Mortgage applications up, FOX beat out expectations and Yum! Brand (YUM) facing tougher recovery

Markets closed slightly lower on Wednesday after mortgage applications rose last week. The Mortgage Bankers Association reported that their seasonally adjusted index of mortgage activity grew 1.3% for the week ending on January 30. The index accounts for refinancing applications and home purchase applications. Refinancing applications grew 2.5% on their own, and home sales dropped 2.3%. The fixed 30-year mortgage rate came in at 3.79%. A level this low has not been recorded since May 2013. Lynn Fisher, the Vice President of Research and Economics at MBS, said, “Following several weeks of already elevated refinance activity due to falling interest rates, FHA refinance applications increased 76.5 percent in response to a reduction in annual mortgage insurance premiums which took effect January 26.” Shares of Twenty-First Century Fox, (FOX) were trading slightly higher after the media giant beat out analysts expectations. Net income came in at $6.21 billion, or $2.88 per share. This was up from $1.21 billion, or 53 cents per share this time last year. Revenue was up to $8.16 billion. Analysts were expecting FOX to post revenue of $7.36 billion. The positive results were helped by the sale of their satellite business, Sky Italia and Sky Deutschland, for…

Read More

Insurance Trade (SPY, XLE, YUM, CTB)

Let’s start the week by running down a few trades and then discussing another item that’s really starting to bug us. [click to listen] Right. We’re going to begin with our covered CALL trade on Cooper Tire (NYSE:CTB), opened back at the beginning of the summer. You’ll recall from our letter dated June 30th (called The S&P Indy 500) that we sold one August CALL and one August PUT on CTB for every 100 shares purchased, giving us an adjusted cost base for the shares of just $28.87. When those options expired worthless, we sold another round, this time the November expiry, bringing the cost of the shares down further, to just $27.42. Along the way, we also pocketed a dividend of $0.10 per share, reducing the overall price to a mere $27.32. And today? Cooper Tire shares are changing hands for $32.29. That’s above the 32 strike that we sold, with a just a week to go before they expire, so we’re still somewhat confident they’ll be called away from us. And if they do, we’ll have registered a handy 17% on the trade in less than five months. But we’re not satisfied with that. Take a look at…

Read More

MBA Mortgage Index up, Sears (SHLD) suppliers backing off and Yum! (YUM) cut profit outlook

Markets were heading higher on Wednesday after mortgage applications were up last week. The Mortgage Bankers Association released their report on mortgage applications for the week ending on October 3 and it showed a 3.8% increase. There was also a 5% increase on applications for refinancing. One of the key driving forces behind the increase was the mortgage rate decline. The average rate for a 30-year-fixed mortgage came in at 4.30%, which was down from the previous week’s 4.33%. This week’s rates are already dropping below the 4% mark. Erin Lantz, vice president of mortgages at Zillow, said, “Mortgage rates inched up briefly last week on the heels of Friday’s stronger than expected jobs report before falling sharply on Monday, hitting 11-week lows. This week, with limited U.S. economic data slated for release, we expect rate movement to remain muted.” Shares of Sears Holdings Corporation (SHLD) were tanking over 12% after news was released that suppliers are beginning to back off. Three insurance firms, Euler Hermes Group, Coface and Atradius Credit Insurance have all reportedly begun to cut back on coverage or cancel policies. It was also reported that a medium-sized vendor has made the decision to cease shipments of products…

Read More

Buy the Chinese Chicken Dealer (YUM, INTC, MSFT, QQQ, XHB, IBB)

We’ve got a great deal to report this week, so buckle up and get ready to roll. We’ll start with a trade that we’re not so pleased with. It was set on June 16th in a letter called Homage to the Aged, a letter that attempted to convince you that the old-line tech stocks were where it’s at, and that concentrating on these issues over the short term would pay off handsomely. And as it turns out, we were right – even though the trade didn’t work out. As fellow Normandy analyst Matt McAbby pointed out last Thursday, it’s the big names that have thrived on the NASDAQ Composite, while the greater number of her components have actually declined. Look here – [care of Bourbon & Bayonets] Whereas companies like Cisco (NASDAQ:CSCO), Intel (NASDAQ:INTC), Microsoft (NASDAQ:MSFT) and Oracle (NASDAQ:ORCL) have all risen nicely from the time of our call, a full 47% of the index’s remaining components didn’t. They’re all at least 20% below their mid-summer highs, as the chart shows, putting them on a level that, per definition, defines them as being in the grip of the bear. But all that notwithstanding, we played a pairs trade on this…

Read More

NABE report shows increase in hiring and sales for second quarter, Yum! Brands (YUM) face safety scare and Hasbro (HAS) reports strong second-quarter

Markets were heading slightly lower on Monday morning after U.S. companies reported an increase in employment and sales during the second-quarter, a report released by the National Association for Business Economics showed. The report said that of the 85 companies that took the survey, 57% of them said that sales were up during the quarter running from April through June. This is up 53% from the first quarter and up over 35% during this time last year. The report also showed that 59% of the companies surveyed are expecting a steady third-quarter. There was also a strong response in the hiring section of the survey with 36% saying they hired more workers in the second-quarter. This is up from 28% in the first-quarter and up 29% from this time last year. Outlook for the third-quarter was also strong with 37% of the companies surveyed saying they expect hiring to grow. Shares of Yum! Brands, Inc. (YUM) were falling after a new safety scare surfaced in China. The parent company of both McDonald’s and KFC had apologized to their customers after Chinese regulators shut down a local meat supplier. There was a television report that showed workers at the factory picking…

Read More

Powered by WishList Member - Membership Software
GET YOUR FREE SPECIAL REPORT:
"THE SEVEN DEADLY SECRETS OF CHINA"

GET YOUR FREE SPECIAL REPORT:

"THE SEVEN DEADLY SECRETS OF CHINA"

Enter your e-mail address to claim your FREE Special Report “The Seven Deadly Secrets of China”

You have Successfully Subscribed!