March 21st 2011

Return to Middle East
As Japan’s nuclear crisis seemed to have been temporarily running out of favor, the market is now focusing on Libya. After UN decided to set-up a no-fly-zone over Libya, the Allied forces have started to barrage military targets there. For how long Gaddafi will last, it is still uncertain. However, the absence of ground forces coming from the UN could mean Libya will end in four scenarios: Gaddafi will be able to win against the Allied forces (the most unlikely outcome); Gaddafi will offer a truce and to remain as leader (also not that possible); Gaddafi will offer a truce but Libya will be divided (rather likely outcome); or the Allied will win, but only after sending in ground forces (more likely outcome). Despite the joint action by the UN on Libya, US crude price for April delivery ended down 0.28% to $101.31 a barrel, while the Brent crude for May delivery finished at $114.16 a barrel, down 0.81%. Gold contract for April delivery however, jumped $11.9 to end at $1,416.10/oz. The Dow Jones Industrial Average ended up 0.71% on Friday at 11,858.52, boosted by Federal Reserve’s decision to allow banks and lenders to boost dividends, sending financials stronger such as JPM which gained 2.65%. S&P 500 index also gained along with Nasdaq Composite. S&P 500 was up 0.43% to end at 1,279.20 and Nasdaq finished at 2,643.67 or up 0.29%. Situations in the Middle East and North Africa will stay on the investors’ radar while the development from the nuclear disaster in Japan will still be watched carefully. The financial sector has been boosted by the dividend and buyback opportunities on Friday, so there may be more follow-ups of this boost the coming week. JPM is expected to perform well, while CSCO may get its chance at last to recover from the earnings slump. CSCO also announced its dividend recently and given its price level, it is offering an interesting opportunity. CAT was the strongest performer of the week with 5.04% gains, followed by PFE and CVX which went up 3.65% & 2.87%, respectively. Meanwhile, GE was hit hard by its connection to the troubled nuclear reactors in Japan, sending it down 5.45% throughout the week. MCD was the second weakest having lost 4.87%. Third spot at the bottom were jointly owned by INTC and CSCO which fell 4.5%. By the end of the week, PFE, CVX, and CAT were the top three in terms of MTD performance, despite the rollercoaster week shadowed by the nuclear disaster in Japan. The trio was also the best performing stocks this March. At the bottom, CSCO, MSFT and HPQ were the top losers.

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.DJI 11,858.52 (+83.93 ● +0.71%) .SPX 1,279.20 (+5.48 ● +0.43%) .IXIC 2,643.67 (+7.62 ● +0.29%)

March 21st 2011

Corporate News
  AA has agreed to provide railroad sleepers to Axion International. AXP will return capital to shareholders in 2011 by distributing dividends and buying back stocks after its capital distribution was approved by the Federal Reserve. AXP aims to return around 50% of the capital generated. Korean Air confirmed an order for two BA’s 747-8 Freighters worth $639 million. Also, BA named Marc Allen as president of its operation in China, replacing the retiring David Wang. BAC and JPM were up on the news that the Fed has allowed banks to distribute dividends again. The amount should not be more than 30% of banks’ earnings, however. Elsewhere, BAC’s Countrywide unit won court’s approval of $34 million settlement. CSCO announced its first ever quarterly dividend of $0.06 per share, to be paid on April 20th for shareholders on record as of March 31st. IBM has been sued by the SEC for being involved in paying Chinese and Korean officials during 1998 throughout 2009. The Big Blue will have to pay $10 million for settlement of this bribery claim. INTC has declared $0.1812 quarterly dividend on the company’s common stock. The dividend will be payable on June 1st 2011, with record date of May 7th 2011. JPM raised dividend by $0.20 and declared $15 billion of repurchase program. Quarterly dividend will be at $0.25 per share. T is set to acquire T-Mobile USA from Deutsche Telekom for $39 billion in cash and stock to become the biggest wireless operator in the US. T also announced its next earnings release for Q1 2011 on Wednesday, April 20th 2011.

