Earnings Announcements
Company/Estimate
AMZN/.19
AXP/.62
AIG/1.06
AMGN/.56
APA/1.05
ABX/.07
BRCM/.27
CAH/.99
CAT/.70
GLW/.05
GDT/.55
HCA/.70
IGT/.32
MSFT/.29
PSFT/.18
Splits
None of note.
Economic Data
Producer Price Index for March estimated +.4% vs. +.1% in February.
PPI Ex Food & Energy for March estimated +.1% vs. +.1% in February.
Initial Jobless Claims last week estimated at 340K vs. 360K prior week.
Continuing Claims estimated at 2998K vs. 2980K the prior week.
Recommendations
Goldman Sachs reiterated Outperform on AGI, FE, X, KLAC, CDL, AMR, TLAB, KMI, KMR, CVD and Underperform on EK and AZR.
Late-Night News
Asian indices are quietly mixed as strength in Japan is offset by a falling Taiwanese market. China will allow the yuan to fluctuate in a wider range against a basket of currencies, the Financial Times reported. Scotch whisky exports rose to a six-year high last year, boosted by sales to the U.S., the Financial Times said. Spending on advertising may increase 5.5% in the U.S. this year, the most in over three years, the FT said. SAP AG, the world's largest maker of business-management software, said profit increased 23% in the first quarter as license revenue rose for the first time in almost 3 years, boosted by U.S. spending. SAP's CEO Kagermann said orders in the U.S. look very good compared with last year.
Late-Night Trading
Asian Indices -1.25% to +.50%.
S&P 500 indicated -.09%.
NASDAQ indicated +.03%.
BOTTOM LINE: The bond market's reaction to the PPI and Initial Jobless Claims reports tomorrow will likely dictate the direction of the stock market. Corporate earnings are coming in significantly above expectations once again, however many stocks are selling off on good news, thus the P/E on the S&P 500 is contracting further. Tech stocks appear as though they are headed lower in the short-run, however I would use any weakness over the next couple of months to build long positions as I think tech will outperform in the second half of the year. I also continue to believe 04 will be a good year for stocks. Double-digit gains should be expected in the major U.S. indices, on top of last year's strong performances.
Thursday, April 22, 2004
Wednesday, April 21, 2004
Wednesday Close
S&P 500 1,124.09 +.53%
NASDAQ 1,995.63 +.86%
Leading Sectors
Wireless +3.38%
Hospitals +2.69%
Airlines +2.46%
Lagging Sectors
Fashion -1.32%
Papers -1.43%
Nanotechnology -1.54%
Other
Crude Oil 35.82 +.25%
Natural Gas 5.61 +.41%
Gold 391.70 +.08%
Base Metals 108.32 -5.30%
U.S. Dollar 91.08 -.04%
10-Yr. Long-Bond Yield 4.42% -.72%
VIX 15.60 -6.42%
Put/Call .70 -12.50%
NYSE Arms .52 -57.02%
After-hours Movers
JNPR -7.08% on profit-taking after beating 1Q estimates and raising 2Q guidance.
KLAC -8.51% after beating 3Q estimates, but disappointing 4Q guidance.
ERES +4.35% after beating 1Q estimates, announcing 3-for-2 stock split, 500,000 share buyback and raising 2Q/04 forecast.
EYE +4.88% after beating 1Q estimates and raising 04 guidance.
ASCL -17.57% after missing 1Q estimates substantially and lowering 2Q guidance.
SSTI -7.72% on profit-taking after beating 1Q estimates and raising 2Q guidance.
PLXS -10.97% on profit-taking after meeting 2Q estimates and raising 3Q guidance.
CTXS -11.95% after beating 1Q estimates, raising 2Q sales estimate, but lowering 2Q profit forecast.
AFCO -5.71% after missing 3Q estimates and weak guidance.
Recommendations
Goldman Sachs reiterated Outperform on UTX, SKYW, KO, RCL and Underperform on PLXS and OMI.
