S&P 500 1,120.48 -.17%
NASDAQ 1,973.20 -.82%
Leading Sectors
Insurance +.63%
Banks +.46%
Drugs +.42%
Lagging Sectors
Oil Service -2.48%
Homebuilders -2.41%
Semis -2.92%
Other
Crude Oil 37.05 -1.12%
Natural Gas 5.93 -.52%
Gold 387.10 +.36%
Base Metals 103.45 +.57%
U.S. Dollar 90.66 -.55%
10-Yr. Long-Bond Yield 4.55% +1.09%
VIX 16.35 +.37%
Put/Call .86 -1.15%
NYSE Arms 1.02 -46.32%
Market Movers
MACR +18.9% after substantially beating 4Q estimates, raising 1Q guidance and multiple upgrades.
MANT +15.4% after beating 1Q estimates, raising 2Q/04 guidance and multiple upgrades.
TARO -27.4% after disappointing 1Q earnings and multiple downgrades.
VAS -17.1% after missing 1Q estimates and JP Morgan downgrade to Underweight.
INSP -9.9% after disappointing 1Q and 2Q guidance.
ACH -6.2% on continued selling of Chinese commodity stocks.
Economic Data
1Q GDP was 4.2% versus 5.0% estimate and 4.1% last quarter.
1Q Personal Consumption was 3.8% versus 4.2% estimate and 3.2% prior quarter.
1Q GDP Price Deflator was 2.5% versus 2.0% estimate and 1.5% last quarter.
1Q Employment Cost Index was 1.1% versus .9% estimate and .8% prior quarter.
Initial Jobless Claims for last week were 338K versus estimate of 343K and 356K prior week.
Continuing Claims were 3013K versus estimates of 2987K and 3010K prior.
Help Wanted Index for March was 39 versus 41 estimate and 40 in February.
Recommendations
Goldman Sachs reiterated Underperform on TCO, LSI, STA, SYMC and QLGC. GS reiterated Outperform on AL, N, NUE, STLD, AKS, NEM, PDG, MO, AHC, ATG, AET, ACS, EMC and ATI. JP Morgan cut CUB and VAS to Underweight. ASD rated Buy at Bank of America, target $130. DOV rated Buy at Bank of America, target $50. GE rated Buy at Bank America, target $36. HON rated Buy at Bank of America, target $42. TYC rated Buy at Bank of America, target $36. MACR raised to Buy at Merrill, target $26. SPW cut to Sell at Bank of America, target $40. MANT raised to Buy at Legg Mason, target $29. Merrill Lynch cut ACAI to Sell. Jim Cramer, of TheStreet.com, thinks commodity stocks are overdone on the downside.
Mid-day News
U.S. stocks are lower mid-day on a relatively disappointing GDP report, interest rates worries and concerns over the possible slowing of Chinese economic growth. The U.S. government estimates that 41 million Americans have higher-than-normal levels of blood sugar, classifying them as having pre-diabetes and at greater risk of developing the disease, the AP reported. Microsoft is very close to reaching an agreement in its antitrust case with the European Commission, Dow Jones reported. Nokia's market share dropped to 29% in the first quarter, the lowest in at least three years, as competitors such as Siemens shipped more attractive models, Bloomberg reported. Dow Chemical, the largest U.S. chemical marker, said first-quarter profit rose more than 600% on higher prices and greater demand for its products, Bloomberg reported. The U.S. economy expanded at a slower-than-expected 4.2% annual rate in the first quarter, Bloomberg reported. Sinclair Broadcasting ordered its ABC affiliates to preempt "Nightline", saying the show appears to be motivated by an anti-war political agenda. Sinclair which owns 62 U.S. television stations said ABC is disguising political statements as news content, Bloomberg reported. U.S. Treasuries are falling, pushing the yield on the benchmark 10-yr note to a seven-month high, after a surge in measures of inflation tied to the first-quarter GDP report.
