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http://ymlp323.net/zAQsgN ——————————————————————————– May 27, 2012 Month In Review…
Week & Month In Review For May 21 to May 25, 2012 Website Outage: The AllPennyStocks.com website is experiencing network outages so links in this email may not work. We are working to fix the outages but these problems may be ongoing until Tuesday, May 29th. We apologize for any inconveniences that this may have caused.
Canadian Companies mentioned include:
* Eacom Timber Corp. (TSX-Venture:ETR) * Colonial Coal International Corp. (TSX:CAD) * Caza Gold Corp. (TSX-Venture:CZY) * Corex Gold Corp. (TSX-Venture:CGE) * Columbus Gold Corp. (TSX:CGT) U.S. Companies mentioned include:
* Cellceutix Corp. (OTCBB:CTIX) * McKenzie Bay International Inc. (Pink Sheets:MKBY) * Godfather Media Inc. (Pink Sheets:GFMD) * Adamis Pharmaceuticals Corp. (OTCBB:ADMP) This week on AllPennyStocks.com:
* Article Published, May 22, 2012: Junior Biotech Gaining Ground on Omega-3 Deficiencies (http://www.allpennystocks.com/aps_ca/special_reports/270/Junior-Biotech-Gaining-Ground-on-Omega-3-Deficiencies.htm) (CDN / U.S. Company) * Article Published, May 23, 2012: $3.8 Million in Q1 Net Profit Poises This Tech Firm to Change the Way the World Uses Keyboards (http://www.allpennystocks.com/aps_us/special_reports/266/$38-Million-in-Q1-Net-Profit-Poises-This-Tech-Firm-to-Change-the-Way-the-World-Uses-Keyboards.htm) (U.S. Company) * Article Published, May 25, 2012: Too Many Investors Overlooking This Junior Mining Gem (http://www.allpennystocks.com/aps_ca/special_reports/271/Too-Many-Investors-Overlooking-This-Junior-Mining-Gem.htm) (CDN Company) Video charts for the week:
* May 22nd Technical Video Chart For CTIX. The CTIX chart has been trending in a channel for about 4 months ever since a move to nearly 80 cents. The moving averages have converged and the bollinger bands are trending up which will have traders on the watch for a breakout of the pattern. view:
( http://www.youtube.com/user/AllPennyStocks#p/a/u/1/sgha-CiLFjA ).
* May 23rd Technical Video Chart For ETR:CA. Eacom Timber has developed a good support at 9 cents and is facing resistance at a dime. A break of that resistance and the 50 and 200 dmas, could lead to a rise in pps to the next resistance point at 12.5 cents. view:
( http://www.youtube.com/user/AllPennyStocks#p/a/u/1/TEVGYmbjs-k ).
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WEEKLY & MONTHLY UPDATE –GREEK TURMOIL ROCKS NORTH AMERICAN MARKETS As May was playing-out to be a month that the bulls would rather forget, last week saw all five major North American exchanges reverse course after three straight down weeks. Volumes were scant at different times during the week as Canada took Monday off in observance of Victoria Day and Americans got a head start on a three day weekend on Friday; prepping for the unofficial start of summer with Memorial Day coming on Monday.
While Bay Street was shuttered on Monday, the American exchanges came out of the gate as the Dow snapped a six-session losing streak as investors put aside their concerns over debt-riddled Greece and other European Union woes to help lift 9 out of 10 S&P 500 industry groups and 5 out of every 6 NYSE-listed companies.
Although notching gains, exuberance in the States was tempered throughout the week via ongoing worries about the financial state of Greece and Spain and a number of international economic reports showing a global slowdown in growth. Fitch downgraded Japan, the world`s number-three economy, and suggested further downgrades could be coming. China kept investors on edge with reports on slowing demand for exports. Further reports showed that factory activity in China contracted for the seventh straight month. The United Kingdom fell back into a recession with its latest GDP data as Germany moved that direction as well upon reports of negative growth in the most recent quarter. Germany failing to grow last quarter sparked further anxiety from Europe as investors look to the major country for strength amidst the financial concerns of neighboring countries.
