Bloomberg:
- Barry Diller’s IAC/InterActiveCorp agreed to sell its 5.44% stake in Vivendi Universal Entertainment to GE’s NBC Universal for $3.4 billion in stock and cash.
- ABN Amro Holding NV, the biggest Dutch lender, and JPMorgan Chase plan to enter the $36 billion shipping futures market to benefit from widening price swings.
- McDonald’s said May sales climbed 1.8% after the US debut of fruit and walnut salads and other new items muted lower European demand.
- ImClone Systems said an independent review of its Erbitux colon-cancer drug confirmed that the medicine also helps patients with head and neck cancer.
- Billionaire Kerkorian will boost his share in GM to about 7.2%, short of his goal of 8.8%, after completing the purchase of 18.9 million shares.
- Yields on German, Swiss and Swedish bonds fell to records as faltering economic growth spurs investors to the security of government debt.
- OPEC will consider a proposal to raise output quotas when the group meets next week, said the group’s acting secretary-general.
- Crude oil fell, pulled lower by heating oil, after an Energy Dept. report showed that supplies of the fuel rose last week.
Wall Street Journal:
- The European Aeronautic, Defense & Space Co. and Northrop Grumman Corp. of the US agreed in principle to team up for the purpose of competing with Boeing for a contract to supply the US Air Force with aerial refueling tankers.
- A slowdown in the growth of US credit-card business is likely to cause a spate of consolidation that may spell the end of independent card companies.
- US states are taking the initiative on measures to reduce fuel consumption rather than waiting for Congress to resolve details of an energy bill.
- Time Warner’s AOL will later this month offer a free Web site featuring content that was previously available only to its paying subscribers to increase ad revenue.
- Regulation of hedge funds, which the SEC is due to introduce next February, may be shelved now that Christopher Cox is set to succeed William Donaldson as SEC chairman.
- A number of US radio stations are up for sale at companies from Viacom to Susquehanna Pfaltzgraff, and there are even hints that Walt Disney may sell its ABC Radio stations.
- US states including Illinois and Pennsylvania have begun to trim property taxes after state and local governments’ budget situations improve.
- Time Warner’s HBO cable tv unit has experienced a decline in ratings as viewers lose interest in some of their shows because they have become too focused on Hollywood entertainment themes.
- Clear Channel Communications is trying to provide podcasting, or delivering fans’ favorite shows directly to their computers, in return for fees.
NY Times:
- Investors are losing interest in Chinese IPOs.
Washington Post:
- A new drug safety board created by the FDA to revive confidence in the country’s drug supply will actually hurt efforts to improve safety, FDA safety officer David Graham and Senator Charles Grassley said.
LA Times:
- A California father and his son have been arrested by FBI agents after the younger man admitted to attending al-Qaeda training camps in Pakistan.
Arizona Republic:
- Arizona’s tax revenue has risen to record levels, hitting $1 billion in April, because of profits from the state’s booming housing and real estate market.
Wednesday, June 08, 2005
Wholesale Inventories Rise Less Than Sales, Crude Inventories Fall
- Wholesale Inventories rose .8% in April versus estimates of a .4% increase and an upwardly revised .6% gain in March.
- Summary of Weekly Petroleum Data for the Week Ending June 3, 2005.
- The EIA reported crude inventories fell 3.09M barrels versus estimates of a 250K barrel rise. Gasoline inventories fell 31K barrels versus estimates of a 1.1M barrel gain. Distillate inventories rose 1.29M barrels versus estimates of a 1.28M barrel rise.
- Summary of Weekly Petroleum Data for the Week Ending June 3, 2005.
- The EIA reported crude inventories fell 3.09M barrels versus estimates of a 250K barrel rise. Gasoline inventories fell 31K barrels versus estimates of a 1.1M barrel gain. Distillate inventories rose 1.29M barrels versus estimates of a 1.28M barrel rise.
BOTTOM LINE: Stockpiles at US wholesalers rose more than forecast in April, led by machinery and other business equipment, however sales increased by the most in a year. The inventory-to-sales ratio declined to 1.18 months from 1.19 months in March, the lowest since January, which suggests factories may not need to continue trimming production.
Oil is rising $1.30 on the inventory news. While the drawdown in crude is unwelcome, inventories are still well above average levels for this time of year. The main focus of traders recently has been distillates, which saw a build.
Wednesday Watch
Late-Night Headlines
Bloomberg:
- Samsung Electronics said better-than-expected demand for semiconductors that store pictures and songs in gadgets such as mobile phones will prolong a shortage of the chip.
- Chinese stocks climbed, with key indices on course for their biggest advances in four months, as investors bet the government will introduce more incentives to bolster markets.
Financial Times:
- Foreign companies warn that proposed changes in Japan's commercial code could lead investment banks, law firms and others to leave Japan if implemented, citing the European Business Community and American Chamber of Commerce in Japan.
