Archive for September, 2011

Arch Coal Lowers Guidance For FY 2011; Spikes Sharply Lower

Courtesy of Benzinga.

Arch Coal (NYSE: ACI) today announced that it expects its adjusted earnings before interest, taxes, depreciation, depletion and amortization to be in the $900 million to $1.0 billion range for full year 2011, representing the highest level in company history but below the previous range given on July 29, 2011. The company also expects its 2011 adjusted earnings per diluted share to be in the range of $1.00 per share to $1.40 per share, subject to the final determination of purchase price accounting for the acquisition of International Coal Group.





S&P 500 Snapshot: Good Riddance, September!

Courtesy of Doug Short.

The S&P 500 has now closed the books on September, historically the weakest month of the year, with another grim statistic. The index was down 2.50% for the day and 7.18% for the month.

Among the many news items of the day, the two that especially resonate are the conflicting ECRI recession call and Warren Buffett’s assurances on CNBC that a recession is “very, very unlikely.”

Year-to-date the index is in the red at -10.04%, which is 17.03% below the interim high set on April 29.

From an intermediate perspective, the index is 67.2% above the March 2009 closing low and 27.7% below the nominal all-time high of October 2007.

Below are two charts of the index, with and without the 50 and 200-day moving averages.

 

 

 

 

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

For a bit of international flavor, here’s a chart series that includes an overlay of the S&P 500, the Dow Crash of 1929 and Great Depression, and the so-called L-shaped “recovery” of the Nikkei 225. I update these weekly.

These charts are not intended as a forecast but rather as a way to study the current market in relation to historic market cycles.

 

 

 

 





Market Snapshot: Worst Quarter For S&P 500 Since Q4 2008 And Second Best Ever For TSYs

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Equities ended on a very weak note, bringing the worst quarter since Q4 2008 for the S&P500 to an end. Stocks remain, perhaps remarkably to some, expensive relative to credit markets – especially HY which is feeling significant pain as issuance volumes drop 75% in the quarter to their lowest since Q2 2009. While stocks dropped around 2 standard deviations from a long-run mean, Treasuries did even better and rallied around 3.5 standard deviations – the second largest percentage shift in yields ever (once again Q4 2008 was the only better). Truly a remarkable day, week, month, and quarter and to be frank, one that shows no signs of slowing.

Quarterly percentage change in S&P 500 – down two standard deviations – highest since Q4 2008.

 

With Financials and Industrials bearing the brunt down around 19% and Utilities outperforming on the quarter in the US.

 

Quarterly percentage (yes I know that’s a little odd but given the range of yields over the period we thought it would make sense) in 30Y Treasuries – down 3.5 standard deviations – second largest drop ever.

 

Since the end of QE2, there has been significant weakness (obviously) and we recommended a QE-Unwind trade back on May 16th. It has performed rather well – besting the S&P 500 by over 21.5%.

Somewhat interestingly though, the US remains the best performer among global equity markets (in USD terms) with only Mexico and Switzerland beating it in local currency terms for the quarter. S&P 500 -14.33% QTD, Dow -12.09%. Perhaps more notable is the year-to-date numbers where US equities are the clear winner (so far…) and the Dow down only 5.7% (S&P -10%) – last two columns for local and USD-based returns.

and finally with everyone talking about the big rotation-allocation trade from bonds to stocks – bear in mind that these reallocations are not done in a vacuum but based on a risk-budget and the change in the VIX this quarter just broke all records – with a 4 standard deviation jump on the quarter – perhaps now the bonds vs equities divide will narrow as we have discussed at length (drawdowns and risk-returns).

A few other fun facts:

  • S&P 500 in constant USD terms (adjusted for DY that is)


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UPDATE: Verizon Appeals FCC Imposition of ‘Net Neutrality’ Rules

Courtesy of Benzinga.

