Earngings Announcements
Company/Estimate
AMT/-.16
ADCT/.00
AMAT/.08
ECLG/.03
INTU/.70
OVTI/.42
Splits
OVTI 2-for-1
Economic Data
Housing starts estimated at 2000K vs. 2088K last month.
Building Permits estimated at 1910K vs. 1924K last month.
Late-night News
Senator Kerry edged out Senator Edwards in Wisconsin's primary. Thailand reports 7th human death from bird flu. Scott Moritz of TheStreet.com says Cingular/AT&T Wireless deal could be huge opportunity for OPWV. Jury finds against Tyson Foods in Cattle price-fixing, Tyson plans appeal.
Late-Night Trading
Asian markets are mostly higher, ranging from +.5% to +1.0%.
S&P 500 indicated +.02%.
NASDAQ indicated +.07%.
BOTTOM LINE: Very little late-night news of any importance. I still expect a pretty good day for the longs tomorrow, led by tech.
Wednesday, February 18, 2004
Tuesday, February 17, 2004
Tuesday Close
S&P 500 1,156.99+.98%
NASDAQ 2,080.35+1.30%
Leading Sectors
Wireless+3.98%
Airlines+3.26%
Iron/Steel+3.18%
Lagging Sectors
Broadcasting+.34%
Fashion+.07%
Transports-.25%
Other
Crude Oil 35.14-.14%
Natural Gas 5.31-.17%
Base Metals 112.43+2.63%
U.S. Dollar Index 84.87-.11%
10-Yr. Long-Bond Yield 4.04%-.05%
After-hours Movers
NTAP+9.5% on exceeding 3Q earnings/sales and raised 4Q guidance.
BRCM+7.1% after setting conference call tomorrow to discuss "stronger business outlook."
EP-11.1% after slashing its assessment of natural gas and oil reserves by 41%.
ANF+5.1% after meeting 4Q earnings/missing sales targets and reaffirming 1Q guidance on price increases for their clothes, baffling analysts.
BRKT+19.4% after significantly beating 4Q earnings estimates and raising 1Q guidance.
DITC+14.7% after beating 3Q estimates and raising 4Q guidance.
NTES+7.7% on excellent 4Q earnings above estimates.
PLAB+7.1% after significantly beating 1Q earnings estimates.
TXCC+5.6% on announcement that Samsung selected it as preferred VLSI component supplier for W-CDMA wireless platforms.
After-hours News
U.S. stocks advanced today on optimism an increase in merger activity is a sign that shares are cheap. Exceedingly strong corporate profits and low interest rates also helped. A U.S. appeals court rejected the challenge to the "Do not call" list. Rambus(RMBS) won a ruling from a U.S. FTC judge that may help it reap as much as $3B/year from semi makers. Japan's economy grew at a 7% annual pace last quarter, the fastest in 13 years. NYSE specialists settled with SEC for $240M.
BOTTOM LINE: Asian indices are indicated higher as prospects for the first synchronized global recovery in decades are brightening. The Portfolio had a very good day, notwithstanding its conservative position at the start of the day. It is now 100% net long. I added long positions in the basic material, overseas telecom and energy-related sectors. I expect more follow-through tomorrow, with tech leading the way after a multitude of good earnings reports after-hours. I may rotate into some tech if my short-term indicators give buy signals on the open.
NASDAQ 2,080.35+1.30%
Leading Sectors
Wireless+3.98%
Airlines+3.26%
Iron/Steel+3.18%
Lagging Sectors
Broadcasting+.34%
Fashion+.07%
Transports-.25%
Other
Crude Oil 35.14-.14%
Natural Gas 5.31-.17%
Base Metals 112.43+2.63%
U.S. Dollar Index 84.87-.11%
10-Yr. Long-Bond Yield 4.04%-.05%
After-hours Movers
NTAP+9.5% on exceeding 3Q earnings/sales and raised 4Q guidance.