BOTTOM LINE: The Portfolio is up slightly today as my shorts are falling more than my longs. I added a few new shorts in the retail and homebuilding sectors in the morning, bringing the Portfolio's market exposure to 25% net short. I was very surprised by the very good, but below-expectations, GDP report and even more surprised by the bond market's reaction. Bond investors are focusing on the higher-than-expected inflation readings in the report rather than the actual report. This does not bode well for the short-term direction of interest rates. While the 4.2% GDP number was below expectations, it likely gives the Fed a little more room to hike rates at a gradual pace. As well, commodity prices continue to fall. Thus, the current higher-than-expected readings on inflation should be temporary and will likely decelerate throughout the remainder of the year. The semiconductor index(SOX) has now clearly breached its 200-day moving-average. This likely means more damage to the overall tech sector and the broader market to an extent. The daily drumbeat of negativity from the mainstream press has turned investor psychology very negative even as the sentiment indicators are not overly bearish. This usually indicates further downside with an eventual spike-up in fear indicators such as the VIX, ARMS and Put/Call ratio signaling a short-to-intermediate term bottom.
Thursday, April 29, 2004
Thursday Watch
Earnings Announcements
Company/Estimate
APCC/.19
ANDW/.11
CELL/.20
BOBJ/.15
CE/.17
COX/.05
DOW/.43
DUK/.37
ERTS/.21
XOM/.75
FIC/.42
FDRY/.17
FLML/.03
GR/.36
IM/.24
KROL/.30
MCK/.65
MGM/-.08
NTES/.37
PTEN/.26
Splits
None of note.
Economic Data
1Q Gross Domestic Product estimated +5.0% versus 4Q growth of 4.1%.
1Q Personal Consumption estimated +4.2% versus 4Q growth of 3.2%
1Q Employment Cost Index estimated +.9% versus +.8% in 4Q.
Initial Jobless Claims last week estimated at 343K versus 353K prior week.
Continuing Claims estimated 2987K versus 3019K prior week.
Help Wanted Index for March estimated at 41 versus 40 in February.
Recommendations
Goldman Sachs reiterated Outperform on AG, KMT, PPL, WON, DRE, BIIB, STLD, MO, OG, and NUE. GS reiterated Underperform on NFG, EQR, GSIC and HRB.
Late-Night News
Asian indices are down across the board after the Chinese government called on its banks to restrict lending and stopped construction of a $1.3 billion steel plant, as it escalates attempts to slow the economy, Bloomberg reported. China has already raised banks' reserve ratio, restricted lending to the steel, cement and aluminum industries and banned new construction projects to slow the economy and prevent inflation. Still, the second-largest economy in Asia grew at a faster-than-expected 9.7% in the first quarter with investment jumping 53% in the first 2 months, including a 173% increase in money invested in the steel industry, Bloomberg reported.
Late-Night Trading
Asian Indices -3.25% to -.50%.
S&P 500 indicated -.08%.
NASDAQ indicated -.10%.
BOTTOM LINE: I expect U.S. stocks to open lower tomorrow as an exceptionally strong GDP report will likely push interest rates higher. I expect US 1st quarter GDP growth of around 6%, versus economists' expectations of 5%. Commodity-related stocks will probably remain under pressure as investors panic-sell any stock that has benefited from China. It is possible that the major U.S. indices could see a substantial sell-off tomorrow as bonds fall more than I currently anticipate. I will analyze the situation on the open and decide whether to increase or decrease market exposure.
Company/Estimate
APCC/.19
ANDW/.11
CELL/.20
BOBJ/.15
CE/.17
COX/.05
DOW/.43
DUK/.37
ERTS/.21
XOM/.75
FIC/.42
FDRY/.17
FLML/.03
GR/.36
IM/.24
KROL/.30
MCK/.65
MGM/-.08
NTES/.37
PTEN/.26
Splits
None of note.
Economic Data
1Q Gross Domestic Product estimated +5.0% versus 4Q growth of 4.1%.
1Q Personal Consumption estimated +4.2% versus 4Q growth of 3.2%
1Q Employment Cost Index estimated +.9% versus +.8% in 4Q.
Initial Jobless Claims last week estimated at 343K versus 353K prior week.
Continuing Claims estimated 2987K versus 3019K prior week.
