Futures were pointing towards a big open on better-than-expected economic news and strong earnings from some of America’s most powerful companies. Second-quarter earnings season has gotten off to a nice start, excluding the Big Banks, and today’s news that housing is “improving” has helped the bulls push resistance once again.
Housing Starts for June were 629,000 units, which was better than the 570,000 units that had been penciled-in. The June numbers were a huge improvement over the 549,000 units that were recorded in May. Elsewhere, Building Permits came in at 624,000, up from 609,000 and ahead of the 610,000 units that had been forecast.
One of America’s favorite icons is having a banner day after smashing Wall Street’s estimates. Harley-Davidson (HOG, $45.26, up $3.84) is up nearly 10% after saying it earned $190 million, or $0.81 a share, versus $140 million, or $0.59 a share, in the year earlier period. Revenue for the quarter was $1.34 billion.
Analysts were expecting the company to report numbers of $0.71 a share on revenue of $1.26 billion. Harley-Davidson also raised its guidance on bike shipments for the upcoming quarter.
It was good to see demand for Harley’s still on the rise and although we don’t own a bike, we do have one share of the stock which we have hanging up at our corporate headquarters. Believe it or not, you can still get printed stock certificates for many publicly traded companies and we love the art work.
We would have also loved to have played call options on Harley-Davidson but our portfolio is pretty packed right now. In any event, the August 42 calls (HOG110820C00042000, $4.00, up $2.40) have surged 150% today while the August 45 calls (HOG110820C00045000, $1.80, up $1.20) have zoomed nearly 200%.
There have been rumors over the last 6 months or so that Harley-Davidson would be taken private or there could be a leveraged buyout of the company. That would be great for shareholders. We just hope they don’t sell the name to China.
As far as the market, many of you know the resistance levels: Dow 12,500-12,600; S&P 1,325: Nasdaq 2,800.
As we head to press the Dow is up 131 points to 12,516 while the S&P is showing an advance of 13 points to 1,318. The Nasdaq is higher by 44 points to 2,809.
One of our current trades has hit a triple-digit return today and we are expecting a few more pops from other trades. Subscribers, check the super-hot Members Area for the updates. We could be getting our “One Clap” video ready…