S&P 500 1,123.75.75 +1.17%
NASDAQ 1,976.76 +1.73%
Leading Sectors
Iron/Steel +4.05%
Airlines +3.40%
Biotech +2.82%
Lagging Sectors
HMO's +.39%
Drugs -.67%
Homebuilders -1.22%
Other
Crude Oil 38.19 +.03%
Natural Gas 5.74 +.31%
Gold 407.30 +.05%
Base Metals 112.09 +.56%
U.S. Dollar 88.66 +.08%
10-Yr. Long-Bond Yield 3.68% +.05%
VIX 18.11 -10.96%
Put/Call .80 -23.08%
NYSE Arms .67 -9.46%
After-hours Movers
TIBX +4.6% after beating 1Q earnings estimates.
PLNR -17.7% after lowering 2Q guidance.
ESMC -12.8% on announcing that it sold 800,000 shares in a private placement 32% below Wed. close.
MLHR -6.6% after meeting 3Q estimates and lowering 4Q guidance.
Recommendations
Goldman Sachs reiterated Outperform on PKG. TheStreet.com's Chris Edmonds thinks oil will fall to around $30/bbl in the next 3-6 months. CNBC had guests that were positive on VECO and FEIC, providers of the "picks and shovels" for nanotechnology.
After-hours News
U.S. stocks rallied today on strong earnings from economic bell-weather FedEx and strength in other cyclicals. Martha Stewart's daughter said she isn't interested in running her mother's company, CNNMoney.com reported. Crude oil futures closed above $38 a barrel for the first time since the 1990-91 Gulf War, after the U.S. Energy Dept. reported a decline in nationwide gasoline inventories. Afghanistan is aiming to hold presidential and parliamentary elections in the middle of the year, President Karzai said.
BOTTOM LINE: The Portfolio was up today as I added quite a few new long positions into the afternoon strength. The Portfolio is now 100% net long. The market's strength in the face of 13-year highs in the price of oil and a hotel bombing in Iraq was impressive. I am seeing a number of stocks stabilize and begin to break-out to the upside. It is too early to tell whether or not the recent correction is over, but signs are pointing to continued strength in the short-term. Most of the longs I added were beaten up technology and base metal stocks with exceptional fundamentals.
Wednesday, March 17, 2004
Mid-day Update
S&P 500 1,122.47 +1.06%
NASDAQ 1,971.94 +1.48%
Leading Sectors
Iron/Steel +3.72%
Airlines +2.86%
Internet +2.46%
Lagging Sectors
HMO's -.03%
Drugs -.76%
Homebuilders -1.97%
Other
Crude Oil 38.07 +1.52%
Natural Gas 5.73 +.74%
Gold 404.10 +.37%
Base Metals 112.09 +.56%
U.S. Dollar 88.71 +.14%
10-Yr. Long-Bond Yield 3.70% +.61%
VIX 18.48 -9.14%
Put/Call .89 -14.42%
NYSE Arms .72 -2.70%
Market Movers
MAMA +9.1% after First Berlin rated it Strong Buy with $12 target.
AOT +4.3% on $3.7B acquisition by FSH.
YHOO +4.3% after multiple analyst upgrades.
NVTL +17.3% on order from O2 Germany for its pc card modems.
PNR +6.4% after boosting 1Q and 04 estimates.
FDX +4.6% after reporting better-than-expected 3Q estimates.
SCHL -8.2% after missing 3Q estimates and lowering guidance.
CENF -29% after significantly lowering 1Q forecast.
CANI -19.9% after disappointing 4Q report.
Economic Data
Consumer Price Index for Feb. rose .3%, meeting expectations.
CPI Ex Food & Energy for Feb. rose .2% vs. expectations of a .1% rise.
