The Recovery We've Been Waiting For

Today's Headline on Wall Street Journal - "New Home Sales Jumped 11% in June From May". For the past two years the entire world economy had almost collapsed and it all started with the bubble bust of the US housing market. Finally there seems to be the light at the end of the tunnel as new-home sales has been up for the past three consecutive sessions. And how real is this recovery? Compare to May the new home sales were up 11% in June, better than economists estimates of just 2.3%.

And how about the home builders? Price of KB Home (KBH) is up 4.38% this morning and has gained almost 30% in one month. Lennar (LEN) gained 7.38% so far and has also gained 30% for the month. D. R. Horton (DHI) gained 2.7% while Centex (CTX) gained 6.58%. Winner so far today is Hovnanian Enterprises(HOV) which gained 10.18%. Time to jump into the home builders?Maybe.

Stress Test

The big announcement, the stress test result, is coming tomorrow for the nations 19 largest financial institutions.  The stress test which test the banks financial strength with the worst case scenario would let the government know if the bank need addtional equity or not.  So far it is reported that 10 of the 19 largest US financial institutions would need additional capitals.  Among the 10, Bank of America and Wells Fargo are said to be included.

So what are the 19 institutions?  Here they are:

• American Express(AXP)   
  
• Bank of America(BAC)
• BB&T(BBT)
• Bank of New York Mellon (BK)
• Citigroup(C)
• Capital One Financial (COF)
• Fifth Third (FITB)
• GMAC (GMA)
• Goldeman Sach (GS)
• JPMorgan Chase (JPM)
• KeyCorp (KEY)
• MetLife (MET)
• Morgan Stanley (MS)
• PNC Financial (PNC)
• Regional Financial (RF)
• SunTrust (STI)
• State Street (STT)
• U.S. Bankcorp (USB)
• Wells Fargo (WFC)

Flu Outbreak

Three years ago bird flu in Asia caused wide panic but did little damage. However some healthcare stocks - especially those with flu vaccine tie went up in dramatic fashion in short amount of time. This time with the swine flu actually causing damage in Mexico, United States and Europe those bird flu vaccine stocks should get real benefit. Today many of the flu related stocks have already drew crowd of speculators and many went up more than 50%.

Here are the flu related stocks:

• Novavax (NVAX): $2.55 +79.58%
• BioCryst Pharmaceuticals (BCRX): $3.88 +75.57%
• Generex Biotechnology (GNBT): $0.61 +82.09%
• Hemisphrex BioPharma (HEB): $0.81 +39.66%
• Crucell (CRXL): $15.5 +7.86%
• GlaxoSmithKline (GSK): $31.56 +7.57%
  

Las Vegas Reviving

Well not exactly.  The real estate in the area is still bottoming and the casino hotels are trying their best to attract cash strapped visitors by slashing room prices to new low levels never seen.  The two casino giant, Las Vegas Sand (LVS) and MGM Grand (MGM), scared investors as both dropped to as low as $1.38 and $1.81 respectively.  LVS was trading as high as $83.13 and MGM was trading as high as $61.97 during the past 52 weeks.  

So are the casinos dead?  Recent run on both LVS and MGM shows bargain hunters are eyeing the casino stocks as both are now trading at $5.13 and $6.22, up 100% in just a month.  Maybe it's a good time to get into these casino giants while they are cheap:

• Las Vegas Sand (LVS)
• MGM Grand (MGM)
• Wynn Resort (WYNN)
• Riviera (RIV)

Solar Shines Again

Up 40% in one day? And almost all stocks in the same sector? Yes this happens to almost all Chinese solar stocks after the announcement that the Chinese government is planning to subsidize solar power installation. And with the solar stocks hammered so badly, many of them are seeing single digit P/E ratio which make the stock price really attractive. So 40% gain across the board isn't a surprise. Here are how the Chinese solar stock did today:

• Canadian Solar (CSIQ) +27.54%
• China Sunergy (CSUN) +30%
• JA Solar (JASO) +41.73%
• LDK Solar (LDK) +31.75%
• ReneSola (SOL) +40.68%
• Solarfun (SOLF) +41.74%
• Suntech Power (STP) +43.82%
• Trina Solar (TSL) + 40.76%
• Yingli Green Energy (YGE) +44.82%
  

Save From Bankruptcy

No we are not just talking about a company but the entire industry of auto suppliers. As the demands of car fall off the cliff, the downstream (or in this case upstream) industries are also deeply impacted. And one of the industry got hit the most? The auto suppliers.

Following the faith of the auto maker, the auto suppliers stocks have also been on the slide for the past 52 weeks and were trading around a dollar or in many case even below a dollar. Fortunately with Obama's announcement of a $5 billion dollar support to the industry today, the auto suppliers seem to be getting a relief from the financial storms. As a result the stocks all went sky rocketed.

So let's see the performance of some of the auto suppliers:

• Lear Corporation (LEA): $1.33 +84.72%
• Tenneco (TEN): $2.70 +30.43%
• TRW Automotive Holding (TRW): $4.38 +36.02%
• Nobel International (NOBL): $0.42 +94.44%
• Visteon Corporation (VSTN): $0.29 +81.25%
• Delphi Corporation (DPHIQ): $0.07 +66.67%
  

Signs of Bottoming?

So what's going on with the banks?  Just not long ago investors are so afraid about all banks going for nationalization that they dumped the once so called blue-chip banks as if they are going out of business like Circuit City.  Therefore we saw used to be stars such as Citigroup(C) and Bank of America(BAC) trading as low as 97 cents and $2.53 respectively.  And both of them are part of Dow 30 stocks.

When the bears were ready for their last strike on these two dying banks, the positive comments from the CEO resurrect the bulls back as both company saw their stocks rose almost 100% in just 3 days.   

So could this finally be "The Bottom" we've been looking for?  With both stocks all trading at multi-year low, even this my not be the real bottom, as long as the banks are "too big to fail", this may be the best time to invest.