Portfolio Manager's Commentary on Investing and Trading in the U.S. Financial Markets
Monday, August 25, 2008
Stocks Lower into Final Hour on Global Growth Worries, Financial Sector Angst
Today's Headlines
Bloomberg:
- Gold fell $7.5/ounce on speculation that last week's rally was overdone. The metal has dropped 20 percent from a record $1,033.90 an ounce in March, partly because the US dollar has rebounded against the euro. Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell 1.2 percent last week to 651.4 tons. The fund reached a record 705.9 tons on July 11. The historical volatility of gold, or the rate at which a price moves up and down, was 26 percent in the past month, compared with 16 percent over the same period a year earlier.
- Wheat fell 1.9% on speculation rain in the southern U.S. Great Plains will help build soil moisture for plants that will be seeded starting next month. Wheat has plunged 35 percent from a record $13.495 a bushel on Feb. 27 on forecasts for increased global production. World inventories are expected to jump 18 percent to 136.2 million tons by May 31.
- Asian currencies declined, led by South Korea's won, on speculation overseas investors will cut holdings of local shares, adding to demand for dollars. The won fell the most in almost three months to reach its lowest since November 2004 after Finance Minister Kang Man Soo said Aug. 22 that South Korea's inflation rate is likely to remain high even after oil's decline.
- Thailand's economic growth slowed more than expected in the second quarter, increasing the likelihood the central bank will soon stop raising interest rates. Growth may ease further in the second half as protests and court cases against Prime Minister Samak Sundaravej's six-month-old government erode consumer confidence.
- Petroleo Brasileiro SA(PBR), Brazil's state-controlled oil company, fell the most in a week in Sao Paulo trading after Itau Corretora said the government is likely to raise taxes on existing oil concessions in the so-called pre- salt fields once production begins.
CNBC.com:
- Kohlberg Kravis Roberts, the private-equity firm run by Henry Kravis, has "expressed a high level of interest" in buying Lehman Brothers’(LEH) crown jewel, the Neuberger & Berman money management firm, people close to the negotiations said.
- Intel(INTC) Sees Strong 2008 – And No Slowdown.
- Chip makers are convinced of the potential for motion sensing chips in portable gadgets, thanks to the success of Nintendo's Wii game consoles and Apple's iPhones. The market for micro-electro-mechanical systems (MEMS) devices, which detect motion using acceleration sensors, could reach $7.3 billion this year and $11 billion by 2011, Taiwan chip maker Taiwan Semiconductor Manufacturing (TSMC) has said, quoting independent research.
Reuters:
- Apple (AAPL) expects to sell 3.5 million iPhones in Russia in the next two years, according to market sources familiar with new deals being struck by Russian carriers. Up to 600,000 iPhones have already flooded into Russia through unauthorized sales but now at least two carriers have signed an official framework agreement with the manufacturer and one more deal is expected next week, according to analysts and market sources.
- The International Monetary Fund has trimmed its forecasts for 2008 and 2009 world economic growth, largely due to a marked worsening in the outlook for the euro zone, a G20 finance official told Reuters on Monday.
El Pais:
- More than half of
El Mundo:
- Fuel sales at the pumps of Spanish service stations fell in July by 15%, the fastest pace since 1993 as consumers reined in spending and limited holiday trips.
Gestion:
- Rio Tinto Group’s(RTP) Peruvian copper mine may start producing in 2014. Rio Tinto’s
Times of
-
Bear Radar
Style Underperformer:
Small-cap Value -2.24%
Sector Underperformers:
Coal irlind (-4.81%), Steel (-3.92%) and HMOs (-3.52%)
Stocks Falling on Unusual Volume:
HWAY, APWR, R and HGR
Stocks With Unusual Put Option Activity:
1) ATVI 2) GE 3) CHL 4) LTD 5) BCSI
Exisiting Home Sales Rise More Than Estimates
- Existing Home Sales for July rose to 5.0M versus estimates of 4.91M and 4.85M in June.
Bull Radar
Style Outperformer:
Large-cap Value (-1.01%)
Sector Outperformers:
Airlines (+.29%), Drugs (-.59%) and Computer Services (-.65%)
Stocks Rising on Unusual Volume:
FRO, FEED, KNSY, AMLN, AFAM, TISI, KNM, TMB and TTC
Stocks With Unusual Call Option Activity:
1) ATVI 2) ESLR 3) AEO 4) BCSI 5) NLY
Links of Interest
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