Thursday, March 15, 2007

Yesterday's Positive Reversal Carries Over To Today's Open

The markets are getting a bounce in early trading, despite a higher than expected inflation report. The PPI rose +1.3% (+0.5% consensus), which looks like a pretty big rise, but this data can be very volatile from month to month.

I would have thought that bond yields would be much higher on the news, but they seem to be taking it in stride. I think the bond market may be waiting for tomorrow's more important CPI report. And the fact that there was some weak manufacturing data this morning could be providing a bit of an offset. The 10-year yield is up a little to 4.54%.

CSCO announced it is buying WEBX, pushing the latter's stock up +24%. Have you seen CSCO's videoconferencing gear? It's pretty impressive. I would expect them to use this acquisition to make a big push into rolling out additional videoconferencing services to corporations.

Also, ICE made a competing offer to acquire BOT, valued at nearly $10 billion. This bid is higher than the current bid on the table from CME. BOT's stock is up +14% on the news, while CME is taking a hit.

And BEAV raised guidance yet again, reiterating the strong business trends they see and the good visibility the cycle is providing.

Asian and European markets both rose overnight, with the Nikkei bouncing back +1.1%. The Yen is also down a bit vs. the dollar, so no headwind there (so far). Oil is also trading down a touch, hovering around $58. Oil pretty much seems to be stuck in a trading range.

long BEAV


At 12:06 PM, Blogger skeedaddy said...


I agree with what you said about yesterday's reversal. The bearishness/fear factor has certainly extended itself to the point where it cannot be justified by the state of the economy. If anything, I think the pullback is healthy. Sell volatility spreads?

BTW, I'm working as an Investment Banking Analyst at Countrywide, and I specialize in Subprime deals. Just thought you might find that interesting since we've been the center of the CNBC universe for a few weeks now. I do.

Finally, did you get my flowers?

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