S&P 500 1,088.68 -.26%
NASDAQ 1,898.17 +.02%
Leading Sectors
Nanotechnology +2.20%
Fashion +1.87%
Networking +1.78%
Lagging Sectors
Hospitals -1.51%
Biotech -1.58%
Homebuilders -2.59%
Other
Crude Oil 41.59 +.22%
Natural Gas 6.48 +.42%
Gold 382.50 -.13%
Base Metals 102.67 +1.97%
U.S. Dollar 90.53 -.79%
10-Yr. T-note Yield 4.78% +1.05%
VIX 18.93 -2.07%
Put/Call .80 -13.98%
NYSE Arms 1.08 +33.33%
After-hours Movers
INTU -9.0% after beating 3Q estimates and lowering 4Q and 05 forecast.
SNPS +6.2% after beating 2Q estimates and raising 3Q guidance.
BBOX -11.86% after missing 4Q estimates.
CMOS +5.28% after significantly beating 2Q estimates and raising 3Q forecast substantially.
Recommendations
Goldman Sachs said key takeaway from day one of Steel Conference is that the very strong steel cycle is sustainable on strong demand, no signs of a slowing Chinese economy, stability in scrap prices, tight supply for carbon steel sheet, no price weakness and stainless demand/pricing improving. Goldman reiterated Outperform on GDT, FDC and ARG. Goldman said IBM has 22% upside from here.
After-hours News
U.S. stocks finished mildly lower Wednesday as climbing interest rates and energy prices led to afternoon profit-taking. After the close, Taiwan President Chen Shui-bian said his inaugural speech today will outline a positive approach to improving relations with China and will seek to repair U.S. ties strained by his pro-independence politics, the South China Morning Post reported. The U.S. government should continue filling the strategic petroleum reserve instead of releasing oil from it to lower prices temporarily, T. Boone Pickens told CNBC. American Airlines, United Airlines and Northwest Airlines raised fares in some markets after Continental Airlines boosted prices as much as $20 one way on higher jet fuel costs, Bloomberg reported. SBC Communications is facing the largest U.S. strike since 1997 after the union negotiating labor contract for 100,000 workers rebuffed the telephone company's latest offer and called a four-day walkout, Bloomberg said. Crude oil rose and gasoline futures surged today after the Energy Department said U.S. stockpiles of the motor fuel increased less than expected, Bloomberg reported.
BOTTOM LINE: The Portfolio had a good day today as a few of my tech and Chinese ADR longs rose substantially. However, performance was better earlier in the day. I took profits in a few longs and put on a few new shorts in the homebuilding and retail sectors in the afternoon. The Portfolio is now 75% net long. It was a very disappointing day for the Bulls as investors seem completed fixated on oil prices to the detriment of all other fundamentals. While I think a short-term bottom was made in most stocks last week, it appears that the market will need a few more weeks of consolidation before a real intermediate-term advance begins.
Wednesday, May 19, 2004
Mid-day Update
S&P 500 1,102.54 +1.01%
NASDAQ 1,929.61 +1.68%
Leading Sectors
Nanotechnology +3.74%
Networking +3.63%
Semis +3.46%
Lagging Sectors
Homebuilders -.17%
Hospitals -.19%
HMO's -.43%
Other
Crude Oil 41.15 +1.50%
Natural Gas 6.34 +2.94%
Gold 382.80 +1.84%
Base Metals 102.67 +1.97%
U.S. Dollar 90.56 -.76%
10-Yr. Long-Bond Yield 4.78% +.96%
VIX 17.86 -7.5%
Put/Call .66 -29.03%
NYSE Arms .44 -44.44%
Market Movers
HPQ +5.6% after beating 2Q revenue estimates and boosting 2nd half revenue forecast by $1B.
KROL +29.9% after announcing that MMC would acquire it for $1.9B in cash.
RIMM +6.59% on Legg Mason upgrade.
AMD +7.16% after announcing it established AMD China, enabling it to conduct an increased scope of business in the country.
SKYE +22.35% after winning U.S. FDA approval for their DepoDur pain treatment.
AMI +17.74% after it agreed to be acquired by CAH for about $1.62B. in cash.
DRIV +9.91% after positive comments at Piper Jaffray conference.
CCDC -19.71% after lowering 04 forecast.
ADSK -5.0% after beating 1Q estimates and lowering 2Q forecast.
Economic Data
None of note.
