The Prepared Mind 1.28.2013

Last week allowed market pundits to use their full range of superlatives – both positive and negative.  Equities were up for the eighth straight session – the longest streak since December 2004.  The year-to date performance of the Dow Jones Industrials (+6%) is the best start to a market year since 1987.  Consumer confidence is up, bullish sentiment in the markets has doubled in the past two months, new job claims were the lowest since 2008, German business conditions have improved, and political confrontation over the fiscal cliff/debt ceiling has moved out to May.   Earnings were a mixed bag last week.  Netflix, Starbucks and Procter & Gamble showed strong than expected earnings last week.  Netflix (NFLX) gained nearly 70% to close at $169.56,  On the flip side, Apple (AAPL) lost over $60 to finish the week down 12%.  Caterpillar (CAT) announced a $800 million write-off due to fraud at an American managed Chinese subsidiary.  This has further raised concerns about the veracity of Chinese financial reporting.

Last week, the Dow Jones Industrial Average (DJIA) again finished at recent highs, gaining 246.28 points, or 1.80%, to close at 13,895.98.  The S&P 500 closed at 1,502.95, up 16.97 points or a gain of 1.14%.  The S&P 100 (OEX) gained 0.86%, or 5.78 points, to close 677.15.  The NDX reflected relative weakness of Apple (AAPL) by closing at 2,736.73, a loss of 6.51 points or – 0.24%.  The RUT closed at 905.25, a gain of 13.43 points or 1.51%. The VIX and other volatility indexes reflected the current lack of fear.  The VIX closed the week near 5 year lows.   The VIX closed last week at 12.89, an increase of 0.43 points or a weekly gain of 3.45%.  The cash VIX reflects a lack of concern about market volatility in the short term. It continues to be near the lowest levels for the VIX since June 2007.  The other volatility indexes reflected the same lack of concern and reflected similar movement 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)

13,895.98

246.28

1.80%

6.04%

11.75% (VXD)

S&P 500 (SPX)

1,502.95

16.97

1.14%

5.38%

12.89% (VIX)

NASDAQ 100 (NDX)

2,736.73

-6.51

-0.24%

2.85%

14.06% (VXN)

Russell 2000 (RUT)

905.25

13.43

1.51%

6.32%

16.05% (RVX)

S&P 100 (OEX)

677.15

5.78

0.86%

4.72%

12.45% (VXO)

CBOE Volatility Index (VIX)

12.89

0.43

3.45%

NA

The FOMC meeting, GDP, jobs, earnings will be the primary focus of the trading week.  The FOMC will be watched very closely to assess if we will continue to see low interest rates.  There is speculation the economy has improved to the extent where interest rates may be raised sooner rather than later.  The monthly jobs report released on the first Friday of every month has the potential to be a major market mover.  It has become increasingly more important over the past 18 months.  This report and jobs reports on Wednesday and Thursday cannot be ignored.  Other important economic announcements cover housing and consumer/investor  confidence.

Companies making earnings announcements are highlighted by Caterpillar, Yahoo, Amazon, Ford, Marathon Petroleum, United Parcel Service, Time Warner Cable, Qualcomm, ExxonMobil,   I have scanned stocks with upcoming earnings using the following criteria:  Price > 20, 30 Day Implied Volatility > 20, and Average Daily Option Volume > 200 contracts.  Be wary of trading in equities where there is not adequate liquidity and narrow enough markets.  You should be aware of daily volume and open interest in the products you trade.   I am including a consensus earnings estimate for each stock.  Stick with your plan.    Remain disciplined.  Remain on top of market news and movers.  Do not chase profits and disregard risk.

Remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

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

Monday January 28:

Economic:  Durable Goods Orders – 8:30, Pending Home Sales – 10:00, Dallas Fed Manufacturing Survey – 10:30.

Earnings:

Symbol

Company Name

Jan 18 close

IV30

XEPS

B/A

BIIB Biogen Idec Inc.

$143.72

22.9

$1.46

B

CAT Caterpillar Inc.

$95.70

21.3

$1.70

B

BMC BMC Software Inc.

$42.76

25.9

$1.01

A

ILMN Illumina Inc.

$51.59

39.8

$0.41

A

OLN Olin Corp.

$22.91

22.8

$0.34

A

STX Seagate Technology

$35.02

45.7

$1.27

A

VMW VMware Inc.

$95.36

36.5

A

YHOO Yahoo! Inc.

$20.13

27.5

$0.28

A

ZION Zions Bancorp.

$22.50

27.7

$0.39

A

 

Tuesday January 29:

Economic:  ICSC-Goldman Sachs Store Sales – 7:45, Redbook – 8:55, S&P Case- Shiller Home Price Index – 9:00, Conference Board Consumer Confidence – 10:00, State Street Investor Confidence – 10:00.

Other:  FOMC Meetings begin.

Earnings:

Symbol

Company Name

Jan 25 close

IV30

XEPS

B/A

ARLP Alliance Resource Partners LP

$64.21

25.1

$1.32

B

ASH Ashland Inc.

$85.77

25.3

$1.36

B

AXE Anixter International Inc.

