- Lawrence Lewitinn at Talking Numbers9 hrs ago
If you like a little volatility, gold could be your game right now.
Early in the morning, higher U.S. jobless claims helped slam gold futures down to $1,269 per ounce, a 10-week low. Then, in a matter of minutes, reported violence in Ukraine and troop movements on both sides of the Ukraine/Russia border sent gold on a quick rebound toward $1,300 per ounce, where it came up against resistance at its 200-day moving average.
So how sustainable is the bounce?
Ari Wald, head of technical analysis at Oppenheimer & Co., says don't bet on a big bullion rally, gold will continue to stay within a trading range started in the middle of last year.
"We came into the year saying 2014 was going to be a year of stabilization for gold," he said. "I think that's what we're seeing."
Gold has traded generally between $1,200 and $1,400 per ounce over the past year. Since he foresees gold potentially at risk of getting nearer to the bottom end of the range, Wald says buyers should hold off until then.
- Talking Numbers23 hrs ago
Biotech is getting its mojo back.
The iShares NASDAQ Biotechnology Index ETF (the IBB) is up nearly 5 percent in the last five trading sessions thanks in large part to rallies by Biogen, Gilead, Mylan and Illumnia.
It's a welcome from the last two months, when biotechs became the poster child for all that is wrong with momentum stocks.
So is this simply a dead cat bounce or perhaps the start of a sustainable rally and a good entry point for traders who missed the rally?
"Biotech has been a runaway winner and for a heck of a long time," said Steve Cortes of Veracruz TJM. "It has outperformed the S&P  for six of the last seven years. Until about six weeks ago, it was absolutely on fire. I think this is a healthy pullback."
Cortes noted that unlike some other highfliers, biotech companies have been minting cash. "When I look at Biogen, when I look at Gilead," Cortes said. "Are they expensive stocks? Yes. But they are profitable already."
- Lawrence Lewitinn at Talking Numbers23 hrs ago
Casino stocks have been on a winning streak. But it might be time to fold them.
Stocks such as MGM Resorts and Las Vegas Sands have gained roughly 2 percent this week alone while Wynn, despite losing 4.3 percent on Wednesday, is still up 1 percent in the last five trading days thanks to its Tuesday rally. Traders say the catalyst has been more positive news out of Macau, the world's gaming mecca.
But according to Steve Cortes, founder of Veracruz TJM, the good news coming out of China will likely be short-lived.
"It's all about Singapore [and] Macau," Cortes said. "And, that's my problem. I'm actually short emerging markets right now. I'm short the EEM" (the iShares MSCI Emerging Markets Index ETF).
Cortes pointed to HSBC's China purchasing managers index staying below 50 for the fourth month in a row. A number below 50 indicates manufacturing in China is in contraction.
- Lawrence Lewitinn at Talking Numbers1 day ago
Greenlight's David Einhorn is sounding the alarm on tech stocks to his investors.
The 45-year-old manager of the $10 billion fund wrote in an investment letter, “Now there is a clear consensus that we are witnessing our second tech bubble in 15 years. What is uncertain is how much further the bubble can expand, and what might pop it.”
Well, Einhorn may be exaggerating about a consensus, let alone a clear one. But, he says there are reasons to go short high-flying tech stocks. "While we aren’t predicting a complete repeat of the collapse," wrote Einhorn, "history illustrates that there is enough potential downside in these names to justify the risk of shorting them."
“Talking Numbers” contributor Richard Ross, global technical strategist at Auerbach Grayson, says the technicals back up Einhorn's fundamental take on tech stocks, particularly the tech-heavy PowerShares QQQ Trust ETF, which tracks the Nasdaq composite index.
- Amanda Diaz at Talking Numbers1 day ago
It’s being called one of the best drug launches in history.
Gilead Sciences announced better-than-expected earnings Wednesday, pushing shares higher. The results were driven by the launch of its new hepatitis C drug Sovaldi, which costs a staggering $1,000 per pill and generated $2.3 billion dollars last quarter.
“Sovaldi’s profile has the potential to transform the treatment of hepatitis C. I couldn’t be more proud of the teams at Gilead who rapidly brought this product to market,” Gilead CEO John Martin said during the company’s earnings conference call.
Despite a banner quarter for profits, Gilead’s stock is relatively flat on the year. So, is Gilead the right prescription for your portfolio?
