S&P 500 1,134.74 -.10%
NASDAQ 2,019.45 -.05%
Leading Sectors
Nanotechnology +2.17%
Airlines +1.70%
Hospitals +1.70%
Lagging Sectors
Oil Service -1.25%
Commodity -1.26%
Broadband -1.69%
Other
Crude Oil 37.25 -.45%
Natural Gas 5.53 +.38%
Gold 398.40 -.70%
Base Metals 114.38 -.60%
U.S. Dollar 90.43 +.70%
10-Yr. Long-Bond Yield 4.39% +.19%
VIX 15.12 -2.08%
Put/Call .73 +10.61%
NYSE Arms 1.08 +11.34%
Market Movers
TASR -19.0% on profit-taking after beating 1Q estimates by "only" .02.
CHKP +9.7% after beating 1Q estimates.
GM +5.0% after substantially beating 1Q estimates and raising 2Q and 04 guidance.
JCOM +16.0% after beating 1Q estimates and raising 2Q guidance.
SPRT +11.33% after beating 1Q estimates and raising 2Q guidance.
HUG +8.95% after raising 1Q/2Q and 04 forecast.
LNCR +7.93% after beating 1Q estimates.
COH +7.19% after beating 3Q forecast and raising 04 guidance.
NFI -17.6% after saying it was notified by the SEC about an informal inquiry into some of its business practices.
NDC -13.19% after missing 3Q estimates and lowering 04 guidance.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on INTC, FON, PCS, BSX, PFE, MSFT, BC, KMI, KMR, CBL, DDR, UDR, VNO, ASN and SRE. Goldman reiterated Underperform on PPS, SLG, AKS and AVB. GS raised TPX to Outperform and lowered VRSN to Underperform. Citi Smith Barney said to Buy G on weakness, target $42. Citi reiterated Buy on MATK, target $90. Citi reiterated Buy on BC, target $49. ASH rated Overweight at JP Morgan. EMC raised to Buy 1 at UBS. PNRA raised to Outperform at Thomas Weisel, target $50. WOOF rated Buy at Bank of America, target $43. SMI rated Sell at Bank of America. CNF raised to Buy at Merrill Lynch, target $40.
Mid-day News
U.S. stocks are mixed mid-day as strength in a multitude of companies reporting better-than-expected earnings is being offset by weakness in commodity-related stocks. The Bush Administration thinks al-Qaeda will try to strike the U.S. before the election in November because of its success in changing the outcome of the Spanish election last month, the Washington Post reported, citing National Security Adviser Condoleezza Rice. California Governor plans steps to boost business in the state by balancing the budget and increasing energy supplies, the LA Times reported. Coca-Cola debuted tv ads last month for Powerade sports drink, part of its new strategy to focus on non-carbonated beverages to invigorate sales. Janus Capital said CEO Whiston is stepping down as the U.S. mutual fund company struggles to settle allegations that it permitted improper trading that hurt investors, Bloomberg reported. With 101 companies in the S&P 500 having reported 1st quarter results, earnings have jumped 19% and beat estimates by 6.8% on average, according to Thomson Financial. The semiconductor book-to-bill ratio came in at 1.10 versus expectations of 1.17, Bloomberg reported.
BOTTOM LINE: The Portfolio is up today as the majority of my longs are up and shorts are down. I added a few new homebuilding shorts this morning on their recent bounce. Sky-high ply-wood and copper prices, coupled with rising rates, should continue to pressure this group in the intermediate-term. The Portfolio is now 50% net long.
Tuesday, April 20, 2004
Tuesday Watch
Earnings Announcements
Company/Estimate
MO/1.13
ASKJ/.18
AMCC/-.01
ONE/.81
BDK/.92
BSX/.22
CECO/.32
CTX/1.74
COH/.26
FRX/.38
GM/1.79
IR/.87
LU/.02
MOT/.07
PFE/.51
TASR/.22
WFC/.97
Splits
UNFI 2-for 1
Economic Data
None of note.
Recommendations
Goldman Sachs recommends Selling DQE and Buying AYE and RRI. GS reiterated Outperform on RE, MSFT, PKG, NSIT, BAX, BC and UDR. Goldman reiterated Underperform on MXT.
