Stocks May Take a Breather Today - Ahead of Wall Street
February 15 2013 - 4:50AM
Zacks
Friday, February 15, 2013
The backdrop for today’s market action remains favorable, with the
New York Fed’s Empire State manufacturing index coming in better
than expected. The regional manufacturing index reversed seven
months of negative readings to reach its best level since May 2012.
Other data on tap for release a little later includes the
University of Michigan’s preliminary Consumer Sentiment survey for
February and the January Industrial Production data. The sentiment
data is expected to have improved from the prior month’s level,
with momentum in the stock market and gains in jobs expected to
offset the income drag from higher payroll taxes resulting from the
Fiscal Cliff deal.
But stocks may not do much today ahead of the President’s Day
weekend, particularly after reaching milestone levels the day
before. The market’s gains on Thursday were notable as they came in
the face of distressing news out of Europe and Japan. This has been
the norm lately, with investors using every pullback as a buying
opportunity. With money flows indicating that mom and pop investors
are flocking back to the market, it appears that nobody wants to
miss out on this rally. Retail investors’ sense of timing doesn’t
inspire much confidence, but let’s hope that they don’t get
disappointed again.
Over the weekend, we will get the official statement from the Group
of 20 (G-20) finance officials meeting in Moscow. The meeting is
pondering ways to avoid ‘begger thy neighbor’ currency actions, an
issue that has take center stage after the activist policies of
Japan’s new government has taken effect. The value of Japan’s
currency relative to that country’s trading partners has been
sharply coming down in recent days, while that of Euro has been
going up. With every major developed country pursuing
unconventional monetary policies at present, the G-20 meeting is
not expected to come out with anything tangible, though there
wouldn’t be any shortage of nice-sounding words and commitments in
the final statement.
In corporate news, we got better looking results from
Campbell Soup (CPB) and J.M.
Smucker (SJM), while Kraft Foods (KRFT)
came up short. The drama surrounding Herbalife
(HLF) took another interesting turn yesterday, after Carl Icahn
announced that he has accumulated a 13% stake in the company,
opposite the well publicized short position in the company by rival
hedge fund manager Bill Ackman. Given Icahn’s feelings for Ackman,
some may wonder whether his Herbalife stake is his way of getting
back Ackman. We will know more in the coming days, but this clash
of the titans is no doubt very interesting.
Sheraz Mian
Director of Research
CAMPBELL SOUP (CPB): Free Stock Analysis Report
HERBALIFE LTD (HLF): Free Stock Analysis Report
KRAFT FOODS GRP (KRFT): Free Stock Analysis Report
SMUCKER JM (SJM): Free Stock Analysis Report
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