Recommendations
YHOO raised to Buy at Citi Smith Barney. MMM raised to Buy at Citi, $88 target. WY raised to Buy at Citi, $71 target. Citi says KSS mgmt. most upbeat in a long time, reiterating 1M rating and $60 target. Citi raised LEH estimates and price target to $99. PLXS raised to Buy 2 at UBS. CYT raised to Buy at Deutshe Bank, $42 target. GCI raised to Overweight at Morgan Stanley, target $98. TXU raised to Buy at Merrill, $32 target. SMBI rated Buy at Merrill, $22 target. MTLG raised to Outperform at Raymond James, $28 target. Goldman Sachs reiterated Outperform on GDT. GS rated TRW Outperform, $28 target. GS reiterates Outperform on PEP.
Mid-day News
U.S. stocks are rallying mid-day as the CPI showed no signs of inflation and FedEx reported better-than-expected earnings. TheStreet.com reports that venture capitalists are pouring more money into late-stage investments, companies that are near an initial public offering, than at any time since the mid-80's. TheStreet.com also saying that the Put/Call ratio has had readings above 1.0 for 4 consecutive days, the first time this has happened since last May. Cisco CEO Chambers said CSCO will probably pay a dividend at some point. Goldman Sachs says a recent survey shows WalMart's food is 13% cheaper than 4 other major supermarket chains. John Ryding, chief market economist at Bear Stearns, and Paul McCulley, of PIMCO, told CNBC that the Fed is waiting for sustained improvement in job growth before considering a move to raise interest rates.
BOTTOM LINE: The Portfolio is up today as my shorts are even and my longs are up. I added a few tech longs this morning, bringing market exposure to 50%. I will likely add another 25% to long exposure this afternoon on any strength into the close. The market's action is impressive in the face of higher crude prices and a hotel bombing in Baghdad. If you haven't already glanced at the most comprehensive Iraqi poll to date, mentioned in last night's post, I would highly recommend it.
NASDAQ 1,971.94 +1.48%
Leading Sectors
Iron/Steel +3.72%
Airlines +2.86%
Internet +2.46%
Lagging Sectors
HMO's -.03%
Drugs -.76%
Homebuilders -1.97%
Other
Crude Oil 38.07 +1.52%
Natural Gas 5.73 +.74%
Gold 404.10 +.37%
Base Metals 112.09 +.56%
U.S. Dollar 88.71 +.14%
10-Yr. Long-Bond Yield 3.70% +.61%
VIX 18.48 -9.14%
Put/Call .89 -14.42%
NYSE Arms .72 -2.70%
Market Movers
MAMA +9.1% after First Berlin rated it Strong Buy with $12 target.
AOT +4.3% on $3.7B acquisition by FSH.
YHOO +4.3% after multiple analyst upgrades.
NVTL +17.3% on order from O2 Germany for its pc card modems.
PNR +6.4% after boosting 1Q and 04 estimates.
FDX +4.6% after reporting better-than-expected 3Q estimates.
SCHL -8.2% after missing 3Q estimates and lowering guidance.
CENF -29% after significantly lowering 1Q forecast.
CANI -19.9% after disappointing 4Q report.
Economic Data
Consumer Price Index for Feb. rose .3%, meeting expectations.
CPI Ex Food & Energy for Feb. rose .2% vs. expectations of a .1% rise.
Recommendations
YHOO raised to Buy at Citi Smith Barney. MMM raised to Buy at Citi, $88 target. WY raised to Buy at Citi, $71 target. Citi says KSS mgmt. most upbeat in a long time, reiterating 1M rating and $60 target. Citi raised LEH estimates and price target to $99. PLXS raised to Buy 2 at UBS. CYT raised to Buy at Deutshe Bank, $42 target. GCI raised to Overweight at Morgan Stanley, target $98. TXU raised to Buy at Merrill, $32 target. SMBI rated Buy at Merrill, $22 target. MTLG raised to Outperform at Raymond James, $28 target. Goldman Sachs reiterated Outperform on GDT. GS rated TRW Outperform, $28 target. GS reiterates Outperform on PEP.