Late-Night News
Asian indices are rising as Japanese technology stocks climb in anticipation of strong earnings reports. China's leaders are planning steps to try to cool the nation's booming economic growth, including a possible increase in interest rates, the Financial Times reported. The 10 suspected terrorists arrested yesterday in England were planning a suicide bombing attack at the Old Trafford soccer stadium during the Premiership match between Manchester United and Liverpool on Saturday, the Sun reported. DirectTV is near an agreement to sell its 81% stake in PanAmSat for $23.50/share to Kohlberg Kravis Roberts, the Wall Street Journal Reported.
Late-Night Trading
Asian Indices -.50% to +2.50%.
S&P 500 indicated +.05%.
NASDAQ indicated +.07%.
BOTTOM LINE: U.S. stocks should open higher tomorrow on strength in Asian technology shares. However, numerous corporate earnings reports will likely dictate the market's direction for the day. I will closely monitor the market's reaction to these reports and then decide whether or not to add or cut exposure. The Portfolio is 75% net long heading into tomorrow.
Company/Estimate
MO/1.13
ASKJ/.18
AMCC/-.01
ONE/.81
BDK/.92
BSX/.22
CECO/.32
CTX/1.74
COH/.26
FRX/.38
GM/1.79
IR/.87
LU/.02
MOT/.07
PFE/.51
TASR/.22
WFC/.97
Splits
UNFI 2-for 1
Economic Data
None of note.
Recommendations
Goldman Sachs recommends Selling DQE and Buying AYE and RRI. GS reiterated Outperform on RE, MSFT, PKG, NSIT, BAX, BC and UDR. Goldman reiterated Underperform on MXT.
Late-Night News
Asian indices are rising as Japanese technology stocks climb in anticipation of strong earnings reports. China's leaders are planning steps to try to cool the nation's booming economic growth, including a possible increase in interest rates, the Financial Times reported. The 10 suspected terrorists arrested yesterday in England were planning a suicide bombing attack at the Old Trafford soccer stadium during the Premiership match between Manchester United and Liverpool on Saturday, the Sun reported. DirectTV is near an agreement to sell its 81% stake in PanAmSat for $23.50/share to Kohlberg Kravis Roberts, the Wall Street Journal Reported.
Late-Night Trading
Asian Indices -.50% to +2.50%.
S&P 500 indicated +.05%.
NASDAQ indicated +.07%.
BOTTOM LINE: U.S. stocks should open higher tomorrow on strength in Asian technology shares. However, numerous corporate earnings reports will likely dictate the market's direction for the day. I will closely monitor the market's reaction to these reports and then decide whether or not to add or cut exposure. The Portfolio is 75% net long heading into tomorrow.
Monday, April 19, 2004
Monday Close
S&P 500 1,135.82 +.11%
NASDAQ 2,020.43 +1.24%
Leading Sectors
Broadband +2.11%
Wireless +2.10%
Biotech +1.93%
Lagging Sectors
Hospitals -1.11%
Airlines -1.26%
Homebuilders -1.34%
Other
Crude Oil 37.42 unch.
Natural Gas 5.51 -.02%
Gold 400.90 -.07%
Base Metals 115.07 +1.89%
U.S. Dollar 89.80 -.16%
10-Yr. Long-Bond Yield 4.37% +.83%
VIX 15.42 +3.21%
Put/Call .66 -14.29%
NYSE Arms .97 -32.64%
After-hours Movers
JCOM +10.34% after beating 1Q estimates and raising 2Q and 04 forecast.
SPRT +9.36% after beating 1Q estimates and raising 2Q and 04 forecast.
PXLW +6.80% after beating 1Q estimates and raising 2Q forecast.
MGAM +5.65% after announcing it will replace Pacific Sunwear in S&P 600.
NTPA -41.32% after missing 2Q forecast substantially.
Recommendations
Goldman Sachs reiterated Outperform on KO, CCE, CEN and PEP. APH raised to Buy 2 at UBS.
After-hours News
U.S. stocks finished mostly higher as the 1990-2000 support level held on the NASDAQ, providing the catalyst for tech and biotech stocks to strengthen throughout the day. After the close, Saudi Arabia said it was determined to stamp out terrorist groups, the country's leader Crown Prince Abdullah said, Reuters reported. The U.S. will lift economic sanctions on Libya this week after the country agreed to dismantle its nuclear weapons program, the Financial Times reported. The Index of Leading Economic Indicators showed a year-over-year gain of 4.4%, the most since 1984.
