Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings.
Twitter, Coty Take Hits After Misses
Originally published Feb. 9 at 8:52 a.m. EDT
The market opened up slightly across the board Thursday, the mirror image of Wednesday's opening. We continue to see scores of earnings reports hit the wires this week.
Twitter (TWTR - Get Report) is down 10% in trading as its results once again disappointed. With such a well-known and used application, you would think someone could figure out how to monetize Twitter's huge user base more efficiently.
Retail continues to be a very difficult sector. There are lots of land mines and poor quarterly results of late. Coty (COTY - Get Report) becomes the latest retailer to join that list as quarterly numbers missed both the top- and bottom-line consensus. Shares are down about 9% in early trading.
Bank of America Merrill Lynch upgrades Micron Technology (MU - Get Report) from Underperform to Buy as it says the DRAM maker is seeing less competition in DRAM from Samsung. It ups the price target from $11.50 to $35 a share. Of course, the shares have moved up from under $18 before the election to almost $25 currently. My guess is BAML's clients probably would have appreciated a timelier update on Micron.
Let's Check Out Health Insurers and GreeceOriginally published Feb. 9 at 8:51 a.m. EDT
It looks like consolidation among the large health insurers is deader than a doornail. Anthem's (ANTH) $54 billion deal to buy Cigna (CI - Get Report) was blocked by a federal judge yesterday. This follows a recent court-ordered halt that looks like it could derail the potential combination of Aetna (AET) and Humana (HUM - Get Report) . There are a lot of unknowns about the overall health care market right now, as no one knows what will happen with the Affordable Care Act this year.
I am more than amused by calls on both the left and the right complaining or rejoicing that the ACA's repeal and/or replacement has not been put in motion yet. The new POTUS has not even got his cabinet nominees approved yet. It's amazing how little patience both sides of the aisle and their grassroots supporters have these days. The previous POTUS was in office almost two years before the ACA was passed, and it was even more years before full implementation occurred. It is not going to be altered or undone overnight.
Going to the other extreme, the Greek debt crisis seems to be raising its ugly head once again for the umpteenth time since 2010. Recently the International Monetary Fund has suggested that a looming "debt Armageddon" potentially could pose a risk to the broader eurozone. The German finance minister, of course, stated the country would need to leave the European Union to get a debt haircut.
This Mexican standoff was old years ago, but still has the potential to cause volatility in the eurozone. The Germans will continue to "extend and pretend" on the Greek debt rather than provide any sort of debt forgiveness, which would be hard politically. The Greeks, on the other hand, continue to refuse to make the necessary labor and other structural reforms needed to make their economy competitive. Unfortunately, I don't see either side changing their stance.