Help Wanted Index for March estimated at 41 versus 40 in February.
Recommendations
Goldman Sachs reiterated Outperform on AG, KMT, PPL, WON, DRE, BIIB, STLD, MO, OG, and NUE. GS reiterated Underperform on NFG, EQR, GSIC and HRB.
Late-Night News
Asian indices are down across the board after the Chinese government called on its banks to restrict lending and stopped construction of a $1.3 billion steel plant, as it escalates attempts to slow the economy, Bloomberg reported. China has already raised banks' reserve ratio, restricted lending to the steel, cement and aluminum industries and banned new construction projects to slow the economy and prevent inflation. Still, the second-largest economy in Asia grew at a faster-than-expected 9.7% in the first quarter with investment jumping 53% in the first 2 months, including a 173% increase in money invested in the steel industry, Bloomberg reported.
Late-Night Trading
Asian Indices -3.25% to -.50%.
S&P 500 indicated -.08%.
NASDAQ indicated -.10%.
BOTTOM LINE: I expect U.S. stocks to open lower tomorrow as an exceptionally strong GDP report will likely push interest rates higher. I expect US 1st quarter GDP growth of around 6%, versus economists' expectations of 5%. Commodity-related stocks will probably remain under pressure as investors panic-sell any stock that has benefited from China. It is possible that the major U.S. indices could see a substantial sell-off tomorrow as bonds fall more than I currently anticipate. I will analyze the situation on the open and decide whether to increase or decrease market exposure.
Wednesday, April 28, 2004
Wednesday Close
S&P 500 1,122.41 -1.38%
NASDAQ 1,989.54 -2.12%
Leading Sectors
Utilities +.18%
Restaurants +.12%
Hospitals -.47%
Lagging Sectors
Homebuilders 3.15%
Nanotechnology -3.24%
Papers -3.58%
Other
Crude Oil 37.26 -.53%
Natural Gas 5.93 -.60%
Gold 384.80 -.29%
Base Metals 102.86 -4.18%
U.S. Dollar 91.17 +.84%
10-Yr. Long-Bond Yield 4.47% +1.94%
VIX 16.29 +8.10%
Put/Call .87 +22.54%
NYSE Arms 1.90 +62.39%
After-hours Movers
MACR +20.21% after beating 4Q estimates and raising 1Q guidance.
PHTN +6.13% after missing 2Q estimates, but raising 3Q guidance.
TWX +4.18% after beating 1Q estimates and raising 04 guidance.
JDSU -7.51% after meeting 3Q estimates and lowering 4Q guidance slightly
SWKS -7.75% on profit-taking after beating 2Q estimates and raising 3Q guidance.
Recommendations
Goldman Sachs reiterated Underperform on AKS, BMY, ACAI and Outperform on SYMC, ATI, FOX. GS says to Buy ROV on weakness. The Street.com has a positive column on PD, saying now is a good long-term entry point.
After-hours News
U.S. stocks finished sharply lower Wednesday on Nortel's ongoing scandal, higher interest rates and concerns about the health of the Chinese economy. After the close, Time Warner's CEO Richard Parsons told CNN that business is stabilizing and that "there's a lot more value there than we're getting credit for." Caterpillar forecast its China sales will grow 35% to $1 billion this year, the China Daily reported. The U.S. House voted to make permanent a tax cut for married couples that expires next year after retooling the legislation to allow more low-income Americans to claim a tax credit for working.
BOTTOM LINE: The Portfolio fell slightly today and I did not make any changes in the afternoon, leaving market exposure at 25% net long. Interest rates rose in anticipation of tomorrow's strong GDP report. Economists are expecting 1st quarter U.S. economic growth of 5.0%. I am expecting a number closer to 6.0%. Commodities continued their fall today on rising U.S. interest rates, a rising U.S. dollar and Chinese economic concerns.
