Key Market Reports and Commentary for Friday 30/05/2014

Morning Markets Report
Prepared on Friday, May 30, 2014

Copyright 2014 INO.com. All Rights Reserved.

Summary
The Dow Future is falling 3 points to 16678. The US Dollar Index slipped 0.061 points to 80.439. Gold is dropping 5.415 dollars to 1252.830. Silver is lower 0.0350 dollars to 19.0100. The Dow Industrials climbed 65.56 points, at 16698.74, while the S&P 500 rose 10.25 points, last seen at 1920.03. The Nasdaq Composite moved higher by 20.77 points to 4245.84. Streaming charts of these markets are available 24/7 at MarketClub

Blog Postings and Videos
Candlestick Patterns – Kicking
Thursday May 29th

Charts Point To Another 5%-7% Advance Before A Correction
Wednesday May 28th

Chart of The Week – Gold
Tuesday May 27th

Key Events for Friday

8:30 AM ET. U.S. Weekly Export Sales

Corn, In Metric Tons (previous 1001.8K)

Soybeans, In Metric Tons (previous 120K)

Wheat, In Metric Tons (previous 610.8K)

8:30 AM ET. April Personal Income & Outlays

Personal Income (previous +0.5%)

Personal Spending (previous +0.9%)

PCE Price Index Monthly (previous +0.2%)

PCE Price Index Yearly (previous +1.1%)

PCE Core Price Index Monthly (previous +0.2%)

PCE Core Price Index Yearly (previous +1.2%)

9:45 AM ET. May ISM-Chicago Business Survey – Chicago PMI

Employment Index (previous 57.8)

New Orders Index (previous 68.7)

Prices Paid Index (previous 55.2)

Purchasing Managers Index (Adjusted) (previous 63)

Supplier Deliveries Index (previous 50.6)

9:55 AM ET. May Thomson Reuters / University of Michigan Survey of Consumers – final

Sentiment Index End month (previous 84.1)

Expectations Index End Month (previous 74.7)

12-Month Inflation Forecast (previous 3.2%)

5-Year Inflation Forecast (previous 2.9%)

Value (Current Period) End Month (previous 98.7)

3:00 PM ET. May Agricultural Prices

Farm Prices, M/M (previous +3.6%)


 

Currencies Snapshot
Symbol Last Change %
US DOLLAR INDEX 80.439 -0.061 -0.08%
POWERSHARES DB US DOLLAR INDEX 21.5200 -0.0100 -0.05%
US Dollar/Canadian Dollar 1.082350 -0.001325 -0.12%
Euro/US Dollar 1.361100 +0.000745 +0.05%
JAPANESE YEN Jun 2014 0.009838 +0.000008 +0.08%
SWISS FRANC Jun 2014 1.1154 +0.0013 +0.12%

CURRENCIES

The June Dollar postged an inside day with a lower close on Thursday as it consolidates some of this month’s rally. The high-range close sets the stage for a steady to higher opening when Friday’s night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off May’s low, April’s high crossing at 80.77. Closes below the 20-day moving average crossing at 79.97 would confirm that a short-term top has been posted. First resistance is Wednesday’s high crossing at 80.63. Second resistance is April’s high crossing at 80.77. First support is the 10-day moving average crossing at 80.27. Second support is the 20-day moving average crossing at 79.97.

The June Euro closed higher due to short covering on Thursday as it consolidates some of the decline off May’s high. The mid-range close sets the stage for a steady opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remains neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends the aforementioned decline, the 38% retracement level of the 2013-2014-rally crossing at 135.45 is the next downside target. Closes above the 20-day moving average crossing at 137.40 would confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 136.60. Second resistance is the 20-day moving average crossing at 137.40. First support is Wednesday’s low crossing at 135.89. Second support is the 38% retracement level of the 2013-2014-rally crossing at 135.45.

The June British Pound closed slightly higher on Thursday as it consolidated some of Wednesday’s decline but remains below the November-February uptrend line thereby confirming that the short-term trend has turned bearish. The mid-range close sets the stage for a steady opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends this month’s decline, the reaction low crossing at 1.6640 is the next downside target. Closes above the 20-day moving average crossing at 1.6842 would temper the near-term bearish outlook. First resistance is the 20-day moving average crossing at 1.6842. Second resistance is May’s high crossing at 1.6992. First support is the reaction low crossing at 1.6640. Second support is the reaction low crossing at 1.6545.

The June Swiss Franc closed slightly higher on Thursday. The low-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near-term. If June extends this month’s decline, the 75% retracement level of the January-March-rally crossing at 1.1086 is the next downside target. Closes above the 20-day moving average crossing at 1.1263 would confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 1.1263 . Second resistance is May’s high crossing at .11493. First support is Wednesday’s low crossing at 1.1124. Second support is the 75% retracement level of the January-March-rally crossing at 1.1086.

The June Canadian Dollar closed higher on Thursday. The high-range close sets the stage for a steady to higher opening when Friday’s night session begins trading. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If June renews this spring’s rally, the 38% retracement level of the 2013-2014-decline crossing at 92.96 is the next upside target. Closes below the 20-day moving average crossing at 91.74 would confirm that a short-term top has been posted. First resistance is the reaction high crossing at 92.40. Second resistance is the 38% retracement level of the 2013-2014-decline crossing at 92.96. First support is the 20-day moving average crossing at 91.74. Second support is April’s low crossing at 88.45.

The June Japanese Yen closed slightly higher on Thursday. Today’s low-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If June renews this month’s rally, February’s high crossing at .9930 is the next upside target. If June resumes this week’s decline, the reaction low crossing at .9771 is the next downside target. First resistance is last week’s high crossing at .9920. Second resistance is February’s high crossing at .9930. First support is the reaction low crossing at .9771. Second support is May’s low crossing at .9687.


 

Energy Snapshot
Symbol Last Change %
CRUDE OIL Jul 2014 103.11 -0.47 -0.45%
NY HARBOR ULSD HEATING OIL Jul 2014 2.9101 -0.0098 -0.34%
NATURAL GAS Jul 2014 4.563 +0.004 +0.09%
RBOB GASOLINE Jul 2014 2.9834 -0.0124 -0.41%
POWERSHARES DWA ENERGY MOMENT 60.07 0.00 0.00%
UNITED STATES GASOLINE 61.44 +0.17 +0.28%

ENERGIES

July crude oil closed higher on Thursday. The high-range close sets the stage for a steady to higher opening when Friday’s night session begins. Stochastics and the RSI are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 101.32 are needed to confirm that a short-term top has been posted. If July extends this month’s rally, weekly resistance crossing at 105.22 is the next upside target. First resistance is Tuesday’s high crossing at 104.50. Second resistance is weekly resistance crossing at 105.22. First support is the 10-day moving average crossing at 102.98. Second support is the 20-day moving average crossing at 101.32.

July heating oil closed lower on Thursday and below the 20-day moving average crossing at 292.95 confirming that a short-term top has been posted. The low-range close sets the stage for a steady to lower opening when Friday’s night trading begins. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If July extends this week’s decline, May’s low crossing at 288.19 is the next downside target. If July renews the rally off May’s low, April’s high crossing at 300.98 is the next upside target. First resistance is Tuesday’s high crossing at 296.81. Second resistance is April’s high crossing at 300.98. First support is today’s low crossing at 291.82. Second support is May’s low crossing at 288.19.

July unleaded gas closed higher on Thursday. The mid-range close sets the stage for a steady to higher opening when Friday’s night session begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a double top with April’s high might be forming. Closes below the 20-day moving average crossing at 293.73 would confirm that a short-term top has been posted. If July extends this week’s rally, April’s high crosing at 301.72 is the next upside target. First resistance is today’s high crossing at 301.65. Second resistance is April’s high crossing at 301.72. First support is the 10-day moving average crossing at 296.43. Second support is the 20-day moving average crossing at 293.73.

July Henry natural gas closed lower on Thursday but remains above the 20-day moving average crossing at 4.545 confirming that a short-term low has been posted. Today’s low-range close sets the stage for a steady to lower opening when Friday’s session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If July extends this week’s rally, May’s high crossing at 4.844 is the next upside target. If July resumes this month’s decline, the 50% retracement level of the November-February rally crossing at 4.251 is the next downside target. First resistance is today’s high crossing at 4.665. Second resistance is May’s high crossing at 4.844. First support is the 50% retracement level of the November-February rally crossing at 4.251. Second support is the 62% retracement level of the November-February rally crossing at 4.092.


 

Food Snapshot
Symbol Last Change %
COCOA Jul 2014 3070 +24 +0.79%
COFFEE Jul 2014 177.20 -4.75 -2.62%
ORANGE JUICE-A Jul 2014 156.10 -1.45 -0.93%
IPATH DJ-UBS SUGAR TRUST 54.5500 +0.5799 +1.04%
IPATH DJ-UBS SOFTS TRUST 51.1499 -0.2625 -0.51%

FOOD & FIBER

July coffee closed higher due to short covering on Thursday. The high-range close set the stage for a steady to higher opening on Friday. Stochastics and the RSI are oversold but are turning neutral to bullish signaling that a low might be in or is near. Closes above the 20-day moving average crossing at 18.94 would confirm that a short-term low has been posted. If July extends this month’s decline, the 50% retracement level of this winter’s rally crossing at 16.82 is the next downside target.

July cocoa closed higher on Thursday as it extends this month’s rally. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If July extends this month’s rally, weekly resistance crossing at 30.89 is the next upside target. Close below the 20-day moving average crossing at 29.41 are needed to confirm that a top has been posted.

July sugar closed sharply higher due to short covering on Thursday as it consolidates some of this week’s decline. The high-range close set the stage for a steady to higher opening on Friday. Stochastics and the RSI are oversold but are turning neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the 10-day moving average crossing at 17.53 would confirm that a short-term top has been posted. If July extends month’s decline, the 62% retracement level of the January-March-rally crossing at 16.51 is the next downside target.

