as a Santa Claus rally keeps trying to happen. My article on NuStar Energy (NS), initially published on Oilprice.com, is now available on Seeking Alpha. Click on the main menu option Published Articles for a link. I have received several interesting comments.
Time to get ready for another dull day.
1st Posting Wednesday 12/05/2012 8:00 AM
Tuesday was a blah day in the stock market, as expected. Volatility was low, there were no economic releases, the tax/spending stand-off in Washington continued unabated, and stocks ended the uninspiring session with modest declines on all of the major stock averages.
Overnight, Asian markets rallied on renewed optimism regarding China, with Hong Kong and Shanghai up over 2%. European markets are modestly positive at this hour. After an off day yesterday, there are a number of economic releases due out today. The ADP Employment report, a pre-cursor for the monthly Employment Report on Friday, will be out at 8:15 AM. At 8:30, we will have the revised Q3 figures for Productivity and Unit Labor Costs. Then, at 10:00, Factory Orders for October and ISM Services for November will be released. U.S. futures are positive at the moment.
Several upgrades/downgrades on my stocks have come out this morning:
Digital Realty (DLR) was upgraded from Sell to Hold at Cantor Fitzgerald. While not exactly a ringing endorsement, an upgrade nevertheless.
Waste Management (WM) was upgraded from Neutral to Buy at Goldman.
Darden Restaurants (DRI) was downgraded from Buy to Hold at Jeffries. This borderline stock will probably be dropped from my lists after my year-end review. I just cannot see much upside for formula restaurants in this economy.
Intel (INTC) was downgraded from Market Perform to UnderPerform at Raymond James.
I did manage to start a position in Westar Energy (WR) yesterday, picking up shares at $28.48. After trying for two days to buy at $28.45, I raised my bid a whopping three cents and got filled late yesterday afternoon. WR goes ex-dividend today. I would prefer to have paid $27 or less, but I decided to redeploy some cash into a 4.5% or better return stock, as a preferable alternative to a near-zero return on cash.
I wonder if the “fiscal cliff” stand-off will be resolved today? I would have to have some terrific odds before I would consider taking that bet on the “yes” side.
1st Posting Tuesday 12/04/2012 9:00 AM
Stocks experienced a down day on Monday, with all of the major averages posting modest declines. Overnight, Asian markets ended in the green in Hong Kong, Shanghai, and India, and in the red, slightly, in Japan and Singapore. European markets are mostly trading in the green as well, with only Britain showing a small decline. There are no economic releases scheduled for today. U.S. futures are basically flat, as the fiscal cliff concern trumps modestly positive corporate news.
None of my stocks have received any upgrades/downgrades today, so far at least.
I tried to buy Westar (WR) yesterday, below $28.50. No go. I will try again today. WR goes ex-dividend tomorrow. Another stock I am watching is NuStar Energy (NS). After recovering somewhat following a management presentation last Thursday, it appears to have stalled out at the mid-$40 level.
Today may be a dull day.
1st Posting Monday 12/03/2012 9:00 AM
Stocks ended the day Friday very close to where they began, as the Dow Industrials and the New York Composite indices finished slightly up, the S & P 500 ended flat, and the NASDAQ and the Russell 2000 indices finished slightly down. Volatility was very low.
Overnight, of the Asian markets, only Japan managed a gain. Hong Kong and Shanghai were both down over 1%. European markets, however, are all trading in the green at this hour. U.S. futures are positive. Economic releases on tap are the ISM Index and Construction Spending, both to come out at 10:00 AM.
Several stocks on my lists received upgrades/downgrades this morning:
Frontier Communications (FTR) was downgraded from Neutral to UnderPerform at Macquarie. Hard to see how it could underperform from here, but FTR probably will find a way.
Verizon (VZ) was upgraded from Neutral to Buy at Nomura.
AT&T (T) was initiated at equal weight at Evercore.
Royal Dutch Shell (RDS.B) was downgraded from Buy to Hold at Deutsche Bank.
Total SA (TOT) was upgraded from Hold to Buy at Deutsche Bank.
Stocks on my lists going ex-dividend this week are:
Kimberly Clark (KMB), 12/5/2012, yield 3.45%.
Public Service Enterprise Group (PEG), 12/5/2012, yield 4.72%.
Pepsico (PEP), 12/5/2012, yield 3.06%.
Westar Energy, 12/5/2012, yield 4.60%.
Frontier Communications (FTR), 12/5/2012, yield 8.32%.
SCANA (SCG), 12/6/2012, yield 4.27%.
Reynolds American (RAI), 12/6/2012, yield 5.40%.
Heinz H J Co (HNZ), 12/7/2012, yield 3.52%.
Centurylink (CTL), 12/7/2012, yield 7.47%.
None of my stocks are scheduled to release earnings this week.
As an aside, note that I have published my first article on a site other than Seeking Alpha. The article was on NuStar Energy (NS), and was published last week on Oilprice.com, a website devoted to happenings in the energy industry. A link is provided under the SA Articles selection from my home page. If I expand my writing to other venues besides Seeking Alpha, I will re-title the selection.
One month to go in 2012. The big issue is the “fiscal cliff”. Will we or won’t we go over it? Time will tell.