December 15, 2008

Diamonds and Dogs

Thursday, December 11th, 2008

Diamonds
Oil prices rallied to $48 per barrel today as the US dollar fell in value and the weather is starting to get quite a bit cooler in the Northeast. Higher oil prices are usually good for oil companies and Chevron was a big winner today, gaining 3.65% or $2.86 per share to $81.30. Energy prices have fallen 70% from July highs, so the $4 move higher today should not come as any surprise, even with inventories appearing to build.

Dogs
How about a sweater for the kids this Christmas? KB Toys filed for bankruptcy today, with two weeks to go until the big day for Santa. Although not publicly traded, KB Toys joins fellow retailer Steve & Barry's seeking protection from creditors during this recession. The list of creditors includes Mattel Toys and Energizer Battery as well as Hasbro. KB Toys is not unfamiliar with bankruptcy, going this route as recently as 2006.

Wednesday, December 10th, 2008

Diamonds
Stocks gained almost 1 percent in today's trading, as commodity stocks started to find their bottom. Rio Tinto (RTP) the large multi-national miner gained $21 to $94.50 after they announced 14,000 in layoffs. If that's all it takes to get your stock price up, then the Dow should be at new highs. Total layoffs this year are in the millions. RTP also put some assets up for sale in order to wipe out $10 billion in debt next year.

Dogs
Eastman Kodak (EK) in a sign of the times withdrew their future guidance with respect to sales and earnings. Picture this; EK is going to begin more aggressive cost cuts in the very near future. EK closed the session at $6.59, down from $14 earlier in the year.

Tuesday, December 9th, 2008

Diamonds
Merry Christmas Charlie Brown! Metlife (MET), the insurance company that has Snoopy for a sponsor, rallied $1.97 to $32.00 after bullish comments at an investment conference. MET is still well off the highs of the year, but has performed admirably compared to other insurance companies. Citigroup also raised their rating on the stock.

Dogs
FedEx (FDX) dropped off the back of a truck, losing $10.78 to $63.65 after they warned of lower earnings next quarter. FDX should be benefiting from lower energy costs, and from the disappearance of DHL, from the market place. The economic slow down is trumping those positives though and delivering FDX as the dog of the day.

Monday, December 8th, 2008

Diamonds
Infrastructure spending discussions, most recently President-Elect Obama on Meet the Press, have lifted construction stocks. On Monday, Mexican cement maker Cemex (CX) rallied 28% or $2.07 per share and US Steel (X) rose 24% to $35.79. The thinking (maybe an oxymoron in Washington) is that the much needed reconstruction of the US infrastructure could be similar to the "New Deal" in helping the economy mitigate a very serious slump.

Dogs
Dow stock 3M (MMM) cut their future earnings numbers and the market cut their price in turn. MMM fell $2.47 to $57.38 on the news. MMM has actually held in there over the last several months, during the most severe downturn in stocks, and has been greatly helped by the weak US dollar last year. The stronger dollar may be part of the reason the maker of scotch tape and sticky pads and more importantly medical supplies, had to lower guidance.