Mid-day News
U.S. stocks are rallying mid-day as the CPI showed no signs of inflation and FedEx reported better-than-expected earnings. TheStreet.com reports that venture capitalists are pouring more money into late-stage investments, companies that are near an initial public offering, than at any time since the mid-80's. TheStreet.com also saying that the Put/Call ratio has had readings above 1.0 for 4 consecutive days, the first time this has happened since last May. Cisco CEO Chambers said CSCO will probably pay a dividend at some point. Goldman Sachs says a recent survey shows WalMart's food is 13% cheaper than 4 other major supermarket chains. John Ryding, chief market economist at Bear Stearns, and Paul McCulley, of PIMCO, told CNBC that the Fed is waiting for sustained improvement in job growth before considering a move to raise interest rates.
BOTTOM LINE: The Portfolio is up today as my shorts are even and my longs are up. I added a few tech longs this morning, bringing market exposure to 50%. I will likely add another 25% to long exposure this afternoon on any strength into the close. The market's action is impressive in the face of higher crude prices and a hotel bombing in Baghdad. If you haven't already glanced at the most comprehensive Iraqi poll to date, mentioned in last night's post, I would highly recommend it.
Wednesday Watch
Earnings Announcements
Company/Estimate
BSC/2.05
BMET/.33
BKST/2.32
FDX/.66
GME/.67
JBL/.22
TSA/1.06
Splits
CLZR 2-for-1
DCOM 3-for-2
Economic Data
Consumer Price Index estimated up .3% in Feb. vs. a .5% rise in Jan.
CPI Ex Food & Energy estimated up .1% in Feb. vs. a .2% rise in Jan.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, BIIB and DNA. GS reiterated Outperform on NKE ahead of earnings on Thur. GS reiterating Outperform on RCL and CCL after attending State of the Industry panel at Seatrade.
Late-Night News
Asian stocks are mostly higher as a strengthening Japanese economy propelled the Nikkei, led by homebuilders, to a 2% gain. Yum! Brands, the operator of KFC and Pizza Hut, increased China sales by 31% to $1.1B last year, the Xinhua news agency said. The most comprehensive poll taken inside of Iraq has some very interesting and positive findings. A Chinese government official says the U.S. complaint over tax breaks for chipmakers is groundless.
Late-Night Trading
Asian market gains range from +.5% to +2.0%.
S&P 500 indicated +.14%.
NASDAQ indicated +.32%.
BOTTOM LINE: The late-day rally in the U.S. today may continue in the morning on strength in Asia. I will closely monitor the volume and breadth readings on any morning strength to decide whether or not to increase market exposure. The Portfolio is currently 25% net long. It will be interesting to see if the mainstream press burries the positive findings from the Iraqi poll on the back pages, tries to spin it in a negative way or actually makes an effort to report something very positive.
Company/Estimate
BSC/2.05
BMET/.33
BKST/2.32
FDX/.66
GME/.67
JBL/.22
TSA/1.06
Splits
CLZR 2-for-1
DCOM 3-for-2
Economic Data
Consumer Price Index estimated up .3% in Feb. vs. a .5% rise in Jan.
CPI Ex Food & Energy estimated up .1% in Feb. vs. a .2% rise in Jan.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, BIIB and DNA. GS reiterated Outperform on NKE ahead of earnings on Thur. GS reiterating Outperform on RCL and CCL after attending State of the Industry panel at Seatrade.
Late-Night News
Asian stocks are mostly higher as a strengthening Japanese economy propelled the Nikkei, led by homebuilders, to a 2% gain. Yum! Brands, the operator of KFC and Pizza Hut, increased China sales by 31% to $1.1B last year, the Xinhua news agency said. The most comprehensive poll taken inside of Iraq has some very interesting and positive findings. A Chinese government official says the U.S. complaint over tax breaks for chipmakers is groundless.
Late-Night Trading
Asian market gains range from +.5% to +2.0%.
S&P 500 indicated +.14%.
NASDAQ indicated +.32%.
