Monday Morning Musings

Morning News of Note:

• QCOM Texas Instruments, Broadcom complain to S. Korea FTC about Qualcomm - Reuters
  Reuters reports Texas Instruments (TXN) and Broadcom (BRCM) have filed complaints that Qualcomm (QCOM) stifled competition in the South Korea's modem chip market, an official of the Fair Trade Commission said on Monday. The commission has already been investigating Qualcomm after similar accusations from South Korean companies, the official said by telephone. "We are investigating whether Qualcomm has used its dominant position in the (South Korean) modem chip market, such as discrimination in royalties,'' said the official, who asked not to be named. Officials for Qualcomm and Texas Instruments in Seoul declined to comment.
• Credit Suisse and Morgan Stanley say equities storm has passed -- Bloomberg.com
  Bloomberg reports that Credit Suisse and Morgan Stanley recommend that investors increase their stock holdings while reducing cash; the firms say the best performers will be shares of large companies. Bloomberg quotes a Credit Suisse strategist who cites rising corporate stock buybacks and insider purchases. He also points to low investor sentiment, which he sees as a contrarian signal. The strategist adds that credit spreads -- the difference between corporate and Treasury bond yields -- have widened less than is normal during a bear market.
• WMT Wal-Mart sees June same-store sales up 1.2%, the low end of its forecast
• Small-cap picks and pans mentioned in Technology Trader - Barron's
  The following names are mentioned positively in Technology Trader: Superior Essex (SPSX), Belden (BDC), Trimble Navigation (TRMB), Powerwave Technologies (PWAV) and Stratex Networks (STXN). Names mantioned negatively include OmniVision Technologies (OVTI), Carrier Access (CACS) and Trident Microsystems (TRID).

Market Comments: The SPX is right at resistance around its 50-day (1275), but I think after some consolidation this level can be broken and allow the market to move higher into earnings season.

Bond yields are slightly higher this morning (5.15%) and oil is up also ($74). We don't want to see either of these move up too much higher, or they will start to weigh on equities again. Although high oil will probably keep the energy stocks moving higher, not to mention the fear of the upcoming hurricane season.

Market strength this morning is pretty widespread. Retail is weak off of the comments WMT made, but most other sectors are higher.

long BRCM