Verizon Communications (NYSE: VZ) on Friday (Sept. 30) filed an appeal in the United States Court of Appeals for the District of Columbia Circuit of the Federal Communications Commission’s December 2010 Report and Order (FCC 10-201) adopting so-called “net neutrality” rules. The following statement should be attributed to Michael E. Glover, Verizon senior vice president and deputy general counsel:

“Verizon is fully committed to an open Internet. We are deeply concerned by the FCC’s assertion of broad authority to impose potentially sweeping and unneeded regulations on broadband networks and services and on the Internet itself. We believe this assertion of authority is inconsistent with the statute and will create uncertainty for the communications industry, innovators, investors and consumers.”





Momenta Pharmaceuticals Files for Preliminary Injunction Against Amphastar Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc. and International Medical Systems, Ltd.

Courtesy of Benzinga.

Momenta Pharmaceuticals, Inc. (Nasdaq: MNTA) today announced that it has filed a request for a temporary restraining order and preliminary injunction to prevent Amphastar Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc. and International Medical Systems, Ltd. from launching their enoxaparin sodium product in the United States.

Separately, on September 21, 2011 Momenta announced that it had sued Amphastar Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc. and International Medical Systems, Ltd. in the United States District Court for the District of Massachusetts for infringement of two Momenta patents. The patents cover the company’s innovative methods of producing enoxaparin sodium, which assure that the commercial product meets standards for identity and quality. One patent, U.S. Patent No. 7,790,466, is related to methods of processing enoxaparin to determine the presence of certain tetrasaccharide structures. The second patent, U.S. Patent No. 7,575,886, is related to methods of analyzing enoxaparin for the presence of a certain structural signature.





We’re Getting Closer

Courtesy of ZeroHedge. View original post here.

Submitted by Bruce Krasting.

I couldn’t be more delighted than to see the DAX get tagged for 2.5% today. This is a consequence of the “Successful” vote yesterday in the German Parliament to throw more good money after bad. The hit (so far) to German investors comes to $40b. That should make them happy this weekend.

It’s not just investors that a giving the raspberry. According to this WSJ article yesterday, 75% of the folks in German are fed up with more bailouts.

A poll for national German broadcaster ZDF earlier this month shows three-quarters of Germans are against the expanded European rescue fund.

How can this happen? Politicians are doing what the voters don’t want. It can only mean that new politicians are coming and the bailouts will be curtailed.

Keep in mind that the expanded EFSF is still woefully inadequate to address the debt problem in the EU. There has to be a much bigger effort. In my view, anything less than Euro $2 Trillion is not going to work. A big bazooka is required, a popgun is being offered.

This brings us to the speculation this week about a Euro SPV. There was the “Leisman Plan” (I wanna puke) and the EURECA Plan. These are confusing to most people. Let me make it easy. What is being proposed are Euro Bonds in disguise. This is just financial engineering to cosmetically create a joint and several EU debt obligation.

This won’t work. The ratings agencies and investors will see through this. If something silly like this is going to come I would anticipate that Moody’s and S&P will downgrade both France and Germany within weeks. Everything that is being offered is just a half-assed effort to deal with a very big problem.

The conclusion for me is that the Euro has to continue to suffer on the crosses as a result.

I see the dollar as the backbone for the markets in general. In a “perfect” world an orderly depreciation of the dollar (5% a year) is a “good thing”. It supports US inflation (that makes debt look smaller). A weak dollar is beneficial for tourism, and encourages foreigners to buy real assets like real estate. It gives US manufacturers of big-ticket items (planes/construction equipment) a…
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The AMD Event

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Nanex

On September 29, 2011, beginning at 14:08:25, quote rates from one stock, AMD, accounted for nearly half of all equity quotes. The pattern of data is similar to what we found in Dell a month earlier. There were 6 seconds that each had over 20,000 AMD quotes.

We are having trouble finding the appropriate superlative to describe the level of lunacy that generated this event, and the incompetence of regulators to allow it to continue. And continue it does: both in frequency and magnitude. Soon 20,000 quotes/second per stock will be the new normal.