BRCM+7.1% after setting conference call tomorrow to discuss "stronger business outlook."
EP-11.1% after slashing its assessment of natural gas and oil reserves by 41%.
ANF+5.1% after meeting 4Q earnings/missing sales targets and reaffirming 1Q guidance on price increases for their clothes, baffling analysts.
BRKT+19.4% after significantly beating 4Q earnings estimates and raising 1Q guidance.
DITC+14.7% after beating 3Q estimates and raising 4Q guidance.
NTES+7.7% on excellent 4Q earnings above estimates.
PLAB+7.1% after significantly beating 1Q earnings estimates.
TXCC+5.6% on announcement that Samsung selected it as preferred VLSI component supplier for W-CDMA wireless platforms.
After-hours News
U.S. stocks advanced today on optimism an increase in merger activity is a sign that shares are cheap. Exceedingly strong corporate profits and low interest rates also helped. A U.S. appeals court rejected the challenge to the "Do not call" list. Rambus(RMBS) won a ruling from a U.S. FTC judge that may help it reap as much as $3B/year from semi makers. Japan's economy grew at a 7% annual pace last quarter, the fastest in 13 years. NYSE specialists settled with SEC for $240M.
BOTTOM LINE: Asian indices are indicated higher as prospects for the first synchronized global recovery in decades are brightening. The Portfolio had a very good day, notwithstanding its conservative position at the start of the day. It is now 100% net long. I added long positions in the basic material, overseas telecom and energy-related sectors. I expect more follow-through tomorrow, with tech leading the way after a multitude of good earnings reports after-hours. I may rotate into some tech if my short-term indicators give buy signals on the open.
Mid-day Update
S&P 500 1,156.86+.96%
NASDAQ 2,079.13+1.25%
Leading Sectors
Wireless+3.72%
Iron/Steel+3.08%
Homebuilders+2.55%
Lagging Sectors
Fashion+.07%
Drugs+.44%
Transports-.26%
Other
Crude Oil 34.62+.17%
Natural Gas 5.31-3.81%
Gold 416.70+1.44%
Copper 129.9+4.46%
Market Movers
AWE+15.7% on Cingular's $41B takeover bid.
NXTL+6.2% on AWE news and anticipation of strong earnings report.
RTRSY+20.2% on strong earnings and raised guidance.
IDXC+9.2% on Suntrust and Maxim upgrades to "Strong Buy".
SLAB-5.6% on Morgan Stanley downgrade to "Equal-weight".
OMC-2.2% on earnings report that disappointed some.
DE+4.7% on significantly better-than-expected 1st Q earnings and raised guidance.
Recommendations
Morgan Stanley positive on large-cap integrated oil-service companies. INTC developer forum Feb.17-19 is being watched closely. Goldman Sachs has positive comments on AZO. Goldman also saying Oil/E&P shares can rally to peak valuations, up 30% from current levels, and AMAT quarterly report should be VERY strong. Finally, Goldman likes cell-tower stocks as consolidation news is now out. Citigroup raised estimates for Samsung. Also said prices for power amps and linear IC's have risen 80% and 60%, respectively at TXN and NSM. NSM says 6-inch fabs running at full capacity and TXN has extended lead-times to 12-16 weeks from 6-8 weeks. Citigroup says SEBL favorite play on applications recovery. OSI raised to "Buy" at BB&T Capital. CIEN raised to "Buy" at W.R. Hambrecht. UNA raised to "Buy" at Robert Baird.
Mid-day News
U.S. stocks advanced on optimism an increase in mergers is a sign that shares are cheap even after an 11-month rally and corporate profits will keep rising. The Empire Manufacturing reading came in at 42.05, higher than the 37.0 estimates. Industrial Production met expectations, rising .8%. Capacity Utilization rose to 76.2%, modestly below expectations of 76.4%. Foreigners purchases of U.S. debt, corporate bonds and stocks rose by a net $75B in Dec., dispelling the notion that the falling U.S. dollar and larger budget/trade deficits are hurting demand for U.S. assets. Moreover, the report showed foreigners added 23% to their net holdings of U.S. securities for all of 2003. National City agreed to buy Provident Financial for $2.1B.
