The Prepared Mind 11.12.2012

Barack Obama won the presidency last week.  The Democrats control the Senate and the Republicans control the House of Representatives.  The index futures were up the during night following the election.  This reaction was tempered by warnings from Mario Draghi concerning the state of the European economy- including Germany.  The markets immediately sold off over 1% in response to Draghi’s comments. Concerns about the impending U.S. “fiscal cliff” helped accelerate the decline in the markets the rest of the week.  Weekly market performance reflected uneasiness over both.

The Dow Jones Industrial Average (DJIA) was down 2.12% , losing 277.77 points to close at 12,815.39.  The S&P 500 closed at 1,379  –  down 34.35 points or a gain of 2.43%.   The NASDAQ 100 (NDX) closed at 2,5863.79,  a loss of 72.49  points or – 2.73%.  The Russell 2000 (RUT)  closed at 795.00  – a loss of 16.60 points or down 2.05%.  The S&P 100 (OEX) lost 2.60% , or -16.85 points,  to close at 630.03. The VIX and other volatility indexes reflected fear in the markets the markets.  The VIX closed last week at 18.61 – a gain of 5.80%.  Volatility measurements for the other indexes showed similar gains compared to the previous week.  There appeared to be a disconnect between market index performance and volatility index performance.  Given the concerns voiced after the election, many volatility pundits expressed surprise the volatility indexes did not show greater gains for the week.

Here is a capsule view of last week’s market numbers:

Index

Close

Weekly Change

% Weekly

% YTD

Volatility of  Index

Dow Jones Industrials (DJIA)

12,815.39

-277.77

-2.12%

4.89%

17.23% (VXD)

S&P 500 (SPX)

1,379.85

-34.35

-2.43%

9.72%

18.61% (VIX)

NASDAQ 100 (NDX)

2,583.79

-72.49

-2.73%

13.43%

19.41% (VXN)

Russell 2000 (RUT)

795.00

-16.60

-2.05%

7.30%

21.62% (RVX)

S&P 100 (OEX)

630.03

-16.85

-2.60%

10.38%

19.35%(VXO)

CBOE Volatility Index (VIX)

18.61

1.02

5.80%

NA

Both sides will have to give to end the fiscal gridlock.  Obama and congressional leaders will need to work overtime to convince the world, the country, the markets, investors and each other they are serious about coming about with bipartisan solutions.    Obama has called for a meeting with congressional leaders this week.  These efforts will set the tenor of the markets for the rest of the year.  This will be a busy week for domestic economic reports.  Economists will be focused on the PPI, CPI, regional Fed manufacturing indexes, and industrial productio.   Recent European reports have raised a concern about the health of our domestic economy.  Confirmation by domestic reports of economic weakness can send the markets lower.

The quarterly earnings announcements have ended.  With impetus and assistance from a good friend,Walter Catching, I have continued to change my method for reporting earnings announcements.  I have expanded the information to include the previous week’s closing price for each individual equity , the current 30 day implied volatility for the options(IV30), and a consensus earnings per share (XEPS.)  I have sorted the pending announcements to include optionable stocks trading above $20 with an implied volatility greater than 20 and average daily volume exceeding 200 contracts.   Unfortunately I neglected to include the average daily options volumes.  I will include them next week.  Remember to check option volume and open interest prior to opening any positions. This information provides crucial first pass information – liquidity and relative price – for those trading earning announcements.  Future blogs will include average daily option volume for each stock with earnings announcements.  .

Trade with a plan.  Be wary.  Don’t panic.  Profitability does not require buying a bottom or selling a top.

 

Remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

This week’s economic news (All times are Eastern Daylight Time.) Dates and times are subject to change:

Monday November 12:

Veteran’s Day Observed – U.S. Banks Closed….Markets are open.

Other:  Euro-zone finance ministers meet to discuss financial aid to Greece and problems in Spain.

Earnings:

Symbol

Company Name

11/9 close

IV30

B/A

XEPS

DHI DR Horton Inc.

20.97

42.0

B

0.28

HOLX Hologic Inc.

20.07

37.6

A

0.36

JEC Jacobs Engineering Group Inc.

38.97

30.5

A

0.80

 

Tuesday November 13:

Economic:  NFIB Small Business Optimism Index – 7:30, ISCS-Goldman Sachs Retail Sales – 7:45, Redbook – 8:55, October Treasury Budget – 2:00.

Other:

Earnings:

Symbol

Company Name

11/9 close

IV30

B/A

XEPS

ACM AECOM Technology Corporation

21.79

35.4

B

0.82

DKS Dick’s Sporting Goods Inc.

49.3

31.0

B

0.37

HD The Home Depot Inc

60.86

21.9

B

0.70

KORS Michael Kors Holdings Limited

50.7

64.4

B

0.40

TJX TJX Companies Inc.