After-hours News
U.S. stocks finished higher Wednesday as Fed Chairman Greenspan said the U.S. economy is vigorous and broad-based inflation was not a problem as unit labor costs remain subdued. After the close, The Street.Com reported that Sony is in advance talks to join two buyout firms in a $5B acquisition of movie studio Metro-Goldwyn-Mayer. eBay said first-quarter earning surged 92% as more people listed items for sale and used its PayPal e-mail payment service. eBay also raised 04 profit and revenue forecasts, Bloomberg reported. Qualcomm said second-quarter profit more than quadrupled on surging demand for phones based on CDMA technology, Bloomberg reported. China conceded to U.S. demands to crackdown on the piracy of software and movies and abandon a standard for wireless encryption opposed by Intel and other chip companies, Bloomberg reported.
BOTTOM LINE: The Portfolio rose slightly today as one of my shorts fell substantially in afternoon trading, offsetting small loses elsewhere. I added to a couple of short positions in the afternoon and took profits in a few longs, bringing the Portfolio to a market neutral position(longs-shorts=0). I still feel that the market, specifically technology stocks, may have more work to do on the downside in the short-run. Complacency by investors is still too high. On a more positive note, China's talking down its economy and threatening to raise interest rates seems to be working. China's insatiable demand for raw materials has been one of the key drivers of commodity price increases. Commodity prices, as measured by the CRB Index, broke down through their 6-month uptrend line today. A rising U.S. dollar also pressures commodity prices. This should help the U.S. economy later in the year as investors begin to realize that a substantial rise in inflation is not in the cards for the foreseeable future.
NASDAQ 1,995.63 +.86%
Leading Sectors
Wireless +3.38%
Hospitals +2.69%
Airlines +2.46%
Lagging Sectors
Fashion -1.32%
Papers -1.43%
Nanotechnology -1.54%
Other
Crude Oil 35.82 +.25%
Natural Gas 5.61 +.41%
Gold 391.70 +.08%
Base Metals 108.32 -5.30%
U.S. Dollar 91.08 -.04%
10-Yr. Long-Bond Yield 4.42% -.72%
VIX 15.60 -6.42%
Put/Call .70 -12.50%
NYSE Arms .52 -57.02%
After-hours Movers
JNPR -7.08% on profit-taking after beating 1Q estimates and raising 2Q guidance.
KLAC -8.51% after beating 3Q estimates, but disappointing 4Q guidance.
ERES +4.35% after beating 1Q estimates, announcing 3-for-2 stock split, 500,000 share buyback and raising 2Q/04 forecast.
EYE +4.88% after beating 1Q estimates and raising 04 guidance.
ASCL -17.57% after missing 1Q estimates substantially and lowering 2Q guidance.
SSTI -7.72% on profit-taking after beating 1Q estimates and raising 2Q guidance.
PLXS -10.97% on profit-taking after meeting 2Q estimates and raising 3Q guidance.
CTXS -11.95% after beating 1Q estimates, raising 2Q sales estimate, but lowering 2Q profit forecast.
AFCO -5.71% after missing 3Q estimates and weak guidance.
Recommendations
Goldman Sachs reiterated Outperform on UTX, SKYW, KO, RCL and Underperform on PLXS and OMI.
After-hours News
U.S. stocks finished higher Wednesday as Fed Chairman Greenspan said the U.S. economy is vigorous and broad-based inflation was not a problem as unit labor costs remain subdued. After the close, The Street.Com reported that Sony is in advance talks to join two buyout firms in a $5B acquisition of movie studio Metro-Goldwyn-Mayer. eBay said first-quarter earning surged 92% as more people listed items for sale and used its PayPal e-mail payment service. eBay also raised 04 profit and revenue forecasts, Bloomberg reported. Qualcomm said second-quarter profit more than quadrupled on surging demand for phones based on CDMA technology, Bloomberg reported. China conceded to U.S. demands to crackdown on the piracy of software and movies and abandon a standard for wireless encryption opposed by Intel and other chip companies, Bloomberg reported.
