Morning Call: Thursday, April 30, 2009
Good morning. Markets suffered from an outbreak of confidence. The S&P closed at 874 which is the point of resistance. Despite the awful decline in GDP the drop in inventories and a pick up in consumer spending powered the market. The facile argument that the greater the decline in the GDP, it would lead to a faster recovery, was blithely accepted. The Fed's statement that there were signs of some economic life helped but for us the fact that they don't see the need for more Quantitative Easing was the Biggie. They don't have to buy many more bonds.
Yesterday’s market showed us the "Power of Ease" and pardon us for wondering how bad the Hangover will be. Opco's technical Guru is saying if the market can hold here for 3 to 4 weeks that we can start a new bull market. The earnings season has an interesting internal in that the S&P had beats to misses running 10 to 1. Anyone familiar with CPMS knows the power of earnings surprises.
Japanese factory orders were up 1.6% in March which was a surprise to us.
One client said to us yesterday: the market has gone from pricing in a Depression and now is pricing in a very bad Recession. Maybe with its new found confidence the market may wonder just how bad that recession can be
Follow the trend which is your friend (until its not) and ….………… invest the money.
Don’t forget it’s month end.
Solar Thursday
Arise (APV:TSX) and First Solar (FSLR:NASDAQ) both came out with Q1 09.
Arise saw 2.6MW of cells shipped in Q109 – compared to 6.1MW in Q408 and adjusted EPS were -$0.05 , vs. consensus of -$0.042/ share, due to inventory and raw material write downs as market conditions continued to deteriorate. Positively, scrap rates dropped another 16%, coming closer to the industry standard of 5%.
First Solar had 219.5 MW of Q109 production, Revenue Net income was $164.6mm or $1.99 fully diluted, beating analyst’s consensus of $1.52. Net sales dropped 3.6% Q/Q, Gross margins increased 2.4% to 56.3%, and Operating expenses dropped 7.4%. Cost per watt drop to $0.93/w. With 90% of production already allocated and the statement that it is faster to build a factory than for utility scale projects can get permitted.
SKF US (Bloomberg): UltraShort Financials ProShares is an exchange-traded fund incorporated in the USA. The fund seeks daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones US Financials Index.
Quote of the Day:
“If you have to forecast, forecast often”
-Edgar R. Fiedler
Ed Pennock, CFA, Managing Director
416-369-6921, epennock@dominick.ca
Kris Fisher, Institutional Equity Trading
416-369-6924, kfisher@dominick.ca
416-369-6921, epennock@dominick.ca
Kris Fisher, Institutional Equity Trading
416-369-6924, kfisher@dominick.ca
The above note is prepared by an Institutional Salesperson based on morning meeting comments and general Institutional desk discussion and should not be construed as a research report or a solicitation. For information purposes only. D&D Securities, its clients, and principals may have positions in these securities.