It wouldn`t be a week in 2012 so far without major concerns stemming from Spain and Greece. In the latest outcrying to assistance, the troubled Spanish lender Bankia SA reported that it needs 19 billion euros ($23 billion U.S.) for its recapitalization plan; representing the biggest bailout request in the nation`s history. According to late-week reports, the Spanish government has agreed to provide the funds in an attempt to stabilize the volatile banking situation in Spain. Additionally, Spain`s wealthiest autonomous region, Catalonia, said that it needed help from the central government because it was running out of options for refinancing debt in 2012. Stoking the fire, Standard & Poor`s lowered its ratings on Bankia and four other Spanish banks as it takes a dimmer view of Spain`s economic conditions.
The possibility of Greece exiting the euro was, of course, in the news again this past week, but investors seem to be becoming desensitized to it at the moment. Even with some countries continuing to show their support to do what it takes to keep Greece using the euro, Belgium`s deputy prime minister, Didier Reynders, issued a warning this past week saying it would be a “grave professional error” if central banks and companies were not preparing for a Greek exit from the euro zone. EU leaders called for a summit to discuss the situation as the majority wish to fight to keep Greece in the euro zone because of fears of financial contagion should the Greeks abandon the currency and return to the drachma. Europe`s banks are holding $1.19 trillion of debt to Spain, Portugal, Italy and Ireland which will be slammed with losses and increase the potential exit of other countries from the euro should Greece revert to their old currency.
In the States, the story of the week continued to be the monumentally botched Initial Public Offering of Facebook (NASDAQ:FB, -16.54%).
Uber-hyped and representing the biggest internet offering of all time, Facebook`s IPO is now being called “an embarrassment” by some journalists. The Facebook fallout taking the headlines is a shame really, as it overshadowed a tech rally which pulled the NASDAQ exchange ahead by more than 2 percent on the week.
The Canadian markets had strong days subsequent to the Victoria holiday as gains from resources helped advance the Toronto Stock Exchange during four consecutive sessions. On Tuesday, Canadian stocks had the biggest single-day leap in nearly six weeks on a cocktail of good U.S. housing data, hopes that euro zone leaders will issue common bonds to tackle the area`s debt crisis and news that China intends to take measures to boost growth. In major news from the Great White North, the industry minister said that Canada will gradually boost the threshold for mandatory review for proposed foreign takeovers of Canadian companies from $330 million to $1 billion. Investors were left on the edge of their seats, though, as no clear line was drawn in the sand regarding the change of policy.
The country has been looking for a clear definition of what is a “net benefit” to Canadians as stated in the Investment Canada Act since Ottawa thwarted the attempted takeover of Potash Corp. (TSX:POT, +3.88%) by Australian miner BHP Billiton Ltd. in 2010. Guess they`ll have to wait a little longer.
Economic data was somewhat thin last week from the U.S., but such is not the case during the shortened U.S. week coming. This past week`s economic plate from both Canada and the U.S. was primarily optimistic and an influx of info will be coming this week, including Gross Domestic Product updates. Clearly news from overseas will remain in focus, but the oversold condition of the markets and economic data could see the bulls looking to wrap the final days of May with continuation from last week`s rally.
The Canadian dollar fell for a fourth straight week against its U.S.
counterpart; its longest losing streak since March, as investor risk appetite remains low on speculation that Europe’s debt crisis continues to worsen. Even with initial reports surfacing that the GDP stats coming next Friday will show growth, ten-year government bonds dropped to their lowest levels since 1989. The swing past parity has been large with the greenback gaining about a nickel on the loonie in the past month as the EU situation has investors avoiding riskier currencies and picking-up the USD. On the flip side, Bloomberg analysts are predicting that a reversal is coming and saying that parity will be reached again by the end of June. On the week, the Canadian dollar lost 0.79% against the USD, meaning that next week will begin with one Canadian dollar buying US$0.970735. On the month, Canada`s currency fell by 4.73% against the USD.
* Gold futures managed to settle ahead on Friday to pare losses from weaker preceding days amid growing speculation that euro zone countries will move forward with a mutualized debt proposal. The uncertainty of the overall markets against a backdrop of EU concerns with Greek political and financial turmoil and fragility of Spanish banks has seen investors cashing-out of gold to take cash positions and cover losses from equities. The shiny metal had yet another week of choppy trading with the USD strengthening. On the week, June contracts were the most actively traded; dropping 1.44%, or $23.00 to close the week at $1,568.90. On the month, bullion prices dumped $95.90 per ounce, or 5.76%, in value.
