The Ticker
-
Young Managers Take Bigger Risks
Continue reading… 0 CommentsIt's no secret that the young are especially susceptible to following the latest trends, but it's apparently true in the investing world as well.
Using mutual fund data from Morningstar, academics Robin Greenwood and Stefan Nagel found that during the run-up to the Internet bubble in 2000, younger managers were more inclined to load up on technology stocks, chasing trends in a classic sign of inexperience.
From the study (via the Financial Times's Alphaville):
Using age as a proxy for managers' investment experience, we find that around the peak of the technology bubble, mutual funds run by younger managers are more heavily invested in technology stocks, relative to their style benchmarks, than their older colleagues. Furthermore, young managers, but not old managers, exhibit trend-chasing behavior in their technology stock investments. As a result, young managers increase their technology holdings during the run-up, and decrease them during the downturn. Both results are in line with the behavior of inexperienced investors in experimental asset markets.
So, never trust anybody under 35 (Greenwood's and Nagel's benchmark) with your money?
-
Dow Hits New 2008 Low
Continue reading… 1 CommentFrom the Wall Street Journal's MarketBeat blog:
With its latest decline, the Dow Jones Industrial Average has reached a new intraday low for 2008, falling to 11626.43, surpassing the previous intraday low of 11634.82, reached on Jan. 22. Stocks have recovered a bit—and the other major averages, the Standard & Poor's 500-stock index and Nasdaq Composite, are far from their yearly low.
Technicals don't look too cheery, and with today's big downgrades on Citigroup and General Motors, there's not a lot of reason to expect a big Dow rebound. Is the next leg down on the way?
-
Lofty Expectations for Research In Motion
Continue reading… 0 CommentsPredictions of Research In Motion's fiscal first-quarter results were undoubtedly high, and the 11 percent sell-off in its shares this morning proves just how lofty investor expectations had become.
Profit and revenue more than doubled from a year ago as BlackBerry demand surged among both core business clients and new retail users, who made up 60 percent of the company's 2.3 million new subscribers in the quarter.
-
The Fed's Calming Pause
Continue reading… 1 CommentAs almost everybody had expected, the Federal Reserve today left interest rates unchanged at 2 percent after its two-day meeting, ending 10 months of rate cuts designed to stem slower economic growth and head off the credit crisis.
Stocks are rallying a bit thanks to a post-meeting statement that addressed market fears that central bankers might be ready to get back to fighting inflation with renewed rate hikes.
Central bankers offered no sign that higher interest rates are imminent, saying they'll act "as needed" to head off inflation spurred by rising energy and commodity prices.
The Dow gapped up a quick 20 points before settling back to hold gains notched earlier in the day.
The tone of the statement also looked far brighter than the post-meeting statement in April, when the Fed called economic activity "weak" and cited "some firming" in household spending.
The text of the Fed's post-meeting statement is here.
-
Monsanto Comes Through
Continue reading… 0 CommentsAfter posting a huge 42 percent jump in fiscal third-quarter profit from a year ago, Monsanto continues to extend its lead in seed as record crop prices mean farmers are still willing to spend mightily on its products.
Earnings for the quarter ending May 31 hit $1.45 a share, a full 10 cents ahead of Wall Street consensus estimates. The ag giant also raised full-year 2008 guidance to $3.63 a share, up from an earlier range of $3.38 to $3.48.
-
Wall Street Legal
Continue reading… 0 CommentsLots of news on the legal front today for some of the best and worst stocks out there:
MasterCard settled an antitrust suit with American Express to the tune of $1.8 billion. AmEx had charged MasterCard, Visa, and several member banks with prohibiting financial institutions from issuing American Express credit cards. The settlement means a $1 billion charge for MasterCard in the second quarter.
-
Stocks Wary of the Fed
Continue reading… 1 CommentThe single biggest head wind to stocks this week continues to be the Federal Reserve, whose committee that sets short-term interest rates is meeting today and tomorrow.
