GO
Loading...

Enter multiple symbols separated by commas

Trader Talk with Bob Pisani

More

  Tuesday, 30 Jun 2015 | 3:16 PM ET

Pisani: Stocks deep in Greek drama

Posted By: Bob Pisani

We are past the point of farce on Greece, but the story line just keeps getting weirder.

Stocks rose midday as Greece has thrown a last minute request to negotiate a new bailout, or at least an extension of the current terms, and then dropped back when it appeared there was no deal.

But there will be another meeting on Wednesday!

Creditors—who have said they will not change the terms of the prior offer—are forced to take this seriously because they are afraid of a NO vote on Sunday's referendum. They are afraid Tsipras will use the NO to reopen negotiations, which they have said they will not do.

But the creditors also do not want to be blamed for pushing Greece toward an exit by refusing to negotiate.

So the speculation is the creditors WILL negotiate, and are poised to offer new, more liberal, terms.

The hope is that these concessions will enable Tsipras to switch sides and support a YES vote on the referendum, or, even better, cancel the referendum altogether.

Why would Tsipras switch sides? Because Tsipras knows the creditors despise him. He knows that continuing to campaign for a NO vote is what some (not all) of the creditors want, because that is how they will get him out of office, assuming the vote is YES.

So the entire game hinges on whether Tsipras believes the vote will be YES or NO. If he believes it will be a YES even if he is a NO, and that will cost him his job, then he needs to switch.

But he needs a pretense. The concessions...if there is some meat on the bones...may be the pretense.

Bottom line? Tsipras is very much in charge of the pace of this game. We are very, very deep into the infinite Hall of Mirrors that is Game Theory.

»Read more
  Tuesday, 30 Jun 2015 | 10:18 AM ET

Stocks in the first half offer a very mixed bag

Posted By: Bob Pisani

The market action has been very uneven in the first half of the year. The S&P 500 is only 3 percent from its May historic high, but that is a deceptive picture.

There have been some notable sector winners, but there are also many—perhaps most—that still have modest gains for the year, but have stalled out in the second quarter. And then there is a distinct group that is in a clear downtrend.

If there was ever an argument for owning a broad portfolio of stocks, the first half of 2015 should be Exhibit 1.

First, let's look at the winners on an uptrend so far this year:

Banks have benefited from a rising interest rate environment and hopes for an improving economy, while health care, particularly biotech but also pharmaceuticals, have also been strong. The boost to HMOs and hospitals from the Supreme Court ruling on Obamacare has also bolstered the overall sector.

But there are many sectors that started the year strong, and have begun to stall in the second quarter. Two examples:

The housing numbers have shown notable improvement, as have earnings of companies like Lennar, but there is still an affordability issue hanging over the home building industry. Prices are high and getting higher, wages are still stagnant when inflation-adjusted, and the specter of higher mortgage rates have investors cautious.

Read MoreLee: This may be one of 'few buying opportunities' left

»Read more
  Monday, 29 Jun 2015 | 10:07 AM ET

Markets calm about Greece, but don't be complacent

Posted By: Bob Pisani

The early reaction to the markets reflects a mild concern about contagion, but no panic. Portugal, Spain and Italy's stock markets are all down roughly 4 percent. Big European banks are down 4 to 6 percent. European peripheral debt is seeing a mild rise in yields, but not dramatic. The euro is down only 0.4 percent against the dollar. Gold is up all of $3 (0.3 percent).

This relatively mild reaction may or may not be what Tsipras had in mind when he called for a referendum. Many believe chaos is an important part of his negotiating strategy.

Tsipras' decision to call a referendum Friday night in the midst of negotiations has added a new layer of complexity to the negotiations, but the decision was not entirely absurd.

Read MoreLive Blog: Greek banks to reopen on Thursday, earlier than originally planned: Official

If he went ahead and agreed to austerity, the Greeks would throw him out. If he didn't agree, they would throw him out.

The only chance was to get the country behind him, and hope the chaos encourages the Europeans to go for a better deal.

Or—as many believe—he wants a final OK to leave the euro.

»Read more
  Friday, 26 Jun 2015 | 9:57 AM ET

Morgan Stanley: It's no time to buy Chinese stocks

Posted By: Bob Pisani
Investors watch computer screens at a stock exchange hall in Fuyang, China.
ChinaFotoPress via Getty Images
Investors watch computer screens at a stock exchange hall in Fuyang, China.

Another drop in China. The Shanghai Composite is down 7.4 percent, and the Shenzhen fell 7.8 percent.

Shanghai is now about 20 percent off the multi-year highs of a few weeks ago, but all of this has to be viewed through the prism of the crazy bubble China A shares have been in. The Shanghai Composite rose more than 60 percent from March to the middle of June and is still up 30 percent for the year; the Shenzhen is up 77 percent.