BOTTOM LINE: The Portfolio fell slightly today as I took some losses on a few shorts early in the morning. The unexpected and sustained strength in technology today led me to add a few new long positions in the afternoon. The Portfolio is now 75% net long. The 4.4% gain in the Leading Indicator Index is just another in a string of economic reports that show the best U.S. economic growth since the early 80's. The Federal Reserve has interest rates at emergency levels to combat the aftermath of the bursting stock market bubble, the ensuing recession, multiple corporate scandals, September 11th attacks and what appeared to be the beginnings of a deflationary spiral. Now that it is apparent that the U.S. economy has worked through most of these issues the Fed will likely raise rates from their current emergency levels at the June 28-30 meeting. This does not mean they are necessarily worried about inflation; rather rates should not be at emergency levels in the current vigorous economic climate. The quicker the Fed acts, the sooner stocks will resume their current bull run as it will sooth the concerns of investors that are overly concerned about an imminent and drastic rise in inflation.
NASDAQ 2,020.43 +1.24%
Leading Sectors
Broadband +2.11%
Wireless +2.10%
Biotech +1.93%
Lagging Sectors
Hospitals -1.11%
Airlines -1.26%
Homebuilders -1.34%
Other
Crude Oil 37.42 unch.
Natural Gas 5.51 -.02%
Gold 400.90 -.07%
Base Metals 115.07 +1.89%
U.S. Dollar 89.80 -.16%
10-Yr. Long-Bond Yield 4.37% +.83%
VIX 15.42 +3.21%
Put/Call .66 -14.29%
NYSE Arms .97 -32.64%
After-hours Movers
JCOM +10.34% after beating 1Q estimates and raising 2Q and 04 forecast.
SPRT +9.36% after beating 1Q estimates and raising 2Q and 04 forecast.
PXLW +6.80% after beating 1Q estimates and raising 2Q forecast.
MGAM +5.65% after announcing it will replace Pacific Sunwear in S&P 600.
NTPA -41.32% after missing 2Q forecast substantially.
Recommendations
Goldman Sachs reiterated Outperform on KO, CCE, CEN and PEP. APH raised to Buy 2 at UBS.
After-hours News
U.S. stocks finished mostly higher as the 1990-2000 support level held on the NASDAQ, providing the catalyst for tech and biotech stocks to strengthen throughout the day. After the close, Saudi Arabia said it was determined to stamp out terrorist groups, the country's leader Crown Prince Abdullah said, Reuters reported. The U.S. will lift economic sanctions on Libya this week after the country agreed to dismantle its nuclear weapons program, the Financial Times reported. The Index of Leading Economic Indicators showed a year-over-year gain of 4.4%, the most since 1984.
BOTTOM LINE: The Portfolio fell slightly today as I took some losses on a few shorts early in the morning. The unexpected and sustained strength in technology today led me to add a few new long positions in the afternoon. The Portfolio is now 75% net long. The 4.4% gain in the Leading Indicator Index is just another in a string of economic reports that show the best U.S. economic growth since the early 80's. The Federal Reserve has interest rates at emergency levels to combat the aftermath of the bursting stock market bubble, the ensuing recession, multiple corporate scandals, September 11th attacks and what appeared to be the beginnings of a deflationary spiral. Now that it is apparent that the U.S. economy has worked through most of these issues the Fed will likely raise rates from their current emergency levels at the June 28-30 meeting. This does not mean they are necessarily worried about inflation; rather rates should not be at emergency levels in the current vigorous economic climate. The quicker the Fed acts, the sooner stocks will resume their current bull run as it will sooth the concerns of investors that are overly concerned about an imminent and drastic rise in inflation.