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.DJI 11,858.52 (+83.93 ● +0.71%) .SPX 1,279.20 (+5.48 ● +0.43%) .IXIC 2,643.67 (+7.62 ● +0.29%)

March 21st 2011

Stock Focus: J.P. Morgan Chase & Co.
JPM Last Mar 18th $45.74  2.65% WTD MTD 0.00%  2.69% YTD 12-Month  7.83%  2.21% Resistances Supports Outlook POSITIVE Strategy
BUY while > 43.32, PT 55.70, risk < 43.32

46.46 45.12

47.19 44.79

48.36 44.46

51.56 43.32

55.70 41.76

JPM is now POSITIVE, with PT at $55.70 as the Fed has opened the door for big banks to distribute dividends and conduct buybacks. Technical outlook is positive with MACD climbing towards positive area, and Fed’s news catapulted JPM above its EMAs. RSI is not oversold, meaning lots of space up there, while the rise also supported by rising volume. Improving fundamentals offer a chance to enter LONG. Risk would be below recent swing low at $43.32.
3 .DJI 11,858.52 (+83.93 ● +0.71%) .SPX 1,279.20 (+5.48 ● +0.43%) .IXIC 2,643.67 (+7.62 ● +0.29%)

March 21st 2011

Price Performance - as of Mar 18th 2011
Code Last Dy 0.62% 1.73% 1.17% 0.43% 1.88% 0.82% 0.55% 1.26% 1.15% 0.16% 0.67% -0.27% 1.11% 0.15% 0.76% 2.65% 0.75% 0.67% -0.56% 0.33% 1.49% 0.08% 1.51% 0.28% 0.72% -1.06% 0.84% 1.44% 0.29% -0.38% WTD 0.50% -0.25% -3.55% -2.36% 5.04% -4.51% 2.87% 0.17% -3.96% -5.45% -3.07% -0.98% -4.03% -4.50% -1.88% 0.00% -2.24% -3.26% -4.87% -2.87% -2.51% -3.43% 3.65% -1.45% -1.83% -1.39% -1.38% -0.03% -2.03% -1.55% MTD -0.12% 0.71% -0.19% 3.24% 9.80% -18.11% 10.10% 5.37% 6.13% -4.70% -1.91% -9.21% -2.09% -7.13% -2.40% 2.69% 1.51% 0.79% -0.40% 1.76% -3.51% -10.66% 11.18% -5.61% 1.64% 4.03% -1.56% 0.59% -9.14% 2.35% YTD 4.68% 2.91% 5.88% 5.25% 12.17% -15.27% 12.66% 6.23% 9.92% 5.25% 2.68% -1.85% 6.22% -5.23% -5.30% 7.83% -1.65% -4.67% -4.91% 3.11% -11.46% -11.14% 15.25% -5.80% -4.90% 4.22% 1.83% 0.17% -4.47% 10.57% 12-Mos 13.13% 7.05% -4.83% -21.34% 67.16% -34.15% 35.57% 42.29% 18.10% 5.77% 11.28% -22.26% 21.55% -10.59% -10.17% 2.21% 2.48% 14.00% 9.40% 6.47% -14.56% -15.33% 17.67% -4.22% 8.13% 7.64% 8.90% 15.54% -7.34% 20.71% AA 16.11 AXP 44.17 BA 69.10 BAC 14.04 CAT 105.06 CSCO 17.14 CVX 102.80 DD 52.99 DIS 41.23 GE 19.25 HD 36.00 HPQ 41.32 IBM 155.89 INTC 19.93 JNJ 58.57 JPM 45.74 KFT 30.99 KO 62.70 MCD 72.99 MMM 88.98 MRK 31.91 MSFT 24.80 PFE 20.18 PG 60.60 T 27.94 TRV 58.06 UTX 80.16 VZ 35.84 WMT 51.52 XOM 80.85

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.DJI 11,858.52 (+83.93 ● +0.71%) .SPX 1,279.20 (+5.48 ● +0.43%) .IXIC 2,643.67 (+7.62 ● +0.29%)

March 21st 2011
US Economic Calendar Report Period Actual Existing home sales Feb FHFA home prices Jan New home sales Feb Jobless claims 19-Mar Durable goods orders Feb Durables ex-transport Feb GDP revision Q4 Consumer sentiment March -

Date 21-Mar 22-Mar 23-Mar 24-Mar 24-Mar 24-Mar 25-Mar 25-Mar

Time 10:00 AM 10:00 AM 8:30 AM 8:30 AM 8:30 AM 8:30 AM 8:30 AM 9:55 AM

Forecast 5.1 mln n/a 290K 385K 1.6% 2.0% 3.1% 68.0

Previous 5.36 mln -0.3% 284K 385K 3.2% -3.0% 2.8% 68.2

Disclaimer: This report is provided for information purposes only. It is not an offer to sell or to buy any securities. This report has been prepared based on sources believed to be reliable, but there is no assurance or guarantee regarding its completeness and accuracy. The author accepts no responsibility or liability arising from any use of the report.

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.DJI 11,858.52 (+83.93 ● +0.71%) .SPX 1,279.20 (+5.48 ● +0.43%) .IXIC 2,643.67 (+7.62 ● +0.29%)

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