BOTTOM LINE: The Portfolio is about even into the final hour as gains in my Index shorts and Energy-related shorts are offsetting losses in my Semi longs, Networking longs and Medical longs. I added to my (QQQQ), (EEM) and (IWM) shorts today, thus leaving the Portfolio 25% net long. The tone of the market is very negative as the advance/decline line is substantially lower, every sector is falling and volume is heavy. I am seeing some signs of stabilization the tech sector; however, there is still quite a bit of short-term complacency given today's losses. The Johnson Redbook same-store sales index rose 3.30% year over year last week vs. a 1.7% rise the prior week. This is the strongest reading since the first week of February. The long-term average is a gain of around 2.5%. I continue to expect retail to perform more in line with the market going forward. I also still expect stock selection within the sector to become even more important as consumer spending is likely in the initial stages of slowing to average levels. I expect US stocks to trade mixed-to-lower into the close from current levels as more economically sensitive companies see further profit-taking.
Tuesday, April 11, 2006
Stocks Lower into Final Hour on Energy Worries and Continued Profit-taking
Today's Headlines
Bloomberg:
- GM’s Saturn division, whose sales peaked a dozen years ago, is turning to new models with European styling to shake up its humdrum image and boost profit with higher-priced vehicles.
- UBS AG, Europe’s largest bank by assets, agreed to buy the private client network of Minneapolis-based Piper Jaffray Companies(PJC) for as much as $875 million to expand its wealth management business in the US.
- Heartened by increased hiring and wage growth this year, economists raised their 2006 US growth forecast, according to the latest monthly survey on the economy by Bloomberg.
- The benchmark index in Saudi Arabia, the world’s largest oil producer, continued its recent plunge for a third day on concern that prices don’t reflect prospects for profit growth after a three-year rally.
- Nokia(NOK) said handset prices in the first quarter exceeded the company’s forecast as more advanced models were sold.
- Federal prosecutors will charge people who worked for Merrill Lynch(MER) and Goldman Sachs(GS) with insider trading.
- Merck(MRK) should pay $9 million in punitive damages to a man who blamed the drug for his heart attack, a jury ruled.
- The IRS is examining some electronic-payment transactions processed by EBay’s(EBAY) PayPal unit to find US taxpayers who keep unreported income in offshore accounts, officials said.
- Fidelity Investments bought 12 million shares of United Airlines parent UAL Corp., becoming the carrier’s biggest stockholder with a 13% stake.
- Iranian Presidetn Ahmadinejad said his country completed its first enrichment of uranium two days ago.
- Nasdaq Stock Market(NDAQ) bought 15% of London Stock Exchange for $781.5 million, less than two weeks after withdrawing its takeover offer.
Wall Street Journal:
- Alcatel SA’s(ALA) proposed acquisition of Lucent Technologies(LU) could prompt a similar offer by another telecom technology company for Juniper Networks(JNPR).
- The US is preparing plans to cut the number of troops in Iraq and hand over responsibility for security to local forces, citing military officials.
- Humana Inc.(HUM) is marketing consumer-directed plans that offer various deductible-premium combinations, and is making contacts with potential customers as a way to keep down medical costs.
- Carnival Corp.(CCL), Royal Caribbean Cruises(RCL) and other cruise lines are offering deep discounts to draw customers as industry growth slows amid hurricanes and safety concerns.
NY Times:
- China’s population, recognizing the power of independent organization, are increasingly challenging what is a totalitarian system of government in their country.
- McDonald’s Corp.(MCD) is beginning to use call centers in other parts of the country to take orders from drive-through windows.
- The United Farm Workers, the biggest US union of agricultural laborers, plans to announce today that it has signed the first nationwide contract covering agricultural guest workers.
CNet News.com:
- Lenovo Group Ltd. will sell its ThinkPad notebook computers and 3000 line desktop systems in Best Buy’s(BBY) stores.
Atlanta Journal-Constitution:
- Georgia’s tax revenue is more than $1 billion ahead of the same period a year ago, spurred by double-digit growth in sales and income tax receipts.
Financial Times:
- Walt Disney’s(DIS) plan to offer hit ABC television shows free on the Internet is a sensible way of experimenting with ways of boosting advertising using technology.
Reuters:
- Time Warner’s(TWX) cable unit is in early-stage discussions about developing an auction system that would let advertisers bid for ad spots on video-on-demand channels.
- GM’s Saturn division, whose sales peaked a dozen years ago, is turning to new models with European styling to shake up its humdrum image and boost profit with higher-priced vehicles.
- UBS AG, Europe’s largest bank by assets, agreed to buy the private client network of Minneapolis-based Piper Jaffray Companies(PJC) for as much as $875 million to expand its wealth management business in the US.
- Heartened by increased hiring and wage growth this year, economists raised their 2006 US growth forecast, according to the latest monthly survey on the economy by Bloomberg.
- The benchmark index in Saudi Arabia, the world’s largest oil producer, continued its recent plunge for a third day on concern that prices don’t reflect prospects for profit growth after a three-year rally.
- Nokia(NOK) said handset prices in the first quarter exceeded the company’s forecast as more advanced models were sold.
- Federal prosecutors will charge people who worked for Merrill Lynch(MER) and Goldman Sachs(GS) with insider trading.
- Merck(MRK) should pay $9 million in punitive damages to a man who blamed the drug for his heart attack, a jury ruled.