NASDAQ 1,989.54 -2.12%
Leading Sectors
Utilities +.18%
Restaurants +.12%
Hospitals -.47%
Lagging Sectors
Homebuilders 3.15%
Nanotechnology -3.24%
Papers -3.58%
Other
Crude Oil 37.26 -.53%
Natural Gas 5.93 -.60%
Gold 384.80 -.29%
Base Metals 102.86 -4.18%
U.S. Dollar 91.17 +.84%
10-Yr. Long-Bond Yield 4.47% +1.94%
VIX 16.29 +8.10%
Put/Call .87 +22.54%
NYSE Arms 1.90 +62.39%
After-hours Movers
MACR +20.21% after beating 4Q estimates and raising 1Q guidance.
PHTN +6.13% after missing 2Q estimates, but raising 3Q guidance.
TWX +4.18% after beating 1Q estimates and raising 04 guidance.
JDSU -7.51% after meeting 3Q estimates and lowering 4Q guidance slightly
SWKS -7.75% on profit-taking after beating 2Q estimates and raising 3Q guidance.
Recommendations
Goldman Sachs reiterated Underperform on AKS, BMY, ACAI and Outperform on SYMC, ATI, FOX. GS says to Buy ROV on weakness. The Street.com has a positive column on PD, saying now is a good long-term entry point.
After-hours News
U.S. stocks finished sharply lower Wednesday on Nortel's ongoing scandal, higher interest rates and concerns about the health of the Chinese economy. After the close, Time Warner's CEO Richard Parsons told CNN that business is stabilizing and that "there's a lot more value there than we're getting credit for." Caterpillar forecast its China sales will grow 35% to $1 billion this year, the China Daily reported. The U.S. House voted to make permanent a tax cut for married couples that expires next year after retooling the legislation to allow more low-income Americans to claim a tax credit for working.
BOTTOM LINE: The Portfolio fell slightly today and I did not make any changes in the afternoon, leaving market exposure at 25% net long. Interest rates rose in anticipation of tomorrow's strong GDP report. Economists are expecting 1st quarter U.S. economic growth of 5.0%. I am expecting a number closer to 6.0%. Commodities continued their fall today on rising U.S. interest rates, a rising U.S. dollar and Chinese economic concerns.
Mid-day Update
S&P 500 1,126.34 -1.03%
NASDAQ 2,001.72 -1.52%
Leading Sectors
Restaurants +.77%
Utilities +.03%
Semis -.15%
Lagging Sectors
Biotech -2.33%
Nanotechnology -2.75%
Papers -2.83%
Other
Crude Oil 37.83 +.80%
Natural Gas 5.86 -.24%
Gold 386.00 -3.31%
Base Metals 102.86 -4.18%
U.S. Dollar 91.15 +.83%
10-Yr. Long-Bond Yield 4.45% +1.71%
VIX 16.15 +7.17%
Put/Call .86 +21.13%
NYSE Arms 1.87 +59.83%
Market Movers
NT -26.0% after saying it fired its CEO, former CFO an controller, all for cause. Also said it would restate three year's worth of financial results covering 2000-2003 and delay 1Q results.
SINA -13.0% on Chinese economic concerns after beating 1Q estimate and raising 2Q guidance.
FLEX -7.0% on NT concerns after beating 1Q estimate and raising 04 forecast.
NET -11.60% after missing 1Q estimates and lowering 2Q forecast substantially.
OSIP -10.0% on profit-taking.
CELG -11.16% after stopping a test of its Revlimid medicine after early results failed to show it helped skin-cancer patients live longer.
FTFC +22.69% after announcing it will be acquired by ASBC for $26.79/share.
ECLP +16.65% after meeting 1Q estimates.
GTRC +12.29% after beating 1Q estimate and raising 2Q forecast.
PLT +17.02% after beating 4Q estimate and raising 1Q forecast.
KSWS -20.14% after beating 1Q estimates and substantially lowering 2Q/04 forecast.
MAGS -20.4% after disappointing 1Q results.
INTL -16.14% after missing 1Q estimates.
