Author Archive

• Morning News: October 7, 2011
  Eddy Elfenbein, October 7th, 2011 at 5:25 am

  Merkel-Sarkozy Divided on Default Threat to Banks

  German Minister Signs MOU To Help Greece Restructure Its Economy

  Bank of Japan Keeps Policy Unchanged as It Watches Yen Moves, Europe

  Australia Has Scope to Cut Rates If Needed, IMF Staff Say

  Bank of England Loses Faith in Europe, Announces Stimulus

  U.S. Senate Nears Approval of Measure to Punish China Over Currency Manipulation

  Brent Crude Stays Firm Above $105 on EU’s Move

  Some Unemployed Find Fault in Extension of Jobless Benefits

  F.C.C. Plans to Overhaul Telecom Fund to Focus on Expanding Broadband

  Retailers’ Discounts Lure Shoppers

  Moody’s Cuts RBS and Lloyds Ratings

  S&P Cuts Core Dexia Banks By One Notch, On Watch

  Oracle Settles U.S. Agency Overbilling Case for $199.5 Million

  Moving On, Minus Its Genius

  Jeffrey Carter: Steve Jobs and the Entrepreneurial Ecosystem

  Credit Writedowns: Europe’s Bank Problem

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• Strategists See Big Q4 Rally
  Eddy Elfenbein, October 6th, 2011 at 10:48 am

  From Bloomberg:

  Wall Street strategists say the Standard & Poor’s 500 Index, after falling within 1 percent of a bear market this week, will post the biggest fourth-quarter rally in 13 years even after they cut forecasts at a rate exceeded only during the credit crisis.

  The benchmark index for U.S. stocks will climb 14 percent from yesterday to end 2011 at 1,300, according to the average estimate of 12 strategists surveyed by Bloomberg. The last time they were this bullish in October was 2008, when the group predicted a 27 percent gain and the index lost 18 percent.

  Analysts from Oppenheimer & Co. to UBS AG and Barclays Plc say equities will rebound from a decline of 19 percent since April as policy makers prevent a default by Greece and profit in the S&P 500 climb to $95.85 a share in 2011. Europe’s worsening debt crisis and the U.S. government’s loss of its AAA credit rating led strategists to cut their S&P 500 forecast in the past two months from an average level of 1,401.

  “Investors are way too bearish and are being swayed by macro variables,” Brian Belski, the New York-based chief investment strategist at Oppenheimer, wrote in an e-mail on Oct. 4. “Fundamentals drive stocks,” he said. “U.S. portfolios are not positioned for a positive third-quarter earnings season.”

• Morning News: October 6, 2011
  Eddy Elfenbein, October 6th, 2011 at 5:35 am

  Europe’s Rescue Fund Is Only Last Resort: Merkel

  Euro Rises Versus Dollar as European Stocks Rally; Aussie Gains

  M&G Welcomes Volatility as Bank of England Mulls Asset Purchases

  Hong Kong Shares Jump 5.7%, Best Day Since April 2009

  Swiss National Bank Foreign Currency Reserves Climb to Record

  HSBC Lowers Forecasts for Most Asian Economies

  Unions Lend Muscle, Resources to Wall St. Protests

  Labor Reports Indicate No End to Jobs Worries

  Democrats Seek Tax on ‘Richest,’ Aiming Gauntlet at G.O.P.

  Volcker Rule Draft Gives Banks Ability to Hedge

  A Look Back at Steve Jobs of Apple

  Tim Cook Aims to Carry On Steve Jobs’s Vision

  Belgium’s Dexia Lifts In Early Trading As Key Decisions Loom

  Costco to Raise Membership Fee

  Roger Nusbaum: What to Make of Occupy Wall Street

  Paul Kedrosky: Refuting Dan Yergin

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• 1984: Steve Jobs introduces the Macintosh
  Eddy Elfenbein, October 5th, 2011 at 10:21 pm

• Apple’s Share Price History 1980 to Present
  Eddy Elfenbein, October 5th, 2011 at 9:29 pm

  Apple‘s ($AAPL) stock has averaged a 1% gain each week for eight-and-a-half years.