July cotton closed higher due to short covering on Thursday as it consolidates some of this month’s decline. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If July extends this month’s decline, the 75% retracement level of the November-March-rally crossing at 82.52 is the next downside target. Closes above the 20-day moving average crossing at 90.29 would confirm that a short-term low has been posted.


 

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Grains Snapshot
Symbol Last Change %
CORN Jul 2014 469.25 -0.25 -0.05%
OATS Jul 2014 368.00 +6.50 +1.80%
WHEAT Jul 2014 630.5 -2.0 -0.32%
TEUCRIUM CORN 31.96 -0.43 -1.35%
IPATH DJ-UBS GRAINS TRUST 48.2099 -0.0601 -0.13%
ELEMENTS MLCX GRAINS INDEX TRUST 6.28 +0.02 +0.32%
SOYBEANS Jul 2014 1498.0 -1.0 -0.07%
SOYBEAN (MINI) Nov 2014 1242.250 -2.000 -0.16%
SOYBEAN MEAL Jul 2014 499.5 +1.1 +0.22%
TEUCRIUM SOYBEAN 25.7100 -0.6100 -2.37%

GRAINS

July Corn closed down 3-cents at 4.69 1/2.

July corn closed lower on Thursday and below the 50% retracement level of this year’s rally crossing at 4.73 1/2. Today’s mid-range close sets the stage for a steady opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If July extends this week’s decline, the 62% retracement level of this year’s rally crossing at 4.47 3/4 is the next downside target. Closes above the 20-day moving average crossing at 4.91 1/4 would confirm that a low has been posted. First resistance is the 10-day moving average crossing at 4.76. Second resistance is the 20-day moving average crossing at 4.91 1/4. First support is Wednesday’s low crossing at 4.66 1/2. Second support is the 62% retracement level of this year’s rally crossing at 4.47 3/4.

July wheat closed down 6 1/4-cents at 6.32 1/2.

July wheat closed lower on Thursday as it extended this month’s decline. The low-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible. If July extends this month’s decline, the 62% retracement level of this year’s rally crossing at 6.28 1/2 is the next downside target. Closes above the 20-day moving average crossing at 6.89 1/4 would confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 6.58 1/2. Second resistance is the 20-day moving average crossing at 6.32 1/2. First support is today’s low crossing at 6.29 3/4. Second support is the 62% retracement level of this year’s rally crossing at 6.28 1/2.

July Kansas City Wheat closed down 5 1/4-cents at 7.30 1/2.

July Kansas City wheat closed lower on Thursday as it extended this month’s decline. Today’s low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If July extends this week’s decline, April’s low crossing at 7.26 is the next downside target. Closes above the 10-day moving average crossing at 7.54 1/2 would confirm that a low has been posted. First resistance is the 10-day moving average crossing at 7.54 1/2. Second resistance is the 20-day moving average crossing at 7.90 3/4. First support is today’s low crossing at 7.30 1/2. Second support is April’s low crossing at 7.26.

July Minneapolis wheat closed down 3 1/2-cents at 7.14 1/2.

July Minneapolis wheat close lower on Thursday as it extends this month’s decline. The low-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If July extends this month’s decline, the 62% retracement level of this year’s rally crossing at 6.83 3/4 is the next downside target. Closes above the 20-day moving average crossing at 7.61 are needed to confirm that a low has been posted. First resistance is the 10-day moving average crossing at 7.31 3/4. Second resistance is the 20-day moving average crossing at 7.61. First support is Wednesday’s low crossing at 7.10 1/2. Second support is the 62% retracement level of this year’s rally crossing at 6.83 3/4.

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July soybeans closed up 1 1/4-cents at 14.99.

July soybeans closed higher on Thursday. The mid-range close sets the stage for a steady to higher opening when Friday’s night session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 14.80 1/4 would confirm that a short-term top has been posted. If July renews this year’s rally, weekly resistance crossing at 15.61 is the next upside target. First resistance is last Thursday’s high crossing at 15.36 3/4. Second resistance is weekly resistance crossing at 15.61. First support is the 20-day moving average crossing at 14.80 1/4. Second support is the reaction low crossing at 14.56 1/4.

July soybean meal closed down $0.10 at 498.40.

July soybean meal closed slightly lower on Thursday. The low-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are neutral to bearish signaling that a short-term top might be in or is near. Multiple closes below the 20-day moving average cossing at 486.90 would confirm that a short-term top has been posted. If July renews this year’s rally, weekly resistance crossing at 527.70 is the next upside target. First resistance is last Thursday’s high crossing at 508.00. Second resistance is weekly resistance crossing at 527.70. First support is the 20-day moving average cossing at 486.90. Second support is the reaction low crossing at 471.00.

July soybean oil closed down 22-pts. At 39.41.

July soybean oil closed lower on Thursday as it extends the decline off April’s high. The low-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If July extends the decline off April’s high, the 87% retracement level of this winter’s rally crossing at 38.46 is the next downside target. Closes above the 20-day moving average crossing at 40.73 would confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 40.73. Second resistance is the reaction high crossing at 40.33. First support is today’s low crossing at 39.28. Second support is the 87% retracement level of this winter’s rally crossing at 38.46.


 

Indexes Snapshot
Symbol Last Change %
DJ 30 INDUSTRIALS 16698.74 +65.56 +0.39%
NASDAQ COMPOSITE INDEX (COMBINED) 4245.84 +20.77 +0.49%
S&P 500 CASH 1920.03 +10.25 +0.53%
SPDR S&P 500 192.32 +0.94 +0.49%
QQQQ VOLATILITY INDEX 3.28 +0.42 +12.88%
iShares RUSSELL 2000 INDEX 113.29 +0.30 +0.26%

U.S. STOCK INDEXES

The June NASDAQ 100 closed higher on Thursday as it extends this month’s rally. Today’s high-range close sets the stage for a steady to higher opening when Friday’s night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off April’s low, March’s high crossing at 3733.25 is the next upside target. Closes below the 20-day moving average crossing at 3611.22 are needed to confirm that a short-term top has been posted. First resistance is Wednesday’s high crossing at 3730.25. Second resistance is March’s high crossing at 3733.25. First support is the 10-day moving average crossing at 3647.82. Second support is the 20-day moving average crossing at 3611.22.

The June S&P 500 posted a new all-time high on Thursday as it extends this month’s rally. The high-range close sets the stage for a steady to higher opening when Friday’s night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this year’s rally into uncharted territory, upside targets will be hard to project. First resistance is today’s high crossing at 1915.80. Second resistance is unknown. First support is the 20-day moving average crossing at 1884.15. Second support is the reaction low crossing at 1855.00.

The Dow closed higher on Thursday as it extends this week’s rally. The high-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If the Dow renews this year’s rally, upside targets will be hard to project. Closes below the reaction low crossing at 16,341.30 are needed to confirm that a short-term top has been posted. First resistance the reaction high crossing at 16,735.51. Second resistance is unknown. First support is the reaction low crossing at 16,341.30. Second support is April’s low crossing at 16,015.32.


 

Interest Snapshot
Symbol Last Change %
T-BONDS Sep 2014 137.34375 -0.34375 -0.25%
iShares FLOATING RATE NOTE 50.73 +0.02 +0.04%
5 YEAR T-NOTES Sep 2014 119.687500 -0.125000 -0.10%
ULTRA T-BONDS Sep 2014 149.87500 -0.59375 -0.40%
POWERSHARES SENIOR LOAN PORTF 24.78 -0.03 -0.12%

INTEREST RATES

June T-bonds closed down 15/32’s at 138-06.

June T-bonds closed lower due to profit taking on Thursday. The low-range close sets the stage for a steady to lower opening when Friday’s night trading begins. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this year’s rally, weekly resistance crossing at 140-16 is the next upside target. Closes below the 20-day moving average crossing at 136-22 would confirm that a short-term top has been posted. First resistance is today’s high crossing at 139-03. Second resistance is weekly resistance crossing at 140-16. First support is the 20-day moving average crossing at 136-22. Second support is the reaction low crossing at 136-06.


 

Livestock Snapshot
Symbol Last Change %
FEEDER CATTLE Aug 2014 197.425 +0.375 +0.19%
LEAN HOGS Jul 2014 120.650 +0.050 +0.04%
LIVE CATTLE Aug 2014 139.500 +0.325 +0.23%
IPATH DJ-UBS LIVESTOCK TRUST SUB 30.7600 +0.2400 +0.78%

LIVESTOCK

July hogs closed down $0.68 at $120.60.

July hogs closed lower on Thursday as it extended this month’s decline. The mid-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If July extends the decline off April’s high, the 25% retracement level of the 2013-2014-rally crossing at 118.10 is the next downside target. Closes above the 10-day moving average crossing at 124.26 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 124.26. Second resistance is the reaction high crossing at 128.30. First support is the 25% retracement level of the 2013-2014-rally crossing at 118.10. Second support is April’s low crossing at 114.65.

August cattle closed up $2.07 at 139.17.

August cattle gapped up and closed above the 10-day moving average crossing at 138.52 on Thursday confirming that a low has been posted. The high-range close sets the stage for a steady to higher opening when Friday’s session begins trading. Stochastics and the RSI are oversold but are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If August renews this week’s decline, the 38% retracement level of the 2013-2014-rally crossing at 134.65 is the next downside target. First resistance is today’s high crossing at 139.55. Second resistance is May’s high crossing at 140.82. First support is the 25% retracement level of the 2013-2014-rally crossing at 136.81. Second support is the 38% retracement level of the 2013-2014-rally crossing at 134.65.

August feeder cattle closed up $1.48 at $197.05.

