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Trader Talk with Bob Pisani

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  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
  Friday, 19 Jun 2015 | 10:13 AM ET

Why aren't the markets worried about Greece?

Posted By: Bob Pisani

Why aren't the markets worried about Greece?

I have said for some time that the consequences of Greece leaving the euro zone may be far greater than anyone realizes, but the market thinks otherwise.

The German stock market is rallying today, and is flat on the week. European markets are down only about 1 percent for the week. European bond yields are up, but not too dramatically. The S&P 500 is up 1.3 percent this week, and the CBOE Volatility Index is near the lowest levels of the year.

Read MoreOdds of Greek solution at 60%: Ex-Clinton official

I've had many discussions with analysts and traders about this seeming indifference. Opinions vary, but there are four factors that show up in everyone's list to explain the phenomenon:

1) Fatigue: After five years of crisis, everyone is over it.

2) Complacency: Most feel that a deal will be made, even if it is just a "kick the can" deal.

3) No contagion: Traders believe the European Central Bank when it said it would do "whatever it takes" to keep the euro together.

4) Containability: Finally, even if Greece leaves the euro, many have now convinced themselves the damage could be contained. Peripheral bond yields are only modestly elevated, with Spanish 10-year yields, for example, is at 2.24 percent.

»Read more
  Thursday, 18 Jun 2015 | 10:21 AM ET

Fitbit makes for happy faces at the NYSE

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

There are a lot of happy people on the floor of the New York Stock Exchange today. They are Fitbit employees, which went public today at and has displayed one of the more impressive price surges I have ever seen on its way to an IPO.

»Read more
  Wednesday, 17 Jun 2015 | 3:59 PM ET

Pisani: Stocks up, rates down as Yellen steadies

Posted By: Bob Pisani
A trader watches the markets at the NYSE. (File Photo).
Getty Images
A trader watches the markets at the NYSE. (File Photo).

Stocks rallied and Treasury yields declined as Janet Yellen maintained a dovish outlook in her press conference, emphasizing that even if the Fed raises rates it will be "gradual."

The Fed statement was almost a carbon copy of the April 29 statement. The only change came in the first paragraph on the economic outlook.

The Fed has:

1) modestly upgraded the economic outlook: "has been been expanding moderately after having changed little during the first quarter."

2) modestly upgraded the assessment of the labor market: "The pace of job gains picked up while the unemployment rate remained steady."

3) upgraded its view on housing: "Growth in household spending has been moderate and the housing sector has shown some improvement"

4) left in the key inflation line: "The Committee continues to monitor inflation developments closely."

5) left in the key statement on fed funds rate: "economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."

6) downgraded their 2015 GDP forecast to 1.8-2 percent from 2.3-2.7 percent in March.

»Read more
  Wednesday, 17 Jun 2015 | 11:55 AM ET

Why energy stocks are having trouble rallying

Posted By: Bob Pisani

What happened to the recovery in oil stocks?

The pricing and volume action are telling me that investors are doubting the hoped-for 2016 recovery in production volumes.

Yesterday, Chevron hit a three-year intraday low.

The main Energy ETF, a basket of the energy stocks in the S&P 500, has staged three separate attempts to rally since hitting lows in December and January and is again fading, essentially moving straight down for the past six weeks. Volumes have also faded.

And the rally in crude has stalled. Since bottoming in the low $40s in early March, West Texas Intermediate, the main U.S. benchmark, has staged an impressive rally (over 40 percent) to trade between $58 and $61, but has been stuck in that range for the past six weeks as well.

Read MoreThese stocks are signaling a top in oil, says trader

Here's the problem: Everyone bought energy stocks aggressively in early 2015 on the theory that oil production would bounce back in 2016.

It's human nature. The optimists are focusing on a bounce.

Anticipating that, volumes in big energy ETFs like Oil Service and Exploration & Production picked up dramatically in January as the sector appeared to be bottoming out.

But many are starting to realize that, while oil prices may stage a modest comeback, oil production may not, at least any time soon.

