Indices
S&P 500 1,211.86 +1.72%
DJIA 10,449.14 +1.69%
NASDAQ 2,112.88 +2.72%
Russell 2000 662.14 +3.51%
DJ Wilshire 5000 12,092.00 +1.98%
S&P Equity Long/Short Index 1,031.29 +.45%
S&P Barra Growth 578.63 +1.92%
S&P Barra Value 629.04 +1.53%
Morgan Stanley Consumer 574.16 +.84%
Morgan Stanley Cyclical 730.17 +2.59%
Morgan Stanley Technology 484.63 +2.64%
Transports 3,589.96 +2.93%
Utilities 390.41 +.99%
S&P 500 Cum A/D Line 7,515.00 +2.57%
Bloomberg Crude Oil % Bulls 58.0 +104.95%
Put/Call .79 -20.20%
NYSE Arms .78 -58.95%
Volatility(VIX) 11.45 -4.90%
ISE Sentiment 193.00 -8.53%
AAII % Bulls 43.01 -6.28%
US Dollar 90.25 +1.30%
CRB 309.90 +3.30%
Futures Spot Prices
Crude Oil 59.63 +5.45%
Unleaded Gasoline 176.34 +12.14%
Natural Gas 7.47 +6.97%
Heating Oil 171.81 +4.89%
Gold 423.80 -1.26%
Base Metals 123.28 +4.50%
Copper 155.60 +5.42%
10-year US Treasury Yield 4.09% +1.04%
Average 30-year Mortgage Rate 5.62% +1.63%
Leading Sectors
Biotech +6.47%
Steel +6.46%
Semis +5.65%
Lagging Sectors
Telecom +.18%
Defense -.09%
Gold & Silver -.90%
*5-Day % Change
Friday, July 08, 2005
Stocks Sharply Higher Mid-day on Good Employment Report
Indices
S&P 500 1,208.39 +.88%
DJIA 10,420.14 +1.14%
NASDAQ 2,098.55 +1.09%
Russell 2000 656.75 +1.14%
DJ Wilshire 5000 12,049.30 +.86%
S&P Barra Growth 576.47 +.99%
S&P Barra Value 627.57 +.74%
Morgan Stanley Consumer 572.80 +1.22%
Morgan Stanley Cyclical 727.44 +1.23%
Morgan Stanley Technology 481.38 +1.08%
Transports 3,562.71 +1.24%
Utilities 390.07 +.90%
Put/Call .74 -28.85%
NYSE Arms .85 -28.41%
Volatility(VIX) 11.36 -9.05%
ISE Sentiment 202.00 +33.77%
US Dollar 90.43 +.17%
CRB 311.53 -.15%
Futures Spot Prices
Crude Oil 60.35 -.63%
Unleaded Gasoline 179.70 -.48%
Natural Gas 7.53 +1.65%
Heating Oil 174.00 -1.97%
Gold 423.30 -.21%
Base Metals 123.28 +2.22%
Copper 155.60 +1.34%
10-year US Treasury Yield 4.08% +.48%
Leading Sectors
Broadcasting +2.63%
Airlines +2.38%
Biotech +2.06%
Lagging Sectors
Oil Service -.03%
Hospitals -.19%
Energy -.33%
S&P 500 1,208.39 +.88%
DJIA 10,420.14 +1.14%
NASDAQ 2,098.55 +1.09%
Russell 2000 656.75 +1.14%
DJ Wilshire 5000 12,049.30 +.86%
S&P Barra Growth 576.47 +.99%
S&P Barra Value 627.57 +.74%
Morgan Stanley Consumer 572.80 +1.22%
Morgan Stanley Cyclical 727.44 +1.23%
Morgan Stanley Technology 481.38 +1.08%
Transports 3,562.71 +1.24%
Utilities 390.07 +.90%
Put/Call .74 -28.85%
NYSE Arms .85 -28.41%
Volatility(VIX) 11.36 -9.05%
ISE Sentiment 202.00 +33.77%
US Dollar 90.43 +.17%
CRB 311.53 -.15%
Futures Spot Prices
Crude Oil 60.35 -.63%
Unleaded Gasoline 179.70 -.48%
Natural Gas 7.53 +1.65%
Heating Oil 174.00 -1.97%
Gold 423.30 -.21%
Base Metals 123.28 +2.22%
Copper 155.60 +1.34%
10-year US Treasury Yield 4.08% +.48%
Leading Sectors
Broadcasting +2.63%
Airlines +2.38%
Biotech +2.06%
Lagging Sectors
Oil Service -.03%
Hospitals -.19%
Energy -.33%
BOTTOM LINE: The Portfolio is higher mid-day on gains in my Semiconductor, Retail and Networking longs. I trimmed a few existing shorts and added to my existing longs, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, almost every sector is higher and volume is below average. Measures of investor anxiety are lower. Today’s overall market action is positive. The major indices are breaking out of their recent trading range even with oil near record highs. The Richmond Fed Service Sector Gauge for expected trends over the next six months recently rose 2.02%. This is the steepest increase since the later part of 2000, before the indicator began to plunge. I expect US stocks to trade mixed-to-higher into the close on short-covering, bargain hunting and lower energy prices.
Today's Headlines
Bloomberg:
- Novozymes A/S, the world’s no.1 maker of enzymes, plans to move its sugar-based production to China and the US after the European Union scrapped sugar export subsidies.
- Crude oil flirted with a record $62.10/bbl. in NY on concern Hurricane Dennis might damage oil rigs and platforms in the Gulf of Mexico.
