• While the American economy may continue to be sending investors mixed signals about a potential recovery, famed short-seller Jim Chanos still believes the U.S. is "the best house in a bad neighborhood." He's been bullish on U.S. markets for three years.

    Related: March Jobs Disaster: It’s a Bad Report But Don’t Panic, Brusca Says

    "Boy the U.S. market has gone up quite a bit since then," says Chanos of his prediction. "A lot of what we thought might happen three years ago has sort of now been reflected in prices."

    To his point, both the Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) are trading near all-time highs. As a result, he is finding "fewer attractive long hedges in the U.S."

    As of the fourth quarter of last year, his largest long positions included United States Natural Gas (UNG), SPDR S&P 500 ETF (SPY), SPDR S&P MidCap 400 ETF (MDY), SanDisk (SNDK) and Deere & Co (DE).

    The Daily Ticker’s Lauren Lyster sat down with Chanos, also president and managing partner of

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  • Plenty of Things to Worry About in China, Bird Flu Is Not One

    By Lauren Lyster | Daily Ticker – Mon, Apr 8, 2013 1:40 PM EDT

    Fears over an outbreak of bird flu in China have sent Chinese markets tumbling to multi-month lows Monday. The illness has reportedly claimed the lives of six people, while CNN reports Chinese officials killed 20,000 birds in response. Asian airline stocks have suffered the most on concerns that the outbreak will hurt demand for travel.

    Related: Buy U.S., Sell China? Not For Much Longer

    Michael Pettis, finance professor at Peking University in Beijing and senior associate at the Carnegie Endowment for International Peace, shrugs off the threat.

    “Oh no not again,” Pettis, tongue-in-cheek, tells The Daily Ticker at the 2013 Wine Country Conference benefiting the Les Turner ALS Foundation. “The tendency is for us to get overly excited.” Pettis, who lived in China during the SARS scare last decade, says there's a better chance of dying of pneumonia in New York than of SARS in China.

    Avian flu aside, there are plenty of real concerns Pettis is watching when it comes to China’s economy.

    “I

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  • Every three months, the smallest and least consequential member of the world's most elite stock grouping is showered with disproportionate attention when its quarterly earnings come out. I am referring, of course, to Alcoa (AA) and the upcoming release of its first quarter results. Because of its unique position as one of only thirty companies that make up the Dow Jones Industrial Average, Alcoa gets a degree of contemplation that comparably-sized $8.5 billion businesses such as Whirlpool (WHR), Juniper (JNPR) or Tiffany (TIF) simply don't.

    As my co-host Jeff Macke and I discuss in the attached video, Alcoa's role heralding the impending stream of financial reports we collectively call earnings season is not so much about its relatively minuscule impact on the capital markets, but rather upon the fact that it is first.

    To that point, FactSet earnings analyst John Butters looked for correlation between Alcoa's results and the subsequent performance of the markets, as well as the degree of earnings season surprises (or disappointments) and found "little predictive value" to crow about.

    Simply put, As Goes Alcoa, So Goes the Market just isn't applicable.

    What Butters does highlight is the fact that expectations for Alcoa, and the entire Materials sector, have come way down over the past 90-days, at exactly the same time that stocks have touched all-time highs.

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  • After a court-ordered mediation period seems to have hit a brick wall, Macy's (M), Martha Stewart Living Omnimedia (MSO) and J.C. Penney (JCP) will be back in New York state court this week. As previously discussed on Breakout, the case is a love triangle of sorts. Macy's claims they have a five-year exclusive deal with Martha and that JCP's efforts to open MSO "stores within a store" clearly violate the terms of the contract.

    The case is relatively small potatoes for Macy's, and CEO Terry Lundgren and his legal team have made noise about financial damages to Macy's. But given JCP's collapsing sales — with or without Martha — such claims seem designed more for legal positioning than financial peril. Brian Sozzi, CEO of Belus Capital Advisors, suggests JCP has a lot more riding on the outcome and traders know it.

    "Since the trial began on February 20, JCP shares are down 25%, Macy's up 10%," Sozzi points out. "So what is Mr. Market saying? That Macy's is going to put the final knife, the final dagger, into the heart of J.C. Penney."

    New York Supreme Court Justice Jeffrey Oing is clearly aware that a draconian ruling against JCP and MSO could be a death blow for either or both companies.

    JCP CEO Ron Johnson didn't just sign off on the attempt to exploit a perceived loophole in Stewart's contract with Macy's, he also invested $38.5 million for a 16.6% stake of MSO. The deal placed a value of $3.50 a share for MSO, roughly 30% higher than where the stock is trading today.

    Read More »

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