Mid-day Update
S&P 500 1,131.96 -.23%
NASDAQ 2,004.69 +.45%
Leading Sectors
Wireless +1.24%
Biotech +1.15%
Gaming +.98%
Lagging Sectors
Homebuilders -1.16%
I-Banks -1.24%
Airlines -1.73%
Other
Crude Oil 37.75 +.03%
Natural Gas 5.59 -.36%
Gold 401.80 +.05%
Base Metals 115.07 +1.89%
U.S. Dollar 89.79 -.17%
10-Yr. Long-Bond Yield 4.35% +.23%
VIX 15.68 +4.95%
Put/Call .67 -12.99%
NYSE Arms 1.23 -15.28%
Market Movers
DRIV +23.2% after announcing it will buy Element 5 AG for $120M and raising earnings forecasts for the 2nd quarter and year.
IMCL +12.3% after saying federal regulators had agreed to review a license for a new facility to make Erbitux and Bank of America Buy rating.
ASKJ +8.9% on multiple upgrades.
CNJ +13.9% after receiving an unsolicited buyout offer of $451M in cash from Moulin Intl., topping Luxottica Group's $401M bid the day before shareholders were to vote on it.
MOSY -41.6% after SNPS terminated its merger agreement with the company.
SWIR -11.3% after meeting 1Q estimates, but lowering 2Q guidance.
Economic Data
Leading Indicators for March +.3% versus +.3% estimate and 0.0% in February.
Recommendations
VLO raised to Overweight at JP Morgan. ORCL added to JP Morgan Focus List. JP Morgan rated PCO Buy. AMD raised to Buy at Deutsche Bank. ASKJ raised to Outperform at Thomas Weisel. NOK cut to Underweight at Prudential. QCOM rated Outperform at CSFB. IMCL rated Buy at Bank of America, target $91. UAG rated Buy at Merrill, target $33. Goldman Sachs reiterated Underperform on GAS, RKY, QLGC, DPH and RSH. GS reiterated Outperform on CMA, SYMC, PH, DTV, KMT, CAH, MCK, N, MDT, COH, CCE, NAV, PH, KMT, AG, NSIT, ZION and USB. GS thinks GLW is very attractive under $11 ahead of earnings. Citi Smith Barney's March CIO Macro Trends Survey shows continued optimism and an acceleration in spending by U.S. companies. 52% of all U.S. respondents expect spending to accelerate over the next 12 months. Citi says this should benefit DELL, MSFT, HPQ, SAP, SEBL, ADSK, ADBE, COGN, BOBJ, SAGE, INFA and RSAS the most. Citi rated APCS Buy ahead of earnings, $10 target. Citi reiterated Buy on PTV, FITB and SEE. Citi reiterated Sell on WWCA, TPC and USM. Citi reiterated Buy on SPLS, $31 target.
Mid-day News
U.S. stocks are mixed mid-day as the NASDAQ finds support at the 1990-2000 level and is bouncing. Hawaii will team with five other U.S. states in the first-ever Medicaid multi-state pooling initiative to cut drug prices, the AP said. MetroFi Inc. plans to install wireless-networking gear that will allow anyone within the city limits of Santa Clara, California to access the Internet for 20-30$/month, the San Francisco Chronicle reported. Italian Prime Minister Silvio Berlusconi said that Italy is the U.S.'s closest ally after the U.K., Bloomberg reported. McDonald's CEO James Cantalupo died of an apparent heart attack in Orlando, Florida, Bloomberg reported. The U.S.-led coalition said it won an agreement to help end tensions in the Iraqi town of Fallujah, Bloomberg reported. The index of leading U.S. economic indicators rose .3% in March as tax refunds put more money in the hands of consumers, jobless claims fell and companies took longer to fill orders, Bloomberg reported. Computer Associates fired nine employees in its legal and finance departments after three executives pleaded guilty to securities fraud last week.
BOTTOM LINE: The Portfolio is down slightly today as my shorts are up a little more than my longs. A few of my tech and biotech shorts hit stop losses, thus I exited those positions, raising the Portfolio's market exposure to 25% net long. U.S. stocks appear as though they will head lower in the short-run and I will look for additional shorts this afternoon.