August Feeder cattle gapped up and closed higher on Thursday posting a new high for the year. The low-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. If August extends this year’s rally into uncharted territory, upside targets will be hard to project. Closes below the 20-day moving average crossing at 192.94 would confirm that a short-term top has been posted. First resistance is today’s high crossing at 197.77. Second resistance is unknown. First support is the 20-day moving average crossing at 192.94. Second support is the May 2nd gap crossing at 187.75.


 

Metals Snapshot
Symbol Last Change %
GOLD Aug 2014 1253.2 -3.9 -0.31%
SPDR GOLD SHARES 120.951 -0.249 -0.21%
SILVER Jul 2014 18.965 -0.049 -0.26%
PALLADIUM Sep 2014 833.50 -1.00 -0.12%
DIREXION DAILY GOLD MINERS BEA 29.40 -0.65 -2.21%
POWERSHARES DB PRECIOUS METALS 40.2600 -0.0600 -0.15%

PRECIOUS METALS

June gold closed lower on Thursday as it extends this week’s decline. The low-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends the decline off March’s high, the 75% retracement level of the January-March-rally crossing at 1237.80 is the next downside target. Closes above the 20-day moving average crossing at 1289.70 would confirm that a low has been posted. First resistance is the 20-day moving average crossing at 1289.70. Second resistance is the reaction high crossing at 1306.60. First support is the 75% retracement level of the January-March-rally crossing at 1237.80. Second support is the 87% retracement level of the January-March-rally crossing at 1213.00.

July silver closed lower on Thursday. The high-range close set the stage for a steady to higher opening when Friday’s night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If July extends this week’s decline, May’s low crossing at 18.685 is the next downside target. Closes above the reaction high crossing at 19.825 are needed to confirm that a low has been posted. First resistance is the reaction high crossing at 19.825. Second resistance is May’s high crossing at 20.005. First support is today’s low crossing at 18.780. Second support is May’s low crossing at 18.685.

July copper closed lower on Thursday. The low-range close sets the stage for a steady to lower opening when Friday’s night session begins trading. Stochastics and the RSI are overbought but are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 311.79 would confirm that a short-term top has been posted. If July extends this spring’s rally, the 62% retracement level of the January-March decline crossing at 319.64 is the next upside target. First resistance is Tuesday’s high crossing at 319.25. Second resistance is the 62% retracement level of the December-March-decline crossing at 320.90. First support is the 20-day moving average crossing at 311.79. Second support is the reaction low crossing at 301.55.


 

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3. ED.U17 EURODOLLAR Sep 2017 97.530 -0.015 -0.02% 86,991 +100    Entry Signal
4. GE.M16.E EURODOLLAR Jun 2016 98.610 -0.035 -0.04% 46,440 +100    Entry Signal
5. GE.U15.E EURODOLLAR Sep 2015 99.335 -0.015 -0.02% 41,492 +100    Entry Signal
6. ZF.M14.E 5 YEAR T-NOTES Jun 2014 120.429688 -0.117188 -0.10% 25,502 +100    Entry Signal
7. 6A.M14.E AUSTRALIAN $ Jun 2014 0.9299 +0.0020 +0.22% 23,856 +100    Entry Signal
8. 6C.M14.E CANADIAN $ Jun 2014 0.9233 +0.0012 +0.13% 10,807 +100    Entry Signal
9. CC.N14.E COCOA Jul 2014 3070 +24 +0.79% 3,201 +100    Entry Signal
10. CC.U14.E COCOA Sep 2014 3063 +16 +0.52% 2,070 +100    Entry Signal
Annunci

Say What? – 05/30/2014

Say What?

Yes you heard correctly. GDP actually fell -1% in Q1 and yet investors responded to that news by running stocks to new highs at 1920.

The reason it was so easily dismissed is because the market is forward looking. So this is discarded as “old news” . Looking ahead investors expect a +3% showing for GDP in Q2. So that is why the bull continues its stampede.

The chartists in house are saying there is an important Fibonacci extension level at 1921 that will serve as stubborn resistance. That may create a temporary pause, but the long term bull market is in place til proven otherwise. So best saddle up and ride it out.

Best,

Steve Reitmeister ( aka Reity…pronounced “Righty” )

Executive Vice President

Zacks Investment Research

ADVFN – Report dei mercati 30/05/2014

MERCATO USA

Borsa Usa: indici chiudono in rialzo, nuovo record per l’S&P500

A New York i principali indici hanno chiuso la seduta in rialzo. Il Dow Jones ha guadagnato lo 0,39%, l’S&P500 lo 0,54% e il Nasdaq Composite lo 0,54%. Il Pil nel primo trimestre è calato più delle attese (-1% contro il -0,5% stimato) mentre le richieste di sussidi di disoccupazione settimanali si sono attestate a 300 mila unità (-27 mila rispetto al dato precedente). Gli economisti avevano previsto 318 mila unità. Sul fronte societario Hillshire Brands +17,73%. Tyson Foods ha lanciato una offerta di acquisto sul gruppo alimentare per 6,8 miliardi di dollari.

Abercrombie & Fitch +5,75%. Il gruppo di abbigliamento chiuso il primo trimestre con una perdita di 23,7 milioni di dollari, in crescita rispetto ai 7,2 milioni dello stesso periodo di un anno prima. I ricavi sono diminuiti del 2% a 822 milioni mentre la perdita per azione adjusted si è attestata a 0,17 dollari. Gli analisti avevano previsto una perdita per azione di 0,18 dollari su ricavi per 797,7 milioni. T-Mobile US +1,34%. Secondo l’agenzia Kyodo, Deutsche Telekom avrebbe accettato l’offerta della giapponese Softbank per l’acquisto dell’operatore mobile statunitense. Twitter +0,68%. Cantor Fitzgerald ha alzato il rating sul titolo del social media a buy da hold.

Apple +1,82%. Il gruppo di Cupertino ha annunciato un accordo per l’acquisto del colosso della musica in streaming Beats Music e di Beats Electronics, che produce le cuffie e i diffusori del noto marchio per 3 miliardi di dollari.

Costco Wholesale -0,09%. La catena americana di ipermercati all’ingrosso ha chiuso il terzo trimestre fiscale con un utile di 473 milioni di dollari (1,07 dollari per azione), in crescita del 3% rispetto allo stesso periodo di un anno prima. I ricavi sono aumentati del 7% a 25,79 miliardi. Gli analisti avevano previsto un Eps di 1,09 dollari su ricavi per 25,75 miliardi. BlackBerry +6,17%. Il Ceo John Chen ha detto che la societa’ ha l’80% di possibilita’ di riprendersi.

MERCATI ASIATICI

Tokyo in calo ma il saldo mensile è positivo

La borsa giapponese ha chiuso l’ottava con il segno negativo dopo 4 sedute consecutive di rialzo. Il Nikkei ha archiviato le contrattazioni in calo dello 0,34% portando comunque a casa un risultato positivo su base mensile per la prima volta da inizio anno. La giornata è stata caratterizzata dalla comunicazione di molti dati macro e non tutti certamente positivi.La produzione industriale del Sol Levante è scivolata più delle attese come effetto dell’incremento dal 5 all’8% della tassazione sui consumi in vigore dal 1° aprile. Nel mese di aprile, mostrano i dati del ministero giapponese di Economia, Commercio e Industria, la produzione industriale ha registrato una flessione del 2,5% contro il 2% stimato dagli economisti, facendo calare al 4,1% il progresso su base annuale (4,5% il consensus) dal 7,4% di marzo. Un sondaggio tra i produttori, però, mostra una revisione al rialzo da +0,1% a +1,7% per le stime di crescita del mese in corso.

In aprile la spesa delle famiglie è crollata del 4,6% (contro attese per una flessione del 3,4%) su base annuale dopo il balzo del 7,2% segnato in marzo, maggiore crescita dal 1975, sul dal rincaro delle tasse in vigore dal 1° aprile.
Il ministero nipponico di Affari Interni e Comunicazioni ha reso noto il dato relativo all’inflazione core, al netto dei cibi freschi, che ha segnato un incremento del 3,2% su base annua dall’1,3% di marzo e contro un consensus del 3,1%. Su base mensile il core Cpi è salito del 2,2% e l’inflazione complessiva del 2,1%. Il tasso di disoccupazione è rimasto costante al 3,6% ad aprile per il terzo mese consecutivo e in linea con le attese degli economisti, mentre la produzione di auto, camion e bus in Giappone è cresciuta del 3,4% (dopo il 14% segnato in marzo), ottavo mese consecutivo di progresso, secondo quanto comunicato dalla Japan Automobile Manufacturers Association. In aprile la produzione è salita a 770.484 veicoli da 745.320 dello stesso mese del 2013.

La domanda domestica di vetture è invece come previsto crollata del 5,5% a 345.226 unità dopo il rimbalzo del 17,4% in marzo sull’entrata in vigore dell’aumento della tassa sui consumi dal 1° aprile. Infine da segnalare le dichiarazioni del FMI secondo il quale la Bank of Japan potrebbe essere costretta a proseguire con l’attuale passo di stimoli monetari per permettere al premier Shinzo Abe di completare il suo piano di rilancio dell’economia. Per quanto concerne gli altri indici azionari asiatici leggero rialzo per Shanghai e Hong Kong mentre Seul ha ceduto lo 0,86%.


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MERCATI EUROPEI

Borse europee negative, male Bnp Paribas

Le principali Borse europee hanno aperto l’ultima seduta dell’ottava in ribasso. Il Cac40 di Parigi cede lo 0,5%, il Ftse100 di Londra lo 0,05% e l’Ibex35 di Madrid lo 0,08%. Sulla parità il Dax30 di Francoforte.