Morgan Stanley was out with a note this morning in which it concluded: "This is probably not a dip to buy ... the balance of probabilities is that the top for the cycle on Shanghai, Shenzhen and Chinext has now taken place."

Read More If I had just $1, I'd invest in China: Stephen Roach

The firm cites four issues:

a) increased equity supply,

b) weak earnings growth with a slowing economy,

c) high valuations; and

d) very high margin debt to free float market capitalization.

Read MoreShadow lending crackdown looms over China's stock market

What would make Morgan more positive? An improvement in the economy, for one. Slowing down the IPO calendar, for another. The government could also step in to help the market. One idea is for the government to launch a tax-advantaged savings scheme similar to a U.S. 401(k).

THAT would certainly make a difference, but that is a long way off.

»Read more
  Thursday, 25 Jun 2015 | 11:10 AM ET

Buyers say 'no mas!' to year's biggest IPO day

Posted By: Bob Pisani
Traders work on the floor of the New York Stock Exchange.
Getty Images
Traders work on the floor of the New York Stock Exchange.

The IPO business: the buyers push back. A very mixed report card for the busiest week of the year for IPOs. Did I say mixed? How about crummy.

Eight were scheduled to price overnight, and so far only six have made it.

Thursday's IPO scorecard

1 Above range (Glaukos)

1 Middle of range (TransUnion)

1 Bottom of range (Millacron)

3 Below range (Lantheus, Catabasis, Gener8 Maritime)

1 Postponed (Wayne Farms)

1 MIA (CNX Coal)

Wow. That is a pretty poor scorecard. An IPO bubble? Not on your life. In a bubble, everything prices above the range. That sure is not happening.

What is happening? The tape is telling you that IPO sellers are force-feeding the market. Buyers are pushing back, they are telling the sellers that there is too much product and they don't want a lot of it, or at least not at the prices being floated.

That is a good sign. That's the best protection against a bubble forming.

For those who want the details:

1) The big winner: Glaukos (glaucoma treatment products), is the clear winner. They raised terms yesterday, to $16-$17 from $13-$15, priced at $18, and they added more stock, opened at $29.11.

2) Doing OK: TransUnion, the credit reporting company, priced 29.6 million shares at $22.50, at the high end of the $21-$23 price talk, opened at $24.62.

3) Bottom of range: Milacron Holdings, which makes plastics processing equipment. The company has emerged from a 2009 bankruptcy filing. Priced at $20, low end of $20-$22 price talk, opened at $19.50.

4) Below range: Catabasis Pharmacuticals (technology for improving drug efficacy); priced at $12, below the price talk of $13-$15;

Lantheus Holdings (diagnostic medical imaging agents) priced at $6, well below the price talk of $8.50-$10.50, and added more stock, opened at $6.12;

Gener8 Maritime (seaborne crude oil transportation) priced at $14, well below the price talk of $17-$19, opened at $12.75 (ouch!)

5) Postponed: Wayne Farms, a broiler chicken processing company that supplies chickens to Chic-fil-A, Costco, and others. Why the postponement? Not clear, but may be concerns about chicken prices and exports due to avian flu.

6) Day to day: CNX Coal Resources (Coal MLP, with 10 percent dividend!)

»Read more
  Tuesday, 23 Jun 2015 | 4:16 PM ET

Pisani: Bank rally may have more room to run

Posted By: Bob Pisani
Traders on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders on the floor of the New York Stock Exchange.

The bank rally continues. It may have been a lackluster trading day, but once again banks rallied to new highs, including money center banks like Morgan Stanley (MS), Citigroup (C), JPMorgan (JPM) and Goldman Sachs (GS), as well as large regional banks like SunTrust (STI), Huntington Bancshares (HBAN), KeyCorp (KEY), Comerica (CMA), Wells Fargo (WFC) and Fifth Third (FITB).

Large-cap banks have significantly outperformed the S&P 500 this quarter.

Read MoreHow companies are using secondary offerings to buy assets

»Read more
  Tuesday, 23 Jun 2015 | 1:14 PM ET

Companies using secondary offerings to buy assets

Posted By: Bob Pisani

I noted last week that this week is the biggest of the year for IPOs. Fourteen are expected to price, and more than $2 billion is expected to be raised.

But one space that has escaped market watchers' attention is the secondary market, which dwarfs the IPO market.

For example, there were 10 secondaries announced last night. Think about that: 10.

And here's what's important: Much of the proceeds are being used to buy things.

Read MorePlus-sized retailer FullBeauty seeks sale or IPO

That's right—to buy things. Companies. Hotels. Pipelines. Retirement centers.

Not surprisingly, many are in the energy and real estate fields.

"These are people with very deep interests in their field, and they know when assets in the their fields are cheap," David Menlo of IPOfinancial.com told me. He added that it is generally cheaper to buy than to grow organically.

