Stock Market Commentary

Ike Iossif interviewed me for his website marketviews.tv about the current action in the market. I also asked him about what is happening in Greece and he provided some valuable insights on the situation there, because he actually lives there.

To listen to the interview click here.

Dell Inc. (NASDAQ:DELL), which reported its quarterly results after the market closed this Tuesday, closed at $18.16 last Friday, marking a 2.3% gain for the week. The company giant’s stock is currently up 23% for the year. It is trading down over 7% from yesterday's close in pre-market action.

Dell reported a profit of 43 cents a share, for the fourth quarter ended Feb. 3, which was down 48 cents, from the prior year.

On 21 February, European finance ministers, after a 13-hour meeting, finally approved a €130 billion ($172 billion) package for Greece by tapping into European Central Bank profits and convincing investors to provide more debt relief to Greece. This paved the way for a second bailout of the debt- ridden nation and averting an economic collapse.

Gas prices are higher now this time of the year than ever before. Currently around $3.53 a gallon, gas prices have risen by 25 cents since the start of the year, and are now believed to be heading towards $4.25 a gallon or even higher by April. This also marked the eighth-straight week of price hikes, with the most recent jump of 7 cents following the 2-cent rise the week before.

Last Friday, gold prices settled marginally lower at $1,725.90 an ounce, after a mixed performance during the week. (This marked a 0.04% gain for the week.) Given the general optimism that the Greek debt issue could finally be resolved in the coming days, markets across the board rallied on Friday, driving gold prices down. In addition, the long weekend also made many investors more cautious, and prone to profit-taking. (Since the beginning of February, gold has been trading around $1,700 to $1,760, as investors await the outcome of the Greek debt negotiations.)

Despite softening at the start of the week, markets ended higher by the close on Friday as they were buoyed by better than expected economic news here in the United States and a more positive outlook for a solution to the Greek problem by the end of the week.

On Monday (13 February), Apple (NASDAQ:AAPL) rose above $500, closing at $502.60. This marked the continuation of the stock’s upward trajectory since last November. (Since the start of the year, the stock has increased by 24%). Powered by the popularity of its mobile devices, such as the iPhone and iPad, the technology powerhouse continues to set records in the stock market. As noted by New York Times’ Economix blog last week, “with a market value of about $460 billion, Apple is worth more than Google, Goldman Sachs, General Motors, Ford, Starbucks and Boeing combined.”

Last Friday, Alcatel-Lucent (NYSE:ALU) announced its first annual profit since its acquisition of Lucent Technologies in 2006. (The company had accumulated almost €10 billion in losses over five years.) The telecommunications equipment maker posted a net profit of €1.1 billion ($1.46 billion) in 2011, as compared to a €334 million loss in 2010. (The actual profit is slightly smaller as the numbers were boosted by €353 million of deferred tax assets in the US and €338 million from the sale of the company's Genesys unit.)

Yamana Gold Inc. (NYSE: AUY) continued its downward slide last week, falling by about 5.25% to end at $16.30. The company stock has been on the decline since peaking in late January. With a market cap of about $12.2 billion and a P/E ratio of 22.80, Yamana Gold is a Canada-based gold producer engaged in gold mining and related activities, with significant properties involved in gold and other precious metal production throughout the Americas.

Duke Energy Corporation (NYSE:DUK) will be announcing its fourth-quarter and year-end 2011 earnings this Thursday (16 February). Duke Energy Corp is an energy company, which is located primarily in the Americas, owns an integrated network of energy assets. The company also manages a portfolio of natural gas and electric supply, delivery, and trading businesses.

I just did this video with Dave Skarica of AddictedtoProfits.net at his place in Eleuthera, Bahamas. I just spent the past few days there visiting with him, having a good time, and of course talking about the financial markets and what is going on. I see him once or twice a year and every time I do we can't help but talk about the markets.

In this video Dave talked about one trade he is recommending right now to his subscribers - shorting Japanese bonds.

Last Wednesday, copper prices reached a five-month high at $8,765 a ton, before falling back to $8,485 by the end of the week, over concerns about the Greek debt issue. (In recent months, copper prices have tracked investor sentiments toward the euro zone’s debt crisis.) The price spike on Wednesday was primarily due to expectations of higher demand after the Chinese government announced its economic plan to boost private sector growth.

I just did this video with Dave Skarica of AddictedtoProfits.net at his place in Eleuthera, Bahamas. I just spent the past few days there visiting with him, having a good time, and of course talking about the financial markets and what is going on. I see him once or twice a year and every time I do we can't help but talk about the markets.