* Silver prices fell Monday through Wednesday, but mustered some strength heading into the holiday weekend with green closes on Thursday and Friday to shave-down losses for the week. Much like gold, silver has been under pressure for nearly three months based on growth concerns in China and the U.S. and the financial debacle in the euro zone. Friday`s rise in value was aided in part by the euro`s bounce off of a 21-month low against the USD and Italy`s Prime Minister Mario Monti (as well as German Chancellor Angela Merkel) supporting the idea of mutualized debt in Europe. On the week, July silver contracts were the most actively traded; depreciating by 1.15%, or 32.9 cents, to $28.386 per ounce. On the month, gold`s first cousin took a lumping by falling 9.63%, or $3.025 per ounce.
* Copper prices were not immune from the commodity selling this past week either. Although the European problems don`t necessarily justify the stark drop in copper prices in the past two months, fear and momentum have dug the industrial red metal well-off highs near $4 per pound at the beginning of April. Copper prices got a modest lift early in the week on comments from China, the world`s largest consumer of copper, when Premier Wen Jiabao said China would “stabilize” property market regulations. This heightened possibilities for future demand as copper is widely used in residential construction for electrical wiring and plumbing. July contracts were the most actively traded on New York`s COMEX exchange during the week and finished pretty flat; down by 2.05 cents, or 0.59%, to $3.448 per pound. For the month, copper prices shed 37.7 cents a pound, or 9.86%.
* Oil prices dropped below $90 per barrel this past week for the first time since the opening days of November last year before nudging back up a bit heading into the weekend. Oil prices eked higher on thin volume levels on Friday amid worries about Iran`s continuing standoff with major powers over its disputed nuclear program that many suspect is really a veil over a weapons initiative. Iran and six world powers have been conducting meetings regarding the Iranian initiatives with investors expected to see some sort of progress.
When the most recent two-day meeting ended in Baghdad on Thursday with no new news, a risk premium surfaced once again. On the week, July contracts retreated another $0.62, or 0.68%, to close at $90.86 per barrel. During the month, West Texas Intermediate crude doffed-off 13.41%, or $14.07 per barrel.
Equity Market Snapshot:
(All percentages on a weekly basis unless otherwise noted) * Major gold miners rallied for the second straight week with even larger gains. Barrick Gold (ABX, +8.90%), Goldcorp (G, +9.53%), Newmont Mining (NMC, +2.25%), Yamana Gold (YRI, +9.76%), Agnico-Eagle Mines (AEM, +10.95%) and Kinross Gold (K, +8.81%) all posted solid upward moves on the TSX.
* Energy stocks got some relief with Iran back in the news and crude slowing its downward roll. Suncor Energy (NYSE:SU, +4.36%), Canadian Natural Resources (NYSE:CNQ, +4.73%), Talisman Energy (NYSE:TLM, +7.77%), Imperial Oil (NYSE:IMO, +0.62%) and Cenovus Energy (NYSE:CVE, +1.81%) all forged ahead on the week.
* Ithaca Energy Inc. (TSX:IAE, +25.22%) was a particular standout as it galloped ahead on news of raising its position in the Carna discovery in the Southern Gas Basin of the U.K. North Sea. On the flip side, Northern Dynasty Minerals Ltd. (TSX:NDM, -36.43%) saw its stock nosedive after the company called a draft Bristol Bay watershed assessment report by the U.S. Environmental Protection Agency on the potential effects of mineral development in southwest Alaska “rushed and inadequate.” * Big bank JP Morgan & Chase Co. (NYSE:JPM, +0.03%) continued damage control this past week to sooth investors and regulators regarding the more than $2 billion trading loss that was reported two weeks ago.
The company said that it has suspended its share buyback program, but will continue to pay a dividend; a strategic move that seemed to calm the water surrounding the company a bit.
* The financial sector maintained its volatile pattern. After taking a beating last week on EU worries, banks rebounded this past week as part of the overall market rally with Goldman Sachs Group (NYSE:GS, +1.27%), Bank of America (NYSE:BAC, +1.85%), Wells Fargo & Co.
