Before the Bell – Nelson Mandella Passes – Bitcoin, BA, EXPR – Budget Negotiations

Nelson MandellaMoney won’t create success. The freedom to make it will. – Nelson Mandella

___________________________________________________________________________

A bitcoinThe Bitcoin Battle Begins – The first wire house research on Bitcoin is out with David Woo from Bank of America Merrill Lynch stepping up to the plate issuing a 14 page note. What I know so far is this. 1 Bitcoin contains 100 million Satoshi and that there can only be 21 million bit coins. As a medium of exchange it appears transaction costs are pretty low. Short of that I’ve got a lot to learn.

One thing for certain is the controversy over Bitcoin will rage on for some time with those like former Fed Chief Alan Greenspan calling it a bubble and firms like Merrill Lynch giving it legitimacy. In the end it will be the public that is the final arbiter.

BA Dec 13Boeing (BA) – Jefferies analyst Howard Rubel reiterates his Buy recommendation this morning and raises his target to 165. Boeing continues to be the largest position in the Alpha Select portfolios. The world continues its transition to lighter fuel efficient aircraft and Boeing has a huge lead on its nearest competitor. Mr. Rubel raises his 2014 and 15 estimates to $7.50 and $8.50 respectively pointing out investors will pay a premium as EPS grows faster than the market.

The Chicago Tribune reports this morning that Boeing may spend $10 billion on a jet plant to manufacture the 777X. They go on to say; “A recent study by Washington State said the 777X would support 56,000 jobs and more than $20 billion in economic benefit to the state.”  With employment still struggling throughout the U.S. you can bet there will be lots of cities offering incentives to attract Boeing to their locale.

Technicians will point out the ominous Head & Shoulders formation forming in the chart on the left and that the stock might digest some gains. Don’t lose sight of the big picture. I realize it’s hard to get involved at these levels but I would use any pullback as an opportunity.

EXPRExpress (EXPR) – Goldman (GS) came out yesterday in defense of their Buy recommendation after a 20% decline. Be careful here. Goldman usually doesn’t downgrade a stock on the bad news. However, if memory serves, they very often come back a number of weeks later and downgrade as it starts to fill the gap. I’m not certain of this but I feel like it’s “Deja vu all over again.” –

Budget Negotiations – Reports are coming from both sides of the aisle that they are trying to finish an agreement that would end the possibility of a government shutdown until after the 2014 elections. According to the WSJ Sen. Patty Murray (D., Wash.) and Rep. Paul Ryan (R., Wis.), are close to a deal which could come as early as next week. This could be a stumbling block for the markets if negotiations drags on and we take this down to the deadline.

Job numbers come out at 8:30 and that of course will dominate today’s trading – Have a great weekend.

Funds managed by David Nelson are currently long BA