BOTTOM LINE: The Portfolio rose slightly today as one of my shorts fell substantially in afternoon trading, offsetting small loses elsewhere. I added to a couple of short positions in the afternoon and took profits in a few longs, bringing the Portfolio to a market neutral position(longs-shorts=0). I still feel that the market, specifically technology stocks, may have more work to do on the downside in the short-run. Complacency by investors is still too high. On a more positive note, China's talking down its economy and threatening to raise interest rates seems to be working. China's insatiable demand for raw materials has been one of the key drivers of commodity price increases. Commodity prices, as measured by the CRB Index, broke down through their 6-month uptrend line today. A rising U.S. dollar also pressures commodity prices. This should help the U.S. economy later in the year as investors begin to realize that a substantial rise in inflation is not in the cards for the foreseeable future.
Mid-day Update
S&P 500 1,121.69 +.32%
NASDAQ 1,986.04 +.38%
Leading Sectors
Wireless +3.15%
Hospitals +2.65%
Airlines +2.08%
Lagging Sectors
Nanotechnology -1.42%
Papers -1.53%
Iron/Steel -2.28%
Other
Crude Oil 35.99 -1.40%
Natural Gas 5.58 +.58%
Gold 394.50 -.95%
Base Metals 108.32 -5.30%
U.S. Dollar 90.93 +.49%
10-Yr. Long-Bond Yield 4.43% -.63%
VIX 16.01 -3.96%
Put/Call .75 -6.25%
NYSE Arms .57 -52.89%
Market Movers
MOT +18.55% after significantly beating 1Q estimates, raising 2Q guidance substantially and multiple upgrades.
F +10.12% after significantly beating 1Q estimates, raising 2Q and 04 guidance substantially and multiple upgrades.
SANM +14.7% after beating 2Q estimates and multiple upgrades.
FLIR +14.4% after beating 2Q estimates and raising 04 forecast.
Education Stocks up across the board on strong earnings from CECO and COCO.
POWI +9.12% on American Technology upgrade to Buy.
UTEK -21.05% after missing 1Q estimates.
WEBX -21.59% after meeting 1Q estimates, but lowering 2Q and 04 forecast.
DV -14.02% after missing 2Q estimates and CSFB downgrade to Underperform.
ISSX -14.84% after missing 1Q estimates and lowering 2Q and 04 forecast.
ACS -8.6% after missing 3Q forecast and lowering guidance.
SCSS -12.27% after meeting 1Q estimates, lowering 2Q guidance and raising 04 forecast.
Economic Data
None of note.
Recommendations
MOT raised to Sector Outperform at CIBC, target $25. GPI, CAO and PBY rated Outperform at Thomas Weisel. STX cut to Sell at Thomas Weisel. WSH raised to Overweight at Prudential, target $45. MXIM raised to Overweight at Prudential, target $58. MRVL, AGR/A and STM cut to Underweight at Prudential. NCI rated Outperform at CSFB, target $23. DV cut to Underperform at CSFB. GDW raised to Outperform at Bear Stearns, target $122. BCR raised to Outperform at Bear, target $115. SANM raised to Outperform at Bear, target $16. Goldman Sachs reiterated Outperform on MO, WMT, CFC, VIAB, ACS, DTV, CCU, VIAB, CDL, WON, CTSH and STA. Goldman reiterated Underperform on IPC, AMCC and SLG. Goldman downgraded OSI to Underperform. Citi Smith Barney said to Buy HLT based on belief they will materially increase dividend within next couple of quarters. Citi reiterated view that risk to oil prices is on the downside. Citi reiterated Sell on STX, target $7. Citi raised estimates and target to $25 on MOT. Citi Strongly reiterated Buy on WFC, target $67. Citi reiterated Buy on CKFR, target $39.