NASDAQ 2,004.69 +.45%
Leading Sectors
Wireless +1.24%
Biotech +1.15%
Gaming +.98%
Lagging Sectors
Homebuilders -1.16%
I-Banks -1.24%
Airlines -1.73%
Other
Crude Oil 37.75 +.03%
Natural Gas 5.59 -.36%
Gold 401.80 +.05%
Base Metals 115.07 +1.89%
U.S. Dollar 89.79 -.17%
10-Yr. Long-Bond Yield 4.35% +.23%
VIX 15.68 +4.95%
Put/Call .67 -12.99%
NYSE Arms 1.23 -15.28%
Market Movers
DRIV +23.2% after announcing it will buy Element 5 AG for $120M and raising earnings forecasts for the 2nd quarter and year.
IMCL +12.3% after saying federal regulators had agreed to review a license for a new facility to make Erbitux and Bank of America Buy rating.
ASKJ +8.9% on multiple upgrades.
CNJ +13.9% after receiving an unsolicited buyout offer of $451M in cash from Moulin Intl., topping Luxottica Group's $401M bid the day before shareholders were to vote on it.
MOSY -41.6% after SNPS terminated its merger agreement with the company.
SWIR -11.3% after meeting 1Q estimates, but lowering 2Q guidance.
Economic Data
Leading Indicators for March +.3% versus +.3% estimate and 0.0% in February.
Recommendations
VLO raised to Overweight at JP Morgan. ORCL added to JP Morgan Focus List. JP Morgan rated PCO Buy. AMD raised to Buy at Deutsche Bank. ASKJ raised to Outperform at Thomas Weisel. NOK cut to Underweight at Prudential. QCOM rated Outperform at CSFB. IMCL rated Buy at Bank of America, target $91. UAG rated Buy at Merrill, target $33. Goldman Sachs reiterated Underperform on GAS, RKY, QLGC, DPH and RSH. GS reiterated Outperform on CMA, SYMC, PH, DTV, KMT, CAH, MCK, N, MDT, COH, CCE, NAV, PH, KMT, AG, NSIT, ZION and USB. GS thinks GLW is very attractive under $11 ahead of earnings. Citi Smith Barney's March CIO Macro Trends Survey shows continued optimism and an acceleration in spending by U.S. companies. 52% of all U.S. respondents expect spending to accelerate over the next 12 months. Citi says this should benefit DELL, MSFT, HPQ, SAP, SEBL, ADSK, ADBE, COGN, BOBJ, SAGE, INFA and RSAS the most. Citi rated APCS Buy ahead of earnings, $10 target. Citi reiterated Buy on PTV, FITB and SEE. Citi reiterated Sell on WWCA, TPC and USM. Citi reiterated Buy on SPLS, $31 target.
Mid-day News
U.S. stocks are mixed mid-day as the NASDAQ finds support at the 1990-2000 level and is bouncing. Hawaii will team with five other U.S. states in the first-ever Medicaid multi-state pooling initiative to cut drug prices, the AP said. MetroFi Inc. plans to install wireless-networking gear that will allow anyone within the city limits of Santa Clara, California to access the Internet for 20-30$/month, the San Francisco Chronicle reported. Italian Prime Minister Silvio Berlusconi said that Italy is the U.S.'s closest ally after the U.K., Bloomberg reported. McDonald's CEO James Cantalupo died of an apparent heart attack in Orlando, Florida, Bloomberg reported. The U.S.-led coalition said it won an agreement to help end tensions in the Iraqi town of Fallujah, Bloomberg reported. The index of leading U.S. economic indicators rose .3% in March as tax refunds put more money in the hands of consumers, jobless claims fell and companies took longer to fill orders, Bloomberg reported. Computer Associates fired nine employees in its legal and finance departments after three executives pleaded guilty to securities fraud last week.
BOTTOM LINE: The Portfolio is down slightly today as my shorts are up a little more than my longs. A few of my tech and biotech shorts hit stop losses, thus I exited those positions, raising the Portfolio's market exposure to 25% net long. U.S. stocks appear as though they will head lower in the short-run and I will look for additional shorts this afternoon.
Monday Watch
Earnings Announcements
Company/Estimate
MMM/.87
CD/.41
CF/.69
CNF/.36
LLY/.66
FNM/1.91
JCOM/.23
LXK/.72
LNCR/.56
MVK/.46
MSPD/-.11
SSNC/.17
WM/1.04
Splits
HIBB 3-for-2
SHFL 3-for-2
Economic Data
Leading Indicators for March estimated +.3% versus unchanged in February.