- Chinese exporters reached a cap the US imposed on imports of knit shirts and underwear and neared the limit on trousers just seven weeks after the Commerce Dept. put restrictions on the import of those products.
- Time Warner CEO Parsons said his company is interested in buying more cable systems after agreeing to acquire assets from bankrupt Adelphia Communications in April.
- Leaders of the Group of Eight richest nations pledged to double aid to Africa to $50 billion a year, part of a package of measures aimed at relieving poverty in the world’s poorest countries.
Wall Street Journal:
- London’s 500,000 surveillance cameras that can capture one person as often as 300 times a day may offer clues to identifying people behind yesterday’s bombings in the UK capital.
- Clear Channel Communications and Yahoo! plan to jointly market concerts.
- A Canadian panel of experts is recommending that the country’s regulators allow painkiller Vioxx, made by Merck, back onto the market.
Washington Post:
- Pragmatism, not ideology, drove President Bush’s four nominations to the Texas Supreme Court while he was governor.
Globe and Mail:
- Most Canadians are willing to pay to get faster medical care, suggesting the government’s efforts to prohibit private clinics are out of step with public opinion.
AFP:
- OPEC President al-Sabah said he plans to resume consultations with other OPEC members on soaring oil prices and a possible increase in output.
Economic Times:
- India overtook China to become the country with the world’s second-largest road network after the US.
Xinhua News Agency:
- As much as 14% of China’s population, or 180 million people, have no access to safe drinking water, pointing to the problem of water pollution.
al-Sharq al-Awsat:
- Terrorist attacks on London that killed at least 50 people and wounded 700 other yesterday were probably carried out by one of al-Qaeda’s so-called sleeper cells.
- Novozymes A/S, the world’s no.1 maker of enzymes, plans to move its sugar-based production to China and the US after the European Union scrapped sugar export subsidies.
- Crude oil flirted with a record $62.10/bbl. in NY on concern Hurricane Dennis might damage oil rigs and platforms in the Gulf of Mexico.
- Chinese exporters reached a cap the US imposed on imports of knit shirts and underwear and neared the limit on trousers just seven weeks after the Commerce Dept. put restrictions on the import of those products.
- Time Warner CEO Parsons said his company is interested in buying more cable systems after agreeing to acquire assets from bankrupt Adelphia Communications in April.
- Leaders of the Group of Eight richest nations pledged to double aid to Africa to $50 billion a year, part of a package of measures aimed at relieving poverty in the world’s poorest countries.
Wall Street Journal:
- London’s 500,000 surveillance cameras that can capture one person as often as 300 times a day may offer clues to identifying people behind yesterday’s bombings in the UK capital.
- Clear Channel Communications and Yahoo! plan to jointly market concerts.
- A Canadian panel of experts is recommending that the country’s regulators allow painkiller Vioxx, made by Merck, back onto the market.
Washington Post:
- Pragmatism, not ideology, drove President Bush’s four nominations to the Texas Supreme Court while he was governor.
Globe and Mail:
- Most Canadians are willing to pay to get faster medical care, suggesting the government’s efforts to prohibit private clinics are out of step with public opinion.
AFP:
- OPEC President al-Sabah said he plans to resume consultations with other OPEC members on soaring oil prices and a possible increase in output.
Economic Times:
- India overtook China to become the country with the world’s second-largest road network after the US.
Xinhua News Agency:
- As much as 14% of China’s population, or 180 million people, have no access to safe drinking water, pointing to the problem of water pollution.
al-Sharq al-Awsat:
- Terrorist attacks on London that killed at least 50 people and wounded 700 other yesterday were probably carried out by one of al-Qaeda’s so-called sleeper cells.
Unemployment Falls to Lowest Level Since 9/11 Attacks, Inventories Rise Slightly
- The Unemployment Rate for June fell to 5.0% versus estimates of 5.1% and 5.1% in May.
- Average Hourly Earnings for June rose .2% versus estimates of a .2% increase and a .2% gain in May.
- The Change in Non-farm Payrolls for June rose to 146K versus estimates of 200K and an upwardly revised 104K in May.
- The Change in Manufacturing Payrolls for June fell to -24K versus estimates of -5K and -6K in May.
- Wholesale Inventories for May rose .1% versus estimates of a .5% increase and a .8% gain in April.
- Average Hourly Earnings for June rose .2% versus estimates of a .2% increase and a .2% gain in May.
- The Change in Non-farm Payrolls for June rose to 146K versus estimates of 200K and an upwardly revised 104K in May.
- The Change in Manufacturing Payrolls for June fell to -24K versus estimates of -5K and -6K in May.
- Wholesale Inventories for May rose .1% versus estimates of a .5% increase and a .8% gain in April.
BOTTOM LINE: US employers added 146,000 workers in June and the unemployment rate fell to the best level since the 9/11 terrorist attacks in 2001. Wage gains are helping boost consumer spending. Wages and Salaries were up 7% in May from the same time last year, more than twice the rate of inflation. Retailers from Wal-Mart to Nordstrom posted their biggest sales gain in 13 months in June even with high gas prices, according to the International Council of Shopping Centers. I continue to believe job gains will remain modest, slowly lowering the unemployment rate while keeping unit labor costs in check.
Rising imports in three of the first four months of the year spurred warehouse construction and suggest inventory expansion continues to support economic growth. The amount of time wholesale goods went unsold, known as the inventory-to-sales ratio, was unchanged from April at 1.18 months. I expect inventory building to increase later in the year as companies gain confidence in a continuation of the current economic expansion and automakers inventories stabilize.
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