Sunday, January 8, 2012

short review of last wk, long oil, MTB earnings

One week in the books, not too much happened on this 1st week of 2012, but let’s take a look:
S&P 500: up 1.6%
Dow Jones: up 1.17%
Nasdaq the winner up 2.65%

We saw some weakness in IBM, large weight on the Dow, so that was the lagger this week, though by Friday Apple closed at a new high (not intraday high) of 422.40. This is less than $4.00 from an all-time high which I will assume will happen sometime this week. There is still a lot to be bullish about on in this name, iPhones and iPads are still selling very well, and who is to say they don’t have another new invention down the pipeline? Long term, this looks good, and speculation of them paying a dividend or doing a share repurchase makes owning Apple more attractive.

The jobs report came out on Friday, and of course everyone’s reaction was to the headline where we created 200K jobs in December. I would give this a B, because at least 25% of those jobs were due to seasonality and the labor force continues to decline. The positive thing is at least we are not losing jobs, but one has to be careful of the rate. Unless you are looking at the U6 (measures discourages and unemployed “real unemployment) the rate that they give you on TV or in the news is the false. It is only a matter of time before people wake up and realize you can only decrease the labor force so much.

It appears to me like bullish sentiment is setting in for 2012, we are definitely seeing it in the crude oil space. Last week at the open, we saw a rocket higher above 100 and we managed to hold above 100 the whole week getting to almost 104. With continued games in the middle east including the Strait of Hormuz, expect oil prices to be around these levels or higher this year.

Below the narrow trading range in the ES last week, it seems like someone already knew about the jobs report Friday zzz… 20 handle range

This week begins Q4 earnings and what better way to kick it off than highlighting one name on my radar. M and T Bank $MTB is a smaller regional bank, mkt cap ~10B, headquartered in Buffalo, NY. Looking at their internals, the company over the last year has been dealing with declining net income due to selling expenses. As the entire banking sector still continues to teeter in the edge, I would not be a buyer of M&T here. Valuations do look cheap, but there are many headwinds. Current liabilities increased 20% from March to June of this year, though their cash pile also increased.

Above it seems like MTB is ready for a breakout, but this looks to me like the top of a range imo, be careful.

Short post, but last week at home until Spring semester starts, and its going to be pretty boring, might do a couple trades I’ll keep you all updated on twitter @peter_eller10 have a good week all.

No comments:

Post a Comment