40.36

29.0

B

0.62

 

Wednesday November 14:

Economic:  MBA Purchase Applications – 7:00, October Producer Price Index – 8:30, October Retail Sales – 8:30, September Business Inventories – 10:00, FOMC Minutes – 2:00.

Other:   Partial (?) general strike by unions in Greece, France, Spain, and Portugal. San Francisco Federal Reserve Bank Pres. John Williams delivers the Wu Lecture at the Center for the Pacific Rim, in San Francisco – 8:45

Earnings: 

Symbol

Company Name

11/9 close

IV30

B/A

XEPS

AG First Majestic Silver Corp.

23.67

46.5

B

0.22

ANF Abercrombie & Fitch Co.

31.5

55.3

B

0.60

TYC Tyco International Ltd.

27.6

29.8

B

0.34

IOC Interoil Corp.

64.57

77.4

A

-0.02

LTD Limited Brands Inc.

46.45

28.7

A

0.25

NTAP Network Appliance Inc.

27.31

49.7

A

0.33

NTES Netease.com Inc.

54.73

41.5

A

1.09

PETM Petsmart Inc.

66.38

28.0

A

0.63

WSM Williams-Sonoma Inc.

45.37

35.1

A

0.45

 

Thursday November 15:

Economic:  October Consumer Price Index – 8:30, Jobless Claims – 8:30, November Empire State Manufacturing Survey – 8:30, November Philadelphia Fed Survey – 8:4, EIA Natural Gas Status Report – 10:30, EIA Petroleum Status Report – 11;00.

Other:  Richmond Federal Reserve Bank President Jeffrey Lacker speaks to the West Virginia Economic Outlook Conference in Charleston, W.Va. – 9:00, Richard Fisher, Dallas Federal Reserve Bank President,  speaks at the State of the West Symposium sponsored by the Stanford Institute for Economic Policy Research and Bill Lane Center for the American West – 2:45.  Charles Plosser, Philadelphia Federal Reserve Bank President,  delivers closing address at the CATO Institute Annual Meeting. Also speakinh are close aide to Greek central bank governor George Tavlas, and former ECB Executive Board member Jurgen Stark – 4:30.

Earnings: 

Symbol

Company Name

11/9 close

IV30

B/A

XEPS

BKE Buckle Inc.

46.64

31.7

B

0.83

DLTR Dollar Tree Stores Inc.

38.13

35.1

B

0.49

GME GameStop Corp.

22.52

63.6

B

0.32

HP Helmerich & Payne Inc.

45.75

38.3

B

1.25

PLCE The Childrens Place Retail Stores Inc.

56.18

37.0

B

1.60

ROST Ross Stores Inc.

55.67

28.0

B

0.72

TGT Target Corp.

61.82

20.6

B

0.81

VIAB Viacom Inc.

49.43

26.8

B

1.17

ADSK Autodesk Inc.

30.73

44.0

A

0.31

ATW Atwood Oceanics Inc.

47.25

31.2

A

1.24

FMCN Focus Media Holding Ltd.

24.89

46.5

A

0.59

GPS Gap Inc.

34.07

32.7

A

0.63

INTU Intuit Inc.

59.82

23.8

A

-0.17

SHLD Sears Holdings Corporation

61.84

55.2

A

-0.84

SINA Sina Corp.

53.87

55.5

A

0.05

 

Friday November 16:

Economic:   September Treasury International Capital – 9:00, University of Michigan/Reuters Consumer Sentiment – 8:55, October Industrial Production – 9:15, Q3 E-Commerce Retail Sales – 10:00, ECRI Weekly Leading Index – 10:30.

Other:  Atlanta Federal Reserve Bank Pres. Dennis Lockhart speaks at the 5th Annual University of Virginia Investing Conference, in Charlottesville, Va – 4:20.

Earnings:  

Symbol

Company Name

11/9 close

IV30

B/A

XEPS

FL Foot Locker Inc.

32.13

39.0

B

0.53

SIRO Sirona Dental Systems Inc.

57.79

29.9

B

0.71

 

Monday November 19:

Economic:   October Existing Home Sales – 10:00, November  Housing  Market  Index – 1:00

Earnings:

Symbol

Company Name

11/9 close

IV30

B/A

XEPS

LOW Lowes Companies Inc.

32.1

29.2

B

0.35

A Agilent Technologies Inc.

36.88

30.8

A

0.80

JACK Jack in the Box Inc

25.42

31.7

A

0.36

NUAN Nuance Communications Inc.

21.42

40.3

A

0.34

QIHU Qihoo 360 Technology Co., Ltd.

22.32

58.9

A

0.06

URBN Urban Outfitters Inc.

35.25

39.3

0.41

 

 

 

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