This problem will only continue to grow until one day, when there is real market impacting news, there simply won’t be enough bandwidth or computing power to process legitimate equity prices. And everyone will wonder what happened. The last time this occurred was May 6, 2010.


 

Time #Quotes
14:08:25 4,126
14:08:26 15,390
14:08:27 13,260
14:08:28 20,517
14:08:29 25,687
14:08:30 27,089
14:08:31 24,702
14:08:33 11,279
14:08:34 2,696
14:08:35 16,619
14:08:36 13,351
14:08:39 20,871
14:08:40 23,563
14:08:41 5,171
14:08:49 1,233

 


AMD – ADVANCED MICRO DEVICES, Price and Sizes for 2 second period of 14:08:29, 14:08:30



Zoom in of previous chart showing the sequence:



The impact on CQS Line # 1 (Red). AMD quotes make up the majority of quotes on that line. Chart shows quotes/second on a 1 second interval.



Zoom in of previous chart showing quote traffic rates on a 50 ms interval.



 





Chart Of The Week: Monetary Chaos In The Bubble Years

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Sean Corrigan of Diapason Commodities

Here we show the divergence in sigmas from the mean of the stable, well-behaved, 43-year distribution laid out between 1952-1974 of the sectoral share of total domestic US holdings of money (currency + demand depos) which took place over the last wild, decade and a half of bubble and bust and outrageously suppressed interest rates…

…apart from the sheer scale of the disruptions involved since ‘Irrational Exuberance’,  note the underlying message that, given that they hold a higher fraction of the stuff than has traditionally been the case,  if you want to ‘mobilize’ the money in existence now, it is the willingness to do so of Non-financial BUSINESSES (both corporate and non-corporate) you need to encourage, a finding which further supports our oft-expressed contention that it is not the level of interest rates or currency parities, but the extreme degree of regime uncertainty which is the enervating factor and that this last is as much to blame for the current, sub-par recovery as it was in the FDR/Morgenthau/Eccles 1930s – and for similar reasons relating to the stultifying effect of an excess of overactive, arbitrary political intervention amid a patently incomplete liquidation of the mistakes of the prior Boom!!!





Startling Unpublished Keynes Equations Discovered (Friday Afternoon Humor)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Startling Unpublished Keynes Equations Discovered
 
LONDON | Friday Sep 30, 2011 3:26pm EDT
 
(Routers) – A remarkable discovery reveals equations that economists say could end the business cycle – forever.

Ian Macallum, spokesman for the Royal & Ancient Historical Society of London, told Routers that the equations were contained in an unpublished manuscript which was found in the attic of an 18th century flat in Soho.

“We were skeptical when initially contacted by the current owners” said Macallum. “There is no record of Keynes ever having resided at that address.  But we can confirm that the manuscript is indeed an original work of Lord Keynes.”

The formulas seem to have been derived from the Navier-Stokes equations which describe the motion of fluid substances.

“It’s pure Keynesian genius” said former Fed Governor Fred Mishkin.  “There is a strong consensus among economists, at least within the Federal Reserve, that liquidity is the answer to the age-old question ‘what is the meaning of life?’”   So, it makes perfect sense that someone as brilliant as Keynes would adapt these equations to a framework for fiscal and monetary policy.”

Although very technical in original form, Moody’s Chief Economist Mark Zandi said the final derivation of the equations can be simplified to the following:

“Unless you’re a PhD economist, I think it’s impossible to appreciate the elegance of the final derivation: by raising every stimulus factor to the power of infinity, you immediately move the probability of future recessions to zero.  It’s brilliant.  The notion that ‘risk’ is a necessary component of free market capitalism will finally be discredited.”

Federal Reserve Chairman Ben Bernanke was equally sanguine.  “I’ve asked some of my fellow academics at CERN to begin modeling the equations with an array of neutrinos, mixed with a small amount of unconventional policy.  Even without the helicopter, it should be theoretically possible to achieve an economic growth rate faster than the speed of light.  Einstein was a monetarist, so I’ve always been skeptical of his Special Theory.  It is now painfully obvious that he should have raised ‘c’ to the power of infinity, not 2.”

