Is The Federal Reserve Refilling Its Punchbowl? ETF News Alert (SPY, DIA, IWM QQQ)
by ilene - August 31st, 2011 6:46 pm
Courtesy of John Nyaradi
Stock markets are looking at a scary September.
Disclaimer: Wall Street Sector Selector actively trades a wide range of exchange traded funds and positions can change at any time.
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DiggLooking At A Scary September: ETF News Alert
by ilene - August 31st, 2011 6:46 pm
Courtesy of John Nyaradi
The much ballyhooed Jackson Hole Federal Reserve conclave has come to a close, and now exchange-traded fund investors face a treacherous September.
This September is likely to be particularly volatile as Federal Reserve Chairman Ben Bernanke deferred any new simulative action until the now two-day Fed meeting on Sept. 20 and 21. Bernanke puts off easing talk until Sept. FOMC
Also, International Monetary Fund leader Christine Lagarde said the global economy was in a dangerous phase while Kansas City Fed President Thomas Hoenig, said last week that the Fed, “can’t do it all,” adding further to the uncertainty facing us as we leave the dog days of summer behind.
Beyond the gloom from the Tetons, a continuing stream of economic reports indicates that the economy continues to slow towards “stall speed.” Manufacturing has dropped to contraction levels and the revision to second-quarter GDP to 1% brought the economy perilously close to negative growth.
Stock markets are looking at a scary September.
Click here to learn more about John’s book and for a free membership to Wall Street Sector Selector
Guest Post: Bear Market Bounce OR New Bull Market
by Zero Hedge - August 31st, 2011 6:44 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Submitted by Lance Roberts of Streettalk Advisors
Market Bounce OR New Bull Market
The question that I have been asked more today than almost any other time in the past month has been “Is This The Time To Start Buying Back In?”. With the recent rally off of very oversold conditions in July and August, a reflex rally has been in the offing. Also, with this being the end of the month, we are seeing portfolio window dressing for mutual funds.
However, a brief review of our technical indicators is in order to determine where we are in this current market environment and what the potential “risk” versus “reward” of being fully invested currently is.
Back on April 25th of this year we stated that: “Our proprietary risk metric is beginning to throw off a warning signal which comes just as the markets are about to enter their seasonally weakest 6 months of the year. The risk ratio indicator is a weighted average for bullish to bearish sentiment, the volatility index, the rate of change for the S&P 500, and the new highs/new low ratio of the NYSE. This weighted average is then smoothed with an 8 week rolling average to eliminate a lot of the noise. While most analysts look at these indicators individually, we combine, weight and smooth them to provide a more global look at market psychology and sentiment. Currently, that outlook is very bullish which, as a contrarian investment manager, this is a time to begin raising cash and hedging risk in portfolios.”
Raising cash and fixed income levels back in April has played very well for us during this summer’s “Market Madness”. As you can see above the indicator is now moving into the extremely bearish territory which certainly perks up our antenna that an better buying opportunity is soon approaching. With all the psychological indicators that are measuring market emotions – “the markets can remain irrational longer than you can remain solvent”, which is why we always combine our psychological “fear” guage with more standardized technical indicators in order to “confirm” turns in the market.
As asset managers for mostly retired individuals it is not our job to catch the exact bottom or top in the market. Our…
U.S. Government Seeking to Reject AT&T’s $39 Billion Acquisition of T-Mobile
by Insider Scoop - August 31st, 2011 6:42 pm
Courtesy of Benzinga.
According to a report from Bloomberg, the United States Justice Department has filed a complaint to block AT&T’s $39 billion acquisition of T-Mobile, which was announced back in March of this year. The complaint cites that the deal going through would violate U.S. antitrust law.
AT&T has responded to this complaint filed by the DOJ, stating that it is “surprised and disappointed,” mainly because the carrier has met with the DOJ on multiple occasions and there was no evidence that this was even being discussed. The full response is below:
We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.
We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.
At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:
- Help solve our nation’s spectrum exhaust situation and improve wireless service for millions.
- Allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans, or 97% of the population;
- Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.
We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.
In addition, the Federal Communications Commission (FCC) has responded (.PDF) to the suit, stating that if this deal would go through there would be “substantially” lessened competition in the carrier market. The FCC’s entire statement is below as well:
By filing suit today, the Department of Justice has concluded that AT&T’s acquisition of T-Mobile would substantially lessen competition in violation of the antitrust laws. Competition is an essential component of the FCC’s statutory public interest analysis, and although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition. Vibrant competition in wireless services is vital to innovation, investment, economic growth and job
…
Recession? No. We’re in the Second Great Contraction
by Chart School - August 31st, 2011 6:35 pm
Courtesy of Doug Short.
