Companies featured in the current edition of the newsletter: CETG, CLXS, ETGF, GNBT, ITUI, PLKH
Apathetic investors combined with the tail end of summer resulted in anemic trading activity last week, as volume was at its lowest level of the year. That didn’t stop investors from selling stocks, however, as the S&P 500 ended the week down 0.7%. Overall the S&P 500 fell by 9 points, increasing its year to date loss to 12.6%. The Dow Jones Industrial Average dropped 84 points, giving it a year to date loss of 13%. The Nasdaq Composite Index fell by 47 points, bringing its year to date loss to 10.7%. The Russell 2000 managed to gain two points or 0.3%, bringing its year to date loss to 3.5%.
From an economic standpoint, the personal income report was the only true disappointment for the week. Outside of that report, the remaining notable releases – existing home sales, new home sales, consumer confidence, durable goods, initial claims and revised Q2 GDP – all brought relatively good news. The biggest surprise of all was the latter report. Second quarter real GDP was revised up to 3.3% from 1.9%. Favorable revisions to net exports, inventories and personal consumption were the major drivers for the upgraded measure of growth. The revised GDP number showed the economy was a long way from recession in the second quarter. The 3.3% rate of growth is even above the long-term trend.
Separately, Fannie Mae and Freddie Mac rallied strongly last week, possibly due to the absence of any bailout news and some relatively successful debt offerings. At their highs on Thursday, FNM and FRE were up 59% and 92% from the prior week’s close. Wall Street should get a better idea about investor sentiment this week, as investors return from vacation.
What should investors look for next week? The corporate calendar for the holiday-shortened week is light. Staples (NASDAQ: SPLS) is scheduled to report its earnings Wednesday before the market opens, followed by SAIC (NYSE: SAI) after the close. However, trading could be significantly impacted by the path of Hurricane Gustav, which could have a far-ranging economic impact, depending upon the amount of damage it does. Some of the industries that could be affected include the petroleum and shipping industries.
Alternately, the economic calendar is quite active. On Tuesday at 10:00 a.m., Construction Spending for July, and the ISM Index for August will be announced. August Auto and Truck Sales will be reported on Wednesday, followed by July Factory Orders at 10:00 a.m. and the Fed’s Beige Book at 2:00 p.m. On Thursday morning, expect Initial Jobless Claims for the week and the revised Productivity numbers for the second quarter being released at 8:30 AM, with the ISM Services Index for August being released at 10:00 AM. The weekly Crude Inventories will follow at 10:35 a.m. Friday morning’s schedule is full. Unemployment Rate, Non-farm Payrolls, Hourly Earnings, and Average Workweek numbers for the month of August are all expected at 8:30 AM.
The conference schedule is also on the lighter side and begins on Tuesday with the three day Citigroup Global Technology Conference in NYC and the two-day Lehman Brothers CEO Energy Conference in NYC. The two day Goldman Sachs Global Retailing Conference in NYC will begin on Wednesday and Cowen & Co.’s 2nd Annual Clean Energy Conference will take place on Wednesday in NYC.
According to SEC filings, the CEO and a Director of i2 Telecom (OTCBB: ITUI), a developer of award-winning patented and innovative high-quality Voice-over-Internet Protocol products and services, significantly increased their ownership position in the company through the exercise of warrants, collectively acquiring approximately 10 million shares. The increase in ownership by the individuals comes just weeks after the company reported the first profitable quarter in its history, earnings 2 cents per share. Shares which are up more than 60% this year, rose 6% last week to close at $0.135.
Drug delivery company Generex Biotechnology Corporation (NASDAQ: GNBT) entered into a product licensing and distribution agreement with Dong-Sung Pharm Co. Ltd. for the importation, marketing, distribution and sale of Generex Oral-lyn, the company’s proprietary oral insulin spray product, in South Korea. Dong-Sung Pharmaceuticals, founded in 1957, is one of Korea’s leading pharmaceutical companies with more than 500 employees and the largest production facilities in the country. The terms of the deal call for payment of a non-refundable, up-front licensing fee and further payment of an additional non-refundable license fee upon procurement of the requisite approval from the Korea Food and Drug Administration for the sale of the product in South Korea. Shares fell by $0.06, to finish the week at $0.69.
Element 21 Golf Company (OTCBB: ETGF), the manufacturer of advanced Scandium Alloy golf and fishing equipment, announced that Vijay Singh, using Element 21’s Scandium shafts, won The Barclays tournament held at the Ridgewood Country Club. Singh has a reputation for being the hardest working professional golfer, hitting thousands of golf balls on the practice range daily and playing in numerous events worldwide each year. Following his switch to the Scandium shafts, he was quoted as saying that he experienced less vibration and, therefore, less strain in his elbows when he hits the Scandium shafts. He has suffered from an ongoing elbow injury, so the Scandium shafts, with vibration dampening ShockBlok technology, help keep that from flaring up. The stock rose by $0.07 for the week, to close at $1.17.
ProLink Holdings Corp. (OTCBB: PLKH) , the world’s leading provider of Global Positioning Satellite golf course management systems and digital out-of-home on-course advertising, announced that Battleground at Deer Park Golf Course, Avery Ranch Golf Club, and Black Squirrel Golf Club now feature the ProLink Solutions GPS system used at many of the world’s most famous golf courses and plan to participate in ProLink’s exclusive national advertising opportunity. Shares fell by $0.03, to finish the week at $0.48.
Collexis Holdings Inc. (OTCBB: CLXS), a developer of semantic search and knowledge discovery software, announced that it has partnered with Health Sciences South Carolina to launch the first virtual knowledge directory of health science research being conducted across the state by HSSC partner institutions. This is a major advancement, making South Carolina the first state in the nation to create a searchable directory of medical research and biomedical expertise. Collexis’ technology will significantly benefit Health Sciences South Carolina by allowing its member institutions’ researchers and health professionals to remain abreast of all ongoing research across the state. Additionally, experts who specialize in different research areas can be identified to build teams necessary to address complex challenges in health research. The stock finished the week unchanged at $0.37.
On The Wires: Capital City Energy Group, Inc. (OTCBB:CETH) announced that it has appointed David A. Tenwick to its Board of Directors.