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Trader Talk with Bob Pisani

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  Thursday, 4 Dec 2014 | 10:28 AM ET

Mario Draghi is all over the place on ECB action

Posted By: Bob Pisani

The Shanghai Composite is up 4.3 percent to another new high, and Hong Kong's Hang Seng rose 1.7 percent. There's no specific reason, but mainland China stocks have been surging since the market opened to foreign investors in a big way in early November.

The People's Bank of China has also been hinting at stimulus measures. Exchange volumes have increased dramatically. The Shanghai Index is up 37 percent year to date. Chinese energy names like PetroChina and Sinopec were up big, too.

Meanwhile, European Central Bank President Mario Draghi is all over the place.

European stocks weakened and the euro shot higher as the ECB chief said the the bank will reassess its current plan in the first quarter, implying that any initiative to purchase sovereign debt—which the market wants—was not imminent.

Draghi also made references to the ECB balance sheet today, saying that it is his "intention" to raise the balance sheet by 1 trillion to 3 trillion euros, but that is not a "target." If that sounds a little too subtle, it is in a normal sense—if not in central banker speak. It means the ECB may not be as aggressive as initially thought.

Read MoreECB's Draghi: 'We don't need unanimity for QE'

Draghi later said that the ECB was discussing buying all assets "except gold." Gold dropped, the euro began to weaken, and stocks began to come back.

»Read more
  Wednesday, 3 Dec 2014 | 12:00 AM ET

Strange stock market trades confuse Wall Street

Posted By: Bob Pisani

A strange series of very heavy trading in roughly a dozen stocks has Wall Street traders scratching their heads; here's what I think is happening.

It started at about noon ET. All the trades occurred in roughly the same time period—roughly noon ET to roughly 12:30 p.m.—and the volume in all the stocks was heavy, in most cases several times daily volume.

It all points to one likely explanation: somebody executed some kind of program.

But what kind of program? And was intentional, or did somebody mess up?

Some stocks (CPB, HRS) dropped; some (ADI, CAT, JOY, HRB) went up; others (CVC) went up fast, then down almost as fast.

Two other points:

1) Most of them recovered to a great extent,so most exhibit at least a partial V-shaped pattern.

2) They do not seem related by sector, or any other obvious metric. True, President Barack Obama was aggressively pushing infrastructure during a news conference at this time, so infrastructure stocks moving (CAT, JOY, TSCO) makes some sense, but that would not account for the moves in other stocks.

There are two possible explanations:

1) A Wall Street firm has updated one of its buy/sell lists for 2015. That does happen at this time of the year: many release lists of high quality stocks, or dividend screens, to private clients.

It's possible some firm did that and has not yet made it public.

2) Someone mis-executed a program trade. I say "mis-executed" because it is hard to believe that anyone who wanted to buy and sell a basket of stocks with significant volume would dump such a large amount on the market in such a short period of time. Any professional trader would execute such a basket over many hours, with careful attention to disrupt the price as little as possible. That's not even difficult to do: it is common practice.

As part of this "mis-executed" theory, it is also possible that a hedge fund accidentally started liquidating their portfolio, and then noticed it and reversed. How do you know? Because your profit and loss statement suddenly goes haywire.

Either that, or someone is trying to execute a series of pair trades and have no idea what they are doing. Seems unlikely.

Personally, I think somebody messed up. Professionals do not execute such sloppy trading deliberately.

»Read more
  Wednesday, 3 Dec 2014 | 10:31 AM ET

Earnings: Bourbon is in, apparel is out

Posted By: Bob Pisani

Bourbon is in, and apparel is out. That's the story if you look at the earnings picture today.

Abecrombie & Fitch cannot catch a break. Third-quarter earnings were about in line with expectations, but EPS of 42 cents is poor in comparison to last year's 52 cents. Traffic was weak, and with about 30 percent of sales coming from outside the United States, including Europe, is it any wonder?

Here's an understatement: Abercrombie & Fitch expects conditions to remain "difficult." Difficult? I would call lowering full-year guidance to $1.50 to $1.65 from prior guidance of $2.15 to $2.35 more than "difficult." I call it "lousy."

Read More10 things you didn't know about Kentucky & bourbon

We all know merchandise is not the hot item. Accessories and electronics are what's selling, but this goes beyond that. The merchandise is just not connecting with consumers. You can see that in the earnings and the comparable store sales declines.

It's enough to make you take up drinking. Speaking of drinking...

»Read more
  Tuesday, 2 Dec 2014 | 10:25 AM ET

China stocks jump, but be careful how you invest

Posted By: Bob Pisani
People have photos taken with a replica of the famous Wall Street bronze bull on the Bund in Shanghai.
Johanned Eisele | AFP | Getty Images
People have photos taken with a replica of the famous Wall Street bronze bull on the Bund in Shanghai.

China stocks jumped the most in 15 months. What's up?

China's Shanghai Index rose 3.1 percent overnight to a 3-year high. To be blunt, it's a bet on central bank easing, but it's a good time to highlight that China's domestic market—long inaccessible and given up for dead—has been revived in the second half of the year.

The Shanghai Index is up 31 percent this year, but you wouldn't know that if you were investing in conventional methods. There is a huge difference in the China ETFs that are available for U.S. investors.

