STTG Market Recap February 28, 2014

Indexes shot out of a cannon Friday as it looked like stocks were going to build on the breakout over year highs accomplished yesterday but news that Russian forces potentially had entered Ukraine late in the day let to a sharp bout of selling and created mixed indexes at the close.  The S&P 500 still finished up 0.28% while the NASDAQ dropped off 0.25%.   Obviously any serious issue in Ukraine would be a potential short term issue for an overheated market.

The Wall Street Journal, quoting Russia’s Interfax news agency, reported Ukraine’s acting president claimed Russia sent troops to Crimea and seized Parliament. This followed unconfirmed reports from the BBC and AFP that Russian troops may have entered Crimea.

There was a slew of mixed economics news:

The National Association of Realtors reported pending home sales edged up 0.1 percent to 95.0 in January, below estimates for a 2.0 percent gain.  However, the February Chicago Purchasing Managers’ Index rose to 59.8 versus a 57.0 estimate.  Revised figures from the Commerce Department pegged fourth-quarter expansion at 2.4 percent in the fourth quarter, versus the 3.2 percent gain projected in January. The economy grew 4.1 percent in the third quarter.

Here are the longer term charts for the indexes – both in good condition.

spx

nasdaq

Tech company Salesforce.com (CRM) was all over the map after posting earnings Thursday evening.   It raised its full-year revenue forecast but its profit forecast was largely below estimates.

crm

Monster Beverage (MNTR) was a big gainer post earnings.  This stock had a very rough 2013 due to legal concerns, but was a major momentum stock in 2009-2012.

Monster Beverage Corp. got a fourth-quarter jolt from higher sales of its energy drinks despite legal attacks alleging that the company’s caffeinated concoctions pose health risks.  The results seemed to validate Monster Beverage’s recent efforts to combat the assault on its drinks and marketing practices. Regulators and lawsuits contend Monster Beverage targets children who could be harmed or even killed by the caffeine levels in its drinks, claims that the company has adamantly denied.

The company earned $76.1 million, or 44 cents per share, during the quarter. That compared to $68 million, or 39 cents per share, in the prior year. Monster Beverage would have fared better, if not for $4.7 million in expenses tied to the regulatory inquiries and lawsuits revolving around the safety of its drinks. Those costs more than tripled from $1.4 million in the prior year.  Fourth-quarter revenue climbed 15 percent from the previous year to $541 million. The company sold 52.8 million cases of its drinks in the quarter, a 14 percent increase from the previous year.

mnst

We highlighted Target (TGT) Wednesday; the stock had a beautiful follow through move today…

tgt

Lululemon (LULU) was hit today on an analyst downgrade:

Credit Suisse’s analyst Christian Buss has put out a new warning on Lululemon. The firm already had a Neutral rating, but the price target in this call was lowered to $46 from $53, versus a closing price of $53.05 on Thursday.  Friday’s report warns of a negative shift via Internet and social media monitoring via blogs, social networks and customer reviews. Another key concern is that a comparable store sales rebound will be delayed and that e-commerce growth likely will slow. Lululemon also supposedly is losing website traffic to competitors.

lulu

Have a good weekend and try to stay warm; we’ll see you back here Monday.

 

 

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