It seems Wall Street has already closed shop for the long weekend. The indices essentially vacillate around the flat line as investors get no economic data to chew on. Volume is also lower than normal; another signal that many investors stay on the sidelines.
However, oil spikes on news of weather-related disruptions to the Trans-Alaskan Pipeline (TAP), which transports about 4% of the US’s daily oil consumption, and some unscheduled refinery shutdowns. Don’t expect the spike in crude prices to last though, since inventories are still higher than levels at this time last year - Katrina contributed to shortages last year. This is why investors really shrug off the spike in oil prices.
A batch of economic data tomorrow will give investors probably the last chance to really play this week since Friday’s market action will be short – market closes at 1300 ET.
ADBE has really caught fire this month. Today it spikes 3% and then puts in another 52 basis points (0.52%) in after-hours trading. What is driving investors crazy about ADBE? It’s the upcoming release of Creative Suite 3 (CS3), which debuts in Spring 07.
The creative suite bundle of products is the numero uno money maker for ADBE – over 50% of the top line – and CS3 will be the latest version so its significance cannot be overestimated. Apparently there’s pent-up demand for CS3, in particular, because of better inter-operability with Macs.
However, ADBE is more than just a “quick buck” firm. Its fundamentals are strong, and are getting stronger by really any measure but just on ROE, it has averaged about 34% over the past three years – compared to 20% for MSFT, its arch-rival and nemesis. ADBE is one to hold for the long-term.
This firm is going to make a killing as more video and digital content in general migrate to mobile devices over the next few years. I don’t know why it took the comments of an analyst for investors to see what lies under ADBE’s hood. The engine that is ADBE is humming.
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