Read MoreChina rate cut is cold comfort for struggling developers

Simply put, the Chinese stock market is divided into two main segments: those shares that trade only in mainland China (known as A-Shares), and those that trade outside mainland China, including Hong Kong and the United States.

Because of restrictions on the ability of foreigners to own A shares, the mainland Chinese market often trades at a substantial discount—or a premium—to the China shares that trade outside the U.S.

»Read more
  Monday, 1 Dec 2014 | 4:08 PM ET

Here's why Apple dropped

Posted By: Bob Pisani

What happened to Apple earlier today? About 9:50 a.m. ET it went from roughly $117 to $111, a fairly significant drop of over 5 percent. Huh?

The usual market rumors quickly surfaced: A fat-finger trade was the most common. There were also product rumors, none of which seemed plausible: iWatch, iPad, even hacking rumors.

Occam's Razor says the explanation with the fewest assumptions is usually the correct one. In other words, the most likely explanation is usually the right one.

After talking to several traders, here's the explanation with the fewest assumptions: Someone sold a ton of Apple. Very fast.

Volume was very high during that minute, and on either side of it. More than 6.5 million shares traded in that one minute; Apple normally trades about 50 million shares a day.

That's a lot. There were a few large 50,000 or so share bids came in, but they kept getting taken out and the stock continued to drop.

That suggests a large seller.

But most of the trades were the usual, boring few hundred shares at a time.

»Read more
  Monday, 1 Dec 2014 | 10:23 AM ET

Traditionally strong December begins on weak data

Posted By: Bob Pisani

December is traditionally a strong month, but as we begin we are getting:

1) more weak data from China, with PMI down to 50.3, the lowest reading since March. Many big material names like BHP Billiton were down big last week—about 10 percent—on concerns China's growth is slowing.

2) more weak data from Europe, with manufacturing contracting in Germany, France and Italy, the three largest countries. New orders fell at the fastest pace in 19 months. These markets have also held up on stimulus relief from the European Central Bank.

3) generally disappointing U.S. retail sales over Thanksgiving weekend. The National Retail Federation said total spending fell 11 percent, with the average shopper spending about 6 percent less than Thanksgiving weekend last year.

»Read more
  Thursday, 20 Nov 2014 | 12:00 AM ET

Solving the investor's Big Data problem

Posted By: Bob Pisani

Did you ever hear or read a comment about a market trend and wonder how accurate it was over a certain time period? Or when some trader says, "We are entering a seasonally strong period of the year," did you ever wonder exactly how often that was true, and under what circumstances?

Sure you have. All of us who cover the markets engage in this kind of research every day.

Today, CNBC has announced a strategic partnership with Kensho, a company that was set up to answer complex financial questions...in a few seconds.

Read MoreTrader stakes millions on gold miners

That's right. A few seconds. Data mining is a key part of the life of any financial reporter, as well as hedge funds and other professional investors.

»Read more
  Wednesday, 19 Nov 2014 | 10:04 AM ET

European markets strong, retailers mixed

Posted By: Bob Pisani

While U.S. markets are up only fractionally this week, Europe is having another strong day. Most of the major European stock indices are posting gains between 0.5 to 1.0 percent this morning.

This week, Italy is up 2.8 percent, Spain up 2.8 percent, and Germany up 2.7 percent. Even Russia is up 2.3 percent, though it is essentially at a five-year low.

Standard and Poor's came out and was very negative on the current asset purchase programs, which are buying asset backed securities and covered bonds. S&P said the European Central Bank would need to increase the available pool of assets or the program would not have enough impact.

Read MoreHopes that $375 billion can boost European growth

Of course, that means buying bank bonds, other corporate debt, and sovereign bonds. But that is the whole can of worms that will ignite more push back from the Germans. We are waiting for a ruling from the European Court on whether the ECB has the legal status to purchase sovereign debt.

»Read more
  Tuesday, 18 Nov 2014 | 10:06 AM ET

The IPO rush begins

Posted By: Bob Pisani

IPO rush. There are 12 deals set to price this week. This is the rush to get deals done before Thanksgiving.

»Read more
  Monday, 17 Nov 2014 | 10:08 AM ET

More stimulus coming after Japan GDP shocker?

Posted By: Bob Pisani

The shocker overnight wasn't that the Halliburton-Baker Hughes deal went through. It was Japan GDP going negative—for the second straight quarter.

I don't know what you call GDP coming in negative 1.6 percent for the quarter when the consensus was growth of 2.1 percent, but it certainly is a shock. That, following a 7.1 percent fall in the second quarter! The first quarter showed an increase of 6.7 percent.

Read More Japan shocks as economy slips into recession

The second planned sales tax hike is now unlikely to happen. More importantly, Prime Minister Shinzo Abe is not going to declare Abenomics a failure; if anything this will likely accelerate demands for even more monetary easing.

According to Davy Research, the bulk of the decline was caused by business destocking, a temporary response to the dip in consumer spending in the second quarter.

Maybe. But Japan is a big producer of machinery used in Chinese factories. That is stoking some concern that China may have slowed down its order rate, raising questions about China's 7 percent GDP.

»Read more

About Trader Talk with Bob Pisani

  • Direct from the floor of the NYSE, Trader Talk with Bob Pisani provides a dynamic look at the reasons for the day’s actions on Wall Street. If you want to go beyond the latest numbers— Bob will tell you why the market does what it does and what it means for the next day’s trading.

 

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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