As the central bankers get set to start unwinding all the support offered up to head off the credit crisis, stocks will lose another buffer of easier money they enjoyed when interest rates were falling fast. The Fed has lowered the federal funds target rate from 5.25 percent last September to 2 percent.
-
Home Prices Sink. Time to Buy Home Builders?
Continue reading… 0 CommentsAnother month, another record decline in home prices, according to the Case-Shiller index.
But today's 15.3 percent year-over-year drop in April prices is accompanied by a gutsy call by Credit Suisse, which upgraded the home-building sector. From CS via Clusterstock (bold is mine):
Tough conditions to continue, but an inflection point in housing is likely in spring 2009 as inventory levels will likely start to decline. A peak in inventory of homes for sale is likely in spring 2009: Our supply-demand analysis suggests that we will begin to see declining inventory levels after spring 2009, which will be an initial step toward price stabilization, with prices being the key driver of margins and earnings.
-
Agrium Hits New High
Continue reading… 1 CommentWe've been talking up fertilizer stocks around here all year, and today Agrium shot up 8 percent to an all-time high of $100 after raising second-quarter guidance. The Canadian chemicals maker now expects to earn $2.80 to $3 a share in the quarter, up from previous expectations of $2.50, and those numbers exclude a recent acquisition of UAP that could give results a "significant" boost.
With sales surging as farmers worldwide scramble to get more food harvested at a time when high prices (and shortages) abound, fertilizer makers have seen demand skyrocket. Fertilizer prices have climbed 65 percent from a year ago as of April, according to the USDA.
-
Smartphone Wars: After Apple's iPhone Upgrade
Continue reading… 14 CommentsNewer, faster, cheaper.
Apple's $199 3G iPhone and MobileMe, an upgrade version of its Mac syncing service, should successfully give shares a shot at a new leg up. It's simply too tough to argue that sales won't be absolutely huge now that the iPhone has moved from must-have status gadget to can-have everyday phone for tens of thousands of new users.
Apple gained 1.5 percent today, though shares fell after the hype ahead of the announcement. (Here's the big moment, complete with Steve Jobs, at AllThingsD.com.)
-
Lehman's Day of Reckoning
Continue reading… 0 CommentsLehman Brothers' shares fell more than 9 percent after the bank announced it would have to raise $6 billion in capital and post a big $2.8 billion during the first quarter.
It's mostly bad news.
Yves Smith of the Naked Capitalism.com blog points out that's 10 times expected losses of around $300 million.
-
Potash, Innophos Look Like Smart Ag Plays
Continue reading… 0 CommentsFertilizer stocks this year have been among my favorites, and they've continued to climb on the back of incredible demand for food around the globe. After a short break starting in late April, shares of Potash Corp. of Saskatchewan are rallying again. They're up 52 percent, extending a stunning 200 percent jump over the past year.
Will gains continue? Steven Halpern of TheStockAdvisors.com (via BloggingStocks) points to Ticker Tape Digests' Leo Fasciocco, who sees earnings momentum continuing and a target price of $265 a share for Potash. They're around $219 today.
-
Ugly Jobs Report, $150 Oil Forecast Rocks Stocks
Continue reading… 2 CommentsIt feels like summer today outside on Wall Street. Too bad traders are acting like it's early March (again) after the economy's most worrisome sectors—banking and the consumer—showed new signs of trouble ahead. A huge, half-point jump in the unemployment rate to 5.5 percent is the latest headwind for stocks, and shares of retailers and other vulnerable sectors continued to falter under the threat of lower consumer spending.
Wal-Mart, the nation's biggest retailer and one of the best-performing stocks in the sector since this slowdown started, saw shares fall after hitting a new 52-week intraday high Thursday. Options traders seem to be weighing just how much more upside there will be. The SPDR S&P Retail ETF slipped more than 3.5 percent.
-
Energy Woes
Continue reading… 0 CommentsUnited is slashing 100 jets from its fleet, cutting 1,600 jobs, and blaming a $3 billion fuel bill.
As our own Rick Newman points out, GM is switching to smaller cars.