Mid-day News
U.S. stocks are mostly higher mid-day as Fed Chairman Greenspan said the U.S. economy is growing vigorously without any signs of broad-based inflation as unit labor costs remain subdued. Ask Jeeves CEO told CNBC that his company is big enough to avoid being bought after it agreed last month to acquire Interactive Search Holdings. A car bomb exploded today in the center of Saudi Arabia's capital, Riyadh, killing one. Five other bombs were defused, Saudi tv reported. Time Warner's AOL unit plans to widen its Internet audience and boost advertising sales by making some content free and more accessible to subscribers, the Wall Street Journal reported. Syria has given weapons to opposition forces in Iraq and has helped them cross the border, the Washington Times reported. The U.S. economy is in a "vigorous expansion" that has not yet produced "broad-based" inflation pressures, Fed Chairman Greenspan said. He said that while unit labor costs, which account for 70% of inflation, no longer seem to be falling rapidly, those costs have yet to post a decisive upturn. He also said, "As I have noted previously, the fed funds rate must rise at some point to prevent pressures on price inflation from eventually emerging." Separately, the Fed's Parry said, "The Fed will have to raise rates significantly at some point to prevent growth from triggering inflation."
BOTTOM LINE: The Portfolio is down slightly today as one of my longs is falling on its earnings report and my shorts are mostly higher. Greenspan and Parry's comments taken together lead me to conclude that the Fed will move sooner rather than later and they are in the initial stages of preparing the markets for this. I still expect the first rate hike at the June 28-30 meeting, barring several weaker-than-expected jobs reports. I have not traded today and the Portfolio is still 25% net long.
NASDAQ 1,986.04 +.38%
Leading Sectors
Wireless +3.15%
Hospitals +2.65%
Airlines +2.08%
Lagging Sectors
Nanotechnology -1.42%
Papers -1.53%
Iron/Steel -2.28%
Other
Crude Oil 35.99 -1.40%
Natural Gas 5.58 +.58%
Gold 394.50 -.95%
Base Metals 108.32 -5.30%
U.S. Dollar 90.93 +.49%
10-Yr. Long-Bond Yield 4.43% -.63%
VIX 16.01 -3.96%
Put/Call .75 -6.25%
NYSE Arms .57 -52.89%
Market Movers
MOT +18.55% after significantly beating 1Q estimates, raising 2Q guidance substantially and multiple upgrades.
F +10.12% after significantly beating 1Q estimates, raising 2Q and 04 guidance substantially and multiple upgrades.
SANM +14.7% after beating 2Q estimates and multiple upgrades.
FLIR +14.4% after beating 2Q estimates and raising 04 forecast.
Education Stocks up across the board on strong earnings from CECO and COCO.
POWI +9.12% on American Technology upgrade to Buy.
UTEK -21.05% after missing 1Q estimates.
WEBX -21.59% after meeting 1Q estimates, but lowering 2Q and 04 forecast.
DV -14.02% after missing 2Q estimates and CSFB downgrade to Underperform.
ISSX -14.84% after missing 1Q estimates and lowering 2Q and 04 forecast.
ACS -8.6% after missing 3Q forecast and lowering guidance.
SCSS -12.27% after meeting 1Q estimates, lowering 2Q guidance and raising 04 forecast.
Economic Data
None of note.
Recommendations
MOT raised to Sector Outperform at CIBC, target $25. GPI, CAO and PBY rated Outperform at Thomas Weisel. STX cut to Sell at Thomas Weisel. WSH raised to Overweight at Prudential, target $45. MXIM raised to Overweight at Prudential, target $58. MRVL, AGR/A and STM cut to Underweight at Prudential. NCI rated Outperform at CSFB, target $23. DV cut to Underperform at CSFB. GDW raised to Outperform at Bear Stearns, target $122. BCR raised to Outperform at Bear, target $115. SANM raised to Outperform at Bear, target $16. Goldman Sachs reiterated Outperform on MO, WMT, CFC, VIAB, ACS, DTV, CCU, VIAB, CDL, WON, CTSH and STA. Goldman reiterated Underperform on IPC, AMCC and SLG. Goldman downgraded OSI to Underperform. Citi Smith Barney said to Buy HLT based on belief they will materially increase dividend within next couple of quarters. Citi reiterated view that risk to oil prices is on the downside. Citi reiterated Sell on STX, target $7. Citi raised estimates and target to $25 on MOT. Citi Strongly reiterated Buy on WFC, target $67. Citi reiterated Buy on CKFR, target $39.
