Monday, February 02, 2004

Monday...Mid-day Update

S&P 500+.8%

Leading/Lagging Sectors

Market Movers
F,GM down on interest rate/weather fears.
TWTC down on increased customer disconnects.
NTES,SINA,SOHU,CHINA up as bird flu results in more internet usage in Asia.

Commodity Movers
Crude Oil+3.4% on cold weather demand and refinery shutdowns.
Gold-1.6% continuing drop on expectations of interest rate hike.

Mid-day News
Morgan Stanley estimating Video-on-demand(VOD) market will increase 38% to
$157M in 2004-Should benefit CCUR,SEAC.
ISM manufacturing index came in at 63.6...highest since 1983 and 8th straight
month above 50(anything above 50 signals expansion)...19.1% jump in
exports(best in 7 years) should help improve trade deficit.
Caterpillar Vice-Chairman says weakened US dollar is significantly improving its
competitive position in global markets.
FCC will investigate Janet Jackson breast exposure during Super Bowl half-time
According to Semiconductor Industry Association(SIA), sales increased 27% in
December from year ago levels. 4th quarter saw 11% growth over 3rd
quarter vs. a historic avg. of 4% growth. Sales were up 19% for all of 2003.
Expectations are for an increase of 20-25% in 2004 with Flash memory
(+59%) and Microprocessors(+29%) seeing the strongest demand.
S&P 500 P/E is now 18 on 2004 estimates, well below the 30x of the late 90's.
Pharma/Biotech valuations are at their lowest relative levels since 1993.
Advance/Decline line is relatively weak on today's up-move.
Interest rates are down modestly.

I am sitting tight on my positions right now. My shorts are up less than my longs, so it is a pretty good day. I am thinking about adding a long position in one of the Chinese internet stocks based on low relative valuations, strong fundamentals and technicals.

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