S&P 500 1,250.58 +.19%
DJIA 10,790.18 +.22%
NASDAQ 2,232.22 +.23%
Russell 2000 675.65 +.51%
DJ Wilshire 5000 12,497.73 +.23%
S&P Barra Growth 599.47 +.22%
S&P Barra Value 646.61 +.14%
Morgan Stanley Consumer 593.03 -.06%
Morgan Stanley Cyclical 764.37 -.04%
Morgan Stanley Technology 525.30 -.20%
Transports 4,144.02 +.09%
Utilities 396.94 +.12%
Put/Call .85 +37.10%
NYSE Arms .91 +24.66%
Volatility(VIX) 11.10 -.18%
ISE Sentiment 255.00 +40.88%
US Dollar 92.03 +.11%
CRB 313.13 +.12%
Futures Spot Prices
Crude Oil 57.20 -.20%
Unleaded Gasoline 146.10 -.14%
Natural Gas 11.31 -.91%
Heating Oil 170.90 +.75%
Gold 489.50 +.68%
Base Metals 142.62 +1.0%
Copper 191.10 -.10%
10-year US Treasury Yield 4.45% -.78%
Leading Sectors
Steel +2.95%
Gaming +1.31%
Homebuilders +1.20%
Lagging Sectors
Computer Services -1.09%
Airlines -1.63%
Disk Drives -2.54%
BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Internet longs and Retail longs are offsetting losses in my Steel shorts and Medical Information Systems longs. I exited a Medical Information Systems long this morning as it hit my stop-loss and added to some existing longs including SKYW, BRCM and ELOS, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is barely higher, most sectors are rising and volume is about average. Measures of investor anxiety are mixed. Overall, today’s market action is slightly negative considering the fall in long-term interest rates and stable energy prices. According to David Rosenberg, Merrill's chief North American economist, blue-chip companies are on track for their greatest run of double-digit quarterly profit gains since at least 1936. The estimated 16% profit gain in the third quarter would mark the 14th quarter in a row in which the S&P 500's component companies increased operating profits by double digits. However, P/E multiples have contracted throughout this period, notwithstanding this amazing streak. As I have pointed out before, the U.S. economy has withstood significant headwinds such as terrorism fears, war, multiple natural disasters, soaring commodity prices, pandemic worries, many Fed rate hikes, corporate scandals, historically bitter politics and the hangover effects from the overcapacity generated during the bubble years. I continue to believe the bulletproof disposition of the U.S. economy will result in P/E multiple expansion for equities. I expect US stocks to trade modestly higher from current levels into the close on short-covering, lower long-term interest rates, more optimism and falling energy prices.
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