James Ross, the University Architect at UNC Wilmington and an avid student of the economy, called my attention to Martin Wolfe’s recent essay at the Financial Times explaining that we’re not at risk of a double-dip recession because the one that began in late 2007 hasn’t ended.
Of course, the National Bureau of Economic Analysis (NBER) declared the end date for the last recession, an 18-month whopper, as June 2009, a decision they announced in September of the following year. You can read their rationale here. According to the NBER’s analytical method, which focuses on major peaks and troughs as boundaries, the June 2009 end for the last recession makes excellent sense. But if you expect the end of a recession to be a return to some semblance of economic normality, then, to paraphrase the immortal words of Yogi Berra, the last recession “ain’t over ’til it’s over.”
Bill McBride, the economic wizard at Calculated Risk, is a master at graphing data series to illustrate troughs and recoveries to new highs. See his August 30th update on recession measures for some excellent examples.
With a hat tip to Bill, here are some charts of troughs to peaks that show why so many people believe the U.S. is still mired in a recession. For those of us who do accept the NBER recession call, the charts support the characterization of our current economic condition as, in the words of economist Kenneth Rogoff, The Second Great Contraction — its predecessor being the Great Depression.
The first chart is a look at Real GDP since 1950 with recessions highlighted. As we can see, at present, more than two years after the end of the last recession, real GDP is still 0.5% off the all-time high set in the last quarter of 2007. The recession officially began in December of that year.
My preferred GDP metric is the per-capita variant. I take real GDP and divide it by the mid-month population estimates from the Census Bureau, which has reported this data from 1959 (hence my 1960 starting date). By this…
Daily Market Commentary: Strongest Market Experiences Weakest Volume
by Chart School - August 31st, 2011 6:30 pm
Courtesy of Declan Fallon
The Nasdaq 100 is the first to test supply at the 50-day MA, but it was also the only index not to experience confirmed accumulation. This weakness may come back to haunt it if buyers run to the safety of Large Cap stocks.
Nasdaq 100 Index ($NDX)
via StockCharts.com
The S&P still has some way to go to achieve the success of the Nasdaq 100 and despite enjoying an accumulation day it was unable to hold its early morning gain.
The Nasdaq was caught in the middle. It made its initial test of 2,616 resistance, but on higher volume accumulation.
Nasdaq Composite ($COMPQ)
via StockCharts.com
Finally, the Russell 2000 finished slightly down on the day, although it’s breakout held.
The issue for tomorrow is whether some of the late day uncertainty builds into a more concerted sell off. How will market breakouts hold when the selling does start? Tomorrow could give us our first clue.
Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.
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United Community Financial Announces Agreement for Sale of Four Ohio Branches
by Insider Scoop - August 31st, 2011 6:06 pm
Courtesy of Benzinga.
United Community Financial (NASDAQ: UCFC) holding company of The Home Savings and Loan Company, announced today that Home Savings has entered into an agreement to sell four of its western-most branches to Croghan Colonial Bank, a subsidiary of Croghan Bancshares (NASDAQ: CHBH). Croghan, headquartered in Fremont, Ohio, will acquire the Home Savings branches located in Fremont, Clyde, Tiffin and downtown Tiffin, Ohio. In the transaction, Croghan will assume all of the deposit liabilities and buy the related fixed assets of the branches. Croghan will pay a premium of 4.0% (or approximately $4.5 million) on all non-jumbo, non-brokered and non-public deposits, which together represent all of the deposits at the branches. In addition, Croghan will acquire performing consumer and residential loans associated with the branches. As of June 30, 2011, there were approximately $111.7 million in deposits and $28.1 million in performing consumer and residential loans at the branches. Croghan anticipates retaining the Home Savings employees at the branches.
Patrick W. Bevack, President and CEO of United Community and Home Savings, commented, “The divestiture of these branches successfully completes one step in the execution of our Capital Plan. The sale represents an opportunity for us to record a gain that will positively impact our capital levels and our book value per share, and it is expected to have minimal impact on liquidity and earnings from continuing operations. At the same time, we are pleased that our loyal customers and employees in these markets will be able to seamlessly establish relationships with Croghan, an institution that is just as committed to the communities it serves as Home Savings. Meanwhile, it remains business as usual at all other Home Savings branches.”
The transaction has been approved by the Boards of Directors of both companies. No shareholder approvals are required. The transaction is subject to customary conditions, including regulatory approvals on the part of Croghan, and is expected to close in the fourth quarter of 2011.