- Investment grade companies' costs for raising funds through syndicated loans are at their lowest level in eight years in Europe and the US, citing market research company Dealogic.
Australian Financial Review:
- BlueScope Steel Ltd., Australia's largest steelmaker, had its share target cut 19% by Citigroup Inc. on concern that steel prices are falling faster than previously forecast.
Oriental Morning Post:
- China may cap steel production when it issues a new policy for the development of the industry in July.
Beijing News:
- The European Union is facing pressure to raise its anti-dumping tariff on bicycles imported from China to 45% from 31%, citing the head of a Chinese industry association.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on LIZ, TRI, CVD and HMA.
- Reiterated Cautious view on Radio sector.
Night Trading
Asian Indices are +.50% to +.75% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.26%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
CMTL/.24
HRB/3.52
KFY/.25
Splits
None of note
Economic Releases
10:00 EST:
- Wholesale Inventories for April are estimated to rise .4% versus a .4% gain in March.
Bloomberg:
- Samsung Electronics said better-than-expected demand for semiconductors that store pictures and songs in gadgets such as mobile phones will prolong a shortage of the chip.
- Chinese stocks climbed, with key indices on course for their biggest advances in four months, as investors bet the government will introduce more incentives to bolster markets.
Financial Times:
- Foreign companies warn that proposed changes in Japan's commercial code could lead investment banks, law firms and others to leave Japan if implemented, citing the European Business Community and American Chamber of Commerce in Japan.
- Investment grade companies' costs for raising funds through syndicated loans are at their lowest level in eight years in Europe and the US, citing market research company Dealogic.
Australian Financial Review:
- BlueScope Steel Ltd., Australia's largest steelmaker, had its share target cut 19% by Citigroup Inc. on concern that steel prices are falling faster than previously forecast.
Oriental Morning Post:
- China may cap steel production when it issues a new policy for the development of the industry in July.
Beijing News:
- The European Union is facing pressure to raise its anti-dumping tariff on bicycles imported from China to 45% from 31%, citing the head of a Chinese industry association.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on LIZ, TRI, CVD and HMA.
- Reiterated Cautious view on Radio sector.
Night Trading
Asian Indices are +.50% to +.75% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.26%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
CMTL/.24
HRB/3.52
KFY/.25
Splits
None of note
Economic Releases
10:00 EST:
- Wholesale Inventories for April are estimated to rise .4% versus a .4% gain in March.
BOTTOM LINE: Asian indices are higher on gains in technology shares in the region after Texas Instruments raised guidance and Samsung made positive comments. I expect US equities to open modestly higher, led by technology shares. The Portfolio is 75% net long heading into the day.
Tuesday, June 07, 2005
Stocks Finish Mixed on Afternoon Reversal
Indices
S&P 500 1,197.26 -.02%
DJIA 10,483.07 +.15%
NASDAQ 2,067.16 -.41%
Russell 2000 623.78 +.13%
DJ Wilshire 5000 11,851.46 -.01%
S&P Barra Growth 578.46 +.04%
S&P Barra Value 614.33 -.08%
Morgan Stanley Consumer 583.99 unch.
Morgan Stanley Cyclical 721.72 -.14%
Morgan Stanley Technology 481.41 -.48%
Transports 3,612.63 -.62%
Utilities 370.13 +.33%
Put/Call .84 -3.45%
NYSE Arms 1.16 -11.49%
Volatility(VIX) 12.39 +.90%
ISE Sentiment 156.00 -11.36%
US Dollar 87.49 -.13%
CRB 306.21 -.35%
Futures Spot Prices
Crude Oil 53.79 +.06%
Unleaded Gasoline 151.67 +.07%
Natural Gas 7.17 +.60%
Heating Oil 161.10 +.72%
Gold 426.50 -.05%
Base Metals 124.80 -1.13%
Copper 153.40 -.58%
10-year US Treasury Yield 3.90% -1.30%
Leading Sectors
Hospitals +1.66%
Broadcasting +.97%
Homebuilders +.85%
Lagging Sectors
Computer Hardware -1.24%
Restaurants -1.30%
Gold & Silver -1.95%
Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play
Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on MO.
Afternoon/Evening Headlines
Bloomberg:
- Borrowing by US consumers grew in April at the slowest pace in five months as a yearlong series of rate increases by the Fed made money more expensive, the Fed said today.
- North Korea has agreed to resume six-party talks aimed at dismantling its nuclear arms program, Wang Guangya, China’s ambassador to the UN, said today.
- The NY Mercantile Exchange, the largest energy market, agreed with the crown prince of Dubai to open the Middle East’s first oil futures exchange as it seeks to expand open-outcry trading, according to Nymex officials.
