With no economic news in the sails of the broad-based S&P 500 (SNPINDEX: ^GSPC ) investors decided that today would mark the perfect time to lock in some recent gains.
However, that doesn't mean we don't have a week full of market-moving data. Consider for a moment that on top of this week being the kickoff to earnings season, we'll also have access to the Federal Open Market Committee's meeting minutes from June 18 on Wednesday. These minutes will give us a good idea of where all of its members stand with regard to interest rates and the health of the overall economy.
In addition, tomorrow we'll get a closer look at May's consumer credit figures. Although a drop is expected from the ridiculous April figures, investors are still going to be looking for steady credit expansion as interest rates remain near their historic lows.
Finally, on Thursday we'll get our weekly look at initial jobless claims. Current expectations are that they'll fall be a little more than 1%, which would be impressive considering last week's blowout jobs report.
For the day, though, the S&P 500 gave back 7.79 points (-0.39%) and finished at 1,977.65. Despite the down day the index is still well within reach of the psychological 2,000 level.
Leading all individual companies to the upside today is mobile application security and management company MobileIron (NASDAQ: MOBL ) which rose 12.5% after all six underwriters that recently brought the company public initiated it with the equivalent of a buy rating.
Source: William Brawley, Flickr.
As noted by Barron's, four of these research firms all slapped a $13 price target on the company, implying up to 32% upside based on Friday's closing price. With many of these research firms noting that the majority of enterprise smartphones and tablets are unpenetrated it certainly could give MobileIron plenty of room to grow. However, despite its rapid growth it could be years before MobileIron is profitable, so chasing shares higher following today's pop would only be wise if you're a very long-term-minded investor.
Source: Kandi Technologies.
Electric and all-terrain vehicle manufacturer Kandi Technologies (NASDAQ: KNDI ) added 6.1% on the day after announcing that one of its subsidiaries, Kandi Electric Vehicles Group, has received a national subsidy of $31.8 million for the sale of more than 3,000 EVs between June and December 2003, and for sales of more than 1,000 EVs in the first quarter of 2014. As Kandi notes, the first quarter subsidy payment was an advance. Kandi Electric Vehicles Group is a 50-50 joint venture between Kandi Technologies and Shanghai Maple Guorun Automobile. Hu Xiaoming, the CEO of Kandi, believes this payment will help accelerate EV development within his company as well as expansion into new territories.
It's definitely easy to like Kandi given the region it operates in (rapidly growing China), and the fact that it's producing clean-energy vehicles which are going to become increasingly important as pollution worsens in China. But investors will also want to consider that Kandi's had a nice run already and its upside, at least in the near term, could be limited. What I wouldn't argue against is adding Kandi to your watchlist.
Lastly, struggling smartphone maker BlackBerry (NASDAQ: BBRY ) leaped 5.7% after a double dose of good news. First, BlackBerry announced this morning that it had won three Red Dot Awards for its BlackBerry Q10, Q5, and Z30. With the basis of the awards being the phone's streamlined design, the idea here is that this media attention could draw in new consumers.
Perhaps an even bigger draw was a report from Barron's, which claimed that BlackBerry was working on building a health-care services platform. With BlackBerry struggling so mightily in smartphones, the company's next best hope might be with interconnected devices, something a health-care platform could help accomplish, or at least get the company on the right path toward accomplishing. Investors are simply cheering BlackBerry's "never say die" attitude.
BlackBerry Q10. Source: BlackBerry.
BlackBerry has had a better than 40% run higher over just the past month on speculation that it could be the next Internet of Things powerhouse, but I'm not buying it as of yet. Chances are that BlackBerry still has notable restructuring initiatives to work through, and it still hasn't demonstrated much in the way of groundbreaking innovation over the past five years. For the time being I'll continue to pass on BlackBerry.
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Report this Comment On July 08, 2014, at 8:08 AM, corstrat wrote:
Slight correction to your article and a short comment. The "December 2003" should have read "December 2013".
Also, as you pointed out, this $31 million payment is from the National Government, but as the actual PR inferred, the City of Hangzhou (pop. 10 million) is finalizing its contribution as well. According to PRC mandate, each of the currently approved "EV" cities are required to match the Federal Government subsidy, so anticipate an additional $31 million from Hangzhou any day now. And this is just for the above mentioned 3000 cars.
During the first two months of Q2, KNDI had, as reported by the MIIT, already matched the prior two quarters with 3005 EV's produced. June's production has not yet been reported. So the sum of it all is that it not only appears that KNDI's Q2 should exceed $50 million in revenues and be very profitable (up from $12.2 million last year with a .03 loss), but also possibly collect over $100 million in subsidies for the first half alone.
(putting this in a perspective; based on current market caps, this $100 million total subsidy for the first half could be compared to TSLA getting a $5 billion subsidy payment)
BTW, while it is the 50-50 JV with China's #1 passenger car manufacturer Geely (Maple) that actually receives the Subsidy and sells the EV's, KNDI and its wholly owned subsidiary actually build over 80% of the car and sell them to the JV which finishes out the car for sale. So KNDI actually gets compensated two ways. But the sale of the almost completed cars to the JV and again by its 50% share in the JV,
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