- The IRS is examining some electronic-payment transactions processed by EBay’s(EBAY) PayPal unit to find US taxpayers who keep unreported income in offshore accounts, officials said.
- Fidelity Investments bought 12 million shares of United Airlines parent UAL Corp., becoming the carrier’s biggest stockholder with a 13% stake.
- Iranian Presidetn Ahmadinejad said his country completed its first enrichment of uranium two days ago.
- Nasdaq Stock Market(NDAQ) bought 15% of London Stock Exchange for $781.5 million, less than two weeks after withdrawing its takeover offer.
Wall Street Journal:
- Alcatel SA’s(ALA) proposed acquisition of Lucent Technologies(LU) could prompt a similar offer by another telecom technology company for Juniper Networks(JNPR).
- The US is preparing plans to cut the number of troops in Iraq and hand over responsibility for security to local forces, citing military officials.
- Humana Inc.(HUM) is marketing consumer-directed plans that offer various deductible-premium combinations, and is making contacts with potential customers as a way to keep down medical costs.
- Carnival Corp.(CCL), Royal Caribbean Cruises(RCL) and other cruise lines are offering deep discounts to draw customers as industry growth slows amid hurricanes and safety concerns.
NY Times:
- China’s population, recognizing the power of independent organization, are increasingly challenging what is a totalitarian system of government in their country.
- McDonald’s Corp.(MCD) is beginning to use call centers in other parts of the country to take orders from drive-through windows.
- The United Farm Workers, the biggest US union of agricultural laborers, plans to announce today that it has signed the first nationwide contract covering agricultural guest workers.
CNet News.com:
- Lenovo Group Ltd. will sell its ThinkPad notebook computers and 3000 line desktop systems in Best Buy’s(BBY) stores.
Atlanta Journal-Constitution:
- Georgia’s tax revenue is more than $1 billion ahead of the same period a year ago, spurred by double-digit growth in sales and income tax receipts.
Financial Times:
- Walt Disney’s(DIS) plan to offer hit ABC television shows free on the Internet is a sensible way of experimenting with ways of boosting advertising using technology.
Reuters:
- Time Warner’s(TWX) cable unit is in early-stage discussions about developing an auction system that would let advertisers bid for ad spots on video-on-demand channels.
Monday, April 10, 2006
Tuesday Watch
Late-Night Headlines
Bloomberg:
- Bausch & Lomb(BOL) said it is temporarily halting shipments of its ReNu solution with MoistureLoc after reports of fungal infections in the US.
- French unions and students, emboldened by their victory over the government on a disputed youth-labor law, are now taking aim at a 2005 measure that makes it easier for small companies to fire workers.
Economic Times:
- India’s crude oil import bill rose to a record of $43.8 billion during 2005, an increase of 46.8%. The bill was larger because of higher oil prices, not an increase in demand, the newspaper said.
Commercial Times:
- Microsoft Corp.(MSFT) is expected to double its orders from Taiwanese suppliers in the second quarter as it accelerates shipments for its Xbox 360 video-game console.
China Daily:
- Applied Materials(AMAT) will build a $225 million support center in the northwestern Chinese city of Xi’an.
Beijing Youth Daily:
- Beijing has registered 14 days of “heavy” air pollution this year, the most in almost six years, citing the city’s environmental bureau.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are -1.0% to unch. on average.
S&P 500 indicated -.06%.
NASDAQ 100 indicated -.10%.
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
- (BRY)/1.55
- (CRK)/.63
- (DSW)/.24
- (DNA)/.41
- (SWN)/.29
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- The Trade Deficit for February is estimated to shrink to -$67.5 billion versus -$68.5 billion in January.
2:00 pm EST
- The Monthly Budget Deficit for March is estimated to widen to -$82.1 billion versus -$71.2 billion in February.
Bloomberg:
- Bausch & Lomb(BOL) said it is temporarily halting shipments of its ReNu solution with MoistureLoc after reports of fungal infections in the US.
- French unions and students, emboldened by their victory over the government on a disputed youth-labor law, are now taking aim at a 2005 measure that makes it easier for small companies to fire workers.
Economic Times:
- India’s crude oil import bill rose to a record of $43.8 billion during 2005, an increase of 46.8%. The bill was larger because of higher oil prices, not an increase in demand, the newspaper said.
Commercial Times:
- Microsoft Corp.(MSFT) is expected to double its orders from Taiwanese suppliers in the second quarter as it accelerates shipments for its Xbox 360 video-game console.
China Daily:
- Applied Materials(AMAT) will build a $225 million support center in the northwestern Chinese city of Xi’an.
Beijing Youth Daily:
- Beijing has registered 14 days of “heavy” air pollution this year, the most in almost six years, citing the city’s environmental bureau.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are -1.0% to unch. on average.
S&P 500 indicated -.06%.
NASDAQ 100 indicated -.10%.
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
- (BRY)/1.55
- (CRK)/.63
- (DSW)/.24
- (DNA)/.41
- (SWN)/.29
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- The Trade Deficit for February is estimated to shrink to -$67.5 billion versus -$68.5 billion in January.
2:00 pm EST
- The Monthly Budget Deficit for March is estimated to widen to -$82.1 billion versus -$71.2 billion in February.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology stocks in the region. I expect US equities to open mixed and to trade modestly lower into the afternoon. The Portfolio is 50% net long heading into the day.
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