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Mar 28, 2014

Desire, ice, and fire: ‘Game of Thrones’ returns for 4th season

NEW YORK, March 28 (Reuters) – Mystical ice creatures,
fire-breathing dragons, and the people caught in between return
to the small screen come April 6, when HBO’s “Game of Thrones”
unsheathes a fourth season that could see it crowned as the
cable network’s most watched series in history.

The medieval fantasy drama’s fan base has grown
substantially over its first three seasons, with sizable
followings among both men and women thanks to its wrenching
interpersonal relationships, complex plotting, and, being HBO,
plenty of sex and violence.

Mar 28, 2014
via Counterparties

MORNING BID – $4 trillion, through the eye of a needle

The shift in the stock market away from momentum names and toward value is encouraging at least in some sense because it points to an ongoing appetite for equities rather than a reduction in interest there. However, one has to add the caveat that the Federal Reserve is still very much a part of this market, even as it diminishes its footprint.

The $55 billion in bond buying per month definitely continues to underpin rates and keep funding costs low for companies. Still, the market has reduced its reliance on the central bank and yet bond yields continue to sink, at least in the long-dated part of the curve, where the 30-year note neared 3.50 percent and the 10-year came close to 2.60 percent yet again.

Mar 28, 2014
via Counterparties

MORNING BID – $4 trillion, through the eye of a needle

The shift in the stock market away from momentum names and toward value is encouraging at least in some sense because it points to an ongoing appetite for equities rather than a reduction in interest there. However, one has to add the caveat that the Federal Reserve is still very much a part of this market, even as it diminishes its footprint.

The $55 billion in bond buying per month definitely continues to underpin rates and keep funding costs low for companies. Still, the market has reduced its reliance on the central bank and yet bond yields continue to sink, at least in the long-dated part of the curve, where the 30-year note neared 3.50 percent and the 10-year came close to 2.60 percent yet again.

Mar 28, 2014

As U.S. momentum stocks take beating, some sectors benefit

NEW YORK (Reuters) – Investors in some of the past year’s hottest U.S. stocks have been given a savage lesson in the risks of so-called “momentum trading”.

A group of 24 such companies compiled by Credit Suisse has lost $63 billion in market value, or almost 19 percent, so far in March. One of them, streaming video service Netflix (NFLX.O: Quote, Profile, Research, Stock Buzz), has declined on 15 of the last 17 trading days, while another, online travel service Priceline (PCLN.O: Quote, Profile, Research, Stock Buzz), is on pace to for its worst month in nearly two years, while Twitter (TWTR.N: Quote, Profile, Research, Stock Buzz) sank below its November first-day closing price for the first time.

Mar 26, 2014
via Counterparties

MORNING BID – Crushing It

Is King Digital Entertainment the next Zynga or not? The markets may not find out with today’s first day of trading in the London-based company, but it will provide a bit more context for those eager to build some kind of “time wasting” index or something like that. The King IPO has other gamemaker companies waiting in the wings at a time when there’s been a high volume of IPOs this year coming from unprofitable companies – according to Renaissance Capital, the IPO research firm, 66 percent of this year’s 53 IPOs were unprofitable names, though Kathleen Smith, principal at the firm, points out that if you clear out the biotech names, just 37 percent are those that do not yet have earnings. (Whether this is a good argument or not is another matter — witness the trading lately in the biotechnology shares overall, which have been pummeled in the last few weeks.)

The obvious reference point for King is Zynga, which has lost about half of its value since the company’s IPO in 2011 that valued it at about $8.9 billion. And things did well for them as long as people were interested in Farmville, until they weren’t. Right now, Candy Crush is the current darling, drawing in more revenues on Apple’s App store than any other in 2013, and, well, it just happens to garner three-quarters of its revenue from this game (well, 78 percent, actually). These kinds of fads tend to fade, though, putting pressure on the company to keep filling the void with some kind of new version or new product, not an easy task.

Mar 26, 2014
via Counterparties

MORNING BID – Crushing It

Is King Digital Entertainment the next Zynga or not? The markets may not find out with today’s first day of trading in the London-based company, but it will provide a bit more context for those eager to build some kind of “time wasting” index or something like that. The King IPO has other gamemaker companies waiting in the wings at a time when there’s been a high volume of IPOs this year coming from unprofitable companies – according to Renaissance Capital, the IPO research firm, 66 percent of this year’s 53 IPOs were unprofitable names, though Kathleen Smith, principal at the firm, points out that if you clear out the biotech names, just 37 percent are those that do not yet have earnings. (Whether this is a good argument or not is another matter — witness the trading lately in the biotechnology shares overall, which have been pummeled in the last few weeks.)