BOTTOM LINE: A very good day. Only one sector I follow is down today. However, my short-term indicators are still giving sell signals on the NASDAQ and the technology sector, but buys in many other sectors and the broad market. Thus, I have taken my market exposure back to 100%, adding new positions in a variety of sectors, excluding technology.
NASDAQ 2,079.13+1.25%
Leading Sectors
Wireless+3.72%
Iron/Steel+3.08%
Homebuilders+2.55%
Lagging Sectors
Fashion+.07%
Drugs+.44%
Transports-.26%
Other
Crude Oil 34.62+.17%
Natural Gas 5.31-3.81%
Gold 416.70+1.44%
Copper 129.9+4.46%
Market Movers
AWE+15.7% on Cingular's $41B takeover bid.
NXTL+6.2% on AWE news and anticipation of strong earnings report.
RTRSY+20.2% on strong earnings and raised guidance.
IDXC+9.2% on Suntrust and Maxim upgrades to "Strong Buy".
SLAB-5.6% on Morgan Stanley downgrade to "Equal-weight".
OMC-2.2% on earnings report that disappointed some.
DE+4.7% on significantly better-than-expected 1st Q earnings and raised guidance.
Recommendations
Morgan Stanley positive on large-cap integrated oil-service companies. INTC developer forum Feb.17-19 is being watched closely. Goldman Sachs has positive comments on AZO. Goldman also saying Oil/E&P shares can rally to peak valuations, up 30% from current levels, and AMAT quarterly report should be VERY strong. Finally, Goldman likes cell-tower stocks as consolidation news is now out. Citigroup raised estimates for Samsung. Also said prices for power amps and linear IC's have risen 80% and 60%, respectively at TXN and NSM. NSM says 6-inch fabs running at full capacity and TXN has extended lead-times to 12-16 weeks from 6-8 weeks. Citigroup says SEBL favorite play on applications recovery. OSI raised to "Buy" at BB&T Capital. CIEN raised to "Buy" at W.R. Hambrecht. UNA raised to "Buy" at Robert Baird.
Mid-day News
U.S. stocks advanced on optimism an increase in mergers is a sign that shares are cheap even after an 11-month rally and corporate profits will keep rising. The Empire Manufacturing reading came in at 42.05, higher than the 37.0 estimates. Industrial Production met expectations, rising .8%. Capacity Utilization rose to 76.2%, modestly below expectations of 76.4%. Foreigners purchases of U.S. debt, corporate bonds and stocks rose by a net $75B in Dec., dispelling the notion that the falling U.S. dollar and larger budget/trade deficits are hurting demand for U.S. assets. Moreover, the report showed foreigners added 23% to their net holdings of U.S. securities for all of 2003. National City agreed to buy Provident Financial for $2.1B.
BOTTOM LINE: A very good day. Only one sector I follow is down today. However, my short-term indicators are still giving sell signals on the NASDAQ and the technology sector, but buys in many other sectors and the broad market. Thus, I have taken my market exposure back to 100%, adding new positions in a variety of sectors, excluding technology.
Tuesday Watch
Earnings Announcements
Company/Estimates
ANF/.95
A/.22
DE/.52
NTES/.32
NTAP/.10
Economic Data
Empire Manufacturing estimated at 37 vs. 39.2 last month.
Industrial Production estimated at .8% vs. .1% last month.
Capacity Utilization estimated at 76.4% vs. 75.8% last month.