“I’m still trying to catch my breath!” exclaimed Nobel Prize winning economist Paul Krugman.  “Literally, when I read the equations, I felt a chill down my spine and a tingle in my balls.  We…
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First Solar Sells 550-Megawatt Desert Sunlight Solar Farm

Courtesy of Benzinga.

First Solar, Inc. (Nasdaq: FSLR) today announced completion of the sale of one of the world’s largest photovoltaic solar power projects – the 550-megawatt Desert Sunlight Solar Farm near Desert Center, Calif.





 
 
 

Zero Hedge

Explosion Hits Russia's Largest Virus Lab Which Houses Plague, Smallpox, Ebola And Other Deadly Viruses

Courtesy of ZeroHedge View original post here.

A sudden explosion at a Siberian virus research center on Monday reportedly left the facility engulfed in flames, according to several Russian news outlets. 

Firefighters and other emergency personnel were dispatched to the "Vector Institute" located several miles from Novosibirsk - an emergency which was upgraded "from an ordinary emergency to a major incident," a...



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Phil's Favorites

The future of work will still include plenty of jobs

 

The future of work will still include plenty of jobs

Even though the future is unknown, Canada’s employment rate has risen steadily from 53 per cent in 1946 to more than 61 per cent today. (Shutterstock)

Courtesy of Wayne Simpson, University of Manitoba

There is now widespread anxiety over the future of work, often accompanied by calls for a basic income to protect those displaced by automation and other technological changes.

As a labour economis...



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Lee's Free Thinking

Is The Drone Strike a Black Swan?

Courtesy of Lee Adler

Pundits are calling yesterday’s drone strke a “black swan.” Can a drone strike on a Saudi oil facility, be a “black swan.”

According to Investopedia:

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.

I seriously doubt that no one expected or could have predicted a drone strike on a Saudi oil facility.

Call Me A B...

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Insider Scoop

New Relic Cuts 2020 Sales Guidance, Announces Changes In Management

Courtesy of Benzinga

New Relic (NYSE: NEWR) has reaffirmed its second-quarter guidance and cut its sales guidance for fiscal year 2020 from $600 million-$607 million to $586 million-$593 million.

The company’s chief technology officer, Jim Gochee, and chief revenue officer, Erica Schultz, have resigned. New Relic also named board member Michael Christenson as its chief operating officer. Christenson joins from his ...



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The Technical Traders

Metals are following downside sell off prediction before the next rally

Courtesy of Technical Traders

It is absolutely amazing how the precious metals markets have followed our October 2018 predictions almost like clockwork.  Our call for an April 21~24 momentum base below $1300 followed by an extensive rally to levels above $1550 has been playing out almost like we scripted these future price moves.

Now that the $1550 level has been reached, we are expecting a rotation to levels that may reach just below the $1490~1500 level before attempting to set up another momentum base/bottom formation.  And just like clockwork, Gold has followed our predictions and price is falling as we expected. Just look at our October 2018 chart where we forecasted the price of gold...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Kimble Charting Solutions

Bond Yields Due For Rally After Declining More Than 1987 Stock Crash

Courtesy of Chris Kimble

U.S. Treasury Bond Yields – 2, 5, 10, 30 Year Durations

The past year has seen treasury bond yields decline sharply, yet in an orderly fashion.

This has spurred recession concerns for much of 2019. Needless to say, it’s a confusing time for investors.

In today’s chart of the day, we look at a longer-term view of the 2, 5, 10, and 30-year treasury bond yields.

Short to long term bond yields are all testing 7 to 10-year support levels as momentum is at the lowest levels in a decade.

A yield rally is likely due across the board after a recent decline that was bigger than the stock crash in 1987!

If yields fail to ral...



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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

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Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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