Numericable +1,8%. Exane ha alzato il rating sul titolo dell’operatore via cavo a outperform da neutral.
Bnp Paribas -5%. La banca francese rischia una multa di oltre 10 miliardi di dollari dalle autorità Usa per non aver rispettato sanzioni contro l’Iran e altri Paesi.

Siemens +0,4%. Secondo  Bloomberg, il conglomerato tedesco potrebbe tagliare 11.600 posti di lavoro con l’obiettivo di risparmiare 1 miliardo di euro.
Gdf Suez +0,4%. L’utility ha annunciato un accordo per l’acquisto dell’americana Ecova. Ubs ha confermato il rating buy sul titolo.

APERTURA MERCATO ITALIANO

Borsa italiana in verde, Ftse Mib +0,20%. Bene il gruppo Benetton, deboli Telecom e Unicredit

Il Ftse Mib segna +0,20%, il Ftse Italia All-Share +0,16%, il Ftse Italia Mid Cap +0,03%, il Ftse Italia Star +0,06%.

Borse europee deboli in avvio. Ieri sera a Wall Street l’S&P 500 ha chiuso a +0,54%, il Nasdaq Composite a +0,54% e il Dow Jones Industrial a +0,39%. I future sui principali indici USA al momento sono in ribasso dello 0,1% circa. A Tokyo il Nikkei 225 ha terminato a -0,34%, mentre a Hong Kong l’Hang Seng attualmente segna +0,4% circa.

Avvio di seduta positivo per i titoli della galassia Benetton: le migliori performance tra le blue chip sono infatti quelle di Autogrill (+1,7%), WDF (+0,4%) e Atlantia (+1,5% a 20,39 euro): su quest’ultima Jp Morgan ha alzato il target price da 23 a 24 euro.

Buona performance per Safilo Group (+2,2%): gli analisti di Banca Imi hanno promosso il titolo ad add (incrementare) da hold (mantenere). Martedì scorso  Moody’s ha comunicato di aver alzato il rating sul debito a lungo termine di Safilo da ‘B2’ a ‘B1’ (con outlook positivo), sulla base del minor rischio di rifinanziamento, conseguente al recente lancio di un prestito obbligazionario, e della stabile performance operativa registrata dalla Società.

Poco mossa Acea (-0,1%) dopo che Fitch Ratings ha migliorato l’outlook del rating dell’utility romana da Negativo a Stabile confermando il rating a BBB+. La decisione è stata motivata con: (i) la positiva evoluzione del quadro regolatorio idrico; (ii) i risultati conseguiti dalla Società negli ultimi dodici mesi; (iii) la maggiore visibilità, a lungo termine, sull’evoluzione dei business, sulla politica dei dividendi e sugli obiettivi finanziari del Gruppo, in seguito all’approvazione del Piano Strategico 2014-2018.

Debole Telecom Italia (-1,5% a 0,90 euro) con UBS che alza il target price a 0,55 euro ma conferma la raccomandazione di vendita. Marco Fossati, socio tramite Findim di Telecom Italia, in un’intervista ha parlato di un’eventuale fusione per incorporazione con Gvt, secondo operatore brasiliano della banda larga, che è complementare a Tim Brasil nelle offerte di contenuti.

Unicredit (-0,5%) sotto la parità in scia alla decisione di Moody’s di rivede l’outlook sul rating di Piazza Cordusio da stabile a negativo alla luce del nuovo quadro regolamentare relativo alla risoluzione delle crisi bancarie europee.


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Analisi e Segnali di Borsa quotidiani dai professionisti della finanza.

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TITOLI DEL GIORNO

BP Milano grazie alla accelerazione rialzista vista dal 26 maggio si è riportato nella parte alta della fase laterale disegnata dai prezzi dal top di aprile, resistenza in area 0,69. La rottura di questa soglia fornirebbe un importante segnale rialzista per obiettivi a 0,80 e 0,86: le oscillazioni viste nelle ultime settimane si dimostrerebbero un “rettangolo”, figura di continuazione della precedente fase rialzista disegnata dai minimi di febbraio. Caratteristica del rettangolo e’ quella di proiettare un obiettivo per il trend proporzionale alla sua ampiezza proiettata dal punto di rottura, nel caso specifico quindi posto a 0,86 euro circa. Sotto 0,6010, base del gap del 26 maggio, atteso invece il test della parte bassa della fase laterale, in area 0,53, dove passa anche la media a 100 giorni. La violazione di 0,53 sarebbe un pesante segnale ribassista.
Per chi volesse comprare il titolo attendere quindi la rottura di 0,69 per intervenire con target a 0,86 e stop loss sotto 0,65.
Per chi gia’ detiene il titolo mantenere le posizioni con stop sotto 0,60, incrementare oltre 0,69 per 0,86.

Movimenti laterali per Eni che consolida il rally partito la settimana scorsa e attende lo spunto per attaccare le resistenze a 19,00/19,10 euro. Al di sopra di questi riferimenti si creerebbero le condizioni per un allungo verso il massimo di inizio 2013 a 19,59, ostacolo di importanza strategica nel lungo periodo dato che in caso di superamento dello stesso il titolo potrebbe lasciarsi alle spalle la lunga fase laterale in cui si trova da fine 2008, con primo obiettivo su un vecchio supporto in area 20,70 e successivo a 22,50 circa. Eventuali discese sotto 18,30 preannuncerebbero invece un test di 17,80/17,90, sostegno determinante per scongiurare approfondimenti sui 17,00/17,10.
Per chi volesse acquistare il titolo: posizioni long oltre 19,10 per 19,59, stop sotto 18,65.
Per chi detiene attualmente il titolo: incrementare oltre 19,59 per 20,70 e 22,50, ridurre sotto 17,80 e uscire alla violazione di 17,00.

Mediaset nelle ultime dieci sedute ha messo a segno un cospicuo rimbalzo grazie al quale le quotazioni si sono portate a contatto con le resistenze posizionate tre 3,63 e 3,66 euro. Si tratta quindi del momento decisivo per verificare la significatività del recente recupero: se i prezzi venissero respinti dagli ostacoli citati sotto 3,34 si sarebbe trattato di un rimbalzo tecnico, una semplice correzione in attesa della ripresa della flessione. Conferme in tal senso arriverebbero con la violazione del minimo di metà mese a 3,1240, prologo a un test dell’importante supporto a 2,8540 (bottom di dicembre). Una vittoria confermata in chiusura di seduta oltre 3,66 favorirebbe un allungo sui 4,07, riferimento oltre il quale verrebbe invertita la tendenza negativa di breve termine con successivo ritorno sul massimo annuale a 4,4460.
Per chi volesse acquistare il titolo: posizioni long oltre 3,66 per 4,07, stop sotto 3,55.
Per chi detiene attualmente il titolo: incrementare oltre 4,07 per 4,4460, ridurre sotto 3,1240 e uscire alla violazione di 2,8540.

DATI MACRO ATTESI

Venerdì 30 maggio 2014
01:30 GIA Consumi apr;
01:30 GIA Inflazione apr;
01:30 GIA Tasso di disoccupazione apr;
01:50 GIA Produzione industriale (prelim.) apr;
08:00 GER Vendite al dettaglio;
09:00 SPA Inflazione (prelim.) mag;
10:00 ITA Indice prezzi alla produzione apr;
10:30 ITA Assemblea annuale Banca d’Italia,
Considerazioni finali Governatore Visco;
11:00 ITA Inflazione (prelim.) mag;
14:30 USA Deflatore consumi apr;
14:30 USA Redditi apr;
14:30 USA Consumi apr;
15:45 USA Indice PMI Chicago mag;
15:55 USA Indice fiducia consumatori (Reuters/Univ. Michigan) (finale) mag.


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HEADLINES

UniCredit: Moody’s rivede l’outlook da stabile a negativo alla luce del nuovo quadro regolamentare europeo
L’agenzia di rating Moody’s ha rivisto l’outlook del rating di lungo termine sul debito e sui depositi ‘Baa2’ di UniCredit S.p.A. da stabile a negativo. Questa decisione è dovuta alla revisione del supporto sistemico alla luce del nuovo quadro regolamentare relativo alla risoluzione delle crisi bancarie europee.

Risanamento: conversione del prestito obbligazionario denominato “Prestito Convertendo Risanamento 2011-2014”  
Risanamento comunica che è stato integralmente ed automaticamente convertito – anche per la quota di interessi capitalizzata – il prestito obbligazionario a conversione obbligatoria denominato “Prestito Convertendo Risanamento 2011-2014”, del valore nominale complessivo pari a Euro 254.816.000 e costituito da 254.816 obbligazioni di valore nominale unitario pari ad Euro 1.000, emesse da Risanamento S.p.A. in data 10 giugno 2011. Il rimborso anticipato delle Obbligazioni Convertende (unitamente agli interessi sulle stesse maturati al 12 maggio 2014, data di scadenza anticipata) mediante conversione automatica in azioni ordinarie di Risanamento di nuova emissione (le “Azioni di Compendio”) è avvenuto mediante messa a disposizione degli obbligazionisti di complessive 989.793.102 Azioni di Compendio, secondo il rapporto di conversione definito all’art. 11 del regolamento del Prestito Convertendo, pari a 3.884,3444 Azioni di Compendio per ciascuna Obbligazione Convertenda (determinato sulla base del valore nominale e degli interessi maturati) e corrispondente a un prezzo di conversione pari a Euro 0,28 per Azione di Compendio. Si ricorda che il Prestito Convertendo si inserisce nell’ambito della ristrutturazione dell’indebitamento di Risanamento e di alcune società del Gruppo Risanamento che aveva portato alla sottoscrizione, in data 2 settembre 2009, dell’accordo di ristrutturazione ex art. 182-bis Legge Fallimentare. A seguito dell’esecuzione integrale della conversione il nuovo capitale sociale di Risanamento sarà pari a Euro 382.301.503,75, suddiviso in 1.800.844.234 azioni ordinarie prive del valore nominale.

