S&P 500 1,240.91 +.75%
DJIA 10,671.40 +.72%
NASDAQ 2,173.76 +.36%
Russell 2000 676.75 +.47%
DJ Wilshire 5000 12,403.50 +.73%
S&P Barra Growth 594.26 +.70%
S&P Barra Value 643.02 +.92%
Morgan Stanley Consumer 592.60 +.80%
Morgan Stanley Cyclical 747.22 +.77%
Morgan Stanley Technology 506.14 +.55%
Transports 3,618.78 -.89%
Utilities 421.73 +1.39%
Put/Call .77 -10.47%
NYSE Arms .63 -43.27%
Volatility(VIX) 12.09 -6.50%
ISE Sentiment 207.00 +32.69%
US Dollar 86.89 -.17%
CRB 323.20 -.47%
Futures Spot Prices
Crude Oil 64.00 -.76%
Unleaded Gasoline 197.50 -2.97%
Natural Gas 11.28 -.55%
Heating Oil 190.25 -1.40%
Gold 453.20 +.55%
Base Metals 127.09 -.59%
Copper 160.65 -.74%
10-year US Treasury Yield 4.12% -.56%
Leading Sectors %
Gold & Silver +2.66%
Energy +2.44%
Homebuilders +1.84%
Lagging Sectors
Disk Drives -.27%
Oil Tankers -.55%
Airlines -1.79%
BOTTOM LINE: The Portfolio is higher mid-day on gains in my Oil Tanker shorts, Semiconductor longs and Internet longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is modestly positive as the advance/decline line is higher, almost every sector is higher and volume is slightly below average. Measures of investor anxiety are lower. Today’s overall market action is slightly positive given declines in energy prices and long-term interest rates. Global demand for oil is not strong and it will turn negative as a result of Katrina. Oil is $3 a barrel lower than its highs before the hurricane. Import prices have declined over the last four months excluding energy. Moreover, prices of goods from China have fallen 1.3% over the last 12 months. Copper is breaking down. It is also below the highs set before the hurricane. Steel prices in the U.S. fell for the 11th straight month in August, notwithstanding the rally in the stocks. The 10-year Treasury-note yield is 4.12%, which is still near historic lows. Unit labor costs may temporarily rise more than the Fed would like as a result of Katrina, however labor costs will begin decelerating again in the first quarter of next year. The bottom line is the market is viewing Katrina as a demand-destroying event, not an inflationary one. I expect US stocks to trade mixed-to-lower from current levels into the close ahead of the 9/11 anniversary.
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