Weekend News
U.N. says bird flu eradication may take years. Disney(DIS) may be worth up to $35/share according to Goldman Sachs and Bear Stearns, the company's advisers. The Democratic Party wants to increase taxes on the wealthy to spend as much as $6B more annually on education, according to the Washington Post. Senator Kerry's chances of winning the Democratic nomination rebounded to 95% over the weekend, as no additional news regarding the intern scandal surfaced. The NYPD has been preparing for possible nuclear, biological or chemical weapons attacks, the NY Times reported. Wal-Mart said February sales at U.S. stores are rising at the high end of its forecast, as shoppers purchased more coats, food and Valentine's items last week. U.K. warns major terror attacks may be imminent in Saudi Arabia. North Fork Bancorp confirmed rumors that it would buy GreenPoint Financial for $6.3B.
Weekend Recommendations
Guests on "Forbes on Fox" made positive comments on APC,COP,CAM,POG and NWL. On "Cashin N", ATVI, MX, TELK, NGG and VE were talked up. ATVI, NTOP, GNSS, LUV, and TXN were recommended on "Bulls and Bears". Barron's had positive comments on LORLF, DIS, JNS, HZO, CLE, FITE, ANN and CHS. It had negative analysis on CMCSK, FD, MAY, DDS, SKS and the technology sector.
Late-Night Trading
Asian indices are up on average .75% to 1.25%.
S&P 500 indicated +.24%.
NASDAQ indicated +.47%.
BOTTOM LINE: With my short-term indicators on "sell", I have positioned the Portfolio conservatively at 40% net long. It looks like the markets may try and rebound on the open from the end-of-week selling. I will closely watch the strength of this rebound and my short-term indicators. I am very bullish intermediate-term, but I don't want to fight the tape.
Company/Estimates
ANF/.95
A/.22
DE/.52
NTES/.32
NTAP/.10
Economic Data
Empire Manufacturing estimated at 37 vs. 39.2 last month.
Industrial Production estimated at .8% vs. .1% last month.
Capacity Utilization estimated at 76.4% vs. 75.8% last month.
Weekend News
U.N. says bird flu eradication may take years. Disney(DIS) may be worth up to $35/share according to Goldman Sachs and Bear Stearns, the company's advisers. The Democratic Party wants to increase taxes on the wealthy to spend as much as $6B more annually on education, according to the Washington Post. Senator Kerry's chances of winning the Democratic nomination rebounded to 95% over the weekend, as no additional news regarding the intern scandal surfaced. The NYPD has been preparing for possible nuclear, biological or chemical weapons attacks, the NY Times reported. Wal-Mart said February sales at U.S. stores are rising at the high end of its forecast, as shoppers purchased more coats, food and Valentine's items last week. U.K. warns major terror attacks may be imminent in Saudi Arabia. North Fork Bancorp confirmed rumors that it would buy GreenPoint Financial for $6.3B.
Weekend Recommendations
Guests on "Forbes on Fox" made positive comments on APC,COP,CAM,POG and NWL. On "Cashin N", ATVI, MX, TELK, NGG and VE were talked up. ATVI, NTOP, GNSS, LUV, and TXN were recommended on "Bulls and Bears". Barron's had positive comments on LORLF, DIS, JNS, HZO, CLE, FITE, ANN and CHS. It had negative analysis on CMCSK, FD, MAY, DDS, SKS and the technology sector.
Late-Night Trading
Asian indices are up on average .75% to 1.25%.
S&P 500 indicated +.24%.
NASDAQ indicated +.47%.
BOTTOM LINE: With my short-term indicators on "sell", I have positioned the Portfolio conservatively at 40% net long. It looks like the markets may try and rebound on the open from the end-of-week selling. I will closely watch the strength of this rebound and my short-term indicators. I am very bullish intermediate-term, but I don't want to fight the tape.
