Thursday, May 28, 2015

China Bubble and Merger Mania?

Good morning Folks, 
Well The markets here opened green and stayed green. The SMH helped that cause as we got rumors of a mammoth merger between AVGO and BRCM. We mentioned over the weekend that the Semi sector was looking poised for a breakout and potential continuation. This merger should make the space pretty hot so keep an eye out for sympathy plays. MRVL, RMBS MU  CY are a few that come to mind. 
China finally showed signs of a bubble releasing some air last night with the Shanghai index dropping a whopping 6.5 percent to record its worst session of 2015. For an index that is up nearly 50 percent in 6 months there may be more room on the downside so bee careful if you are playing in that space. 
Yesterdays pop in the markets could be attributed to the rumor flying around that Greece may have come to an agreement with the EU. EU officials have put the kibosh on that rumor denying that a deal is near. 
The markets were fun yesterday and we could start seeing more volatility as rumors fly and mergers pop up. Just make sure you have a plan for your trades. Know why you are taking it and what type of trade it is going to be. Do not let a swing become an investment or a day trade to turn into a swing. Create your plan, figure out your risk reward and execute your plan. 

Stocks on my radar premarket
ENZN like the daily took it for a swing yesterday looking for potential continuation, BIOC gapper off pr thin float be careful likely to need to do an offering soon, OCLR potential continuation recent insider buying a bit extended on the daily,  ATNM pr but it has already had a nice move but still worth watching maybe for a quick scalp, ACW could be in a good bounce spot with long term contract announcement, PLUG reaffirms guidance really looks like it wants to take out 3, ECOL reaffirms guidance nice looking daily could be in a good bounce spot off 200 day, RRD pr a cross of 20 with conviction might be fun but its overbout on the daily, NVGN patent news possible 6 roll, EGLT another one with pr and a potential bounce off the 200 day, PLAY priced secondary @ 31.50 daily still looks pretty hot, 
CNBC in the News 
U.S. stock futures were lower in early trading afterWednesday's rally on Wall Street. The Nasdaq closed at a record high. Gains in the Dow and S&P 500 were not enough to make up for Tuesday's declines. (CNBC)
San Francisco Fed President John Williams said today the central bank is likely to raise interest rates this year. During a Q&A in Singapore, he predicted above-trend growth for the rest of 2015. (Reuters)

European stocks were under pressure today as hopes for a Greek reform-for-aid deal faded. Meanwhile, a leading ECB member told CNBC policymakers need to be careful with their bond-buying program. (CNBC)

Chinese stocks lost 6.5 percent overnight-closing near a one-week low, marking its biggest one-day loss since mid-January, and breaking an eight-session winning streak. (CNBC)

Japanese stocks closed at a new 15-year high-extending gains to a 10th straight session. The Bank of Japan governor told CNBC he doesn't think a bubble is brewing. (CNBC)

Avago Technologies (AVGO) has agreed to buy rival chipmaker Broadcom (BRCM) in a deal worth $37 billion. Avago is set to report earnings this afternoon. (Reuters)

Google (GOOG) is set to unveil a new payments initiative for merchants and an overhauled consumer app at its developers' conference today. Meanwhile,Apple (AAPL) is working on a rewards program for Apple Pay. (NY Times)

GoPro (GPRO) is introducing a six-camera device to capture 360-degree spherical video. It's also coming out with a quadcopter drone for capturing video from up high in a whole new way. (CNBC)

Nearly one million people will be staying at Airbnb properties on any given night this summer, said CEO Brian Chesky. The online marketplace for people to rent their homes was valued at $13 billion in October. (Re/code)

Former New York Gov. George Pataki is expected to announce his GOP candidacy for president today, following ex-Pennsylvania Sen. Rick Santorum's jump into the Republican race yesterday. (USA Today & CNBC)

Former Lehman Brothers boss Dick Fuld is scheduled to give his first public address since the 2008 financial crisis. Fuld now has a financial advisory firm Matrix Advisors. (USA Today)

Some of soccer's biggest sponsors have been quick to show their dismay at the FIFA corruption allegations. But the details of Wednesday's indictment appear to implicate one U.S. household name in particular. (CNBC)

Tracy Morgan and Wal-Mart (WMT) have reached a settlement regarding the New Jersey accident last summer that seriously injured Morgan and killed comedian James McNair. The crash involved a Wal-Mart truck. (USA Today)

The storms and floods in Texas and Oklahoma this week have left at least 23 people dead and nine others missing. Rising rivers could bring more flooding, officials in Texas said. (NBC News)

Two economic reports are on today's agenda, starting with the Labor Department's weekly look at initial jobless claims at 8:30 a.m. ET. Economists expect claims of 275,000 for last week, virtually unchanged from the prior period.
At 10 a.m. ET, the National Association of Realtors issues its April report on pending home sales, the measure of contracts signed but not closed. Forecasts call for a 0.9 percent increase, following a 1.1 percent rise in March.

The Energy Department is out with its weekly look atnatural gas inventories at 10:30 a.m. ET, followed by the holiday-delayed oil and gasoline inventoriesnumbers at 11 a.m. ET.

Investors are also already looking ahead to tomorrow'supdated first-quarter GDP report, and next week's May employment report, as they seek clues on the timing of interest rate hikes.

Retailers Abercrombie & Fitch (ANF) and Express(EXPR) are among the companies issuing quarterly earnings this morning. After-the-bell reports today include Deckers Outdoor (DECK), Gamestop (GME),Pacific Sunwear (PSUN), Splunk (SPLK), and Ulta Salon(ULTA).

Costco (COST) last night reported better-than-expected earnings, but revenue and comparable store sales fell short of forecasts. The warehouse retailer was hurt by lower gasoline prices and a stronger dollar.

Teva Pharmaceutical (TEVA) disclosed a 1.35 percent stake in Mylan (MYL), which the drugmaker wants to buy. Teva's $82 per share offer for Mylan was rejected last month as "grossly undervalued."
General Electric's (GE) unit that funds leveraged buyouts is near the end of an auction process that could fetch more than $17 billion, according to the Wall Street Journal, with KKR, Apollo Global, and Ares Management among the interested parties expected to submit final bids today.

Morgan Stanley (MS) Chairman and CEO James Gorman defended his 25 percent pay hike last year-reportedly the highest among Wall Street chief executives-saying it was justified by the bank's performance.

A judge in California ruled Sirius XM (SIRI) will face aclass action lawsuit involving royalties for songs produced before 1972. The action started with the 1960s group The Turtles claiming copyright infringement because no royalties are paid on those songs.

Amazon (AMZN) today said members of its Prime program living in more than a dozen metropolitan areas can now receive free same-day delivery on orders of $35 or more. The service previously cost $5.99. (CNBC)
Seeking Alpha
Today's Markets:
In Asia, Japan +0.4% to 20551. Hong Kong -2.2% to 27454. China -6.5% to 4620. India -0.2% to 27507.
In Europe, at midday, London +0.2%. Paris -0.4%. Frankfurt -0.3%.
Futures at 6:20: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude +0.4% to $57.75. Gold +0.2% to $1188.30.
Ten-year Treasury Yield flat at 2.13%