On Friday, the following press release was issued by General Electric:
“The Board of Directors of General Electric Company (NYSE: GE) today raised the Company's quarterly dividend 20% from $0.10 per outstanding share of the Company's common stock to $0.12 per outstanding share of the Company's common stock. The Board declared that the dividend is payable October 25, 2010 to shareowners of record at the close of business on September 20, 2010. The ex- dividend date is September 16,
2010.
In addition, the Board extended the existing share-repurchase plan, which would have otherwise expired on December 31, 2010, through 2013. Repurchases under the existing $15 billion repurchase plan were suspended on September 25, 2008. The plan currently has approximately $11.6 billion in remaining authorization. The Company will resume repurchases under the plan this quarter.
"We are able to restore the GE dividend at a historical payout level for 2010 earlier than previously anticipated and to extend our share buyback program because of continued strong cash generation, recovery at GE Capital, and solid underlying performance in our Industrial businesses through the first half of 2010," GE CEO Jeff Immelt said. "In addition, the Company continues to plan on capitalizing on strategic and financially attractive inorganic growth opportunities. "We are executing well, progressing on our plans to make GE Capital a smaller, more competitive specialty-finance company, and continuing to generate strong cash flow," Immelt said. "This gives us the flexibility to allocate capital for growth and shareholder value, while keeping GE safe and secure."
There is absolutely no other way of interpreting this in my mind as anything other than bullish. While GE did not readjust its dividend anywhere close to pre-crash levels, the fact that they raised their dividend shows confidence in themselves much less took away any fears that they may actually reduce their dividend. It is the same story for the stock buyback program. There is of course no way of telling whether the company will actually wind up buying $11.6 billion of its own shares. Furthermore there is no guarantee it is even a wise thing to do. Yet the fact it is willing to at least intimate that it will put its money where its mouth is (along with the thinking that the company certainly will buy some of its shares soon so as not to make the announcement hollow). Finally, there is also no way the CEO of GE would make a comment about the company’s operations doing well unless, well, they were doing well. Thus, Friday’s rally was not a short covering rally; rather, it was but a sign that maybe hopefully perhaps the worst has passed with the likelihood of a double dip lessening a bit based on one major worldwide company along with the thought that other companies will imitate GE’s actions over the next few weeks.
Markets overnight were higher in Asia with Hong Kong up 0.1% and Tokyo 0.8%. Prices fell ever so slightly in Europe though despite the European bank stress test results as well as the rumored imminent departure of BP’s embattled CEO. The FTSE is down 0.2% with the DAX down 0.3%. Oil is down almost 1%, gold is up slightly, and the dollar is notably weaker against the yen and the euro. Futures are a tinge lower. Overall, it’s a quiet summer Monday…doesn’t seem like we get many of ‘em anymore, but this certainly feels like one of them. Look for a muted session overall today with a focus on smaller biotechs in the news, the drillers on reactions to BP rumors, and relative strength/weakness plays early on.
Reiterating-
If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified.
If something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-
Good- The following stocks have good news and/or a strong technical pattern
CMG- closed near a high after posting great earnings
FSLR- closed near a high
SNDK- near island reversal in closing near a high after posting poor earnings
NXTM- closed near a high after posting good earnings
DV- among other for-profit education stocks closing near a high after a watered down rule proposal from the Department of Education
GENZ- closed near a high on rumors of a takeover from Sanofi
AXP- closed near a high after posting good earnings
BUCY- closed near a high after posting good earnings
WYNN- closed near a high
AMZN- an amazing island reversal in closing near a high after posting terrible earnings
BIDU- closed near a high
MA- closed near a high
X- closed near a high
APA- closed near a high
RIMM- closed near a high
JOYG- closed near a high
MUR- closed near a high after announcing an attempt to exit its refining business
CKH- closed near a high after posting good earnings
RVBD- closed near a high after posting good earnings
INFN- closed near a high after posting good earnings
APC- announced an oil discovery near Ghana
ONXX- announced positive top-line results from its Carfilzomib Phase 2b study
EPD- decent earnings
SOHU- decent earnings
Bad-The following stocks have bad news and/or a weak technical pattern
RIG- closed near a low
BXS- closed near a low after posting poor earnings
Earnings:
MON JUL 26 BEFORE
CSR EPD FTI
LO ROP RSH
SOHU
MON JUL 26 AFTER
ACL BEC CR
HMA JEC LF
LM MAS PCL
PLT RRC SLG
UHS VECO
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
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