Monday, February 16, 2004
Weekly Outlook
U.S. stocks should extend recent gains this week, as the release of a number of key economic indicators should confirm brisk growth with little inflation. As well, recent merger activity should continue and a number of leading U.S. companies are set to release earnings. Reports over the weekend say North Fork is nearing an agreement to acquire GreenPoint Financial for about $6.2B in a union of two similarly sized New York regional banks. Shares of AT&T Wireless and Disney gained in Europe on Mon., as investors speculated there will be takeover battles for the 3rd-largest U.S. mobile phone provider and the No. 2 U.S. media company. Agilent(A), Applied Materials(AMAT), Hewlett-Packard(HPQ), Intuit(INTU), Nextel(NXTL), Nordstrom(JWN), Wal-Mart(WMT) and Target(TGT) report this week. Options expiration should add to volatility towards the end of the week.
BOTTOM LINE: The short-term technical indicators I follow turned negative last week, thus my Portfolio's relatively low(40% net long) level of market exposure. I believe we are still consolidating from the markets extraordinary strength over the last 12 months before we make new highs. While I am cautious short-term, I am getting more and more positive on the markets potential performance for the year. Valuations are LOW for the general market on expected 04 earnings relative to interest rates. With an expected P/E of 18.8 and interest rates at 46-year lows, the S&P 500 should continue a meaningful advance. Fed Fund futures are now showing market expectations that the Fed will remain on hold until Oct. I can't emphasize enough how positive the recent acceleration in merger and acquisition activity is for the market. Venture capital, for the first time in several years, is accelerating its flow into many promising U.S. start-ups. Investors have poured $31B into equity mutual funds just this year, according to recent data. The media harps on the decline in the dollar and large budget/trade deficits scaring away foreign investors, yet recent data suggest otherwise. Foreigners' appetite for U.S. stocks and bonds remains voracious. In November, foreign purchases of U.S. stocks and bonds jumped 217% to 87.6 billion, after a 560% jump in October according to The Street.com. A quiet IPO/secondary market, major Merger/acquisition activity and increasing inflows into U.S. equity funds all paint a very bright supply/demand picture for the market. Economic data points released this week should confirm accelerated spending by corporate America. Finally, with asset values increasing, debt service burdens decreasing, interest rates/inflation low, large increases in income tax refunds and income/job growth steadily accelerating, the consumer should continue to contribute meaningfully to economic growth. Strong housing and retail markets will provide a significant boost to 1st Q GDP, propelling it above 5% for the quarter. Overall, despite the negativity conveyed by most of the mainstream media, 04 is shaping up to be another very good year.
BOTTOM LINE: The short-term technical indicators I follow turned negative last week, thus my Portfolio's relatively low(40% net long) level of market exposure. I believe we are still consolidating from the markets extraordinary strength over the last 12 months before we make new highs. While I am cautious short-term, I am getting more and more positive on the markets potential performance for the year. Valuations are LOW for the general market on expected 04 earnings relative to interest rates. With an expected P/E of 18.8 and interest rates at 46-year lows, the S&P 500 should continue a meaningful advance. Fed Fund futures are now showing market expectations that the Fed will remain on hold until Oct. I can't emphasize enough how positive the recent acceleration in merger and acquisition activity is for the market. Venture capital, for the first time in several years, is accelerating its flow into many promising U.S. start-ups. Investors have poured $31B into equity mutual funds just this year, according to recent data. The media harps on the decline in the dollar and large budget/trade deficits scaring away foreign investors, yet recent data suggest otherwise. Foreigners' appetite for U.S. stocks and bonds remains voracious. In November, foreign purchases of U.S. stocks and bonds jumped 217% to 87.6 billion, after a 560% jump in October according to The Street.com. A quiet IPO/secondary market, major Merger/acquisition activity and increasing inflows into U.S. equity funds all paint a very bright supply/demand picture for the market. Economic data points released this week should confirm accelerated spending by corporate America. Finally, with asset values increasing, debt service burdens decreasing, interest rates/inflation low, large increases in income tax refunds and income/job growth steadily accelerating, the consumer should continue to contribute meaningfully to economic growth. Strong housing and retail markets will provide a significant boost to 1st Q GDP, propelling it above 5% for the quarter. Overall, despite the negativity conveyed by most of the mainstream media, 04 is shaping up to be another very good year.
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