Gold continued its downward trend last week. Uncertainty over the outcome of Greek negotiations for a bailout package prompted investors to sell off gold and hoard cash instead, following losses in the euro and US equities. Last Friday, gold prices ended at $1722.10 an ounce, marking the second straight weekly loss. Investors also believe that gold is likely to experience a correction after rising about 11% so far this year, particularly on possible negative headlines related to the euro zone debt crisis.

Markets have been swung by a number of factors this week, and a firmer tone set by optimism over a Greek austerity and debt package settlement earlier in the week evaporated with general strikes and parliamentary resignations in Athens on Friday.

Economic news in the United States was generally more positive, with the four week average jobless claims number falling to a near three month low (366,000), and wholesale inventories rising by 1%, the strongest for three months.

I just did this video with Dave Skarica of AddictedtoProfits.net at his place in the Bahamas. I just spent the past few days there visiting with him, having a good time, and of course talking about the financial markets and what is going on. I see him once or twice a year and every time I do we can't help but talk about the markets.

So I thought I'd let you in on what we are thinking now in this video for you.

On Thursday, following protracted overnight negotiations, Greece’s main political leaders finally agreed on a set of budget, wage and pension cuts that would hopefully pave the way for a bond swap deal between the Greek government and its private-sector creditors. These measures are necessary for a package of new loans and debt restructuring, without which Greece will default on its debt, setting off a wave of catastrophic repercussions for the rest of the euro zone.

Last week, the Baltic Dry Index (BDI), a measure of shipping costs across four vessel sizes, fell to 662 points, the lowest since August 1986. Since the start of the year, the BDI has fallen by 61%. (The index measures the demand for shipping capacity versus the supply of dry bulk carriers.) As the BDI shows the cost of transporting the major raw materials by sea, it is often seen as a good gauge of the global trade volume.

Last week, banking giant Citigroup Inc. (NYSE:C) announced that it was exiting the mortgage brokerage business, where many banks have been grappling with the fallout from the housing collapse. According to Citigroup, most of the 300 employees tied to the brokerage business will be reassigned. The company’s spokesman Mark Rodgers said that job “discontinuances” may be in the “low double digits”, and that Citigroup will now focus on its own retail and correspondent channels instead.

Last Friday, shares of Ford Motor Company (NYSE:F), a global automotive industry leader, rose by 4.16%, after the release of better than expected unemployment figures, which showed that the unemployment rate has fallen to a three-year low of 8.3%. Given that more people working means greater consumer spending, Ford, together with the other US automobile makers, experienced big jumps in their stocks last Friday.

An update on the Fed actions by Omid Malekan.

The iShares FTSE/Xinhua China 25 Index Fund (NYSE:FXI), the ETF of Chinese stocks, ended last week at $40.48, marking a 1.38% gain for the week. The index fund, which has been on an upward trajectory since last October, has gained 16.15% since the start of the year.

Social networking giant Facebook filed for IPO last Wednesday, which is currently expected to value the company at around $75-100 billion. People familiar with the matter said that the company hopes to raise as much as $10 billion through the IPO. The company plans to use the IPO proceeds for working capital and other general corporate purposes. In addition to Morgan Stanley, Facebook also hired JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp., Barclays Plc and Allen & Co. to manage the IPO.

Contrary to initial expectations, the US unemployment rate for January fell to 8.3%, the lowest since February 2009. (This was the fifth consecutive monthly decline.) Moreover, there was also a net increase of 243,000 jobs, the biggest gain in nine months. In addition, the Labor Department also published revisions showing that another 60,000 more jobs were created in December and November than previously reported.

I am doing a little bit of traveling this week and my trip started with a business stop in Asheville, North Carolina. I stayed there one night and the next afternoon went downtown and got some lunch. They got some of those Occupy Wall Street people there next to city hall and I decided to walk over and see what they are about for myself.

You may have seen some news stories about them. If you live in New York you know about it, because they had big demonstrations and clashes with police in the Wall Street area this last Fall. After that they sprouted up in other cities in public areas.

Struggling to maintain the year’s upward momentum, market malaise was finally broken on Friday with news that unemployment hit its lowest rate for two years. Large increases in non-farm and private payrolls help the rate fall to 8.3%, and the Dow Jones rise 157 points on the last trading day of the week, a net gain of 202 points, or 1.59% for the week. The S & P 500 Index burst through resistance at 1325 to finish the week at 1344.90, a gain of 2.2%, whilst last week’s star, the Nasdaq 100, continued to out perform with a gain of 2.7% to 2529.17.

Cisco Systems (NASDAQ:CSCO), which develops network infrastructure products, will be reporting its quarterly earnings after the close of the market on 8 February (Wednesday). The company’s stock has not performed well in the past two years.

I just did an interview with Matt Frailey of BreakPointTrades.com.

In this interview we talked about gold, Breaktpointtrades.net, and his recent trades.

For the charts referenced in this interview click here.