A Citigroup piacciono Unicredit e Mediobanca
Citigroup in Italia preferisce Mediobanca e Unicredit. Per entrambi i titoli il giudizio è “buy”. Tra le banche preferite c’e’ anche Ubi Banca. Apprezzabile la solidita’ patrimoniale di Intesa, ma le quotazioni del titolo sono a premio rispetto al comparto. Banco Popolare e’ tra i titoli del settore più convenienti, ma gli esperti di Citigroup restano preoccupati per la qualita’ degli impieghi.

Tyson sfida Pilgrim’s Pride per Hillshire con offerta da 6,8 mld $ debito incluso
Alimentare Usa in grande fermento. Tyson Foods ha messo sul piatto 6,3 miliardi di dollari per Hillshire Brands per un’offerta che, includendo il debito della preda, tocca quota 6,8 miliardi contro i 6,4 proposti da Pilgrim’s Pride pochi giorni fa.

Alitalia: Renzi è ormai questione di ore
Sarebbe arrivata al punto l’attesa svolta sul dossier Alitalia e sull’offerta di Etihad. Ieri il primo ministro Matteo Renzi ha affermato che ormai sarebbe solo questione di ore, intervenendo al Nazareno, la direzione del Pd. Dovrebbe insomma arrivare a breve una formale lettera di intenti dalla compagnia emiratina, un documento che dovrebbe aprire l’ultima fase di queste lunghe trattative e favorire l’ingresso della compagnia aerea in Alitalia con un investimento di 560 milioni di euro e una quota del 49% del capitale. Le banche avrebbero accettato di rinegoziare debiti per 565 milioni di euro cancellandone un terzo e convertendo il resto in azioni. Le più esposte sarebbero Intesa e Unicredit oltre a Pop Sondrio e Banca Mps. Secondo le indiscrezioni circolate nei giorni scorsi gli esuberi potrebbero essere “limitati” a 2.600 dai 3.000 inizialmente previsti. Si attende comunque una risposta da Etihad, non ancora giunta, dopo la proposta partita da Alitalia il 15 maggio scorso.

Ford richiama 1,4 milioni di vetture in Nordamerica
Non si fermano i recall di auto. Ford ha annunciato il richiamo di 1,39 milioni tra berline e Suv in Nordamerica per lo più per problemi al servosterzo.

ARN Daily Basic: Daily Analysts’ Updates for 5/29/2014

Analysts’ Upgrades

  • S&P 500 (INDEXSP:.INX) was upgraded by analysts at Benchmark Co. to a “market perform” rating. Tweet This.
  • Apple Inc. (NASDAQ:AAPL) was upgraded by analysts at Morgan Stanley to a “buy” rating. Previous closing price of $624.01. Tweet This.
  • AngloGold Ashanti Limited (NYSE:AU) was upgraded by analysts at HSBC from a “neutral” rating to an “overweight” rating. Previous closing price of $15.46. Tweet This.
  • Biogen Idec Inc (NASDAQ:BIIB) was upgraded by analysts at JPMorgan Chase & Co. from a “neutral” rating to an “overweight” rating. They now have a $375.00 price target on the stock, up previously from $300.00. 21.4% upside from the previous close of $308.81. Tweet This.
  • CoreSite Realty Corp (NYSE:COR) was upgraded by analysts at Cantor Fitzgerald from a “sell” rating to a “hold” rating. Previous closing price of $31.20. Tweet This.
  • D.R. Horton, Inc. (NYSE:DHI) was upgraded by analysts at RBC Capital from a “sector perform” rating to an “outperform” rating. They now have a $27.00 price target on the stock, up previously from $26.00. 15.7% upside from the previous close of $23.33. Tweet This.
  • De La Rue plc (LON:DLAR) was upgraded by analysts at Beaufort Securities to a “buy” rating. Tweet This.
  • Dollar Tree, Inc. (NASDAQ:DLTR) was upgraded by analysts at Sterne Agee from a “neutral” rating to a “buy” rating. They now have a $61.00 price target on the stock, up previously from $54.00. 15.6% upside from the previous close of $52.78. Tweet This.
  • Companhia Paranaense De Energia (NYSE:ELP) was upgraded by analysts at Zacks from an “underperform” rating to a “neutral” rating. They now have a $16.00 price target on the stock. 7.6% upside from the previous close of $14.87. Tweet This.
  • Harmony Gold Mining Co. (ADR) (NYSE:HMY) was upgraded by analysts at HSBC from an “underweight” rating to a “neutral” rating. Previous closing price of $2.61. Tweet This.
  • Hospira, Inc. (NYSE:HSP) was upgraded by analysts at Zacks from a “neutral” rating to an “outperform” rating. They now have a $58.00 price target on the stock. 20.1% upside from the previous close of $48.28. Tweet This.
  • Orix Corp (NYSE:IX) was upgraded by analysts at ING Group to a “buy” rating. Previous closing price of $78.22. Tweet This.
  • Mercadolibre Inc (NASDAQ:MELI) was upgraded by analysts at JPMorgan Chase & Co. from a “neutral” rating to an “overweight” rating. They now have a $104.00 price target on the stock, down previously from $114.00. 26.7% upside from the previous close of $82.10. Tweet This.
  • Natural Gas Services Group, Inc. (NYSE:NGS) was upgraded by analysts at Capital One Financial Corp. from an “equal weight” rating to an “overweight” rating. Previous closing price of $29.95. Tweet This.
  • Palo Alto Networks Inc (NASDAQ:PANW) was upgraded by analysts at Oppenheimer from a “market perform” rating to an “outperform” rating. They now have a $80.00 price target on the stock, down previously from $85.00. 15.1% upside from the previous close of $69.51. Tweet This.
  • Palo Alto Networks Inc (NASDAQ:PANW) was upgraded by analysts at Raymond James from an “outperform” rating to a “strong-buy” rating. They now have a $90.00 price target on the stock, up previously from $84.00. 29.5% upside from the previous close of $69.51. Tweet This.
  • Premier Inc (NASDAQ:PINC) was upgraded by analysts at Citigroup Inc. from a “neutral” rating to a “buy” rating. They now have a $37.00 price target on the stock, up previously from $33.00. 23.5% upside from the previous close of $29.96. Tweet This.
  • Prospect Capital Corp. (NASDAQ:PSEC) was upgraded by analysts at Evercore Partners from an “underweight” rating to an “equal weight” rating. They now have a $10.00 price target on the stock. 0.3% upside from the previous close of $9.97. Tweet This.
  • Qihoo 360 Technology Co Ltd (NASDAQ:QIHU) was upgraded by analysts at STANDARD CHARTERED.5 from an “underperform” rating to an “outperform” rating. They now have a $104.00 price target on the stock, up previously from $80.00. 9.3% upside from the previous close of $95.14. Tweet This.
  • Thomas Cook Group plc (LON:TCG) was upgraded by analysts at Nomura to a “neutral” rating. They now have a GBX 173 ($2.91) price target on the stock. Tweet This.
  • Thomas Cook Group Pl (NASDAQ:TCKGY) was upgraded by analysts at Nomura from a “reduce” rating to a “neutral” rating. Previous closing price of $5.22. Tweet This.
  • Thomas Cook Group Pl (OTCMKTS:TCKGY) was upgraded by analysts at Nomura from a “reduce” rating to a “neutral” rating. Tweet This.
  • Twitter Inc (NYSE:TWTR) was upgraded by analysts at Cantor Fitzgerald from a “hold” rating to a “buy” rating. They now have a $40.00 price target on the stock. They noted that the move was a valuation call. 18.4% upside from the previous close of $33.77. Tweet This.
  • VMware, Inc. (NYSE:VMW) was upgraded by analysts at Piper Jaffray from a “neutral” rating to an “overweight” rating. They now have a $111.00 price target on the stock. 15.6% upside from the previous close of $96.03. Tweet This.
  • Vantiv Inc (NYSE:VNTV) was upgraded by analysts at Wells Fargo & Co. from a “market perform” rating to an “outperform” rating. Previous closing price of $31.06. Tweet This.
  • Boingo Wireless Inc (NASDAQ:WIFI) was upgraded by analysts at ING Group to a “hold” rating. Previous closing price of $6.95. Tweet This.
  • Wpp Plc (LON:WPP) was upgraded by analysts at Investec to a “buy” rating. They now have a GBX 1,420 ($23.90) price target on the stock, up previously from GBX 1,350 ($22.72). Tweet This.
  • WPP plc – American Depositary Shares each representing five (NASDAQ:WPPGY) was upgraded by analysts at Investec to a “buy” rating. Previous closing price of $107.36. Tweet This.
  • Get today’s most recent analysts’ upgrades at AnalystRatings.net