"To buy a pipeline, for example, is a tremendous capital expenditure. Building new hotels, or senior citizen centers, is more of a risk than buying what's already there because you have a track record with the existing properties. There's verifiable cash flows."

»Read more
  Monday, 22 Jun 2015 | 12:02 PM ET

Europe closes at the highs: 'What? Me, Worry?'

Posted By: Bob Pisani
Greek Prime Minister Alexis Tsipras arrives to attend a Eurozone emergency summit on Greece in Brussels, Belgium June 22, 2015.
Charles Platiau | Reuters
Greek Prime Minister Alexis Tsipras arrives to attend a Eurozone emergency summit on Greece in Brussels, Belgium June 22, 2015.

European markets went into the close at the highs for the day as yet another comical round of "What? Me, worry?" plays out in Europe.

The Greeks sent the wrong proposals to the negotiations?

No problem! They eventually got the right one out! What's a day or two when you're on the verge of default?

No agreement because the finance ministers didn't get the correct proposals in time to examine the details?

No problem! The summit of eurozone heads of state will still take place this evening.

Read MoreGreece deal pushed back; crunch talks continue

The eurozone ministers also can't make a deal because there is no technical agreement?

No problem! The meeting will be used to prepare the ground for another Eurogroup meeting later this week.

We have a problem with the details of the agreement and can't come to an agreement at the Eurogroup meeting?

No problem! There's another meeting, somewhere. And another extension...

»Read more
  Monday, 22 Jun 2015 | 10:26 AM ET

European leaders dangle the ultimate carrot

Posted By: Bob Pisani

Is it safe to go back into Europe again? Euro leaders are dangling the ultimate carrot: a third Greek bailout deal.

European stocks are in sold rally mode, with most bourses up 1 to 2 percent, as EU leaders are scheduled to meet at 1 p.m. ET to attempt to hash out a deal with Greece. Bond yields are down in Greece, Italy, and Spain, and up slightly in Germany and France.

The Greek leadership has presented a slightly different proposal in an effort to end the stalemate. Whether it is good enough is unclear. There is less emphasis on cuts in pension spending and increases in value-added taxes and more on closing tax loopholes and raising taxes on corporate profits. Greece is also reportedly offering to raise the retirement age to 67, well above the average retirement age of 63 for men and 59 for women.

Read MoreWhy Greece has a bad hand: Strategist

If a deal is reached, there have been reports the leaders are willing to discuss debt relief as part of a third bailout.

If there is a deal on Greece, even a "kick the can" deal that would extend the bailout for a few months ahead of a new bailout deal, will that cause a resumption of the European stock rally that started in January and fizzled in April on Greek exit fears?

The initial response would seem to support the idea. Germany is more than 10 percent off its April highs, but it has rallied about four percent since the bottom on Thursday on just such hopes. The Vanguard FTSE Europe ETF, a basket of European stocks, has rallied roughly 2 percent in that time period.

Perhaps more importantly, this will reinforce the idea that central banks will always bail out market participants.

»Read more
  Friday, 19 Jun 2015 | 12:12 PM ET

Pisani: Here's why the IPO market is heating up

Posted By: Bob Pisani
Employees and sellers of the online marketplace Etsy stand with CFO Kristina Salen on the floor of the Nasdaq as the company went public on April 16, 2015.
Getty Images
Employees and sellers of the online marketplace Etsy stand with CFO Kristina Salen on the floor of the Nasdaq as the company went public on April 16, 2015.

The IPO market is finally starting to get going, and next week will be the biggest week of the year. Roughly 14 companies are slated to go public and will likely raise north of $2 billion.

It's been a lackluster start. There's been 82 IPOs this year, about 40 percent below where we were last year.

Why is the market finally heating up? The single most important factor is positive returns for investors. With the overall market relatively healthy, IPOs have also done well. The Renaissance Capital IPO ETF, a basket of roughly 60 recent IPOs, is approaching its April historic high.

For others, there may be a simple calculation that now is the time to take the company public, before the Fed begins raising rates later this year.

Read MoreAre hot start-ups available to retail investors?

The upshot: June could be one of the biggest months for IPOs in years. Perhaps as many as 34 will price, the most in a single month since 1999.

"It's like somebody pressed the IPO reset button," Kathleen Smith from Renaissance Capital said.

What's impressive about next week's crop of IPOs is the breadth of the offerings. There's something for everyone.

»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.

 

  • Bob Pisani

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

Wall Street

  • Robert Shiller

    Nobel Prize-winning economist Robert Shiller says that his key valuation indicator is flashing warning signs.

  • Lael Brainard

    The Fed is in the early stages of an analysis on changes in bond market liquidity, amid signs that liquidity may be less resilient than in past.

  • Bill Gross

    Janus Capital acquired a majority interest in Kapstream Capital and said Kapstream's Palghat will support Bill Gross as co-portfolio manager of the Janus Global Unconstrained Bond strategy.