»Read more
  Tuesday, 16 Jun 2015 | 10:07 AM ET

Why traders shouldn't get comfortable with Grexit

Posted By: Bob Pisani
Greek Finance Minister Yanis Varoufakis arrives at a European Union finance ministers meeting in Brussels February 17, 2015.
Francois Lenoir | Reuters
Greek Finance Minister Yanis Varoufakis arrives at a European Union finance ministers meeting in Brussels February 17, 2015.

The trading day begins again and will end later today, but Greece goes on forever.

How fed up is the trading community with Greece? I attended a hedge fund "idea dinner" last night, where roughly 15 investment professionals exchanged trading ideas, both long and short.

When it came to the subject of Greece, most just shrugged. A surprising number thought it would be good in the long run if Greece defaulted and left the euro zone.

But most didn't want to talk about it.

Read MoreMy Greek investment will work out: Wilbur Ross

That about summarizes the trading community attitude: so fed up they don't want to talk about it anymore. So fed up they seem to have run out of things to say about it.

"Volumes are terrible and traders are fed up w/ Greece," one hedge fund friend messaged me. "If they get kicked out...maybe that's a negative event, but who knows?"

Here's how confused things are on Greece: Traders aren't even sure what resolution would be best for the markets.

"The market isn't trading worse because there is a firm belief that whenever there is an event driven by a policy decision that decision will go the way the market wants, even if the market doesn't know what it wants...like Greece," one trader told me.

»Read more
  Monday, 15 Jun 2015 | 10:21 AM ET

Standard Pacific-Ryland: a rare home builder merger

Posted By: Bob Pisani

Home builder Ryland announced it would merge with Standard Pacific, creating the fourth largest builder by revenue. The deal is expected to close in the fall.

Standard Pacific will undertake a 1-for-5 reverse stock split. After the split, Ryland shareholders will receive 1.0191 shares of Standard Pacific stock for each Ryland share.

Though billed as a "merger of equals," Ryland will hold a 41-percent stake while Standard Pacific will have a 59-percent stake.

Mergers of home builders are fairly rare events. The last real merger of size in this space was between PulteGroup and Centex in 2009, though in 2013 Tri Pointe Homes acquired the land assets of Weyerhaeuser.

Read MoreHome builder confidence hits highest level of year, up 5 points

Why are mergers fairly rare in the home building space? Builders don't like to buy each other because what they really want is the land. That's what is scarce. So why pay a premium for operations when all they want is land? Just buy the land.

Still, in some circumstances, the deal would make sense when you need scale fast. You get the purchasing power of a bigger guy. More negotiating power with subcontractors.

It would also make sense if you thought the home building market was in for a period of slow growth.

»Read more
  Friday, 12 Jun 2015 | 10:16 AM ET

Food for thought: Investors love restaurant stocks

Posted By: Bob Pisani
People line up for free Shake Shack hamburgers outside of the New York Stock Exchange (NYSE) during the burger company's IPO on January 30, 2015 in New York City.
Getty Images
People line up for free Shake Shack hamburgers outside of the New York Stock Exchange (NYSE) during the burger company's IPO on January 30, 2015 in New York City.

The love affair with restaurants continues.

Fast casual chicken restaurant Wingstop priced 5.8 million shares at $19 in its initial public offering (IPO), a significant rise over the initial price talk of $12 to $14, which was then raised to $16 to $18. It's only the latest in a long string of IPO successes for restaurants, mostly in the fast casual space.

Since 2014, restaurant IPOs have been on a tear (source: IPO ETF Manager Renaissance Capital):

One important point: Much of the gains noted above occurred on the first day of trading, so the initial "pop" is very important.

The CEO of Bojangles, Clifton Rutledge, will be on CNBC's "Closing Bell" today.

Read MoreBojangles' marks first earnings report with a beat

Next week will be a big one for the IPO market, with yet another restaurant IPO and the long-awaited debut of Fitbit.

IPOs coming next week include:

  • Fitbit: health and fitness devices
  • MINDBODY: wellness ecommerce platform
  • Fogo de Chao: Brazilian steakhouse
  • Univar: chemical distributor
»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.

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