* On the Canadian banking front, the six biggest banks in country are currently trading lower than they were at the same time last year.
The Bank of Nova Scotia (TSX:BNS, -0.31%), Royal Bank of Canada (RY, -2.61%), Canadian Imperial Bank of Commerce (TSX:CM, -0.01%) and Bank of Montreal (BMO, -0.96%) all sagged lower despite primarily decent earnings reports.
* Spared from losing on the week like other Canadian banks, Toronto-Dominion Bank (TSX:TD, -1.66%), Canada`s No. 2 bank, reported a 20 percent rise in quarterly profit; boosting shares on the week.
* Facebook (NASDAQ:FB, -16.54%) continued to fizzle after its ballyhooed IPO the week prior. Three investors sued Facebook and CEO Mark Zuckerberg Wednesday, along with lead underwriter Morgan Stanley and others, accusing them of withholding negative information ahead of company`s initial public offering.
* Homebuilders Pulte Group (NYSE:PHM, +9.89%) and Lennar Corp.
(NYSE:LEN, +7.72%) climbed on the positive housing report data this week. Toll Brothers (NYSE:TOL, +10.11%) also gained as it reported better-than-expected earnings, revenue that was in line with forecasts and upped its guidance for the second quarter.
* Research In Motion Ltd (TSX:RIM, +1.34%) is preparing for a major restructuring and intends to eliminate 2,000 to 6,000 jobs worldwide in the near term as the company struggles to recapture some market share that it has steadily been losing to Apple, Inc. (NASDAQ:AAPL, +6.02%) and other tech firms. The job cuts are expected to be broad and cover departments including marketing, legal, sales, operations and human resources.
* Personal computer maker Dell Inc. (NASDAQ:DELL, -15.47%) suffered its worst daily fall in 12 years on Wednesday when it reported profits that came up short of analysts` predictions. The weekly loss basically wiped-out all of the stock`s gains in 2012. Rival Hewlett-Packard (NYSE:HPQ, +4.05%) jumped after it reported profit and sales that beat forecasts and raised its forecast for the full year.
The company also announced plans to cut 27,000 jobs worldwide.
* Shares of Lululemon Athletica Inc. (TSX:LLL, +8.72%) rose on the week despite KeyBanc Capital Markets slashing its rating on the retailer`s stock to hold from buy, citing its “cautious view on the U.S. high-end consumer” and the company`s high valuation as the reasons for the rating reduction.
* Verifone (NYSE:PAY, -12.97%) saw its shares slide after the electronic payment company reported fiscal second quarter results that topped estimates, but provided Q3 guidance that came up short of analyst expectations.
* Shares of Talbots (NYSE:TLB, -33.48%) plummeted after private equity firm Sycamore Partners said it wasn`t prepared to execute any deal for the retailer as many analysts thought was going to happen.
* Urban Outfitters (NASDAQ:URBN, +10.93%) posted quarterly results that topped Wall Street`s expectations.
* Upscale clothing maker Ralph Lauren (NYSE:RL, +5.89%) also rose on earnings news that beat Street predictions, including a 29% jump in profit, strong same-store growth margins and doubling of its quarterly dividend.
* Shares of Ford Motor Company (NYSE:F, +5.89%) rose as investor service Moody`s raised the company to investment grade, which allowed Executive Chairman Bill Ford to reclaim the iconic blue oval logo that he put up as collateral for a loan.
* Benihana (NASDAQ:BNHN, +22.94%) roared ahead after agreeing to go private through a $296 million, all-cash buyout by Angelo Gordon & Company. The deal equates to $16.30 per share, which was a 23 percent premium to the prior day`s close.
Weekly Indices Results:
The S&P TSX Composite Index popped-off a bottom; adding 295.83 points, or 2.62%, to 11,576.47. The TSX Venture Exchange took back part of the losses from prior weeks; climbing 81.39 points, or 6.63%, to 1,309.27.
In the States, the Dow Jones Industrial Average ended well away from intraweek highs, but still closed green; appreciating by 85.45 points, or 0.69%, at 12,454.83. The much-broader S&P 500 followed along; growing its total by 22.60 points, or 1.74%, to close at 1,317.82. The tech-rich NASDAQ Composite paced the American exchanges in percentage gained by rising 58.74 points, or 2.11%, to 2,837.53 on the week.