“Clearly what Gilead has demonstrated is the strongest launch in pharmaceutical history,” said Michael Yee of RBC Capital Markets.
Yee’s firm has a price target of $96 per share on Gilead, more than 20 percent higher than current levels.
- Lawrence Lewitinn at Talking Numbers1 day ago
The market appears to be bearish on fear.
One of the most important measures of expected risk, the CBOE Volatility Index (the "VIX") has sold off considerably in the past several days. After trading as high as 17.5 on April 15, it closed at 13.19 on Tuesday.
The VIX is sometimes called the "fear index" because it measures how much investors are willing to pay to protect their portfolio. Specifically, the VIX measures prices for put and call options on the S&P 500 index. The higher the VIX, the more volatility investors expect.
So is a low VIX signaling too much market complacency? After all, geopolitical tension remains high and earnings have been mediocre at best.
According to Steve Cortes, founder of Veracruz TJM, investors should use a lower VIX as a buying opportunity to protect against risks in the market.
- Amanda Diaz at Talking Numbers2 days ago
The fast-food giant reported first-quarter earnings just shy of street estimates, but did see a rise in March sales. The mixed results sent the stock from positive to negative throughout the trading day, and eventually lower for the close.
Today's price action serves as a sort of microcosm for the stock this year. McDonald’s shares have been stuck in a range over the past 12 months, gaining less than one percent and lagging the broader market. Meanwhile, competitors such as Sonic, Jack in the Box, Wendy’s and Burger King have surged.
So is it worth taking a bite out of the golden arches?
“I think McDonald’s is the ultimate safe name,” notes Zachary Karabell, Head of Global Strategy for Envestnet and CNBC contributor. But "safe" doesn’t necessarily make it a profitable investment. Karabell doesn’t see any reason to buy the stock, “I feel totally uninterested but also rather neutral. I don’t think it’s a dynamic space. I don’t see this outperforming the overall market.”
- Amanda Diaz at Talking Numbers2 days ago
Stocks are in the midst of their sixth straight day of gains. And leading the charge? Energy.
In fact, since the S&P 500 hit a two-month low on April 11, 2014, the energy sector has rallied more than 5 percent.
The standouts have been oil service stocks like Halliburton and Schlumberger, both of which are trading at or near all-time highs, and Baker Hughes, which is trading at its highest levels since late 2011.
Halliburton got a boost this week after reporting better-than-expected earnings on Monday. The company beat estimates by 2 cents, and saw profit growth on improved margins in North America.
So is this the best way to play rising energy prices? Or is it too late to buy at all-time highs?
“Oil services have been on fire, and I don’t think it’s too late to buy,” said Steve Cortes of Veracruz TJM. “I wouldn’t go all in, but I think you can start picking away at the buy side here.”
- Maxwell Meyers at Talking Numbers2 days ago
Apple’s moment of truth arrives today after the close when the world’s largest company reports second-quarter results.
Interestingly enough, it was earnings a year ago that sent Apple shares on a torrid run, rising 33 percent in the past 52 weeks as the company increased its stock repurchase program and stirred renewed optimism among investors about a refresh for its iPad and iPhone products.
But 2014 has not been kind to the tech giant. Shares have fallen 5 percent year-to-date and have badly trailed the market.
So will results change all that for Apple?
According to Tavis McCourt of Raymond James, there are three things investors will learn from Apple’s earnings tonight.
First: Is Apple’s business slowing, or is it declining? That may seem like semantics, but according to McCourt, it’s a subtle but important distinction. “The guidance is for modest growth, and if they can achieve that, it’ll be good for the stock,” McCourt told Talking Numbers. “The risk is that this business is in slow decline because of the commoditization of high-end cell phones.”
- Maxwell Meyers at Talking Numbers3 days ago
If filling up your car seems more expensive, that’s probably because it is more expensive.
Quietly, wholesale gasoline prices have been on a tear, hitting an eight-month high as a combination of higher oil prices and refinery outages have conspired to cause more pain at the pump.
So what could this mean for the stock market given that, at least according to some economists, each penny increase in gasoline prices equals $1 billion dollars less spent on other parts of the economy?
Curiously, it may not be such a bad thing.
“Gas prices have largely been a proxy for the broader economy. Strength in the economy filters down to higher gas prices, and we are seeing that,” said Richard Ross of Auyerbach Grayson and a Talking Numbers contributor.