Analysts’ Downgrades

  • HomeAway, Inc. (NASDAQ:AWAY) was downgraded by analysts at JPMorgan Chase & Co. from an “overweight” rating to a “neutral” rating. They now have a $38.00 price target on the stock, down previously from $49.00. 21.8% upside from the previous close of $31.20. Tweet This.
  • Bank of Montreal (NYSE:BMO) was downgraded by analysts at RBC Capital from an “outperform” rating to a “sector perform” rating. Previous closing price of $70.10. Tweet This.
  • Brookfield Residential Properties Inc (NYSE:BRP) was downgraded by analysts at RBC Capital from an “outperform” rating to a “sector perform” rating. They now have a $23.00 price target on the stock. 10.2% upside from the previous close of $20.88. Tweet This.
  • Celgene Co. (NASDAQ:CELG) was downgraded by analysts at JPMorgan Chase & Co. from an “overweight” rating to a “neutral” rating. They now have a $170.00 price target on the stock, down previously from $180.00. 10.2% upside from the previous close of $154.30. Tweet This.
  • Commerzbank AG (OTCMKTS:CRZBY) was downgraded by analysts at ING Group from a “neutral” rating to an “underperform” rating. Tweet This.
  • Credit Suisse (NYSE:CS) was downgraded by analysts at Bank of America from a “buy” rating to a “neutral” rating. Previous closing price of $29.96. Tweet This.
  • Dollar General Corp. (NYSE:DG) was downgraded by analysts at Sterne Agee from a “buy” rating to a “neutral” rating. They now have a $58.00 price target on the stock, down previously from $63.00. 6.2% upside from the previous close of $54.60. Tweet This.
  • Digital Realty Trust, Inc. (NYSE:DLR) was downgraded by analysts at Cantor Fitzgerald from a “buy” rating to a “hold” rating. Previous closing price of $57.64. Tweet This.
  • DSW Inc. (NYSE:DSW) was downgraded by analysts at Susquehanna from a “positive” rating to a “neutral” rating. They now have a $26.00 price target on the stock, down previously from $45.00. 10.1% upside from the previous close of $23.62. Tweet This.
  • EDP-Energias de Portugal, S.A (NASDAQ:EDPFY) was downgraded by analysts at Citigroup Inc. from a “neutral” rating to a “sell” rating. Previous closing price of $46.52. Tweet This.
  • Enel Societa Per Azi (NASDAQ:ENLAY) was downgraded by analysts at Citigroup Inc. to a “sell” rating. Previous closing price of $5.72. Tweet This.
  • Fiat S.p.A. (NASDAQ:FIATY) was downgraded by analysts at Sanford C. Bernstein from a “market perform” rating to an “underperform” rating. Previous closing price of $10.58. Tweet This.
  • Hershey Co (NYSE:HSY) was downgraded by analysts at Argus from a “buy” rating to a “hold” rating. They now have a $3.00 price target on the stock. 96.9% downside from the previous close of $96.75. Tweet This.
  • JPMorgan Chase & Co. (NYSE:JPM) was downgraded by analysts at Zacks from a “neutral” rating to an “underperform” rating. They now have a $50.00 price target on the stock. 9.8% downside from the previous close of $55.45. Tweet This.
  • Michael Kors Holdings Ltd (NASDAQ:KORS) was downgraded by analysts at Avondale Partners from an “outperform” rating to a “market perform” rating. They now have a $103.00 price target on the stock, down previously from $113.00. 6.2% upside from the previous close of $97.01. Tweet This.
  • Liberty Global plc – Class A (NASDAQ:LBTYA) was downgraded by analysts at Bank of America from a “buy” rating to a “neutral” rating. Previous closing price of $45.44. Tweet This.
  • Lincoln Electric Holdings Inc. (NASDAQ:LECO) was downgraded by analysts at Zacks from a “neutral” rating to an “underperform” rating. They now have a $60.00 price target on the stock. 9.2% downside from the previous close of $66.11. Tweet This.
  • Manchester United PLC (NASDAQ:MANU) was downgraded by analysts at JPMorgan Chase & Co. from an “overweight” rating to a “neutral” rating. They now have a $17.50 price target on the stock, down previously from $18.90. 8.1% upside from the previous close of $16.19. Tweet This.
  • Mid-Con Energy Partners (NASDAQ:MCEP) was downgraded by analysts at Stephens from an “overweight” rating to an “equal weight” rating. They now have a $25.00 price target on the stock, down previously from $27.00. They noted that the move was a valuation call. 12.1% upside from the previous close of $22.30. Tweet This.
  • MedAssets, Inc. (NASDAQ:MDAS) was downgraded by analysts at Citigroup Inc. from a “buy” rating to a “neutral” rating. They now have a $26.00 price target on the stock, down previously from $28.00. 9.0% upside from the previous close of $23.86. Tweet This.
  • National Grid plc (ADR) (NYSE:NGG) was downgraded by analysts at Credit Suisse from an “outperform” rating to a “neutral” rating. Previous closing price of $74.44. Tweet This.
  • New Jersey Resources Corp (NYSE:NJR) was downgraded by analysts at Brean Capital from a “buy” rating to a “hold” rating. They now have a $53.00 price target on the stock. They noted that the move was a valuation call. 3.8% downside from the previous close of $55.09. Tweet This.
  • Plains GP Holdings LP (NASDAQ:PAGP) was downgraded by analysts at Stephens from an “overweight” rating to an “equal weight” rating. They now have a $31.00 price target on the stock, up previously from $27.00. They noted that the move was a valuation call. 12.9% upside from the previous close of $27.47. Tweet This.
  • Portugal Telecom, SGPS (NYSE:PT) was downgraded by analysts at Berenberg Bank from a “buy” rating to a “hold” rating. Previous closing price of $3.72. Tweet This.
  • Renault Sa Regie Nat (NASDAQ:RNSDF) was downgraded by analysts at Sanford C. Bernstein from an “outperform” rating to a “market perform” rating. Previous closing price of $94.50. Tweet This.
  • Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) was downgraded by analysts at Zacks from an “outperform” rating to a “neutral” rating. They now have a $122.00 price target on the stock. 5.2% upside from the previous close of $115.96. Tweet This.
  • VMware, Inc. (NYSE:VMW) was downgraded by analysts at Citigroup Inc. from a “buy” rating to a “neutral” rating. They now have a $3.00 price target on the stock, up previously from $2.35. 96.9% downside from the previous close of $96.03. Tweet This.
  • Woodside Petroleum Ltd. (NASDAQ:WOPEY) was downgraded by analysts at Sanford C. Bernstein from an “outperform” rating to a “market perform” rating. Previous closing price of $38.85. Tweet This.
  • Get today’s most recent analysts’ downgrades at Analyst Ratings.net

Analysts’ New Coverage

  • AMEC plc (LON:AMEC) is now covered by analysts at Berenberg Bank. They set a “buy” rating and a GBX 1,450 ($24.41) price target on the stock. Tweet This.
  • Atmel Co. (NASDAQ:ATML) is now covered by analysts at ING Group. They set an “outperform” rating and a $10.00 price target on the stock. 22.1% upside from the previous close of $8.19. Tweet This.
  • Banc of California Inc (NASDAQ:BANC) is now covered by analysts at Bank of America. They set a “buy” rating and a $12.50 price target on the stock. 16.3% upside from the previous close of $10.75. Tweet This.
  • Builders FirstSource, Inc. (NASDAQ:BLDR) is now covered by analysts at Stifel Nicolaus. They set a “hold” rating on the stock. Previous closing price of $7.37. Tweet This.
  • Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) is now covered by analysts at Wells Fargo & Co.. They set a “market perform” rating on the stock. Previous closing price of $31.24. Tweet This.
  • Clean Energy Fuels Corp (NASDAQ:CLNE) is now covered by analysts at Morgan Stanley. They set an “overweight” rating and a $14.00 price target on the stock. 36.3% upside from the previous close of $10.27. Tweet This.
  • Chambers Street Properties (NYSE:CSG) is now covered by analysts at Wells Fargo & Co.. They set an “outperform” rating on the stock. Previous closing price of $7.87. Tweet This.
  • Eni SpA (ADR) (NYSE:E) is now covered by analysts at Jefferies Group. They set an “underperform” rating on the stock. Previous closing price of $51.11. Tweet This.
  • Reed Elsevier NV (NYSE:ENL) is now covered by analysts at Bank of America. They set a “buy” rating on the stock. Previous closing price of $43.89. Tweet This.
  • Examworks Group, Inc. (NASDAQ:EXAM) is now covered by analysts at Deutsche Bank. They set a “buy” rating and a $38.00 price target on the stock. 32.4% upside from the previous close of $28.71. Tweet This.
  • Franco-Nevada Co. (NYSE:FNV) is now covered by analysts at Morgan Stanley. They set an “equal weight” rating and a $52.00 price target on the stock. 13.7% upside from the previous close of $45.72. Tweet This.
  • FairPoint Communications Inc (NYSE:FRP) is now covered by analysts at Wells Fargo & Co.. They set a “market perform” rating on the stock. Previous closing price of $14.49. Tweet This.
  • Guaranty Bancorp (NASDAQ:GBNK) is now covered by analysts at Sterne Agee. They set a “neutral” rating on the stock. Previous closing price of $13.66. Tweet This.
  • TherapeuticsMD Inc (NASDAQ:NYSEAMEX:TXMD) is now covered by analysts at Jefferies Group. They set a “buy” rating and a $7.00 price target on the stock. Tweet This.
  • Phibro Animal Health Corp (NASDAQ:PAHC) is now covered by analysts at Macquarie. They set an “outperform” rating and a $23.00 price target on the stock. 24.1% upside from the previous close of $18.54. Tweet This.
  • ePlus Inc. (NASDAQ:PLUS) is now covered by analysts at William Blair. They set an “outperform” rating on the stock. Previous closing price of $56.16. Tweet This.
  • Royal Gold, Inc USA) (NASDAQ:RGLD) is now covered by analysts at Morgan Stanley. They set an “overweight” rating and a $77.00 price target on the stock. 28.0% upside from the previous close of $60.14. Tweet This.
  • Sabre Corp. (NASDAQ:SABR) is now covered by analysts at Sanford C. Bernstein. They set an “outperform” rating and a $21.00 price target on the stock. 18.0% upside from the previous close of $17.80. Tweet This.
  • Sabre Corp. (NASDAQ:SABR) is now covered by analysts at Bernstein. They set an “outperform” rating and a $21.00 price target on the stock. 18.0% upside from the previous close of $17.80. Tweet This.
  • SCYNEXIS Inc (NASDAQ:SCYX) is now covered by analysts at RBC Capital. They set an “outperform” rating and a $17.00 price target on the stock. 107.3% upside from the previous close of $8.20. Tweet This.
  • SCYNEXIS Inc (NASDAQ:SCYX) is now covered by analysts at Canaccord Genuity. They set a “buy” rating and a $18.00 price target on the stock. 119.5% upside from the previous close of $8.20. Tweet This.
  • Stone Energy Co. (NYSE:SGY) is now covered by analysts at Brean Capital. They set a “buy” rating and a $56.00 price target on the stock. 29.2% upside from the previous close of $43.33. Tweet This.
  • Silver Wheaton Corp. (NYSE:SLW) is now covered by analysts at Morgan Stanley. They set an “equal weight” rating and a $25.00 price target on the stock. 23.7% upside from the previous close of $20.21. Tweet This.
  • Tekcapital PLC (LON:TEK) is now covered by analysts at Northland Securities. They set a “buy” rating and a GBX 45 ($0.76) price target on the stock. Tweet This.
  • Tekcapital PLC (LON:TEK) is now covered by analysts at Northland Capital Partners. They set a “buy” rating and a GBX 45 ($0.76) price target on the stock. Tweet This.
  • Total SA (ADR) (NYSE:TOT) is now covered by analysts at Jefferies Group. They set a “hold” rating on the stock. Previous closing price of $69.65. Tweet This.
  • TherapeuticsMD Inc (NASDAQ:TXMD) is now covered by analysts at Jefferies Group. They set a “buy” rating and a $7.00 price target on the stock. 74.6% upside from the previous close of $4.01. Tweet This.
  • Universal Electronics Inc. (NASDAQ:UEIC) is now covered by analysts at Sidoti. They set a “buy” rating on the stock. Previous closing price of $44.23. Tweet This.
  • John Wood Group PLC (LON:WG) is now covered by analysts at Berenberg Bank. They set a “hold” rating and a GBX 714 ($12.02) price target on the stock. Tweet This.
  • Get today’s most recent analysts’ new coverage at Analyst Ratings.net