Canadian Economic Data:
* The composite leading indicator rose 0.3% in April, matching the increase in March. This was the 10th consecutive monthly increase. Of the 10 components, seven advanced in the month. The components related to household demand supported the increase in April, led by a rise in housing starts. Both furniture sales and sales of other durable goods posted a third monthly gain. The financial components remained positive, as did employment in services. The average workweek, however, declined after being flat in the two previous months.
* Retail sales rose 0.4% to $39.1 billion in March, more than offsetting the decline in February. Warmer than usual weather, especially in Ontario, contributed to the gains. In volume terms, sales also rose 0.4%. Gains were reported in 7 of 11 subsectors, representing 56% of total retail sales. Sales at motor vehicle and parts dealers rose 1.2% in March. Higher receipts at new car dealers (+0.7%) and at other motor vehicle dealers (+7.7%) accounted for most of the gain. Sales at gasoline stations declined for a fourth time in five months, falling 1.6% in March.
* The number of people receiving regular Employment Insurance (EI) benefits was little changed in March at 549,400. The number of beneficiaries has been relatively stable since September 2011. There were more people receiving benefits in March in Nova Scotia, Saskatchewan, Ontario and New Brunswick. At the same time, the number of beneficiaries decreased in Alberta.
Next week, economic data will bring up dates on the Industrial Product Price Index and Raw Materials Price Index on Wednesday; Payroll employment and earnings stats on Thursday and Gross Domestic Product updates from March on Friday.
U.S. Economic Data:
* Sales of existing homes rose in April and remain higher than a year ago, according to the National Association of Realtors. Total sales of existing homes increased 3.4 percent during the month to a seasonally adjusted annual rate of 4.6 million. That`s 10 percent higher than the same point last year. The total inventory of existing homes in the country rose in April to 2.5 million, a seasonal increase that represents about a six-month supply at the current sales rate.
For the first time in nearly two years, the median existing-home sales price rose in consecutive months with April`s figure climbing to $177,400.
* Similarly, new home sales increased 3.3 percent during April, lending credence to the U.S. housing markets finally gaining some traction. New home sales rose to a seasonally adjusted annual rate of 343,000, according to the Commerce Department.
* Orders for durable goods – items meant to last at least three years – edged slightly up in April with a 0.2 percent climb to $215.5 billion after a 3.7 percent drop in March. So-called core capital goods orders, which are considered a proxy for business investment plans, fell 1.9 percent in April after a 2.2 percent decline in March, lead by a fall in demand for computers and electronics products and heavy machinery. While durable goods orders were up for the month, the decline in core capital goods suggests that the second quarter got off to a slow start.
* The number of Americans filing first- time claims for unemployment insurance payments declined for the week ended May 19th, pointing to gradual improvement in the labor market. In line with economists` predictions, applications for jobless benefits decreased by 2,000 to 370,000 from a revised 372,000 the prior week, Labor Department figures showed.
* In May, consumer sentiment rose to its highest level since October 2007 as Americans stayed positive about the job market. The Thomson Reuters/University of Michigan’s Index on consumer sentiment rose to 79.3 from 76.4 in April, outstripping forecasts for 77.8 reading.
Next week, data in the States will include reports on the S&P Case-Shiller HPI and Consumer Confidence on Tuesday; Pending Home Sales on Wednesday; ADP`s Employment Report, Initial Jobless Claims and Gross Domestic Product updates on Thursday; and Motor Vehicle Sales, ISM Manufacturing Index, Employment Situation and Personal Income and Outlays on Friday.
Penny Stocks to Watch & Company Spotlight Results:
Among the stocks we watched this week, industrial goods outfit Eacom Timber Corp. (TSX-Venture:ETR) had a flat week before a quick pop on Friday hit the intraweek high of $0.105 that settled back to close the week even at $0.10. The other stock we had on radar, energy company Colonial Coal International Corp. (TSX-Venture:CAD) tumbled on Tuesday, but pared most of the losses by the end of the week; closing at $0.85 for a loss of a nickel, or 5.56%, with an intraweek high of $0.90.