BOTTOM LINE: The late-day rally in the U.S. today may continue in the morning on strength in Asia. I will closely monitor the volume and breadth readings on any morning strength to decide whether or not to increase market exposure. The Portfolio is currently 25% net long. It will be interesting to see if the mainstream press burries the positive findings from the Iraqi poll on the back pages, tries to spin it in a negative way or actually makes an effort to report something very positive.
Tuesday, March 16, 2004
Tuesday Close
S&P 500 1,110.70 +.56%
NASDAQ 1,943.09 +.20%
Leading Sectors
Gaming +1.47%
Banks +1.24%
Insurance +1.15%
Lagging Sectors
Networking -.79%
Biotech -.85%
Oil Service -.87%
Other
Crude Oil 37.35 -.24%
Natural Gas 5.66 -1.01%
Gold 402.50 +.73%
Base Metals 111.47 +2.08%
U.S. Dollar 88.59 -.25%
10-Yr. Long-Bond Yield 3.68% -2.19%
VIX 20.34 -3.74%
Put/Call 1.04 +1.96%
NYSE Arms .74 -73.38%
After-hours Movers
MAMA +4.19% continuing to rise after Mark Cuban reported 6.3% stake.
ANPI -6.01% on disappointing 4Q earnings report.
BAMM +23% after significantly beating 4Q estimates.
Recommendations
INFY rated new Buy at Janney Montgomery Scott with a $98.00 target. Goldman Sachs initiating coverage of HS with Outperform and $21 target. GS reiterating Outperform on AET. GS reiterates Outperform on SVU. TheStreet.com has a positive article on homebuilding stocks, making the case for continued gains. TheStreet.com thinks the selling in Airlines is overdone.
After-hours News
U.S. stocks gained, led by financials, after the Fed reiterated it will be "patient" about raising interest rates. However, breadth wasn't good as a number of stocks declined in the oil service, technology and biotechnology sectors. After the close, Manpower said its recently released jobs survey says, "Based on the hiring intentions that were reported across a majority of the companies surveyed, it is clear that demand for their products and services has finally surpassed the capacity and productivity of the current workforce." Jim Cramer, of TheStreet.com, thinks there is much less corporate corruption and fraud now than in the 90's, as the feds shutting down Arthur Andersen was a watershed event. The Italian government plans to keep its troops in Iraq, the Financial Times reported. The U.S. government may lodge a complaint to the WTO, saying China is breaking trading rules by giving tax breaks to local chipmakers, the FT said. The Univ. of Mich. said the FBI is investigating "the unauthorized access and public release" of February's report. General Motors said its profit from ventures in China more than tripled to $437M last year as the company's market share in that nation increases, reported Bloomberg.
BOTTOM LINE: The Portfolio had a good day today, notwithstanding its relatively low market exposure of 25%. I did not trade, as I do not see substantial signs of a short-term bottom. "Triple Witching" option expiration on Friday may provide the catalyst for a decent bounce. However, I will not trade too aggressively on the long-side as it seems this correction has a bit further to go.
NASDAQ 1,943.09 +.20%
Leading Sectors
Gaming +1.47%
Banks +1.24%
Insurance +1.15%
Lagging Sectors
Networking -.79%
Biotech -.85%
Oil Service -.87%
Other
Crude Oil 37.35 -.24%
Natural Gas 5.66 -1.01%
Gold 402.50 +.73%
Base Metals 111.47 +2.08%
U.S. Dollar 88.59 -.25%
10-Yr. Long-Bond Yield 3.68% -2.19%
VIX 20.34 -3.74%
Put/Call 1.04 +1.96%
NYSE Arms .74 -73.38%
After-hours Movers
MAMA +4.19% continuing to rise after Mark Cuban reported 6.3% stake.
ANPI -6.01% on disappointing 4Q earnings report.
BAMM +23% after significantly beating 4Q estimates.
