Did the real Black Swan just occur? Apple misses forecast first time since 2002. As we posted earlier, not even Apple (nor GS), is doing God’s work anymore. The stock is selling off in after hours, and trading below 400. Watch out below, as all shorts have abandoned the Apple short, cause it Ruled the World, unless they come up with an iHFT. We live in interesting times.
Apple® today announced financial results for its fiscal 2011 fourth quarter ended September 24, 2011. The Company posted quarterly revenue of $28.27 billion and quarterly net profit of $6.62 billion, or $7.05 per diluted share. These results compare to revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share, in the year-ago quarter. Gross margin was 40.3 percent compared to 36.9 percent in the year-ago quarter. International sales accounted for 63 percent of the quarter’s revenue.
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Solution to HFT coexisting with humans and other computers. Must read by Nanex.
We have thought a lot about how HFT can coexist with human traders and computers that aren’t co-located or wired for speed. We believe a strong and stable market requires a diversity of participants, which isn’t possible when speed is valued above everything else. If everything is wired for speed, then you can count on software engineers wringing every last line of analytical code out of their systems to gain that one extra cpu cycle that will put them ahead. Same goes for error checking. In fact, any code not involved in transmitting an order will be fair game in the race for speed. In an HFT only environment, reaction to news will be instantaneous: shoot first, ask questions later.
|Hardly surprising facts, but another great chart view of the HFT problems. By Nanex.
Every week we hear of a new pro-HFT study that claims HFT reduces volatility, tightens spreads and provides liquidity. While HFT operates in time frames of microseconds, every study we have seen is based on data at least 2 years old and never looks to see what happened within 1 second (some have even averaged data over 1 year intervals!). Take a look at what goes on inside of 1 second.
Presented below is the behavior of 8 major stocks on October 17, 2011, shown with both a pre-event/event/post-event chart and an additional chart showing the event in under 1 second. This is the type of behavior we see every day and shows that at any given second, HFT algo’s are the first ones to withdraw liquidity in the face of real buyers or sellers.
This is why any study that doesn’t include recent data (within 3 months) isn’t worth reading.
The Misery Index was first popularized by Ronald Reagan in the 1980 presidential campaign. It combined the inflation rate and the unemployment rate. Reagan used it as a barometer for how well the country was doing economically. During Jimmy Carter’s presidency the Misery Index hit an all-time high– almost 22%. Near the end of Reagan’s tenure in the White House, he had reduced the unemployment and inflation rates meaningfully — to 7.7% by 1986. Barrack Obama’s Misery Index now stands at almost 13% and we all know things are getting worse not better. We also know that things might be quite a bit worse than what we are led to believe.
Another flip flop session. Markets trading on light volume in early European session. Apart from renewed rumors of the mighty EFSF, and actually some vague figures on the EFSF, no real other news to focus on. Meanwhile, below some important levels in the ES futures to keep track of. 1185 is the first big support.
Chinese stocks led a broad-based decline in Asian markets after data showing the world’s second-largest economy grew at its slowest pace in two years, the FT reports. China’s Shanghai Composite index lost 1.3 per cent with slowing economic growth sparking fears of a hard landing and the MSCI Asia Pacific index was off 1.2 per cent, http://ftalphaville.ft.com/thecut/2011/10/18/704216/chinese-gdp-data-leads-to-asian-markets-fall/
Apple has sold a record 4m of its latest incarnation of the iPhone in its first three days on sale in spite of criticism that the new product was a more limited technological leap forward than its predecessors,http://ftalphaville.ft.com/thecut/2011/10/17/704171/iphone-4s-sales-hit-record-4m-on-launch/
Citigroup’s investment bank weighed on its third-quarter performance, with derivatives positions and proprietary trading – which is set to be banned under new regulations – helping drag down overall revenue, http://ftalphaville.ft.com/thecut/2011/10/17/704146/citigroup-earnings-jump-74-to-3-8bn/
The improvement in US mortgage delinquencies has flattened or reversed, according to quarterly earnings from three of the four biggest US lenders, sparking fresh fears over the resilience of the American consumer, http://ftalphaville.ft.com/thecut/2011/10/17/704126/improvement-in-us-mortgage-delinquencies-ends/