Franco-Nevada Purchases Royalty On Rubicon’s Phoenix Gold Project, Red Lake, Ontario for C$23.2M
by Insider Scoop - August 31st, 2011 5:51 pm
Courtesy of Benzinga.
Rubicon Minerals (NYSE: RBY) is pleased to announce that Franco-Nevada Corporation has purchased all of the right, title and interest of Dominion Goldfields Corporation in the 2% net smelter returns royalty payable on that part of Rubicon’s Phoenix Gold Project in Red Lake, Ontario lying beneath the waters of Red Lake (i.e. excluding mining properties covering the land portion of the Project). The transaction did not trigger any rights of first refusal on the Royalty, however, the Royalty remains subject to Rubicon’s prior right, exercisable at any time, to purchase 25% of the Royalty (being 0.5% of the 2% net smelter returns) for US$675,000. Rubicon acquired the Phoenix Gold Project under option from DGC in 2002 and later earned, subject to the Royalty, a 100% interest in and to the Project.
Franco purchased the Royalty from DGC pursuant to a royalty purchase agreement and issued to DGC, as consideration for the purchase of the Royalty, 550,000 common shares of Franco, such shares having an aggregate value of C$23,232,000.
David Adamson, President & CEO of Rubicon, commented: “Franco-Nevada Corporation is a recognized premier gold royalty company and we welcome their purchase of the Royalty. We see their involvement as another strong validation by an industry leader of our Phoenix Gold Project following close on the heels of the recent purchase by Agnico-Eagle Mines of a 9.2% stake in Rubicon.”
David Harquail, President & CEO of Franco, commented: “We are very pleased to have a royalty interest on Phoenix, a very high grade deposit in the prolific Red Lake camp. We believe Phoenix will be a long life gold mine in Canada that will add to Franco-Nevada’s long term growth.”
BK Is Out Of BK: BNY Chairman And CEO Kelly Forced Out Due To Differences With The Board On Managing Company
by Zero Hedge - August 31st, 2011 5:44 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Some very out of left field late news from the only other tri-party repo in addition to JPM and key corrupt player in the Bank of America settlement litigation, BNY Mellon, whose Chairman and CEO Bob Kelly has just stepped down “because of differences with the board in the approach to managing the company.” His replacement will be president Gerald Hassell, effective imediately. Uh, those never occur unexpectedly. Something big is happening behind the scenes, and alas we ave no idea what it is. Is this the first step to setting up the replacement for Brian Moynihan? Look for the kneejerk response in BAC stock for the answer. Or did the Bank of America settlement, already improbable, just get impossible?
BNY Mellon, the global leader in investment management and investment services, today announced that Gerald L. Hassell, BNY Mellon’s president and a board member since 1998, has been appointed chairman and chief executive officer of the company, effective immediately. Hassell also continues as BNY Mellon’s president. Robert P. Kelly has stepped down as chairman, chief executive officer and director by mutual agreement with the board of directors, due to differences in approach to managing the company.
“Gerald is ideally positioned to guide BNY Mellon through the next phase of its growth and to bring it to its full potential,” said Wesley W. von Schack, lead director of BNY Mellon. ”Over the course of his more than three-decade tenure with BNY Mellon and its predecessor company, The Bank of New York, Gerald has led nearly every major division of the company, has been a key decision maker on every major business action, executive hire and promotion in the merged company, and has served on its board of directors. He brings a broad and deep knowledge of our operations, our clients, our industry and our culture to his new roles. As the executive currently overseeing our investment services business and our global client management function, and given his extensive and long-standing relationships with investment management clients, Gerald is exceptionally well-suited to ensure BNY Mellon maintains and strengthens its role as a global market leader,” von Schack continued.
“I am pleased to accept these new roles and am excited about the strong growth prospects for our company,” said Hassell.…
More Bad News For Euro Banks: SocGen, Intesa And Unicredit Kicked Out Of Stoxx 50 Index
by Zero Hedge - August 31st, 2011 5:29 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Yes, you can’t short them. But that doesn’t mean you can’t sell them. Which is precisely what index funds will be forced to do after the main European index, the Stoxx 50, announced that it will be removing battered SocGen, Intesa and Unicredit from its list of constituents (as well as that anachronism of a cell phone maker Nokia). Let’s hope that European HFTs jump in to prop the bid. Oh wait, unlike our farce of a levitation machine, Europe does not have HFT, which is why following every overnight session it is our vacuum tubes’ patriotic duty to buy everything up into the close with a millisecond holding pattern, only to dump it to other algos, and ultimately retail and ETF hands. And since every loser has an equal and opposite winner, the companies that will replace the aforementioned sinking ships are Unilever, LVMH, National Grid and Air Liquide.
h/t London Dude Trader
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