COCO -12.0% after beating 3Q estimate and lowering 4Q guidance.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on AGR/A, CBL, NEM, CCE, AMLN, AHC, BSX, AL, STLD, PDG, X, HD, PETC, BHI and WON. GS raised NUE to Outperform. GS reiterated Underperform on F, BMY, HMT, ASH and RKY. Citi SmithBarney downgraded MU from Buy to Sell. Citi said to Buy APCC ahead of quarterly report, target $31. Citi upgraded MHP from Sell to Buy, target $90. Citi reiterated Buy on RCI, raised earning and target to $61. Citi reiterated Buy on BC, target $49. Citi rated AXL Buy, target $48. Citi rated BWA Buy, target $108. Citi rated MGA Buy, target $105. Citi rated SUP Sell, target $30. QLTI cut to Reduce at UBS. CIT raised to Buy at Legg Mason, target $44. ELX raised to Buy, target $20.50. CMCSA raised to Buy at Merrill, target $46. COL raised to Overweight at Morgan Stanley. CSGS raised to Raymond James, target $21. AXCA and Q removed from Focus List at JP Morgan. ETN raised to Outperform at Bear Stearns.
Mid-day News
U.S. stocks are sharply lower mid-day on concerns over the Chinese economy, rising interest rates and the continuing scandal at Nortel. VaxGen said it submitted a plan to the U.S. government to make 75 million doses of an experimental anthrax vaccine for a national stockpile. President Bush has approved measures to enhance the country's defenses against a biological weapons attack, including the creation of a surveillance system to track threats, the NY Times reported. IBM announced today it plans to build new server computers that act more like mainframes, the NY Times reported. Viacom's CBS was sued by Mohamed al-Fayed, the father of the man killed with Princess Diana in a 97 crash, for airing pictures of a dying Diana, Reuters reported. Comcast withdrew its $54.1 billion unsolicited bid for Walt Disney, Bloomberg reported. Boeing boosted its 2004-2005 profit forecasts because of better margins and higher-than-expected commercial-aircraft deliveries next year. Hilton Hotels first-quarter profit rose 400% because of increased business travel, Bloomberg reported. Copper futures fell to a 12-week low as some Chinese banks halted new loans in a government bid to slow the economy, signaling an erosion in demand for metal used in buildings, appliances and automobiles, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today on declines in technology and energy-related long positions. I trimmed a few more longs, leaving the Portfolio with 25% net long market exposure. Interest rates are increasing in anticipation of tomorrow's GDP report. If rates make new near-term lows tomorrow U.S. stocks will likely continue their recent sell-off. However, if rates fall on tomorrow's strong economic report, it may provide the catalyst for another upward thrust. There are two positives I see from today's mostly negative action. In a little over a month the CRB Index has now fallen over 5% as China's government continues to make comments about trying to slow recent torrid growth. Most of the Bear's inflation arguments revolve around rising commodity prices. A rising dollar and decelerating Chinese demand should continue to pressure commodity prices in the near-term. As well, it is positive that semiconductors are mostly unchanged today as the rest of tech is falling. Semis usually lead tech and this may be a sign that tech is trying to find a bottom. I expect stocks to remain under pressure in the afternoon as investors worry about the bond market's reaction to tomorrow's GDP report.
NASDAQ 2,001.72 -1.52%
Leading Sectors
Restaurants +.77%
Utilities +.03%
Semis -.15%
Lagging Sectors
Biotech -2.33%
Nanotechnology -2.75%
Papers -2.83%
Other
Crude Oil 37.83 +.80%
Natural Gas 5.86 -.24%
Gold 386.00 -3.31%
Base Metals 102.86 -4.18%
U.S. Dollar 91.15 +.83%
10-Yr. Long-Bond Yield 4.45% +1.71%
VIX 16.15 +7.17%
Put/Call .86 +21.13%
NYSE Arms 1.87 +59.83%
Market Movers
NT -26.0% after saying it fired its CEO, former CFO an controller, all for cause. Also said it would restate three year's worth of financial results covering 2000-2003 and delay 1Q results.
SINA -13.0% on Chinese economic concerns after beating 1Q estimate and raising 2Q guidance.
FLEX -7.0% on NT concerns after beating 1Q estimate and raising 04 forecast.
NET -11.60% after missing 1Q estimates and lowering 2Q forecast substantially.
OSIP -10.0% on profit-taking.