Weekend Recommendations
Forbes on Fox had guests that were positive on VLO and mixed on RGS, IGT, CMX, NXTL and PHM. Bulls and Bears had guests that were positive on SBUX, MCD, KROL, CCU, SIRI, FBR and FNF. Cashin' In had guests that were positive on CME, IPG, PPR, NT, LU and mixed on COH and HD. Louis Rukeyser's Wall Street had guests that were positive on EXBD, TRB, DELL, JNJ, LLY, TXU, APCC, ALL, CNX and negative on IR. Wall St. Week w/Fortune had guests that were positive on AH, FLIR, DHB, CRDN, ANT, ACE, AEP, S, JPM, GM, HIG and PHS. Barron's had positive columns on CL, RESP, RMD, AGIX and KRYX. Ned Davis, of Ned Davis Research, told Barron's he expects the S&P 500 to rise above 1,200 this year.
Weekend News
Cingular Wireless may reduce cell-phone suppliers to 4 from 6 next year to reduce costs, the Chicago Tribune reported. A BJ's Wholesale Club store in Natick, Mass. had a credit-card security breach that may result in millions of dollars being swiped by Russian and Asian thieves, the Boston Herald reported. Wireless computer networks often lack security measures needed to keep hackers out, which suggests there may be a U.S. boom in identity theft, the Philadelphia Inquirer reported. Barry Diller, chairman of InterActiveCorp, is trying to increase its share of the residential real estate market by taking aim at Henry Silverman's Cendant Corp., the NY Times reported. 2 out of 5 Internet users in the U.S. have high-speed access at home, the AP said. The IMF will ask the U.S. Federal Reserve to prepare the world economy for a rise in interest rates, the Financial Times said. Nokia won a contract to build a 3G mobile phone network for Vodafone in New Zealand, the New Zealand Herald reported. Abdel Aziz Rantisi, the new leader of Hamas, was killed in an Israeli missile strike, CNN reported. The U.S. military is leaning toward ending the standoff with insurgents in Fallujah by force as negotiations yield no results, the NY Times reported.
Late-Night Trading
Asian indices are mostly lower, -1.0% to +.25% on average.
S&P 500 indicated -.25%.
NASDAQ indicated -.24%.
BOTTOM LINE: The Portfolio is market neutral(longs-shorts=0) heading into the week. The mainstream press reached new all-time highs in negative reporting this weekend as 9 out of 10 articles I read, across a wide array of publications, had a negative spin. I believe that the vast majority of Americans do not enjoy this type of destructive reporting and would really appreciate a good mix of positive and negative stories. Negative headlines over the weekend, weakness in Asia and inflation concerns will likely lead to a weaker open for U.S. stocks in the morning.
Company/Estimate
MMM/.87
CD/.41
CF/.69
CNF/.36
LLY/.66
FNM/1.91
JCOM/.23
LXK/.72
LNCR/.56
MVK/.46
MSPD/-.11
SSNC/.17
WM/1.04
Splits
HIBB 3-for-2
SHFL 3-for-2
Economic Data
Leading Indicators for March estimated +.3% versus unchanged in February.
Weekend Recommendations
Forbes on Fox had guests that were positive on VLO and mixed on RGS, IGT, CMX, NXTL and PHM. Bulls and Bears had guests that were positive on SBUX, MCD, KROL, CCU, SIRI, FBR and FNF. Cashin' In had guests that were positive on CME, IPG, PPR, NT, LU and mixed on COH and HD. Louis Rukeyser's Wall Street had guests that were positive on EXBD, TRB, DELL, JNJ, LLY, TXU, APCC, ALL, CNX and negative on IR. Wall St. Week w/Fortune had guests that were positive on AH, FLIR, DHB, CRDN, ANT, ACE, AEP, S, JPM, GM, HIG and PHS. Barron's had positive columns on CL, RESP, RMD, AGIX and KRYX. Ned Davis, of Ned Davis Research, told Barron's he expects the S&P 500 to rise above 1,200 this year.