CWS Market Review – May 30, 2014

CWS Market Review

May 30, 2014

“Just because you buy a stock and it goes up does not mean you are right. Just because
you buy a stock and it goes down does not mean you are wrong.” – Peter Lynch

We’re back! I’m pleased to report that the bull market keeps on charging. On Thursday, the S&P 500 closed at 1,920.03. That makes the 13th time this year the index has set an all-time record high. (Perhaps I should go on vacation more often.)I’ve also been surprised by how tame this market has been. We haven’t had a 1% drop in seven weeks. The Volatility Index (VIX) recently dropped to a nine-month low, and it’s close to hitting a seven-year low.

One of the concerns I have with this market is the narrowness of it. In plainer terms, fewer and fewer stocks are doing the heavy lifting. With each successive peak in the S&P 500, the number of stocks hitting new highs decreases. That’s not a good sign.

That’s not all. This week, the government reported that for the first time in three years, the economy got smaller. For Q1, real GDP fell by 1%. Fortunately, that’s almost certainly a temporary blip. I’ll have more details in a bit. I’ll also look at the recent deal between AT&T and DirecTV, and later on, I’ll highlight some recent Buy List earnings, looking at what stocks look especially good right now. But first, let’s take a closer look at this amazingly resilient bull market.

Bull Markets Get Sloppy as They Get Older

One of the basic facts about bull markets is that they get sloppy as they get older. It’s always been that way, and I suspect it always will be. Consider that since the end of 2011, stocks with the worst balance sheets on Wall Street have done the best. In fact, they’ve done nearly twice as well as the S&P 500.

With Janet and friends inside the Fed keeping interest rates on the floor, it’s not such a burden having lousy finances. Companies that have issued junk debt in the past year have seen their stocks rise by an average of 26%. That compares with 15% for the rest of the market. There’s such a strong demand for higher-yielding debt that investors are willing to gobble up anything.

We’re still early in this game, but this is the type of behavior that leads to trouble. Fortunately for us, our Buy List stocks are fundamentally strong. The downside is that in a market like this, they can sit outside the rally. As always, patience is our best friend.

But what’s been even more impressive than the stock market rally has been the relentless rally in Treasury bonds. Bond guru Jeffrey Gundlach was one of the few people who said that bonds would rally this year, and he was bang-on right. On Thursday, the 10-year Treasury yield got down to 2.4%. That’s the lowest yield in close to a year.

Sheesh…anyone else remember when the end of QE was supposed to lead to a rotation out of bonds? That hasn’t happened, and it doesn’t look to start anytime soon.

So what’s going on with the bond market? Some people think bonds are reacting to bad economic numbers. That’s possible, but I’m a doubter. It’s true that Thursday’s GDP report was ugly. The Commerce Department said that for the first time in three years, the U.S. economy actually contracted. Real GDP fell at a 1% annualized rate during the first three months of this year.

Unpleasant, I know, but let’s remember that Q1 started five months ago and ended two months ago. In fact, it looks like the numbers for Q2 and Q3 will be pretty good. We’re also seeing a lot of strength in economically sensitive areas like transportation stocks. So the bond market has everyone perplexed.

Bill Dudley, the top dog at the New York Fed, gave an interesting speech last week which may explain what’s going on. The crucial point of Dudley’s speech came when he said he doesn’t expect real short-term interest rates to return to their historical level.

Let me explain. Here’s a very, very, very oversimplified explanation of what the Fed does. When the economy’s humming along, the Fed keeps real interest rates pinned at 2.5%. Anything above that is too tight. But when the economy’s in the dumps, the Fed lowers real rates to 0%. So the Fed’s job is to oscillate between 0% and 2.5%.

Please understand, this is a big generalization, but it works well for our purposes. Now Mr. Dudley said he thinks the 2.5% level no longer works. In fact, he expects real rates to stay “well below” that for a long time.

Dudley cites three reasons. First, he says, “economic headwinds seem likely to persist for several more years.” He may be right on that. Second, he notes the slowing growth of the labor force. Well, that’s certainly been the case. Third, he mentions changes in bank regulation and higher capital requirements.

Add these up, and we’re living in a low-rate world. If Dudley is right, and I’m not convinced he is, then it’s a major deal. It’s almost as if football suddenly changed from using 10 yards for a first down to only using seven, but no one told the players.

I can’t picture all the ramifications, but for certain, it’s a major change to the cost of capital. I would think lower “equilibrium” rates would depress dividend-payout ratios, since stocks wouldn’t have very strong competition from the short end of the bond market. It would also justify lower long-term rates, which is exactly what we’ve been seeing, so I’m not ready to dismiss Dudley just yet.

The AT&T Deal for DirecTV

In the last CWS Market Review I sent you, I said a deal between DirecTV (DTV) and AT&T (T) could come within two weeks. Well…my time horizon was way too long! The deal came a few hours later. It’s now official: AT&T and DirecTV are getting hitched. Here’s the Flash Alert I sent out on Sunday, May 18:

The merger deal calls for AT&T to buy DirecTV for $95 per share. The deal is a mix of cash and stock. The cash portion is $28.50 per share, and the stock portion is $66.50 worth of AT&T. They added a “collar” to the deal so no one is overly punished by a big swing in AT&T’s share price.

Here’s how it works: DTV shareholders will get 1.905 shares of AT&T if it’s below $34.90 when the deal closes. If AT&T is above $38.58 at closing, then they’ll get 1.724 shares of AT&T. If it’s between those two, they’ll get whatever ratio works out to $66.50 per share.

I expected shares of DTV to bounce up on the news, but it hasn’t happened. I think Wall Street suspects there are still some big obstacles to overcome. For one, there are regulatory concerns. AT&T will probably ditch some of their holdings to appease the government. That’s to be expected. They’ll need to convince the Federales that this is in the best interest of consumers.

There’s also the Sunday Ticket, which is DTV’s very lucrative deal with the NFL. In fact, AT&T is allowed to back out if DTV can’t extend their relationship with the NFL. For their part, AT&T said they expect an agreement to be reached, and I think they’re right about that.

I raised my buy below price on DTV to $95 per share. I expect this deal to close, but it will most likely take several months, perhaps more than one year. There’s no need for anyone to sell DTV, but you’re up side, at this point, is rather limited.

Medtronic Is a Buy up to $65 per Share

Now let’s look at two Buy List earnings reports we had last week. Last Tuesday, Medtronic (MDT) reported Q4 earnings of $1.12 per share. That matched expectations, although I expected a little more.

“In our fourth quarter, our overall organization once again delivered balanced growth, with strong performances in some areas more than offsetting challenges in other parts of our business,” said Omar Ishrak, Medtronic’s chairman and chief executive officer. “We remain focused on delivering consistent and dependable growth across all of our businesses through our three growth vectors: new therapies, emerging markets, and independent services and solutions.”

Some good news is that the company finally settled its dispute with Edwards Lifesciences (EW) over their CoreValve heart valve. Medtronic has agreed to pay EW $750 million plus royalty payments over the next eight years. As part of the settlement, both companies have agreed to stop suing the pants off each other. It’s time to move on.

Now for guidance. For this fiscal year, Medtronic sees earnings ranging between $4 and $4.10 per share. The Street had been expecting $4.09 per share. They expect revenue growth of 3% to 5% on a constant-currency basis.

The shares initially reacted poorly to the earnings news. But within a few days, the stock made back everything it had lost. It’s amazing what waiting a few days can do. Next month, I expect another dividend increase. I think Medtronic will raise their quarterly dividend from 28 cents to about 30 cents per share. Medtronic continues to be a very good buy up to $65 per share.

Ross Stores Reports Inline, Raises Guidance

A week ago Thursday, Ross Stores (ROST) reported Q1 earnings of $1.15 per share, which matched the Street’s estimates. These are decent results, and they could have been a lot worse. Many other retailers put up some bad numbers. Frankly, I had been expecting more, but I hold Ross to a high standard. For Ross, revenue was up 5.6% last quarter to $2.68 billion, which was just shy of consensus. Comparable-store sales, which is the key metric for retailers, were up 1% for the quarter.

