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As Alcoa Goes, So Goes the U.S. Recovery

As I outlined in January, industrial bellwether Alcoa (AA) is starting to signal better quarters ahead for the U.S. economy. Alcoa's sales will likely increase 10% to 13% in 2011, after a 14% surge in 2010, the latter albeit against an easy comparison.

Further, U.S. auto sales are likely to rise 10% to 13% this year, and the housing sector could squeeze out a modest uptrend in new home sales, if a better second-half performance materializes, as expected. This is all good news for aluminum sales and AA. Another positive: The price of aluminum should rise in 2011 on adequate global demand and falling inventories.

Continue reading As Alcoa Goes, So Goes the U.S. Recovery

Single Trader Dominates Copper in London Metals Exchange

copperOver the years there have been some strange goings on in the commodity markets. One episode that comes to mind is the attempt by the Hunt brothers of Texas to corner the silver market in the 1970s.

Now we have another strange occurrence. The Financial Times reported that one trader holds 80% to 90% of the copper in the London Metals Exchange (LME) warehouses, valued at about $3 billion. We do know that JPMorgan Chase (JPM) is a big player in the copper market. Whether JPMorgan increased its holdings is not known.

Continue reading Single Trader Dominates Copper in London Metals Exchange

Alcoa Earnings Defeat Estimates in Third Quarter

alcoa earningsI last discussed aluminum company Alcoa (AA) back in July. At that time, its price was roughly around the $11 mark. Thursday, the stock closed the regular session at $12.20. During the extended-hours trading that followed, the stock rose 2.8% to $12.54 in reaction to the release of the third-quarter report. The 52-week low for the shares is $9.81, so they're comfortably above that level. It's time for long-term investors and short-term participants to decide how the stock looks now that the numbers are out.

Let's first go to the one-year chart. Such a graphic doesn't make things easy, does it? The overall pullback makes the stock appear weak, but I nevertheless see an equity that wants to clear some more resistance levels if only the rest of the market will help it out.

Continue reading Alcoa Earnings Defeat Estimates in Third Quarter

Are Oil, Copper, Aluminum Draw-Downs Sending an Economic Signal?

Some economists argue the U.S. economic recovery has slowed and is veering toward a double-dip recession. Others argue the recovery has merely paused -- a normal phase after the first stage of an impressive manufacturing-led rebound.

But are there other indicators that suggest the recovery has only just begun? Despite solid earnings reports for companies of significance Intel Corporation (INTC) and General Electric Company (GE), the June-quarter earnings season is too young to suggest the economy is stronger than analysts sense.

However, inventory data on oil, copper, and aluminum do suggest the recovery may be just in its initial warm-up stretches, so says one commodity services broker.

Continue reading Are Oil, Copper, Aluminum Draw-Downs Sending an Economic Signal?

Alcoa Kicks Off Earnings Season with Stronger-Than-Expected Growth

Alcoa AA logoWhen Alcoa (AA) issued its first-quarter earnings report back in April, I wasn't impressed. I felt the shares weren't a buy, and I wanted a pullback. Well, we got one. In fact, the stock closed Monday's regular session at $10.87, not far from the 52-week low of $9.04. This was right before a new quarterly report was posted.

So should an investor consider Alcoa a potential buy? I definitely find the shares more attractive now than I did a few months ago. Further, the stock rose 3.5% in Monday's after-hours session.

Continue reading Alcoa Kicks Off Earnings Season with Stronger-Than-Expected Growth

Commodity Metals Decline on Investor Emotions

All over Wall Street investors seem to be running scared. A broad array of stocks have taken a two day beating, with very little rational justification. The European instability excuse is losing its viability. Profit taking is handily tossed around as justification, but that proposition is near entirely exhausted. The "market correction" excuse just doesn't hold up under scrutiny. Yet again this week, the street's traders are deferring to the bears. The single most valid explanation I can come up with is this: The investment community on a whole has lost its nerve.

Continue reading Commodity Metals Decline on Investor Emotions

Alcoa: Not a Buy

Shares of aluminum entity Alcoa (AA) are not acting as a catalyst for the market today. If anything, they are probably bringing the mood of the traders in a downward direction. Pity, since the Dow hit 11,000 and all.

At the time of this writing, shares of the company were off by roughly 3%. Volume was high relative to the norm. The company's first-quarter earnings report is the cause of the selling interest. Of course, a sell-off can oftentimes be a nice opportunity for investors to get in on a stock; you always want to buy low and sell high, correct?

Continue reading Alcoa: Not a Buy

Speculation Is Spurring Price Jumps in Industrial Metals

Industrial metals like copper, aluminum and iron ore are basic to economic development. China, with its explosive growth needs these metals.