- Texas Instruments, whose semiconductors run more than half the mobile phones sold last year, said second-quarter sales may reach its highest forecasts as consumers buy new phones that surf the Internet.
- ImClone Systems said billionaire investor Carl Icahn is seeking US antitrust clearance to increase his stake in the company to as much as $500 million.
- UK Prime Minister Blair and President Bush pledged their governments will make aiding impoverished African nations a major priority.
Wall Street Journal:
- China may ban the broadcast of foreign cartoons during prime-time, hampering efforts by companies such as Walt Disney and Viacom to sell programs and their characters in the world’s biggest television market.
AP:
- China, in its latest effort to police the Internet, ordered the operators of all local Web sites and Web logs to register or be shut down.
Financial Times:
- The European Union’s “socialistic” legal structure discourages overseas businesses from opening offices in the region, citing Owens-Illinois CEO McCracken.
- Workers in industrialized states could earn the equivalent of a year’s salary over their working lives if countries boosted domestic competition and cut trade barriers, citing the OECD.
S&P 500 1,197.26 -.02%
DJIA 10,483.07 +.15%
NASDAQ 2,067.16 -.41%
Russell 2000 623.78 +.13%
DJ Wilshire 5000 11,851.46 -.01%
S&P Barra Growth 578.46 +.04%
S&P Barra Value 614.33 -.08%
Morgan Stanley Consumer 583.99 unch.
Morgan Stanley Cyclical 721.72 -.14%
Morgan Stanley Technology 481.41 -.48%
Transports 3,612.63 -.62%
Utilities 370.13 +.33%
Put/Call .84 -3.45%
NYSE Arms 1.16 -11.49%
Volatility(VIX) 12.39 +.90%
ISE Sentiment 156.00 -11.36%
US Dollar 87.49 -.13%
CRB 306.21 -.35%
Futures Spot Prices
Crude Oil 53.79 +.06%
Unleaded Gasoline 151.67 +.07%
Natural Gas 7.17 +.60%
Heating Oil 161.10 +.72%
Gold 426.50 -.05%
Base Metals 124.80 -1.13%
Copper 153.40 -.58%
10-year US Treasury Yield 3.90% -1.30%
Leading Sectors
Hospitals +1.66%
Broadcasting +.97%
Homebuilders +.85%
Lagging Sectors
Computer Hardware -1.24%
Restaurants -1.30%
Gold & Silver -1.95%
Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play
Afternoon Recommendations
Goldman Sachs:
- Reiterated Outperform on MO.
Afternoon/Evening Headlines
Bloomberg:
- Borrowing by US consumers grew in April at the slowest pace in five months as a yearlong series of rate increases by the Fed made money more expensive, the Fed said today.
- North Korea has agreed to resume six-party talks aimed at dismantling its nuclear arms program, Wang Guangya, China’s ambassador to the UN, said today.
- The NY Mercantile Exchange, the largest energy market, agreed with the crown prince of Dubai to open the Middle East’s first oil futures exchange as it seeks to expand open-outcry trading, according to Nymex officials.
- Texas Instruments, whose semiconductors run more than half the mobile phones sold last year, said second-quarter sales may reach its highest forecasts as consumers buy new phones that surf the Internet.
- ImClone Systems said billionaire investor Carl Icahn is seeking US antitrust clearance to increase his stake in the company to as much as $500 million.
- UK Prime Minister Blair and President Bush pledged their governments will make aiding impoverished African nations a major priority.
Wall Street Journal:
- China may ban the broadcast of foreign cartoons during prime-time, hampering efforts by companies such as Walt Disney and Viacom to sell programs and their characters in the world’s biggest television market.
AP:
- China, in its latest effort to police the Internet, ordered the operators of all local Web sites and Web logs to register or be shut down.
Financial Times:
- The European Union’s “socialistic” legal structure discourages overseas businesses from opening offices in the region, citing Owens-Illinois CEO McCracken.
- Workers in industrialized states could earn the equivalent of a year’s salary over their working lives if countries boosted domestic competition and cut trade barriers, citing the OECD.
BOTTOM LINE: The Portfolio finished slightly higher today on gains in my Internet, Retail and Homebuilding longs and Energy-related shorts. I took profits in a few QQQQs and added to some existing shorts in the afternoon, thus leaving the Portfolio 75% net long. I added to my RIG short and I am now using a $52.50 stop-loss on this position. The tone of the market was slightly negative today as the advance/decline finished slightly lower, sector performance was mixed and volume was slightly above average. Measures of investor anxiety were mixed into the close. Overall, today’s market action was negative considering the reversal from morning highs, a decline in energy prices and lower long-term rates. The Baltic Freight Index, a leading economic indicator, has declined 62.9% from December 2004 highs. Moreover, it has fallen 51.5% just since mid-April and broken its uptrend that has been in place since mid-2002. This is another indicator forecasting slowing global growth.
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