In the States, biotechnology company Cellceutix Corporation (OTCBB:CTIX) was solid, including a run up to an intraweek high of $0.75 on Thursday, and closed ahead by 5 cents, or 10.42%, for the week at $0.53. The other U.S. stock on our watchlist, renewable energy company McKenzie Bay International Ltd. (Pink Sheets:MKBY) completed a nice week of penny stocks to watch for us by closing up by $0.001, or 6.25%, at $0.017 with an intraweek high of $0.019 on Friday.
If you`d invested in all four stocks and held them to the end, you`d have seen an average gain of 2.78%. However, if you`d bought all four at the beginning of the week and sold each at its peak, you`d have realized gains of 20.00%.
Next week, we focus on Caza Gold Corp. (TSX-Venture:CZY) and Corex Gold Corp. (TSX-Venture:CGE). In the States, look for big things from Godfather Media Inc. (Pink Sheets:GFMD) and Adamis Pharmaceuticals Corp. (OTCBB:ADMP).
The Month at a Glance – May Just as April began the first weeks of trading in a weak manner, May followed a similar pattern. The bearishness was more long-winded in May, however, with the major exchanges notching losses for the first three weeks before finding some traction in the final full week of the month to modestly pare large losses throughout May across North America. The old adage of “Sell in May and go away” was executed in broad fashion as equities continued to take a lashing and resources slid to follow the April descent; leaving investors heading to the USD and cash positions to cover losses in equities. Historically, May had seen a drop in 8 years of the 2000`s, including large falls of 16.7%, 24.3%, 15.8% and 17.0% in 2001, 2002, 2008 and 2011, respectively.
May resembled April in more fashions than just the weak starts to the months. Investors digested another round of earnings news that were generally above expectations and economic data continued to show tepid growth patterns and a modest recovery in the U.S. housing markets.
Europe was once again the center of attention, though. The massive debt loads in Greece and Spain do not have any simple remedy as European leaders trudge through ad hoc summits to address ongoing problems with sovereign debt amid growing worries that Greece is moving closer to dropping the euro, and the contagion effects an exit might have on other economies and the coffers of European banks that have trillions of euros at stake. On a regular basis, however, the meetings are adjourned with no mutual agreements as Germany continues to be a thorn in the side of negotiations with its opinion that Greece needs to stay in the euro, but must stick to the unrealistic commitments that it made to receive bailout funds over the last year.
Additionally, Germany is being stubborn in changing its position to not support jointly-issued eurobonds as a potential resolution to a portion of the banking woes in the euro zone.
Political drama from Debt-laden Greece was in the forefront of investors after austerity opponents blocked the formation of a new government on two occasions. In earlier elections the two most established parties both lost seats in parliament, leaving no party with a majority of seats needed to form a government. Greek elections are scheduled for June 17 and could hasten the country`s departure from the euro should a government intent on shredding the country`s bailout program take control. The upcoming election is widely considered to be a referendum on the country`s membership of the euro and could lead to an absolutely messy exit from the currency which will amplify the financial disarray of other debt-wracked countries using the euro.
A change in leadership in France also kept investors on the edge of their seats through the changing of the guard to newly elected President Francois Hallande after his defeat of Nicolas Sarkozy.
Hallande believes that drastic austerity measures are responsible for EU countries being tossed into a recession and the root of large-scale unemployment.
Spain was not forgotten for its struggling banking sector as discussed above. The Spanish government took a large stake in Bankia, one of the largest banks in the country, in an attempt to support investor confidence amidst piles of debt and rising borrowing costs. Throughout the month, yields on Spanish 10-year bonds regularly held above the 6% benchmark that raises serious concerns amongst investors.
The markets had a strong start to 2012 during the first three months of the year, but were taking on a “toppy” look in April that was followed by a May sell-off that has erased the vast majority of first quarter gains. The reality is that ever since the financial crisis in 2008, brokerage firms have been fighting to restore investor confidence with successes followed by more global dysfunction or some cataclysmic type of market event (i.e. the Bernice Madoff scandal, the “flash crash” in 2010, the U.S. debt getting downgraded in 2011, the recent Facebook debacle, etc.) that sucks the life back out of positive sentiment. Europe has just been one more road block in the path to market recovery as investors are scavenging for anything to protect their assets, including taking all-cash positions, very limited long-term commitments in investments, or bonds that yield near zero returns. The late-month rally in May did help the markets edge ever-so-slightly away from oversold conditions, but seasoned investors know that oversold conditions can remain intact – and even accelerate in pace – for quite some time. Sellers may be running out of steam to a certain degree, which could signal a market bounce, but investors will be keenly looking for signs from both here and abroad that show some true strength for the markets in the waning days of May and into June to inspire a summer rally.