Word of this has spread around the world, bringing speculators into the markets. China is the world's biggest consumer of aluminum and copper. Armed with that knowledge, speculators drove the price of copper up 48% in the second half of 2009.

Continue reading Speculation Is Spurring Price Jumps in Industrial Metals

Alcoa: Pull-Back Is Buy Opportunity

The market's recent retreat from Dow 10,700 has led to an oversold condition in Alcoa (AA), and that's one major reason I'm reiterating my buy rating for the company's shares, first recommended on Aug. 17, 2009, at a price of $12.41.

The other major reason is Aloca's smaller-than-expected 27-cent EPS loss in Q4, which is consistent with a recovering U.S./global economy. Alcoa's revenue in FY2010 should increase 15% to 22%, assuming likely stabilization in the U.S. housing and auto sectors. Modestly higher aluminum prices also should take place this year.

Continue reading Alcoa: Pull-Back Is Buy Opportunity

Alcoa Down on Q4 Results -- What Should Investors Do Now?

Aluminum entity Alcoa (AA) is down in the dumps today. As of this writing, shares are off by over 10.5% to $15.60. Many, many shares have traded hands. Much higher than an average day's volume.

Driving the selling pressure was the earnings report, of course. For the fourth quarter, sales decreased 4% compared to the year-ago period. On a reported basis, the company lost 27 cents per share from continuing operations. This was a big improvement over the previous loss of $1.16 per share. Unfortunately, according to Bloomberg, the adjusted profit of a penny per share missed projections by 5 cents.

Continue reading Alcoa Down on Q4 Results -- What Should Investors Do Now?

Alcoa Fourth-Quarter Earnings Preview

The earnings season is going to kick off on Monday when aluminum manufacturer Alcoa (AA) reports its fourth quarter numbers following the market close.

Headed into Monday's report, analysts are expecting to see the company posting its second positive quarter in a row after posting losses for three consecutive quarters. Analysts are expecting earnings of 6 cents per share during the quarter.

Continue reading Alcoa Fourth-Quarter Earnings Preview

Cold Weather Is Wreaking Havoc Across the Northern Hemisphere

From the U.S. to Europe, to Asia, cold weather is wreaking havoc on travel and agriculture. The recent cold snap is is driving the price of oil and agricultural commodities to new highs for the year.

Demand for crude oil is up, pushing prices to a 15-month high. On the New York Mercantile Exchange, oil traded at $81.77 per barrel. Natural gas demand has climbed sharply in China, with prices up as much as 40% in some areas.

Continue reading Cold Weather Is Wreaking Havoc Across the Northern Hemisphere

With solar overheated, here are two indirect ways to play climate change

Investors hoping to ride the climate change bandwagon have had a roller coaster ride over the past two years. Greentech stocks soared with the oil spike in 2007 and 2008, then crashed with stock market and commodity price declines in 2009. Since then, some of the most obvious stock plays have strongly rebounded. Many solar stocks have posted high double-digit gains since rebounding off year-to-date lows in March 2009.

The leading solar panel manufacturer, FirstSolar (NASDAQ: FSLR) has appreciated by 45% from lows of near $100 to a closing price of $154 on October 14. "I wouldn't be stepping into buying these stocks right now," says Pacific Crest senior analyst Mark Bachman, who covers solar stocks. Still, he rates FirstSolar as a market perform and considers it the best solar stock at present on his coverage list.

Continue reading With solar overheated, here are two indirect ways to play climate change

Alcoa posts surprising third quarter profit

alcoa third quarter earningsAlcoa (NYSE: AA) surprised the market this afternoon by posting its first quarterly profit of the year.

The company credited recent cost cutting measures as the main reason for its profit of $77 million during the quarter (75.8% lower than the same period last year), or 4 cents per share excluding certain items. This was a nice surprise to Wall Street, which had expected to see the company show a loss for the quarter of 9 cents per share.

Continue reading Alcoa posts surprising third quarter profit

Alcoa gets $1.3 billion in relief

Within the past year, the stock price of Alcoa (NYSE: AA), a mega aluminum producer, has gone from a high of $44.78 to a low of $4.97. Although, during the past few weeks, things have perked up. In fact, yesterday Alcoa's stock price surged 17% to $6.40.

The reason? Alcoa was able to drum up interest in its recent financing. In all, the company raised $1.3 billion in stock and convertible notes. Keep in mind that Alcoa expected to raise $1.1 billion.

In the aftermarket, the trading of the new securities was robust -- which certainly delighted traders.

Continue reading Alcoa gets $1.3 billion in relief

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Last updated: February 11, 2012: 08:53 AM

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