logo
  Join        Login             Stock Quote

What The Market Wants: Walmart-Gate

 April 24, 2012 12:14 AM
 


(By David Brown) Walmart-Gate, Dutch-Gate, Netflix-Gate, Exit-Gate!

This could be the "exit gate" but probably not.  Over the weekend, the New York Times released a blockbuster story about Walmart's (WMT) alleged massive cover-up of serious violations of the U.S. Foreign Corrupt Practices Act involving more than $24 million dollars in bribes to accelerate store openings and bypass permit and zoning practices.  The stock was down 4.55% today, at $59.54.

Netflix (NFLX), after meeting estimates, indicated that growth would be slow in future quarters, sending the stock down more than 15% in aftermarket trading.

The Dutch Prime Minster offered to resign after budget talks collapsed over the weekend.  The move could cost the Netherlands its AAA credit rating and put increased pressure on Europe's sovereign debt crisis.  Further worsening the Europe issue, Sarkozy failed to win France's presidential election, forcing him into a runoff with Socialist Francois Hollande, whom he trails in most polls by substantial margins.  Hollande seems determined to undermine the Eurozone pact to protect the sovereign debt of the PIIGS.  Some weekend!  I don't recall a weekend with an overall worse picture on so many fronts.

[Related -Netflix, Inc. (NFLX) Q4 Earnings Preview: What To Watch?]

Apparently, the market felt the same way, with the S&P 500 falling nearly 20 points shortly after the open, but then recovering a bit throughout the day to close down about 12 points or nearly 1%.  The SPY is now down nearly 5% from its high on April 2.

But again, this is hardly enough to cry "run for the exits."  Today's earning announcements were more positive than negative by far.  This week, nearly a third of S&P 500 companies will report first quarter earnings, so today's trend must stay in place with no whoppers to avoid serious damage.  In addition, this week's economic releases must include no big negative surprises.  Consumer Confidence tomorrow must be stable; Durables Good orders on Wednesday must be okay; Initial Jobless Claims on Thursday should at least hold steady; and then finally, on Friday, the advance GDP number for Q1 must be inline (2.5% is expected), and Michigan Consumer Sentiment needs to confirm tomorrow's expected reading.

[Related -Netflix, Inc. (NASDAQ:NFLX): Can Netflix Trump Amazon.com, Inc. With New Plans?]

If all of that comes off, along with some stability in Europe, we could rally back a bit, but if we get any bombshells, the exit gates are waiting.  Meanwhile, there are still bargains out there.  Some of them are being seized by insiders (see below), and we remain convinced that hedging, by shorting some combination of the European ETFs VGK, IEV or EWP, is one reasonable way to build a portfolio for this environment.

Here are the market stats.

4 Stock Ideas for this Market

This week, I used the Insider preset search in MyStockFinder.


Next Page >>12
iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageInitial Jobless Claims Rose Unexpectedly

Claims unexpectedly rose in the latest report through last weekend to breach 300,000 for the first time read on...

article imageAll Quiet on the Record High Front

What can we glean from the media’s lack of attention to the market’s recent record read on...

article imageThe Chip Maker Short Sellers Should Be Watching

Investing in semiconductor stocks is always tricky. Industry cycles can lead to bumps in the road for the read on...

article imageChicago Fed: US Economic Growth Slowed In October

The pace of US growth slowed more than expected in October, according to this morning’s update of the read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.