The obvious reference point for King is Zynga, which has lost about half of its value since the company’s IPO in 2011 that valued it at about $8.9 billion. And things did well for them as long as people were interested in Farmville, until they weren’t. Right now, Candy Crush is the current darling, drawing in more revenues on Apple’s App store than any other in 2013, and, well, it just happens to garner three-quarters of its revenue from this game (well, 78 percent, actually). These kinds of fads tend to fade, though, putting pressure on the company to keep filling the void with some kind of new version or new product, not an easy task.

Mar 25, 2014
via Counterparties

MORNING BID: Running on Empty

The most interesting developing trend in the U.S. equity market has been the recent stumble in the biotech and momentum-oriented names, be it Gilead Sciences, Biogen, Netflix or a few others. The biotechs were a group often cited as having entered a “parabolic” stage, which in market parlance refers basically to “going up and up and up in a straight line.” The move wasn’t anything on the order of the homebuilders during the housing bubble of 2006 to 2007, or the tech giants during the latter stages of the tech run – a 300 percent gain versus 700 to 800 percent gains back in the other cases. That doesn’t mean we won’t see an ongoing breakdown, though some of the selling abated late in the Monday session.

But the Nasdaq Biotech Index has now dropped sharply through its 50-day moving average. More worryingly, the Nasdaq Composite sits just five points above its 50-day moving average of about 4221, and the Nasdaq 100 barely managed to close above that level as well on Monday. “Three consecutive down days have been a rare occurrences in this tape,” said Michael O’Rourke, chief market strategist at JonesTrading. “That makes the intraday lows registered today in both single stocks and the indices important support levels to watch. Violations of those levels should be problematic.”

Mar 25, 2014
via Counterparties

MORNING BID: Running on Empty

The most interesting developing trend in the U.S. equity market has been the recent stumble in the biotech and momentum-oriented names, be it Gilead Sciences, Biogen, Netflix or a few others. The biotechs were a group often cited as having entered a “parabolic” stage, which in market parlance refers basically to “going up and up and up in a straight line.” The move wasn’t anything on the order of the homebuilders during the housing bubble of 2006 to 2007, or the tech giants during the latter stages of the tech run – a 300 percent gain versus 700 to 800 percent gains back in the other cases. That doesn’t mean we won’t see an ongoing breakdown, though some of the selling abated late in the Monday session.

But the Nasdaq Biotech Index has now dropped sharply through its 50-day moving average. More worryingly, the Nasdaq Composite sits just five points above its 50-day moving average of about 4221, and the Nasdaq 100 barely managed to close above that level as well on Monday. “Three consecutive down days have been a rare occurrences in this tape,” said Michael O’Rourke, chief market strategist at JonesTrading. “That makes the intraday lows registered today in both single stocks and the indices important support levels to watch. Violations of those levels should be problematic.”

Mar 21, 2014
via Counterparties

MORNING BID: Rebalancing act

There have been a few quiet days of trading lately, but today will not be one of them. Friday includes the quarterly expiration of index options and futures and single stock options and futures, and also a huge index rebalancing that will result in a lot of trading at today’s close.

Credit Suisse strategists estimate about $14 trillion in gross trading for SPX indexers and an additional $6 billion for other indexes, including the Nasdaq, Dow Jones total market index and a couple of FTSE benchmarks as well. This kind of trading is usually pretty methodical, but it will kick volume into the stratosphere – for the day, anyway.

Mar 21, 2014
via Counterparties

MORNING BID: Rebalancing act

There have been a few quiet days of trading lately, but today will not be one of them. Friday includes the quarterly expiration of index options and futures and single stock options and futures, and also a huge index rebalancing that will result in a lot of trading at today’s close.

Credit Suisse strategists estimate about $14 trillion in gross trading for SPX indexers and an additional $6 billion for other indexes, including the Nasdaq, Dow Jones total market index and a couple of FTSE benchmarks as well. This kind of trading is usually pretty methodical, but it will kick volume into the stratosphere – for the day, anyway.

    • About David

      "David Gaffen oversees the stocks team, having joined Reuters in May 2009. He spent four years at the Wall Street Journal, where he was the original writer of the web site's MarketBeat blog. He has appeared on Fox Business, CNN International, NPR, and assorted other media and is the author of the forthcoming book "Never Buy Another Stock Again.""
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