$66.94

27.4

$1.33

B

BTU Peabody Energy Corp.

$25.58

36.6

$0.26

B

CIT CIT Group Inc.

$40.35

24.2

$0.67

B

CP Canadian Pacific Railway Limited

$113.07

23.7

$1.29

B

DHI DR Horton Inc.

$21.72

29.4

$0.14

B

EMC EMC Corporation

$25.04

24.0

$0.43

B

HOG Harley-Davidson Inc.

$52.86

31.2

$0.41

B

IP International Paper Co.

$42.39

23.2

$0.64

B

LXK Lexmark International Inc.

$28.27

48.2

$0.91

B

MNRO Monro Muffler Brake Inc.

$35.75

30.2

$0.36

B

NUE Nucor Corp.

$47.78

20.8

$0.29

B

PII Polaris Industries Inc.

$91.80

41.8

$1.23

B

TUP Tupperware Brands Corporation

$68.87

27.6

$1.68

B

TYC Tyco International Ltd.

$30.94

22.6

$0.39

B

VLO Valero Energy Corp.

$37.96

30.8

$1.17

B

X United States Steel Corp.

$24.22

42.6

($0.75)

B

AMZN Amazon.com Inc.

$273.62

41.9

$0.29

A

BRCM Broadcom Corp.

$34.21

32.2

$0.52

A

DLB Dolby Laboratories Inc.

$31.29

40.5

$0.45

A

PRXL Parexel International Corp.

$34.36

33.1

$0.34

A

RYL Ryland Group Inc.

$40.38

35.6

$0.50

A

VRTX Vertex Pharmaceuticals Inc.

$47.32

43.5

($0.13)

A

 

 

 

Wednesday January 30:

Economic:  MBA Purchase Applications – 7:00, ADP Employment Report – 8:15, Gross Domestic Product (GDP) – 8:30, EIA Petroleum Status Report – 10:30.

Other:  FOMC Meeting Announcement – 2:15

Earnings:

Symbol

Company Name

Jan 25 close

IV30

XEPS

B/A

ADT ADT Corporation

$46.81

26.0

$0.42

B

BA Boeing Co.

$75.32

22.5

$1.19

B

CVLT CommVault Systems Inc.

$73.74

43.9

$0.23

B

HES Hess Corporation

$58.44

27.1

$1.28

B

HNT Health Net Inc.

$27.01

48.7

$0.37

B

MPC Marathon Petroleum Corporation

$68.65

28.8

$2.00

B

PSX Phillips 66

$56.12

35.0

$1.66

B

ROK Rockwell Automation Inc.

$89.15

25.1

$1.26

B

WRLD World Acceptance Corp.

$74.74

28.6

$1.65

B

ALGN Align Technology Inc.

$27.82

51.0

$0.22

A

ATW Atwood Oceanics Inc.

$52.48

27.7

$0.94

A

CNQR Concur Technologies Inc.

$71.38

38.5

$0.03

A

CTXS Citrix Systems Inc.

$69.43

41.1

$0.67

A

FB Facebook, Inc.

$31.08

55.6

$0.11

A

FIO Fusion-io Inc.

$21.28

85.7

$0.00

A

MUR Murphy Oil Corp.

$61.48

23.0

$1.31

A

NOW ServiceNow, Inc.

$29.52

66.0

($0.13)

A

NXPI NXP Semiconductors N.V.

$29.51

45.0

$0.41

A

OI Owens-Illinois Inc.

$22.90

26.5

$0.37

A

QCOM QUALCOMM Inc.

$64.40

26.9

$1.00

A

SLCA US Silica Holdings Inc.

$20.05

63.4

$0.31

A

SWKS Skyworks Solutions Inc.

$21.44

55.7

$0.45

A

TSCO Tractor Supply Company

$93.57

31.3

$1.03

A

TTEK Tetra Tech Inc.

$28.74

23.7

$0.41

A

 

 

 

Thursday January 31:

Economic:  Challenger Job-Cut Report – 7:30, Jobless Claims – 8:30, Personal Income and Outlays – 8:30, Employment Cost Index – 8:30, Chicago PMI – 9:45, Bloomberg Consumer Comfort Index – 9:45,  EIA Natural Gas Report – 10:30, Farm Prices – 3:00.

Earnings:

Symbol

Company Name

Jan 25 close

IV30

XEPS

B/A

AET Aetna Inc.

$49.72

25.1

$0.96

B

ALKS Alkermes Inc.

$21.80

34.8

$0.12

B

CAM Cameron International Corporation

$59.21

28.5

$0.96

B

CNX CONSOL Energy Inc.

$32.17

33.0

$0.22

B

CRR Carbo Ceramics Inc.

$80.19

42.6

$0.89

B

DB Deutsche Bank AG

$48.43

32.3

$0.82

B

DNKN Dunkin Brands Group, Inc.

$36.45

39.0

$0.33

B

DOW Dow Chemical Co.

$34.43

26.9

$0.33

B

ENR Energizer Holdings Inc.