Mid-day News
U.S. stocks are mostly higher mid-day as Fed Chairman Greenspan said the U.S. economy is growing vigorously without any signs of broad-based inflation as unit labor costs remain subdued. Ask Jeeves CEO told CNBC that his company is big enough to avoid being bought after it agreed last month to acquire Interactive Search Holdings. A car bomb exploded today in the center of Saudi Arabia's capital, Riyadh, killing one. Five other bombs were defused, Saudi tv reported. Time Warner's AOL unit plans to widen its Internet audience and boost advertising sales by making some content free and more accessible to subscribers, the Wall Street Journal reported. Syria has given weapons to opposition forces in Iraq and has helped them cross the border, the Washington Times reported. The U.S. economy is in a "vigorous expansion" that has not yet produced "broad-based" inflation pressures, Fed Chairman Greenspan said. He said that while unit labor costs, which account for 70% of inflation, no longer seem to be falling rapidly, those costs have yet to post a decisive upturn. He also said, "As I have noted previously, the fed funds rate must rise at some point to prevent pressures on price inflation from eventually emerging." Separately, the Fed's Parry said, "The Fed will have to raise rates significantly at some point to prevent growth from triggering inflation."
BOTTOM LINE: The Portfolio is down slightly today as one of my longs is falling on its earnings report and my shorts are mostly higher. Greenspan and Parry's comments taken together lead me to conclude that the Fed will move sooner rather than later and they are in the initial stages of preparing the markets for this. I still expect the first rate hike at the June 28-30 meeting, barring several weaker-than-expected jobs reports. I have not traded today and the Portfolio is still 25% net long.
Wednesday Watch
Earnings Announcements
Company/Estimate
AFFX/-.08
AGI/.27
ALTR/.13
AMR/-1.04
CDN/.10
EBAY/.26
ERES/.18
FFIV/.14
F/.44
GD/1.19
HET/.66
JPM/.87
JNPR/.08
PFCB/.27
QCOM/.48
SIRI/-.10
SBUX/.17
TDW/.18
Splits
MTLM 2-for-1
Economic Data
Fed's Beige Book
Recommendations
Goldman Sachs reiterated Outperform on BSX, CAKE, ZION, TRMS, USB, COH, AHC, MUR. GS reiterated Underperform on INFA, DO and FSS.
Late-Night News
Asian indices are mixed on strength in Korea and weakness in Hong Kong. Hynix Semi will be able to survive alone because of a stronger semiconductor industry, JoonAng Ilbo reported. Carlyle Group, a U.S. private equity company, plans to invest as much as $1B in China during the next 18 months, the Asian Wall Street Journal reported. PricewaterhouseCoopers is willing to certify that Bank of China's bad loans are just one percentage point higher than the level estimated by the bank, the Financial Times reported.
Late-Night Trading
Asian Indices -1.0% to +1.0%.
S&P 500 indicated +.18%.
NASDAQ indicated +.63%.
BOTTOM LINE: Tech stocks are trading higher late-night on the heels of Motorola's exceptionally strong report. I expect Greenspan to begin hinting at an impending rate hike tomorrow. The markets took his positive comments today very poorly. I expect we have further downside in the short-run as there is still too much investor complacency as evidenced by the Put/Call, Arms, Bullish % and VIX readings. The Portfolio is 25% net long and I will likely initiate new shorts on any significant strength in the short-run.
