On Commodities, Bullish BofA or Bearish Goldman? (JPM, RVBD, SLGN, GRM, EROC, NEP)

It was a topsy-turvy day for stocks, as the S&P bounced between positive and negative territory before essentially closing just above the flat line. Bank of America/Merrill Lynch, meanwhile, came out with the opposite view on commodities than Goldman Sach’s call yesterday, saying there even was a 30% chance Brent Crude could hit $160 a barrel.

“Commodity prices should move broadly higher in 2011 on robust economic growth in emerging markets, despite relatively weaker growth in developed markets,” commodity strategist Sabine Schels said. “With oil demand expanding rapidly and Libya production down by at least 1 million barrels per day, we forecast (the) Brent crude oil price to average 122 dollars a barrel in the second quarter, and believe prices could briefly break through 140 dollars in the next 3 months.”

Given that oil futures are in backwardation (meaning future contracts are lower than spot prices) and there already have been some signs of demand destruction (lower gasoline sales to start the month), we’re apt to side with Goldman’s view. We also think lower energy prices would be better overall for the market and the progress of the economic recovery.

The Packaging and Container Stocks Index was the top performing tickerspy Index on the day, led by Graham Packaging Company (GRM) with a 33% gain. The Chinese Oil and Gas Stocks Index was the day’s worst performing tickerspy Index, with China North East Holdings (NEP) down -15%.

Stocks edged up on the day, with the Dow closing 7 points higher at 12,271. The S&P inched up fractionally to 1,314, while the Nasdaq advanced 17 points to 2,762. Oil rose 86 cents to $107.11, while gold rose $2.00 to $1,455.60 an ounce.

In economic news, total retail sales rose 0.4% last month after rising 1.1% in February, the Commerce Department said. Economists were expecting a gain of 0.5%. Gasoline sales accounted for 10.7% of all retail sales in March. A second Commerce Department report showed business inventories rose 0.5% in February, below the 1.0% increase in January and the 0.8% February increase economists were forecasting. Meanwhile, the Fed Beige Book showed that consumers spent more and companies picked up hirer across the country, although wage gains were limited.

In earnings news, Dow component J.P. Morgan (JPM), the largest U.S. bank by market value, said its first-quarter profit surged 67% to $5.6 billion, or $1.28 per share, compared with $3.3 billion, or 74 cents a share, a year earlier, but revenue slid to $25.2 billion from $27.7 billion. Investment banking revenue fell to $8.2 billion from $8.3 billion, but higher fees helped boost profits. Analysts were expecting a profit of $1.16 a share. Shares of JPMorgan Chase fell -0.8%. More than 470 pros held JPMorgan Chase in their portfolios at the end of 2010, and more than 2,340 tickerspy members own the stock in their portfolios.

Shares of cloud computing firm Riverbed Technology (RVBD) surged 12.4% after the company said it expects a first-quarter profit of 19-20 cents a share on revenue of $163-$164 million. Analysts were expecting a profit of 18 cents a share on sales of $161 million. California-based Riverbed is scheduled to report those results on April 25th. Twenty pros counted Riverbed Technology among their top holdings at the end of 2010, and nearly 350 tickerspy members own the stock in their portfolios.

Shares of consumer packaging maker Silgan Holdings (SLGN) jumped 18.9% after the company announced it will acquire Graham Packaging for $1.28 billion in cash and stock. Including debt, the deal is worth $4.1 billion. Silgan said it expects cost savings of $50 million by the third year after the deal closes. The transaction is scheduled to close in the third quarter. Shares of Graham surged 33.0%.

Shares of Eagle Rock Energy Partners (EROC) climbed 12.9% after the company said it will acquire CC Energy II LLC for $525 million in cash, stock, and debt. Oklahoma-based CC Energy, also called Crow Creek, produced about 47 million cubic feet of natural gas per day in the first quarter. The deal is expected to close May 3rd.

Tags: EROC, GRM, JPM, NEP, RVBD, SLGN