1:00pm (EST)
Futures were pointing to a lower start this morning amid ongoing concerns about Greece and Italy but started to improve as we headed towards the opening bell. The market opened flat for the most part and drifted lower, before recovering and turning positive. Although the major indexes are now mixed, Tech is showing some strength.
Germany, the strongest country in the eurozone, is making its voice heard as they try to calm worries that Greece is heading for a default. The Germans rejected the notion that a Greek bankruptcy would provide a quick solution, like some have suggested, and say Europe instead needs to stick to its efforts to cut budget deficits and improve its competitiveness.
Meanwhile, Italy confirmed that they are in talks with China to persuade them to buy some of their bonds which was the catalyst for yesterday’s late-day rally.
Here at home, economic news has been light as well as corporate news although there is one company’s fall from grace we would like to highlight.
Best Buy (BBY, $23.11, down $1.82) continues to set fresh 52-week lows after kissing $22.74 earlier this morning. The company posted earnings that were well short of Wall Street’s forecast and shares are down another 7% on weaker sales.
The company earned 47 cents a shares on revenue of $11.35 billion but the suit-and-ties were looking for a profit of 53 cents a share on $11.5 billion. Best Buy also lowered their full-year guidance target to $3.45 a share, down from $3.55 a share, on sales of $51 billion-$52.5 billion. We aren’t “buying” it as we think shares will continue to struggle as consumers get thrifty.
We missed a sweet option trade on this one as the Best Buy September 25 puts (BBY110917P00025000, $1.94, up $0.97) have surged 100% today. Let’s see: stiffer competition, sluggish TV and video game sales, and lack of new products. Yeah, we missed the boat…
No worries, we have a trade we are releasing today that could do equally as well, if not better. In fact, if our price target for this stock, which is currently at $62, is hit, these options will make over 600%!
We said to get your Christmas shopping list ready and we are excited about this trade, folks!
As we head to press, the Dow is down 9 points to 11,051 while the S&P is up by 4 points to 1,166. The Nasdaq is also trading higher and is back over 2,500 – up 18 points to 2,513.
Subscribers, please check the Members Area for the important trade update and make sure you pay close attention to our instructions. We are using tight limit prices to establish positions for our NEW TRADE so we may have to be patient.
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