Media Alert – I will be on CNBC’s Closing Bell later today.
Hewlett Packard (HPQ) – Earlier this year HPQ was priced for extinction. Despite the meteoric rise in the shares it’s hard for me to get excited about a company facing likely revenue declines for the next several years. The debate on the street rages on, with bulls like Morgan Stanley’s Katy Huberty pointing out that “Cash cycle improvements prove largely sustainable while restructuring savings, return on investments, US IT spending recovery, and improving execution begin to drive earnings upside and multiple expansion.”
Goldman’s Bill Shope maintains his sell rating with a target of 17 pointing out “cash flow could sharply reset in 2014.” For today the Bulls have the upper hand with the stock set to open sharply higher. (Not involved)
The Daily Bubble Watch – Even if this is an interim top for the market; why does that imply we are in a Bubble? I will repeat. Talking heads are all looking for their Elaine Gazzarelli moment hoping to call the top. It is a low risk path to stardom. If you get it right, you are made for life. If you are wrong like the countless others no one will remember a few months from now.
When we get a 5% correction many of these bears will be the first to jump up on your TV screen saying the overbought condition is relieved and you have to get back in. If you think you can trade the wiggles, Good Luck! Byron Wien said it best this morning on CNBC. “You don’t stay out of the market waiting for the moment of truth.”
Morgan Stanley & Citi – According to the Wall Street Journal JPM is not the only firm the SEC is investigating over foreign hiring practices. Now they have launched inquiries into Morgan Stanley (MS) and Citi (C). My take is that in the end, all of these will be settled with fines and no admittance of wrong doing. The banks are rapidly becoming ATM’s for the SEC and who will keep hitting the button until someone says no mas.
Funds managed by David Nelson are currently long JPM
