Majority of Hedge Fund Managers Bullish on 2011 (MCP, MNKD, GM, SHZ, RLD)

Stocks shrugged off some lackluster economic data to register another mixed day. The market continues to hold steady as 2010 comes to a close, and investors appear to be getting more bullish for 2011, with 46% of hedge fund managers responding to the TrimTabs/BarclayHedge Survey of Hedge Fund Managers bullish on stocks and only 19% bearish. An overly bullish sentiment among investors is a bit of a yellow flag for us, although we don’t think investors have become overly exuberant just yet.

The Rare Earth Stocks Index was the top performing tickerspy Index on the day, led by China Shen Zhou Mining (SHZ) with a 21% gain. The Photographic Equipment Stocks Index was the day’s worst performing tickerspy Index, with RealD (RLD) down -10%.

Stocks finished the day mixed yet again, with the Nasdaq falling -4 points to 2,663. The Dow advanced 21 points to 11,576, while the S&P edged up 1 point to 1,259. Oil rose 49 cents to $91.49 a barrel, while gold jumped $22.70 to $1,405.60 an ounce.

On the economic front, the S&P/Case-Shiller home price index fell -0.8% in October from its year-ago levels, exceeding the decline of -0.2% anticipated by economists. From September to October, the index dropped a seasonally adjusted -1.0% compared with the -0.6% consensus. Elsewhere, the Conference Board announced that its index of consumer confidence unexpectedly dipped to 52.5 this month from a revised 54.3 in November. Economists were expecting a rise to 56.0.

China’s Commerce Ministry declared that in 2011 it will reduce its exports of rare earths by -11% in order to cope with growing domestic demand. Currently, China produces 97% of the world’s rare minerals, which are used in high-tech items like cell phones and computer drives. Shares of U.S.-based rare earth miner Molycorp (MCP) initially jumped on the news, but eventually ended down -6.6%. Five Pros held Molycorp in their top-15 U.S.-listed equity positions at the end of Q3, and 128 tickerspy members hold the stock in their portfolios.

Shares of MannKind (MNKD) climbed 3.3% after the biopharmaceutical company reported that the U.S. Food and Drug Administration needs more time to review its inhaled insulin treatment Afrezza. Many investors had expected the drug to be rejected by the FDA by its December 29th deadline. Two Pros held the stock in their top-15 U.S.-listed equity positions at the end of Q3, and 152 tickerspy members hold the stock in their portfolios.

Now that the 40-day post-IPO quiet period has expired for General Motors (GM), analysts published their thoughts about the once-bankrupt carmaker. Overall, analysts were bullish, pointing to new models like the Chevrolet Malibu debuting in 2012 and redesigns of SUVs and pickup trucks in 2013 as catalysts for the stock. Price targets ranged between $40-$50, with seven of eight analysts placing a “buy” or “overweight” rating on the stock. Shares of GM moved up 2.1% on the day.

Tags: GM, MCP, MNKD, RLD, SHZ