$87.51

25.7

$2.16

B

EXXI ENERGY XXI LTD

$33.45

31.6

$0.69

B

HAR Harman International Industries Inc.

$49.98

38.3

$0.87

B

HMC Honda Motor Co. Ltd.

$37.92

26.6

$0.71

B

HP Helmerich & Payne Inc.

$61.93

28.2

$1.28

B

MA Mastercard Incorporated

$522.26

21.7

$4.79

B

MDC MDC Holdings Inc.

$40.07

36.4

$0.43

B

MJN Mead Johnson Nutrition Company

$69.54

26.6

$0.68

B

NS NuStar Energy L.P.

$49.90

24.2

$0.31

B

NVO Novo Nordisk A/S

$181.03

21.6

NA

B

PCAR Paccar Inc.

$47.77

25.6

$0.68

B

PENN Penn National Gaming Inc.

$47.88

26.9

$0.50

B

PHM Pulte Homes Inc.

$20.98

39.8

$0.31

B

POT Potash Corp. of Saskatchewan Inc.

$42.51

22.9

$0.59

B

RCL Royal Caribbean Cruises Ltd.

$37.88

31.3

$0.06

B

RGLD Royal Gold Inc.

$79.15

26.5

$0.47

B

SHW Sherwin-Williams Co.

$165.79

23.5

$1.15

B

TEN Tenneco Inc.

$36.91

38.2

$0.68

B

TMO Thermo Fisher Scientific Inc.

$69.76

24.2

$1.28

B

UA Under Armour Inc.

$45.86

44.6

$0.46

B

UTEK Ultratech Inc.

$39.35

39.9

$0.47

B

VIAB Viacom Inc.

$58.56

24.9

$0.92

B

WCC WESCO International Inc.

$73.27

35.5

$1.09

B

WHR Whirlpool Corp.

$110.02

37.0

$2.25

B

BCR CR Bard Inc.

$103.51

20.5

$1.67

A

CAVM Cavium Networks Inc.

$31.61

50.6

($0.01)

A

CTRP Ctrip.com International Ltd.

$22.70

63.7

$0.12

A

CUB Cubic Corp.

$47.36

33.7

$0.70

A

CYMI Cymer Inc.

$98.70

28.4

$0.01

A

EMN Eastman Chemical Co.

$71.24

25.8

$1.19

A

MCHP Microchip Technology Inc.

$33.25

21.4

$0.32

A

N NetSuite, Inc.

$68.75

43.5

($0.14)

A

TRMB Trimble Navigation Ltd.

$63.09

29.0

$0.50

A

WYNN Wynn Resorts Ltd.

$122.68

24.6

$1.26

A

 

 

Friday February 1:

Economic:  Employment Situation – 8:30, PMI Manufacturing Index – 8:58, Reuter’s/University of Michigan Consumer Sentiment – 9:55, ISM Manufacturing Index – 10:00, Construction Spending – 10:00.

Earnings:

Symbol

Company Name

Jan 25 close

IV30

XEPS

B/A

AON Aon Corp.

$58.21

20.5

$1.24

B

BEAM Beam Inc.

$61.39

24.2

$0.67

B

IR Ingersoll-Rand Co. Ltd.

$51.09

23.1

$0.70

B

LEA Lear Corporation

$48.32

32.7

$1.38

B

LM Legg Mason Inc.

$27.40

29.3

$0.54

B

LYB LyondellBasell Industries NV

$62.52

26.9

$1.12

B

MAT Mattel Inc

$38.04

32.2

$1.15

B

NOV National Oilwell Varco Incorporated

$73.76

24.5

$1.44

B

PRGO Perrigo Co.

$101.61

23.0

$1.32

B

TDW Tidewater Inc.

$47.72

25.5

$0.44

B

TSN Tyson Foods Inc.

$22.30

25.7

$0.38

B

 

Monday February 4:

Economic:  Factory Orders – 10:00.

Earnings:

Symbol

Company Name

Jan 25 close

IV30

XEPS

B/A

CYOU Changyou.com Limited

$31.74

51.0

$1.31

B

GCI Gannett Co. Inc.

$20.31

32.8

$0.88

B

GOLD Randgold Resources Ltd.

$96.11

30.0

$1.59

B

HUM Humana Inc.

$73.86

24.0

$1.08

B

PHH PHH Corp.

$22.02

36.1

$0.78

B

SOHU Sohu.com Inc.

$50.26

41.8

$0.54

B

APC Anadarko Petroleum Corp.

$80.02

27.8

$0.74

A

APKT Acme Packet Inc.

$23.85

55.4

($0.05)

A

BIDU Baidu Inc

$107.92

43.8

$1.28

A

GILD Gilead Sciences Inc.

$78.40

25.4

$0.91

A

HIG Hartford Financial Services Group Inc.

$24.39

30.7

$0.30

A

HOLX Hologic Inc.

$23.33

29.7

$0.37

A

LIFE Life Technologies Corporation

$61.66

38.0

$1.11

A

SWI SolarWinds Inc

$54.64

44.7

$0.29

A

YUM Yum! Brands Inc.

$66.39

28.3

$0.01

A

 

 

 

 

 

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