Monthly Indices Results:
* S&P TSX Composite: down 5.83% (-716.22 pts.) * TSX-Venture: down 8.06% (-114.77 pts.) * Dow Jones Industrial Average: down 5.74% (-758.80 pts.) * S&P 500: down 5.73% (-80.09 pts.) * NASDAQ: down 6.86% (-208.83 pts.) Monthly Equity Market Snapshot:
* Some headlines for the month included the arrival of “Facebook Friday,” the heavily anticipated public debut of the social media giant whose shares chimed in at an increased rate to $38 each with more shares hitting the streets than initially planned to boost the company`s valuation to near $100 billion. What followed could be deemed not much more than a “Facebook Faceflop” as Nasdaq botched the opening of trading, shares falling nearly 20 percent the following week before bouncing and the surfacing of news that numerous analysts had cut their growth forecasts for the vaunted company before the public debut, which was allegedly hidden by Facebook management now resulted in lawsuits against Facebook and associated parties that pocketed massive gains through early investments. Nice way to kick-off going public. On a lighter note, the IPO rage that has seen companies sizzle upward in initial trading only to fall sharply back downward has resulted in the coining of IPO standing for “It`s Probably Overpriced”.
* In more things social, reporting earnings for the first time as a public company, online review site Yelp, Inc. (NYSE:YELP, -20.43%) said that it incurred a net loss of $9.8 million, or $0.31 a share, in the first quarter of 2012. The company said that it grew its customer base and expects to top Wall Street expectations for the full year.
LinkedIn (NYSE:LNKD, -9.16%) fell after the professional networking company reported first quarter earnings and revenue that beat estimates and raised its full-year revenue outlook and also disclosed plans to buy presentation service SlideShare through a cash-and-stock deal valued at about $119 million.
* Chesapeake Energy (NYSE:CHK, -14.26%), the U.S.`s second largest natural gas producer, saw its shares tumble after shocking investors with a net loss of $71 million in the first quarter and reports exposing CEO Aubrey McClendon`s actions while running a hedge fund trading oil and gas contracts while heading-up Chesapeake. McClendon was stripped of his position as Chairman of the Board. The SEC confirmed that it will be investigating. Chesapeake also reported that it arranged $3 billion in secured loans from Goldman Sachs and affiliates Jefferies Group and news that activist investor Carl Ichan had boosted his holdings in the company to more than 5 percent.
Further, Standard & Poor`s downgraded the company`s credit rating, citing “mounting turmoil” related to corporate governance and budget gaps.
* Research in Motion (TSX:RIM, -19.75%) had another pitiful month unveiled its new Blackberry 10 software and reported that it will be cutting up to 6,000 jobs in the near future. Shares are at an 8-year low.
* Prudential Financial (NYSE:PRU, -22.04%), the second largest insurer in the country, was one of the worst performers in the S&P 500 as it posted a first quarter loss of a whopping $988 million, or $2.09 per share, compared to a gain of $539 million, or $1.10 per share, the year earlier.
* WestJet Airlines (TSX:WJA, +9.84%), Canada`s second largest airline company, had shares rise for the fifth time in six months with reports that it has selected Bombardier (TSX:BBD.B, -9.09%) to supply turboprop aircraft to the new regional carrier it is establishing as it attempts to continue to capture market from struggling Air Canada (TSX:AC.B, -13.00%).
* JPMorgan Chase & Co. (NYSE: JPM, -22.06%) announced a trading blunder that resulted in a more than $2 billion loss for the company and led to the resignation of senior executives, including Chief Investment Officer Ina Drew, the woman who oversaw the unit responsible for the debacle. To that end, Fitch also lowered its rating on JPM, voicing concerns of “lack of liquidity.” The SEC and FBI have opened investigations of the company related to the matter.
