One of the most anticipated talk by Fed chairman Ben Bernanke gave Friday boost to markets but still it ended in red for the week. This is 4th down week for markets and gave almost all the gains it made in July. Now every word from Fed chairman and other members of fed are watched carefully to understand where is economy headed and how Fed would react. Bernanke's "unusual uncertainty" could be remembered similar to Greenspan's "Irrational Exuberance" comments in 1996.
Final revision of GDP for Q2 came in at 1.6 % which was better than some of the worst fears. So what's in store for Q3 and Q4 since this is what would decide if markets are breaking from trading range. Based on my observations (while back-to-school shopping for kids), retail sales seem to have picked up - at least traffic in shops like Target/Walmart has increased during this season. The all important holiday shopping season is coming soon. It should be relatively ok shopping season. I am predicting GDP growth of above 1% in Q3 and around 2-3% in Q4. IMO we are not heading towards double-dip. It would take few weeks (till just before elections) for markets to come to terms and then it would break out inching towards 11000 (for DOW).
3PAR takeover saga continues. Looking at $30 price offered for a company which was trading below $10, it looks like markets were pricing it completely wrong or HP/Dell are way overpaying it. IMO, Dell should just match $30 price and let HP raise its bid near $32 and then abort the bill, pocket breakup fee of over $72 Million. The price has reached so high that "loser" of this takeover saga may come out as "winner" since ROI calculations do not seem to justify the price. My prediction is that HP would win the bid with price near $33.
Due to housing reports last week, regional banks got hit in a major way creating an opportunity to pick up couple of regional banks at reasonable prices. Hence this week's recommendations are: RF at $6.5 and SNV at $2. These two regional banks offer potential return of 50% in next 18 months.
Have a great week !
/Shyam
Final revision of GDP for Q2 came in at 1.6 % which was better than some of the worst fears. So what's in store for Q3 and Q4 since this is what would decide if markets are breaking from trading range. Based on my observations (while back-to-school shopping for kids), retail sales seem to have picked up - at least traffic in shops like Target/Walmart has increased during this season. The all important holiday shopping season is coming soon. It should be relatively ok shopping season. I am predicting GDP growth of above 1% in Q3 and around 2-3% in Q4. IMO we are not heading towards double-dip. It would take few weeks (till just before elections) for markets to come to terms and then it would break out inching towards 11000 (for DOW).
3PAR takeover saga continues. Looking at $30 price offered for a company which was trading below $10, it looks like markets were pricing it completely wrong or HP/Dell are way overpaying it. IMO, Dell should just match $30 price and let HP raise its bid near $32 and then abort the bill, pocket breakup fee of over $72 Million. The price has reached so high that "loser" of this takeover saga may come out as "winner" since ROI calculations do not seem to justify the price. My prediction is that HP would win the bid with price near $33.
Due to housing reports last week, regional banks got hit in a major way creating an opportunity to pick up couple of regional banks at reasonable prices. Hence this week's recommendations are: RF at $6.5 and SNV at $2. These two regional banks offer potential return of 50% in next 18 months.
Have a great week !
/Shyam
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