Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned cash to make a purchase, is that they expect to make money. Today we look at two noteworthy recent insider buys.
Euro fell under 1.25, marking its weakest day since June 2010. The currency got a boost earlier in the day after polls in Greece showed that there are more voters supporting politicians who back the nation’s bailout ahead of the June 17 general election. The boost, however, was short lived. Spanish banks came back to the worry zone. The borrowing costs in Spain soared and the question is how would the government find additional money to bail out its troubled banks. Banks in Spain have about $1.25 trillion in deposits, and that’s an amount Europe cannot afford, so the fear is banking industry might collapse. We will keep following this, so keep it right here at the Financial News Network. I’m Julia Sun and we’ll be right back.
In trading on Wednesday, gas utilities shares were relative leaders, down on the day by about 0.2%. Leading the group were shares of Star Gas Partners L P (SGU), up about 1% and shares of Agl Resources (GAS) up about 0.6% on the day.
JoS. A.
Follow up on the campaign corruption trial of John Edwards, the jury is in its 7th day of deliberation and there is still no verdict. I’m going to ask the question on everybody’s mind: what is taking so long? Edwards is charged with six felony counts relating to illegal campaign contributions. The jury went through dozens of exhibits and most of them were financial records. Edwards stands accused of using nearly $1 million in secret donations to keep his pregnant mistress out of sight during his presidential bid in 2008. The defense attorney said these money were gifts and the intention was to keep the relationship from Edwards’ wife, Elizabeth, who was diagnosed with cancer and passed away in 2010. I’m not a trial attorney like Edwards, but I’m guessing if there is a hung jury, the chance of this case being re-tried would be low. My colleague legal correspondent Mari Fagel will have more on this later. Meanwhile, share your comments about this case with us, you can send them in to our channel or find me on twitter @juliasun_onair. I’m Julia Sun for the Financial News Network. I’ll be right back.
May 29th here we come. Facebook options begin trading today and as we predicted 11 days ago, it does give the stock some weight. Shares fell below the $30 mark for the first time, rounding out the day at $28.84. At-the-money June call and put options both have volatility in the high 60’s, which is not higher than most of its comparables. From a trading perspective, I cannot help to notice these options are so cheap. Again take June expiry put options for example, at-the-money is only $1.65 and the stock moves about $2 per day, so take a look at that quote. On the cheerful side, Mark is on honeymoon in Rome right now and camera caught him eating McDonald’s takeout with his bride. Hey, whatever makes you happy. It doesn’t matter how much money you have, sometimes it’s about what you feel like doing. Keep it right here for more news and updates. I’m Julia Sun. I’m not in Rome right now, but one day I’ll be there. We’ll be back shortly.
By Zac Storella, CountingPips.com
Today, I am pleased to share our latest forex interview with currency analyst Ilya Spivak from DailyFx.com on the recent currency market major events and trends. Ilya specializes in fundamental analysis and economic and market themes for DailyFx while applying a top-down global macro approach to longer-term investing in the G10 currencies. Ilya has been cited regularly in leading news outlets including the Wall Street Journal, the Daily Telegraph, CNBC, CNN Money and Reuters.
Q: Last week we saw the US dollar gain against the major currencies (except the Japanese yen) as risk aversion reigned with the deepening crisis of the Eurozone. In terms of overall forex market impact and direction, what do you feel is the most important event or theme that traders should pay attention over the next week?
It seems the stock of near-term negativity that can conceivably drive markets downward has been exhausted in the near term, giving scope for a recovery in risky assets and 
a pullback in the US Dollar. Risk aversion is likely to return just ahead of Greece’s second attempt to elect a coherent government on June 17.
Q: What do you think is the likely outcome of this Euro crisis? Do you think there will inevitably be a country (like Greece) to leave or will the Eurozone be able to pull through this with all countries in tact?
The core issue in Europe is ultimately uncertainty because no one really has a viable benchmark for how the crisis can end or what a country’s exit from the currency bloc looks like. It is this very uncertainty rather than a concrete understanding of the outcome scenarios that has weighed so heavily on the Euro and that is likely to remain a major overhang in the near to medium term. With that in mind, a likely Eurozone recession this year and its implications for dovish ECB monetary policy are reasons enough to maintain a bearish bias on the Euro, debt crisis developments notwithstanding.
Q: Outside of the Eurozone woes, what other themes are you watching for and feel will have an impact on the overall forex market and dictating trend direction?
We know that most economic forecasts point to a slowdown in overall global economic growth in 2012 and that headwinds are expected to come from a recession in Europe and a slowdown in Asia. Meanwhile, the US recovery is actually expected to accelerate, so a major theme at work through the year-end is the extent to which North America can mitigate weakness elsewhere. This opens up opportunities in inter-regional growth plays like AUDCAD (trading Asian vs. North American economic performance trends).
Q: Can you share your analysis on the EUR/USD pair? The EUR/USD has recently been falling to its lowest levels of the year due to the crisis. Do you feel we are likely headed to lower levels still or has this bearish trend gone a little too far?
Broadly speaking, EURUSD has been trending lower since topping out above 1.60 in 2008. The boundaries of this structural decline remain very much intact at present and overall weakness seems likely to continue. Zooming in to the recent past, the period between late October 2011 and mid-January 2012 can be seen a move in favor of the overall trend. This was followed by corrective recovery through late February, followed by two months of consolidation and ultimately bearish trend resumption in May. The intensity of recent selling has made for stretched positioning at this point and I expect a bounce from the 1.25 figure to the 1.28-1.29 area before downward momentum returns. A breach of the 1.25 figure is likely to open the for a push lower to 1.2250.
Q: The USD/JPY has trended back down to trading under the 80 level after surging in March to its highest level in almost a year. Can you comment on this currency pair and where you see it going and has this Yen strength been mostly related to risk aversion?
This pair has a long-standing relationship with US Treasury yields, so in a way recent weakness is related to risk aversion. When investors pile into Treasury bonds for safety, yields decline and USDJPY follows. Looking ahead, lingering instability in the Eurozone and slowing growth on a global scale is likely to keep prices relatively capped near-term. If the US recovery gains momentum as most economists’ expectations appear to show however, dissipating QE3 expectations are likely to give yields scope advance and push USDJPY higher in a longer-term, structural way.
Q: As we head towards summer and are approaching the half-year mark of 2012, do you have any predictions for winners or losers over the coming second half of the year in terms of specific currencies and major trends?
The dominant themes that we started with in 2012 remain largely in effect. North American growth looks better than Europe and Asia, and so being long the Canadian Dollar against currencies sensitive to growth the other regional hubs like AUD, SEK and NOK is likely to remain compelling. The US Dollar is likely to remain attractive against European currencies (EUR, CHF, GBP) where the trajectory of monetary policies is likely to look increasingly dovish as growth slows.
Thank you Ilya for taking the time for participating in this week’s forex interview. To read Ilya’s latest currency analysis and trading strategies you can visit DailyFx.com.
Peabody Energy (BTU) was upgraded today by Goldman Sachs (GS) to buy from neutral with a price target of $37 due to improving macro data in China, and the fact that the company is leveraged to higher Powder River Basin coal prices. Shares are higher by about 4.3 percent.
The markets opened higher this morning after the holiday weekend and extended their gains, despite lackluster economic reports. The S&P/Case Shiller composite index of 20 metropolitan cities showed a gain of 0.1 percent in home prices in March, falling short of economists expectations.
Precision Castparts Corporation (PCP) maintained its quarterly dividend of 3 cents per share. The dividend will be payable on July 2, 2012, to shareholders of record at the close of business on June 8, 2012.