  

• Stanford Commencement 2005
  Eddy Elfenbein, October 5th, 2011 at 8:25 pm

• RIP: Steve Jobs
  Eddy Elfenbein, October 5th, 2011 at 8:13 pm

  From the NYT:

  SAN FRANCISCO — Steven P. Jobs, the visionary co-founder and former chief executive of Apple, has died at 56.

  Apple said in a press release that it was “deeply saddened” to announce that Mr. Jobs had passed away on Wednesday.

  “Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives,” the company said. “The world is immeasurably better because of Steve.

  Mr. Jobs stepped down from the chief executive role in late August, saying he could no longer fulfill his duties, and became chairman. He underwent surgery for pancreatic cancer in 2004, and received a liver transplant in 2009.

  Rarely has a major company and industry been so dominated by a single individual, and so successful. His influence went far beyond the iconic personal computers that were Apple’s principal product for its first 20 years. In the last decade, Apple has redefined the music business through the iPod, the cellphone business through the iPhone and the entertainment and media world through the iPad. Again and again, Mr. Jobs gambled that he knew what the customer would want, and again and again he was right.

  The early years of Apple long ago passed into legend: the two young hippie-ish founders, Mr. Jobs and Steve Wozniak; the introduction of the first Macintosh computer in 1984, which stretched the boundaries of what these devices could do; Mr. Jobs’s abrupt exit the next year in a power struggle. But it was his return to Apple in 1996 that started a winning streak that raised the company from the near dead to its current position of strength.

  Bill Gates, the former chief executive of Microsoft, said in a statement that he was “truly saddened to learn of Steve Jobs’s death.” He added: “The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come. For those of us lucky enough to get to work with him, it’s been an insanely great honor. I will miss Steve immensely.”

  Mr. Jobs’s decision to step down in August inspired loving tributes to him on the Web and even prompted some fans to head to Apple stores to share their sentiments with others. Some compared him to legendary innovators like Thomas Edison.

• Tuesdays Continue to Rule
  Eddy Elfenbein, October 5th, 2011 at 1:10 pm

  Thanks to yesterday’s late-day rally, the Tuesday Effect continues to rule the market. While the market has done poorly since April 29th, Tuesdays, on average, have been very good.

  Here are the returns by day of the week since the market topped on April 29th.

  Day	Return	Count
  Monday	-7.25%	20
  Tuesday	14.75%	23
  Wednesday	-9.21%	22
  Thursday	-6.21%	22
  Friday	-9.05%	22

  From the April 29th top to yesterday’s close, the S&P 500 is down 17.58%. My guess is that the Tuesday Effect is due to the political nature of this downturn. Bad news strikes over the weekend due to some decision made in Europe or Washington. Stocks then sell off on Monday and subsequently rebound on Tuesday.

  

• The Average Bear Market
  Eddy Elfenbein, October 5th, 2011 at 10:49 am

  Some interesting stats from Mark Hulbert:

  The bad news: The average bear market since 1900 has lasted 410 days, according to calculations conducted by Ned Davis Research. Since 158 days have already elapsed since the bull market high on April 29, that means that — if this is a bear market and its length is precisely average — we have another 252 days to go.

  That places the bottom of the bear market on June 12 of next year.

  How much further down does the stock market have to go if this turns out to be an average bear market? Again according to Ned Davis Research, the average bear market loss since 1900 has been a decline of 31.5%.

• Bonds Vs. Stocks
  Eddy Elfenbein, October 5th, 2011 at 10:28 am

  Here’s a quick-and-dirty valuation metric. I looked at the total return of the Wilshire 5000 and divided it by the total return index of the Merrill Lynch 15+ years Corporate Bond Index.

  Stocks and bonds are in a perpetual war with each other for investors’ money. Over the past 15 years, stocks have started to outperform bonds (meaning the line rises) at about the level we’re at now.