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D&D Note

D&D Note (4-23-2012) ~ Politically Driven Dark Clouds

D&D Note (4-23-2012)

One of the headwinds D&D has been watching this year are the Euro elections. As expected Sarkozy came in second to Socialist candidate Hollande in the first round of elections. May 6th is the runoff. The Dutch prime minister, Mark Rutte, resigned which now puts Hollands AAA credit rating in jeopardy of being cut.

Eurozone manufacturing fell unexpectedly today and now are at the lowest levels since last November – highlighting that Europe is indeed in recession.

IMF director, Christine Lagarde, warned of “dark clouds on the horizon” for the global economy that threaten the “light recovery blowing in a spring wind.” You can tell she’s French with those elegant words… Much of this chatter is all tied to the further pain we will see when Spanish and Italian banks report earnings.

Chinese PMI numbers came slightly better at 49.1 although still not in expansion territory (any reading below 50 represents contraction).

Sun Trust Bank (STI) – up 3% today – reported earnings which beat estimates and revenue climbed, the stock was one of the biggest gainers in the S&P 500 today. D&D started a position in the Regional bank today marking the first time we have bought into financials in years. The large multi national banks will most likely see more downside due to the Euro financial crisis.

Apple (AAPL) reports earnings tomorrow. Many people are getting worried since Verizon missed on their iphone sales. But remember Apple sells more than iPhones and sells their products to more than just Verizon (VZ), and more than just the USA (see China). The Whisper number is 12 dollars per share and the estimate is 10 dollars.

Kellogg’s (K) earnings fell the most since November and the stock was down more than 5%. Sales fell and where hurt mostly from European sales.

Today the Dow ended down 102 points, S&P 500 down 11 points, and the NASDAQ down 30 points.

Tomorrow will be all about Apple – if we get a blow out expect to see the entire markets rally.

About ddinvestments

Trading Partner for D&D Investments

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