CELG -11.16% after stopping a test of its Revlimid medicine after early results failed to show it helped skin-cancer patients live longer.
FTFC +22.69% after announcing it will be acquired by ASBC for $26.79/share.
ECLP +16.65% after meeting 1Q estimates.
GTRC +12.29% after beating 1Q estimate and raising 2Q forecast.
PLT +17.02% after beating 4Q estimate and raising 1Q forecast.
KSWS -20.14% after beating 1Q estimates and substantially lowering 2Q/04 forecast.
MAGS -20.4% after disappointing 1Q results.
INTL -16.14% after missing 1Q estimates.
COCO -12.0% after beating 3Q estimate and lowering 4Q guidance.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on AGR/A, CBL, NEM, CCE, AMLN, AHC, BSX, AL, STLD, PDG, X, HD, PETC, BHI and WON. GS raised NUE to Outperform. GS reiterated Underperform on F, BMY, HMT, ASH and RKY. Citi SmithBarney downgraded MU from Buy to Sell. Citi said to Buy APCC ahead of quarterly report, target $31. Citi upgraded MHP from Sell to Buy, target $90. Citi reiterated Buy on RCI, raised earning and target to $61. Citi reiterated Buy on BC, target $49. Citi rated AXL Buy, target $48. Citi rated BWA Buy, target $108. Citi rated MGA Buy, target $105. Citi rated SUP Sell, target $30. QLTI cut to Reduce at UBS. CIT raised to Buy at Legg Mason, target $44. ELX raised to Buy, target $20.50. CMCSA raised to Buy at Merrill, target $46. COL raised to Overweight at Morgan Stanley. CSGS raised to Raymond James, target $21. AXCA and Q removed from Focus List at JP Morgan. ETN raised to Outperform at Bear Stearns.
Mid-day News
U.S. stocks are sharply lower mid-day on concerns over the Chinese economy, rising interest rates and the continuing scandal at Nortel. VaxGen said it submitted a plan to the U.S. government to make 75 million doses of an experimental anthrax vaccine for a national stockpile. President Bush has approved measures to enhance the country's defenses against a biological weapons attack, including the creation of a surveillance system to track threats, the NY Times reported. IBM announced today it plans to build new server computers that act more like mainframes, the NY Times reported. Viacom's CBS was sued by Mohamed al-Fayed, the father of the man killed with Princess Diana in a 97 crash, for airing pictures of a dying Diana, Reuters reported. Comcast withdrew its $54.1 billion unsolicited bid for Walt Disney, Bloomberg reported. Boeing boosted its 2004-2005 profit forecasts because of better margins and higher-than-expected commercial-aircraft deliveries next year. Hilton Hotels first-quarter profit rose 400% because of increased business travel, Bloomberg reported. Copper futures fell to a 12-week low as some Chinese banks halted new loans in a government bid to slow the economy, signaling an erosion in demand for metal used in buildings, appliances and automobiles, Bloomberg reported.
BOTTOM LINE: The Portfolio is down slightly today on declines in technology and energy-related long positions. I trimmed a few more longs, leaving the Portfolio with 25% net long market exposure. Interest rates are increasing in anticipation of tomorrow's GDP report. If rates make new near-term lows tomorrow U.S. stocks will likely continue their recent sell-off. However, if rates fall on tomorrow's strong economic report, it may provide the catalyst for another upward thrust. There are two positives I see from today's mostly negative action. In a little over a month the CRB Index has now fallen over 5% as China's government continues to make comments about trying to slow recent torrid growth. Most of the Bear's inflation arguments revolve around rising commodity prices. A rising dollar and decelerating Chinese demand should continue to pressure commodity prices in the near-term. As well, it is positive that semiconductors are mostly unchanged today as the rest of tech is falling. Semis usually lead tech and this may be a sign that tech is trying to find a bottom. I expect stocks to remain under pressure in the afternoon as investors worry about the bond market's reaction to tomorrow's GDP report.