Weekend News
Cingular Wireless may reduce cell-phone suppliers to 4 from 6 next year to reduce costs, the Chicago Tribune reported. A BJ's Wholesale Club store in Natick, Mass. had a credit-card security breach that may result in millions of dollars being swiped by Russian and Asian thieves, the Boston Herald reported. Wireless computer networks often lack security measures needed to keep hackers out, which suggests there may be a U.S. boom in identity theft, the Philadelphia Inquirer reported. Barry Diller, chairman of InterActiveCorp, is trying to increase its share of the residential real estate market by taking aim at Henry Silverman's Cendant Corp., the NY Times reported. 2 out of 5 Internet users in the U.S. have high-speed access at home, the AP said. The IMF will ask the U.S. Federal Reserve to prepare the world economy for a rise in interest rates, the Financial Times said. Nokia won a contract to build a 3G mobile phone network for Vodafone in New Zealand, the New Zealand Herald reported. Abdel Aziz Rantisi, the new leader of Hamas, was killed in an Israeli missile strike, CNN reported. The U.S. military is leaning toward ending the standoff with insurgents in Fallujah by force as negotiations yield no results, the NY Times reported.
Late-Night Trading
Asian indices are mostly lower, -1.0% to +.25% on average.
S&P 500 indicated -.25%.
NASDAQ indicated -.24%.
BOTTOM LINE: The Portfolio is market neutral(longs-shorts=0) heading into the week. The mainstream press reached new all-time highs in negative reporting this weekend as 9 out of 10 articles I read, across a wide array of publications, had a negative spin. I believe that the vast majority of Americans do not enjoy this type of destructive reporting and would really appreciate a good mix of positive and negative stories. Negative headlines over the weekend, weakness in Asia and inflation concerns will likely lead to a weaker open for U.S. stocks in the morning.
Sunday, April 18, 2004
Weekly Outlook
There are relatively few economic reports scheduled for release this week. However, there are a number of notable U.S. companies due to report earnings. Scheduled economic reports include Leading Indicators, Initial Jobless Claims, Continuing Claims and Durable Goods Orders. Leading Indicators and Durable Goods Orders are the most important releases this week.
3M(MMM), Fannie Mae(FNM), Lexmark(LXK), Altria(MO), General Motors(GM), Lucent(LU), Pfizer(PFE), Centex(CTX), General Dynamics(GD), Harrah's Entertainment(HET), eBay(EBAY), Qualcomm(QCOM), Starbucks(SBUX), American International Group(AIG), SAP AG(SAP), United Parcel Service(UPS), American Express(AXP), Amazon(AMZN), Nextel(NXTL), Broadcom(BRCM), Microsoft(MSFT) and Schlumberger (SLB) are some of the more important companies that release quarterly earnings this week. The SEMI Book-to-Bill, Greenspan's testimony to the Senate Banking Committee and the Fed's Broaddus speech on the economy also have market-moving potential.
BOTTOM LINE: Numerous corporate earnings reports on tap this week should continue to paint a very positive picture of the current state of the U.S. economy. However, many stocks have been dropping on great reports due to overriding inflation and war/terrorism fears. I expect the NASDAQ to drop further and the broad market to remain neutral to slightly lower in the short-run. I would like to see the Put/Call, Arms, VIX and Bullish % readings show less investor complacency. I expect this will occur this week.
3M(MMM), Fannie Mae(FNM), Lexmark(LXK), Altria(MO), General Motors(GM), Lucent(LU), Pfizer(PFE), Centex(CTX), General Dynamics(GD), Harrah's Entertainment(HET), eBay(EBAY), Qualcomm(QCOM), Starbucks(SBUX), American International Group(AIG), SAP AG(SAP), United Parcel Service(UPS), American Express(AXP), Amazon(AMZN), Nextel(NXTL), Broadcom(BRCM), Microsoft(MSFT) and Schlumberger (SLB) are some of the more important companies that release quarterly earnings this week. The SEMI Book-to-Bill, Greenspan's testimony to the Senate Banking Committee and the Fed's Broaddus speech on the economy also have market-moving potential.
BOTTOM LINE: Numerous corporate earnings reports on tap this week should continue to paint a very positive picture of the current state of the U.S. economy. However, many stocks have been dropping on great reports due to overriding inflation and war/terrorism fears. I expect the NASDAQ to drop further and the broad market to remain neutral to slightly lower in the short-run. I would like to see the Put/Call, Arms, VIX and Bullish % readings show less investor complacency. I expect this will occur this week.
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