It also was exposed that JPM holds $100 billion in risky bonds, a situation that is far to similar to conditions before the financial fall-out in 2008.
* Yahoo (NASDAQ:YHOO, -1.16%) announced that CEO Scott Thompson left the company after it was found he padded his resume with an embellished college degree, ending his term there after just four months. In other Yahoo news, the company reported that it is close to selling its stake in Alibaba back to the Chinese internet giant.
* Shares of TMX Group (TSX:X, +2.33) got a lift as the consortium of Canadian financial institutions vying to buy the operator of the Toronto Stock Exchange extended its $3.85 billion takeover offer.
* In other M&A news, shares of drugmaker GlaxoSmithKline (NYSE:GSK, -3.08%) said it is taking its previously announced unsolicited $13 a share offer for Human Genome Sciences (NASDAQ:HGSI, -7.48%) directly to shareholders in a hostile bid. Bed Bath & Beyond (NASDAQ:BBBY, +2.86%) had shares rise as it agreed to buy Cost Plus (NASDAQ:CPWM, +13.53%) for almost $495 million, or $22 per share.
* Beauty company Avon Products (NYSE:AVP, -22.34%) said that it would need more time to consider the most recent buyout offer from Coty Inc., which upped its offer to buy the company with Warren Buffett`s Berkshire Hathaway helping to finance the bid and saying it would back the purchase. Coty responded by taking the deal off the table.
* Shares of retailer JC Penney (NYSE:JCP, -22.13%) still took a lumping even though it pulled-up nearly $3 from its monthly lows. The company has been working diligently on re-branding itself, but saw shares nosedive after it reported a much bigger than expected loss last quarter and discontinued its dividend.
* Shares of insurer American International Group (NYSE:AIG, -14.81%) fell after the Treasury Department announced that it was planning to sell 163.9 million shares for $30.50 each. The Government Accountability Office issued a report stating that the U.S. Treasury may eventually turn a $15.1-billion profit on its bailout of AIG when all final payments and asset sales are complete.
* Green Mountain Coffee Roasters (NASDAQ:GMCR, -48.06%) lost nearly half its value as the company continues to struggle to retain market share for single serve coffees and reporting that CEO Robert Stiller was ousted as Chairman for selling more than $125 million worth of Green Mountain stock during the month in a margin call.
* Shares of Walt Disney (NYSE:DIS, +3.22%) hit all-time highs after posting better than expected earnings and reporting a blockbuster opening weekend for its movie “The Avengers” which racked-up $200.3 million in domestic ticket sales. The sales eclipsed the old company record of $169.2 million registered by the wildly-popular “Harry Potter and the Deathly Hallows Part 2” last July.
Monthly Penny Stocks To Watch Leaders & Company Spotlight Results:
Among the stocks that we watched in May, the champion of the month in Canada was Columbus Gold Corp. (TSX-Venture:CGT), which was profiled during the second week of the month when the price was $0.49. Shares rose steadily throughout the week to close at a high of 55 cents for a rise of 6 cents, or 12.24%. In the U.S., the winner for May was biotech Cellceutix Corporation (OTCBB:CTIX) which was listed in the last week of May at $0.48. Shares soared as high at 75 cents; representing a gain of 56.25% before simmering back down to hold gains of more than 10 percent heading into next week. We congratulate all the followers of our “Penny Stocks to Watch” who were able to reap rewards from these most recent Companies and look forward to another solid month of penny stocks to watch in June. Be sure to check each weekend for our new penny stocks to watch as we continue to find gems that are regularly producing solid gains.
————————- Forward Looking Statements This report includes forward-looking statements that reflect the mentioned companies current expectations about its future results, performance, prospects and opportunities. the mentioned companies has tried to identify these forward-looking statements by using words and phrases such as “may,” “will,” “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plan,” “should,” “typical,” “preliminary,” “we are confident” or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause the mentioned companies actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company`s growth expectations and ongoing funding requirements, and specifically, the Company`s growth prospects with scalable customers, and those outlined above. Other risks include the Company`s limited operating history, the Company`s history of operating losses, consumers` acceptance, the Company`s use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company`s securities, the possible volatility of the Company`s stock price, the concentration of ownership, and the potential fluctuation in the Company`s operating results.
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