Wednesday Watch
Earnings Announcements
Company/Estimate
AFCI/.08
BMY/.39
CMCSA/.06
EL/.35
FEIC/.08
HAL/.30
HLT/.06
INSP/.16
MGAM/.26
NEM/.34
PD/1.81
QLGC/.36
SOHU/.27
SWKS/.04
SYMC/.34
TWX/.09
ZBRA/.52
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on BHI, BSX, MUR, MMP and AFL. GS says to Buy ROH ahead of quarterly report.
Late-Night News
Asian indices are mixed on strength in Hong Kong/Australia and weakness in Taiwan/Korea. The European Central Bank signaled yesterday that the 10 countries which are about to join the European Union may have to wait years before they can adopt the euro, the Wall Street Journal reported. Sony fell as much as 3.3% after the company said it may post a weaker-than-expected 13% rise in net income this year. China's efforts to cool expansion in its steel, cement and other heavy industries are working, a central bank official said, suggesting interest rates may remain where they are unless inflation accelerates, Bloomberg reported.
Late-Night Trading
Asian Indices -1.25% to +.50%.
S&P 500 indicated -.06%.
NASDAQ indicated -.13%.
BOTTOM LINE: I expect U.S. stocks to remain mixed to lower tomorrow ahead of Thursday's 1st Quarter GDP report. My short-term trading indicators are giving conflicting signals and the tone of the market has not been good the last couple of days. The Portfolio is 50% net long heading into trading tomorrow.
Company/Estimate
AFCI/.08
BMY/.39
CMCSA/.06
EL/.35
FEIC/.08
HAL/.30
HLT/.06
INSP/.16
MGAM/.26
NEM/.34
PD/1.81
QLGC/.36
SOHU/.27
SWKS/.04
SYMC/.34
TWX/.09
ZBRA/.52
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on BHI, BSX, MUR, MMP and AFL. GS says to Buy ROH ahead of quarterly report.
Late-Night News
Asian indices are mixed on strength in Hong Kong/Australia and weakness in Taiwan/Korea. The European Central Bank signaled yesterday that the 10 countries which are about to join the European Union may have to wait years before they can adopt the euro, the Wall Street Journal reported. Sony fell as much as 3.3% after the company said it may post a weaker-than-expected 13% rise in net income this year. China's efforts to cool expansion in its steel, cement and other heavy industries are working, a central bank official said, suggesting interest rates may remain where they are unless inflation accelerates, Bloomberg reported.
Late-Night Trading
Asian Indices -1.25% to +.50%.
S&P 500 indicated -.06%.
NASDAQ indicated -.13%.
BOTTOM LINE: I expect U.S. stocks to remain mixed to lower tomorrow ahead of Thursday's 1st Quarter GDP report. My short-term trading indicators are giving conflicting signals and the tone of the market has not been good the last couple of days. The Portfolio is 50% net long heading into trading tomorrow.
Tuesday, April 27, 2004
Tuesday Close
S&P 500 1,138.15 +.23%
NASDAQ 2,032.53 -.21%
Leading Sectors
Oil Service +3.17%
Homebuilders +2.14%
Energy +1.86%
Lagging Sectors
Semis -1.35%
Networking -1.58%
Nanotechnology -2.59%
Other
Crude Oil 37.54 +.03%
Natural Gas 5.86 -.15%
Gold 399.80 +.18%
Base Metals 107.35 -.14%
U.S. Dollar 90.40 -.24%
10-Yr. Long-Bond Yield 4.39% -.82%
VIX 15.07 +2.03%
Put/Call .71 +9.23%
NYSE Arms 1.17 +10.38%
After-hours Movers
SNCI +13.59% after beating 1Q estimates.
MSTR +8.91% after beating 1Q estimates, lowering 2Q guidance, maintaining 04 forecast.
GTRC +6.49% after beating 1Q estimates and raising 2Q forecast.
ACLS +6.32% after beating 1Q estimates and raising 2Q forecast.
PLT +6.22% after beating 4Q estimates and raising 1Q guidance.
LPNT +4.29% after beating 1Q estimates.
NET -8.84% after missing 1Q estimates and lowering 2Q forecast.
NTIQ -7.87% after beating 3Q estimates and lowering 4Q guidance.