Company/Estimate
AFFX/-.08
AGI/.27
ALTR/.13
AMR/-1.04
CDN/.10
EBAY/.26
ERES/.18
FFIV/.14
F/.44
GD/1.19
HET/.66
JPM/.87
JNPR/.08
PFCB/.27
QCOM/.48
SIRI/-.10
SBUX/.17
TDW/.18
Splits
MTLM 2-for-1
Economic Data
Fed's Beige Book
Recommendations
Goldman Sachs reiterated Outperform on BSX, CAKE, ZION, TRMS, USB, COH, AHC, MUR. GS reiterated Underperform on INFA, DO and FSS.
Late-Night News
Asian indices are mixed on strength in Korea and weakness in Hong Kong. Hynix Semi will be able to survive alone because of a stronger semiconductor industry, JoonAng Ilbo reported. Carlyle Group, a U.S. private equity company, plans to invest as much as $1B in China during the next 18 months, the Asian Wall Street Journal reported. PricewaterhouseCoopers is willing to certify that Bank of China's bad loans are just one percentage point higher than the level estimated by the bank, the Financial Times reported.
Late-Night Trading
Asian Indices -1.0% to +1.0%.
S&P 500 indicated +.18%.
NASDAQ indicated +.63%.
BOTTOM LINE: Tech stocks are trading higher late-night on the heels of Motorola's exceptionally strong report. I expect Greenspan to begin hinting at an impending rate hike tomorrow. The markets took his positive comments today very poorly. I expect we have further downside in the short-run as there is still too much investor complacency as evidenced by the Put/Call, Arms, Bullish % and VIX readings. The Portfolio is 25% net long and I will likely initiate new shorts on any significant strength in the short-run.
Tuesday, April 20, 2004
Tuesday Close
S&P 500 1,118.15 -1.56%
NASDAQ 1,978.63 -2.07%
Leading Sectors
Fashion +.80%
Hospitals +.74%
Airlines +.16%
Lagging Sectors
Homebuilders -2.82%
Networking -3.52%
Semis -3.56%
Other
Crude Oil 36.20 -.82%
Natural Gas 5.55 -.14%
Gold 394.00 -1.08%
Base Metals 114.38 -.60%
U.S. Dollar 90.49 +.77%
10-Yr. Long-Bond Yield 4.41% +.60%
VIX 16.67 +8.11%
Put/Call .80 +21.21%
NYSE Arms 1.21 +24.74%
After-hours Movers
MOT +21.1% after beating 1Q estimates substantially and raising 2Q guidance substantially.
CVTX +6.95% after saying data from a recent study on its Ranexa drug shows positive results.
CACS +15.2% after beating 1Q estimates.
MKSI +9.07% after beating 1Q estimates substantially and raising 2Q guidance.
EZPW +14.95% after beating 2Q estimates and boosting 04 forecast.
SCSS -11.01% after meeting 1Q estimate, but lowering 2Q guidance.
WEBX -10.02% after meeting 1Q estimate, but lowering 04 forecast.
ISSX -7.81% after missing 1Q estimate.
ACS -7.32% after missing 3Q estimates, maintaining forecast.
SNTO -9.71% exceeding 4Q estimates, but disappointing guidance.
CALM -6.48% after announcing a 5M share secondary.
Recommendations
Goldman Sachs reiterated Outperform on TRI, CTSH, ALL, PFE, TRMS and STN.