For Q2, Ross sees earnings of $1.05 to $1.09 per share and comparable-store sales growth of 1% to 2%. The Street had been expecting $1.08 per share. Bear in mind that Ross had a range of $1.11 to $1.15 per share for Q1, so they tended to be modest with their expectations.

For the entire year, Ross projects earnings of $4.09 to $4.21 per share. That’s an increase of four cents per share to the low end. The consensus on the Street is for $4.21 per share.

CEO Michael Balmuth said, “First-quarter earnings per share performed at the high end of our guidance as strict inventory and expense controls offset the impact from unfavorable weather and a more challenging retail environment. Sales trends improved in April, with more seasonal spring weather that coincided with the later Easter shopping period. Operating margin for the quarter was better than forecasted, declining 25 basis points to 14.6%. A 35 basis-point increase in cost of goods sold was partially offset by a 10 basis-point improvement in selling, general and administrative costs.”

I’m keeping our Buy Below at $76 per share, which is fairly wide, but I think Ross is underpriced here. Ross Stores remains a solid buy.

Buy List Updates

I wanted to add a few comments about some of our other Buy List stocks. Shares of Stryker (SYK) got a nice lift this week after the company said it won’t be bidding for Smith & Nephew. That’s a smart move. I’m raising our Buy Below to $87 per share. I like Stryker a lot.

If you’re looking to start new positions, two of the best bargains on our Buy List are Bed, Bath & Beyond (BBBY) and AFLAC (AFL). My only caution is that it may take a while for the value to appear. AFLAC now yields 2.4%, and I expect to see a dividend increase later this year. BBBY is a buy up to $66 per share, and AFL is a buy up to $68 per share.

Express Scripts (ESRX) got clobbered after its last earnings report. But as we often see with our Buy List, high-quality stocks prove to be sturdy. Shares of ESRX have rallied every since. This week, I’m raising our Buy Below on Express Scripts to $74 per share.

CR Bard (BCR) is another stock that’s been looking strong lately. The last earnings report was decent, in my view, even though it had a delayed reaction on Wall Street. Look for another dividend increase soon. CR Bard has raised their dividend every year since 1972. I’m raising our Buy Below to $151 per share.

Moog (MOG-A) continues its surprising rally. The stock is up close to 20% in the last seven weeks. I don’t think a lot of folks saw that coming. I’m raising my Buy Below on Moog to $76 per share.

That’s all for now. Next week is a big week for economic reports. On Monday, the May ISM report comes out. Then on Tuesday, we’ll get a look at factory orders. On Wednesday, the Fed releases its Beige Book report. We’ll also see the latest reports on productivity, plus ADP releases its jobs report. Then on Friday comes the big May jobs report from the government. The last payroll report was a shocker (+288,000). It’s also very likely that the economy will finally surpass the payroll employment peak from 2008. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 for the last seven years in a row. This email was sent by Eddy Elfenbein through Crossing Wall Street.

2223 Ontario Road NW, Washington, DC 20009, USA

Quartz Daily Brief—Scotland’s independence, Japan’s economy, African debt, Disney villains gone soft

Quartz - qz.com

Good morning, Quartz readers!

What to watch for today

Scotland’s independence campaign kicks off. Supporters claim leaving the UK would boost the Scottish economy by £5 billion a year, while opponents cite the cost of building a new state and creating new policies. The BBC has a nice sentiment tracker on the referendum, which will be held on September 18.

Sparks fly in Singapore. The annual security summit known as the Shangri-La Dialogue will kick off with a keynote speech from Japan’s nationalistic prime minister, Shinzo Abe. He is expected to confront China about its increasingly assertive stance in the South and East China Seas.

Bad news in Brazil. The country’s statistics agency is on strike, but it will still release GDP data showing that growth nearly ground to a halt in the first quarter. Amid ongoing protests against the money being spent on the World Cup, the main federal workers union is set to discuss joining the work stoppage.

While you were sleeping

Microsoft’s Steve Ballmer agreed to buy the Los Angeles Clippers. The former CEO will  pay a record $2 billion for the NBA team that was thrown into chaos by a recording of owner Donald Sterling making racists statements. The deal, negotiated with Sterling’s estranged wife, could face legal obstacles if he opposes the sale.

Li Ka-shing agreed to buy Envestra. The Hong Kong mogul’s Cheung Kong Group $2.2 billion for the Australian natural gas distributor, after beating rival APA’s bid. The company owns 23,000 km (14,000 miles) of gas pipelines that supply to customers in Victoria and South Australia.

Japan’s economy took a tax hike hit. Industrial output growth fell 2.5% in April as consumers kept their wallets shut in response to a steep increase in the sales tax. Because of the hike, consumer prices rose 3.2%, the biggest rise in 23 years.

Google begrudgingly accepted an EU privacy ruling. But CEO Larry Page told the Financial Times that giving individuals “the right to be forgotten” could damage startups and strengthen oppressive governments (paywall).

The US meat wars got even meatier. Tyson Foods, the US’s biggest meat processor, offered to buy Hillshire Brands for $6.8 billion, trumping a lower bid from Pilgrim’s Pride and setting up a possible bidding war.

Ford pulled a GM. The carmaker recalled 1.4 million vehicles, citing problems with power steering, lights that could short-circuit or spontaneously combust, and floor mats that get stuck under gas pedals. Rival automaker General Motors has recalled 16 million vehicles this year.

The IMF told Africa to take it easy. Christine Lagarde, the International Monetary Fund’s boss, warned that Africa could derail its recent period of growth and stability if it takes on too much debt (paywall). Investors have been flocking to high-yield African bonds.

Quartz obsession interlude

Tim Fernholz on why US companies can earn $51 billion in the Cayman Islands even though its GDP is only $3 billion. “The foreign subsidiaries of US corporations made $94 billion in Bermuda in 2010, the latest year we have data for. That’s incredible work, since only $6 billion of goods and services were produced on the island that year. What does that tell us? It tells us that something fishy is going on.” Read more here.

Matters of debate

Rising housing prices will upend Britain’s class system. The middle class will no longer be able to afford a house and private education.

The sharing economy is feeding off economic misery. It encourages people to become part-time cabbies and hoteliers out of necessity.

To spot the next bubble, follow the Harvard grads. They tend to flock to the plushest pastures, and “the getting looks best right before a crash.”

Disney’s villains have gone soft. Modern bad guys now have redeeming qualities and back-stories.

India and Pakistan may be at the beginning of a beautiful friendship. As long as the US keeps out of it, that is.

Surprising discoveries

A restaurant reservation may soon cost you… With an app as the middleman, of course.

…And so will that seat upgrade. Cathay Pacific is contemplating introducing auctions for empty premium seats.

Dots is back, and it’s better than ever. The addictive game now has characters and levels.

The modern man needs a “man bra.” For holding all his wearable tech, of course.

Our best wishes for a productive day. Please send any news, comments, favorite Disney villains, and Dots high scores to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

You’re getting the Europe and Africa edition of the Quartz Daily Brief. To change your region, click here. We’d also love it if you shared this email with your friends. They can sign up for free here.

Minyanville Daily Recap 29/05/2014

An agreement between the Russian Federation, Kazakhstan, and Belarus to form a trading bloc comes only a week after a $28 billion deal with Russia and China for natural gas exports. Kyrgyzstan and Armenia are the next former Soviet republics to join the bloc that would challenge the dominance of the US and eurozone. Russian stocks rallied, although most markets were closed for Ascension Day. Many commentators believed this was another step toward the USSR reforming.

The second estimate of US first-quarter GDP declined to a -1.0% quarterly annualized rate, down from the first estimate of 0.1%. Economists had been expecting GDP to drop to -0.5%. The change from the first to second estimate was almost entirely due to a negative inventory adjustment, which came in March. Another culprit was a small drop in net exports. Domestic final sales were actually revised up to 1.6% from 1.5%. The market (both equities and Treasuries) did not seem to react to the news. It did react to the pending home sales report, however.

Because of recently strong earnings from Toll Brothers (TOL) and new home sales contracts today’s pending home sales garnered a much higher level of attention than normal. Sales rose 0.4% month-on-month (versus the 1.0% expected), causing Treasuries to rally and equities to experience some mild selling.

The major indices were bailed out late in the day with news from the Department of Energy (DOE) that it was proposing a revision to liquid natural-gas exports to countries that aren’t in accordance with the Free Trade Agreement (FTA). Liquid natural-gas producers and exporters all rallied strongly. As a result, the oil and gas sector of the S&P 500 (SPX) was the second-best-performing sector in the index today.

The S&P 500 finished the day up 0.54%, with small-cap and tech performance stocks in line with the benchmark index’s increase. Telecom stocks were the only sector of the S&P 500 to finish negative.

Tomorrow morning’s April personal spending and income report will garner much more attention than normal because of today’s poor GDP figure. If the spending report is below the expected gain of 0.2% and wages don’t see any upward push, market participants will need to bring down their growth expectations for the rest of the year. That would be a positive for interest rates and a negative for growth-related equities. The first major manufacturing report for the month of May (Chicago’s) is scheduled to be reported. The final estimate of the May University of Michigan/Reuters consumer confidence index is also scheduled.

The major catalyst for risk assets overnight is Japan’s employment and consumer price data. Prices are expected to continue to remain high following the government’s April sales tax increase. The Japanese yen remains perilously close to its long-term moving averages versus the US dollar and euro. Additionally, Japanese equities have rallied for almost two weeks straight. Any large variance in the data overnight could cause a change in those trends.

There are no earnings reports scheduled for tomorrow.