ZRAN -7.8% after beating 1Q estimates, lowering 2Q guidance and raising 04 forecast.
QSFT -7.65% after beating 1Q estimates and lowering 2Q forecast.
MNST -6.06% after beating 1Q estimates and leaving 2Q forecast unchanged.
Recommendations
Goldman Sachs reiterated Outperform on HD and BC.
After-hours News
U.S. stocks finished mixed Tuesday as better-than-expected economic numbers, falling interest rates and violence in the Middle East created above average volatility. After the close, Gillette said it may sign a $71.6 million advertising deal with Real Madrid and England soccer player David Beckham, the London-based Times said. The leaders of an interim government in Iraq, chosen by Iraqis, should be name by the end of May, and should use the time before they assume control of the government June 30 to define their relationship with U.S. military forces, said Brahimi, the United Nations' top envoy to Iraq. China Life Insurance said it received an "informal inquiry" from the SEC, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today and I exited some technology positions in the afternoon, bringing the Portfolio's market exposure to 50% net long. Today's breadth was disappointing, as well as the performance of the technology sector. However, the bond market's reaction to better-than-expected economic reports was a positive. If the GDP report Thur. is as strong as I expect(near 6%) and bonds don't fall much or rally, it could provide the catalyst for another upward thrust in stocks. A move substantially lower in bonds on a very strong number would likely signal that the major U.S. indices are still stuck in their recent trading range.
NASDAQ 2,032.53 -.21%
Leading Sectors
Oil Service +3.17%
Homebuilders +2.14%
Energy +1.86%
Lagging Sectors
Semis -1.35%
Networking -1.58%
Nanotechnology -2.59%
Other
Crude Oil 37.54 +.03%
Natural Gas 5.86 -.15%
Gold 399.80 +.18%
Base Metals 107.35 -.14%
U.S. Dollar 90.40 -.24%
10-Yr. Long-Bond Yield 4.39% -.82%
VIX 15.07 +2.03%
Put/Call .71 +9.23%
NYSE Arms 1.17 +10.38%
After-hours Movers
SNCI +13.59% after beating 1Q estimates.
MSTR +8.91% after beating 1Q estimates, lowering 2Q guidance, maintaining 04 forecast.
GTRC +6.49% after beating 1Q estimates and raising 2Q forecast.
ACLS +6.32% after beating 1Q estimates and raising 2Q forecast.
PLT +6.22% after beating 4Q estimates and raising 1Q guidance.
LPNT +4.29% after beating 1Q estimates.
NET -8.84% after missing 1Q estimates and lowering 2Q forecast.
NTIQ -7.87% after beating 3Q estimates and lowering 4Q guidance.
ZRAN -7.8% after beating 1Q estimates, lowering 2Q guidance and raising 04 forecast.
QSFT -7.65% after beating 1Q estimates and lowering 2Q forecast.
MNST -6.06% after beating 1Q estimates and leaving 2Q forecast unchanged.
Recommendations
Goldman Sachs reiterated Outperform on HD and BC.
After-hours News
U.S. stocks finished mixed Tuesday as better-than-expected economic numbers, falling interest rates and violence in the Middle East created above average volatility. After the close, Gillette said it may sign a $71.6 million advertising deal with Real Madrid and England soccer player David Beckham, the London-based Times said. The leaders of an interim government in Iraq, chosen by Iraqis, should be name by the end of May, and should use the time before they assume control of the government June 30 to define their relationship with U.S. military forces, said Brahimi, the United Nations' top envoy to Iraq. China Life Insurance said it received an "informal inquiry" from the SEC, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today and I exited some technology positions in the afternoon, bringing the Portfolio's market exposure to 50% net long. Today's breadth was disappointing, as well as the performance of the technology sector. However, the bond market's reaction to better-than-expected economic reports was a positive. If the GDP report Thur. is as strong as I expect(near 6%) and bonds don't fall much or rally, it could provide the catalyst for another upward thrust in stocks. A move substantially lower in bonds on a very strong number would likely signal that the major U.S. indices are still stuck in their recent trading range.
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