After-hours News
U.S. stocks finished solidly lower today after bonds fell in response to comments by Alan Greenspan about the strength of the economy. After the close, General Electric's NBC said it has received FTC approval to acquire Vivendi Universal's U.S. entertainment assets, CNBC reported. U.S. venture capital funds are outpacing their European counterparts, raising almost 8 times more money in the first-quarter of 04 than a year ealier, the Financial Times said. California Governor Schwarzenegger signed an executive order calling for a network of 200 hydrogen fuel stations to be built along major highways in California by the end of the decade as a way to encourage consumers to buy clean air vehicles, Bloomberg reported. Motorola(MOT) said first-quarter profit tripled to the highest since at least 1990 as handset sales surged 67%, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today as my shorts could not offset losses in long positions. I added a few more shorts and exited a couple of winning longs in the afternoon, leaving the Portfolio with 25% net long market exposure. The weakness I expected in the tech sector came to fruition late in the afternoon, as traders used rising interest rates as an excuse to sell shares. Greenspan basically said the economy is doing very well, will continue to do well and that companies are slowly regaining some pricing power. These very obvious observations resulted in the large afternoon sell-off. I expect the Fed will broadly telegraph its first rate hike, which should occur at the June 28-30 meeting. Once the timing is certain, the U.S. equity markets can start working higher and eventually resume their bull run after it becomes clear that destructive inflation is not a problem. Until this time, I expect tech and interest-rate sensitive sectors to continue to underperform and the broad market to remain slightly negative to neutral.
NASDAQ 1,978.63 -2.07%
Leading Sectors
Fashion +.80%
Hospitals +.74%
Airlines +.16%
Lagging Sectors
Homebuilders -2.82%
Networking -3.52%
Semis -3.56%
Other
Crude Oil 36.20 -.82%
Natural Gas 5.55 -.14%
Gold 394.00 -1.08%
Base Metals 114.38 -.60%
U.S. Dollar 90.49 +.77%
10-Yr. Long-Bond Yield 4.41% +.60%
VIX 16.67 +8.11%
Put/Call .80 +21.21%
NYSE Arms 1.21 +24.74%
After-hours Movers
MOT +21.1% after beating 1Q estimates substantially and raising 2Q guidance substantially.
CVTX +6.95% after saying data from a recent study on its Ranexa drug shows positive results.
CACS +15.2% after beating 1Q estimates.
MKSI +9.07% after beating 1Q estimates substantially and raising 2Q guidance.
EZPW +14.95% after beating 2Q estimates and boosting 04 forecast.
SCSS -11.01% after meeting 1Q estimate, but lowering 2Q guidance.
WEBX -10.02% after meeting 1Q estimate, but lowering 04 forecast.
ISSX -7.81% after missing 1Q estimate.
ACS -7.32% after missing 3Q estimates, maintaining forecast.
SNTO -9.71% exceeding 4Q estimates, but disappointing guidance.
CALM -6.48% after announcing a 5M share secondary.
Recommendations
Goldman Sachs reiterated Outperform on TRI, CTSH, ALL, PFE, TRMS and STN.
After-hours News
U.S. stocks finished solidly lower today after bonds fell in response to comments by Alan Greenspan about the strength of the economy. After the close, General Electric's NBC said it has received FTC approval to acquire Vivendi Universal's U.S. entertainment assets, CNBC reported. U.S. venture capital funds are outpacing their European counterparts, raising almost 8 times more money in the first-quarter of 04 than a year ealier, the Financial Times said. California Governor Schwarzenegger signed an executive order calling for a network of 200 hydrogen fuel stations to be built along major highways in California by the end of the decade as a way to encourage consumers to buy clean air vehicles, Bloomberg reported. Motorola(MOT) said first-quarter profit tripled to the highest since at least 1990 as handset sales surged 67%, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today as my shorts could not offset losses in long positions. I added a few more shorts and exited a couple of winning longs in the afternoon, leaving the Portfolio with 25% net long market exposure. The weakness I expected in the tech sector came to fruition late in the afternoon, as traders used rising interest rates as an excuse to sell shares. Greenspan basically said the economy is doing very well, will continue to do well and that companies are slowly regaining some pricing power. These very obvious observations resulted in the large afternoon sell-off. I expect the Fed will broadly telegraph its first rate hike, which should occur at the June 28-30 meeting. Once the timing is certain, the U.S. equity markets can start working higher and eventually resume their bull run after it becomes clear that destructive inflation is not a problem. Until this time, I expect tech and interest-rate sensitive sectors to continue to underperform and the broad market to remain slightly negative to neutral.
Technical Difficulties
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