WASHINGTON, October 31, 2012 – Happy Halloween, more or less. Except to you New Jersey residents. Governor Christie has postponed trick-or-treating due to unsafe conditions in his state, although we’re sure the little goblins will get their collective chance soon. But right now, door-to-door fun can’t be either fun or safe, given downed trees and power lines, significant electrical outages, and literal assorted flotsam, so the Governor’s decision is the correct one, we think.
Meanwhile, exchanges re-opened for regular trading this morning after a two-day Hurricane Sandy hiatus. Aside from a two-day shutdown back in 1888 caused by a massive blizzard, this is the first time since then that the NYSE has been closed due to weather. Trading is predictably light as of 12 noon EDT, primarily due, one suspects, to continuing transportation issues in New York City which may be preventing traders from commuting. Action may pick up this afternoon as more traders arrive, but this remains to be seen.
The two-day shutdown came at a bad time, as October closeout trading has been reduced to a single day this week. In addition, a great many funds close out their trading year today, and those who didn’t rebalance portfolios or sell off losing positions have only today to execute those trades. That’s a trick this year, not a treat.
Apple (APPL) continued its spooktacular plunge today, trading as low as 587 and change, with much of the negative action linked to high level management shuffles within the organization as CEO Tim Cooke begins to put his stamp on the late Steve Jobs’ pride and joy. Word is that both contentious and weak upper management is being weeded out.
Depending on who you talk to, Apple stock could be a great buy at this level. Or not. In point of fact, though, the stock has drastically dropped in only about a month’s timeframe from its all-time high of over $700 per share. We’re looking. But after last week’s wild ride in January calls, we’ll wait, we think, until November is underway before making any decisions.
CNBC TV’s talking heads are touting any number of stock plays that should benefit from Sandy’s destructive expedition through New Jersey, New York, and beyond. Roofing companies like Owens-Corning (OC) and Beacon Roofing (BECN) have seen a nice kick upward today, as have companies like Home Depot (HD) which is already benefiting from an apparent, if slow, rebound in housing sales and construction. Temporary storage facility REITs are also getting flogged, but, as REITs, the yields are too low to tempt all but enthusiastic traders and speculators.
One oddball play that might work is Great Lakes Dredging & Drydock (GLDD). True to its name, this veteran Chicago-based company provides dredging and demolition services, including a major facility based in Boston. It also operates a sand-dredging facility in New Jersey and has a 50% interest in TerraSea, an environmental remediation outfit. Gosh, that latter operation is probably a Halloween treat that even the greenest Greenie could appreciate.
If you’re getting the jist of this, you’re already with us. Virtually everything GLDD does will be very much in demand for probably upwards of the next 6 months as the Atlantic Coast—particularly New Jersey, New York’s Long Island, and parts of Rhode Island, will have a lot of work to do on their respective shorelines and dock facilities, not to mention a significant amount of demo work due to the hurricane’s massive swath of destruction.
We wouldn’t chase any of these stocks which are considerably up today. But if the market should pull back somewhat starting tomorrow, many of these stocks could be prime candidates for year end stocking stuffers.
Momentarily forgotten, next week’s election results will loom large in upcoming market action. No matter who wins the election, the market is likely to be unpredictable, unconsciously favoring the incumbent (the devil you know) as opposed to the challenger (the devil you don’t). It’s entirely possible that a victory by business-friendly Mitt Romney could cause a downdraft in the averages, as tighter fiscal policies—likely under a Romney presidency—would be viewed as a short-term negative by stock traders. That’s an “unexpected” trick now, isn’t it?
Given all the uncertainty, we’re putting a few stocks from the above list, plus a number of others, onto our “watch list.” But we’re highly disinclined to do much until the clouds clear after next Tuesday’s national elections. The worst possible thing that could happen would be an instant replay of 2000’s debacle. Any extended vote-count/lawsuit combo could be a short seller’s dream.
As for tonight’s trick-or-treating, enjoy the fun. But avid Romney partisans might want to consider taking in their campaign signs before darkness falls. Halloween would be a good Walpurgisnacht for puckish, fun-loving, slightly older nonpartisan goblins to trash, burn, or otherwise vandalize Romney signs. The holiday’s events and traditions will provide them with plenty of cover.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.
Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.
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