Recommendations
INFY rated new Buy at Janney Montgomery Scott with a $98.00 target. Goldman Sachs initiating coverage of HS with Outperform and $21 target. GS reiterating Outperform on AET. GS reiterates Outperform on SVU. TheStreet.com has a positive article on homebuilding stocks, making the case for continued gains. TheStreet.com thinks the selling in Airlines is overdone.
After-hours News
U.S. stocks gained, led by financials, after the Fed reiterated it will be "patient" about raising interest rates. However, breadth wasn't good as a number of stocks declined in the oil service, technology and biotechnology sectors. After the close, Manpower said its recently released jobs survey says, "Based on the hiring intentions that were reported across a majority of the companies surveyed, it is clear that demand for their products and services has finally surpassed the capacity and productivity of the current workforce." Jim Cramer, of TheStreet.com, thinks there is much less corporate corruption and fraud now than in the 90's, as the feds shutting down Arthur Andersen was a watershed event. The Italian government plans to keep its troops in Iraq, the Financial Times reported. The U.S. government may lodge a complaint to the WTO, saying China is breaking trading rules by giving tax breaks to local chipmakers, the FT said. The Univ. of Mich. said the FBI is investigating "the unauthorized access and public release" of February's report. General Motors said its profit from ventures in China more than tripled to $437M last year as the company's market share in that nation increases, reported Bloomberg.
BOTTOM LINE: The Portfolio had a good day today, notwithstanding its relatively low market exposure of 25%. I did not trade, as I do not see substantial signs of a short-term bottom. "Triple Witching" option expiration on Friday may provide the catalyst for a decent bounce. However, I will not trade too aggressively on the long-side as it seems this correction has a bit further to go.
Tuesday Watch
Earnings Announcements
Company/Estimate
FDS/.41
GIS/.66
KBH/1.59
LEH/1.67
LEN/.83
Splits
ATVI 3-for2
BRL 3-for-2
CEC 3-for-2
GWR 3-for-2
Economic Data
Housing Starts for February estimated at 1930K vs. 1903K in January.
Building Permits for February estimated at 1900K vs. 1899K in January.
FOMC expected to leave rates unchanged.
Recommendations
Goldman Sachs says ITW seeing broad-based improvement, raises estimates. GS raised estimates on MMM. Goldman reiterates Outperform on BAX and $40 target.
Late-Night News
Ericsson says Nokia's new walkie-talkie handset won't work with other suppliers' network software and it may take years to fix, the Wall Street Journal reported. Merrill Lynch was hired to manage China Power's IPO.
Late-Night Trading
Asian markets are mostly lower, ranging from -1.0% to +.20%.
S&P 500 indicated +.11%.
NASDAQ indicated -.04%.
BOTTOM LINE: Not much in the way of late-night news. I will look for more concrete signs of a short-term bottom as we are approaching very oversold levels. The Portfolio is currently 25% net long.
Company/Estimate
FDS/.41
GIS/.66
KBH/1.59
LEH/1.67
LEN/.83
Splits
ATVI 3-for2
BRL 3-for-2
CEC 3-for-2
GWR 3-for-2
Economic Data
Housing Starts for February estimated at 1930K vs. 1903K in January.
Building Permits for February estimated at 1900K vs. 1899K in January.
FOMC expected to leave rates unchanged.
Recommendations
Goldman Sachs says ITW seeing broad-based improvement, raises estimates. GS raised estimates on MMM. Goldman reiterates Outperform on BAX and $40 target.
Late-Night News
Ericsson says Nokia's new walkie-talkie handset won't work with other suppliers' network software and it may take years to fix, the Wall Street Journal reported. Merrill Lynch was hired to manage China Power's IPO.
Late-Night Trading
Asian markets are mostly lower, ranging from -1.0% to +.20%.
S&P 500 indicated +.11%.
NASDAQ indicated -.04%.
BOTTOM LINE: Not much in the way of late-night news. I will look for more concrete signs of a short-term bottom as we are approaching very oversold levels. The Portfolio is currently 25% net long.
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