Recommendations
PHRM raised to Overweight at JP Morgan. PETM rated Buy at Deutsche Bank, target $32. UVN raised to Overweight at Moran Stanley, target $36. HPQ raised to Sector Outperform at CIBC, target $30. ERICY rated Buy at Legg Mason, target $31. RIMM rated Buy at Legg Mason, target $124. CNO rated Overweight at Morgan Stanley, target $24. Goldman Sachs reiterated Outperform on MERQ, UST and PEP. Goldman thinks EMS names are attractive at 18x CY05 estimates, favorites are SLR and CLS. Citi SmithBarney upgraded DNET to Buy, target $28. Citi rated MDT Buy, target $57. Citi rated GDT Sell, target $57. Citi reiterated Buy on BJ, target $30. Citi reiterated Buy on JCP, target $46. Citi reiterated Buy on DIS, target $32.
Mid-day News
U.S. stocks are higher mid-day on strong earnings reports and strength in Asia. PIMCO's Mohamed El-Erian, who manages more emerging-market debt than any other fund manager, told CNBC that credit fundamentals are improving in emerging markets. OPEC recognizes that near-record crude oil prices may hurt importing nations and can increase supply if needed, Bloomberg reported. The U.S. Department of Health and Human Services plans to speed up investigations of marketing practices by medical-device makers and may bring more charges of fraud and abuse, the Boston Globe reported. More than 100 companies are planning to submit offers for a five-year contract to provide phone and Internet connections for New York City agencies, in the first open-bid process, the New York Daily News reported. Pharmaceutical companies, seeking to cut costs and find new medicines as patents expire, are merging at a record pace this year, making the $430 billion global drug industry the most active acquisition market behind banking, Bloomberg said. Merrill Lynch picked Morningstar and BNY Jaywalk to provide research to its clients as part of the company's settlement with regulators over biased stock advice, Bloomberg reported. Manmohan Singh will form a Congress-led government to run India for the next five years after Sonia Gandhi, who led the party to a surprise election victory, said she wouldn't become prime minister, Bloomberg said. An index of U.S. mortgage applications fell 12% last week as home purchases slowed for the first time in more than a month and loan refinancing dropped to the lowest level since early January, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a very good day today as my Chinese cyclical and tech longs are rising substantially. Rising interest rates and energy prices are keeping U.S. stocks from rising even more. Volume and breadth are pretty good today and I would like to see stocks rally into the close as shorts cover and investors sense they have missed the bottom. I have not traded today and the Portfolio is still 125% net long.
NASDAQ 1,929.61 +1.68%
Leading Sectors
Nanotechnology +3.74%
Networking +3.63%
Semis +3.46%
Lagging Sectors
Homebuilders -.17%
Hospitals -.19%
HMO's -.43%
Other
Crude Oil 41.15 +1.50%
Natural Gas 6.34 +2.94%
Gold 382.80 +1.84%
Base Metals 102.67 +1.97%
U.S. Dollar 90.56 -.76%
10-Yr. Long-Bond Yield 4.78% +.96%
VIX 17.86 -7.5%
Put/Call .66 -29.03%
NYSE Arms .44 -44.44%
Market Movers
HPQ +5.6% after beating 2Q revenue estimates and boosting 2nd half revenue forecast by $1B.
KROL +29.9% after announcing that MMC would acquire it for $1.9B in cash.
RIMM +6.59% on Legg Mason upgrade.
AMD +7.16% after announcing it established AMD China, enabling it to conduct an increased scope of business in the country.
SKYE +22.35% after winning U.S. FDA approval for their DepoDur pain treatment.
AMI +17.74% after it agreed to be acquired by CAH for about $1.62B. in cash.
DRIV +9.91% after positive comments at Piper Jaffray conference.
CCDC -19.71% after lowering 04 forecast.
ADSK -5.0% after beating 1Q estimates and lowering 2Q forecast.
Economic Data
None of note.
Recommendations
PHRM raised to Overweight at JP Morgan. PETM rated Buy at Deutsche Bank, target $32. UVN raised to Overweight at Moran Stanley, target $36. HPQ raised to Sector Outperform at CIBC, target $30. ERICY rated Buy at Legg Mason, target $31. RIMM rated Buy at Legg Mason, target $124. CNO rated Overweight at Morgan Stanley, target $24. Goldman Sachs reiterated Outperform on MERQ, UST and PEP. Goldman thinks EMS names are attractive at 18x CY05 estimates, favorites are SLR and CLS. Citi SmithBarney upgraded DNET to Buy, target $28. Citi rated MDT Buy, target $57. Citi rated GDT Sell, target $57. Citi reiterated Buy on BJ, target $30. Citi reiterated Buy on JCP, target $46. Citi reiterated Buy on DIS, target $32.
Mid-day News
U.S. stocks are higher mid-day on strong earnings reports and strength in Asia. PIMCO's Mohamed El-Erian, who manages more emerging-market debt than any other fund manager, told CNBC that credit fundamentals are improving in emerging markets. OPEC recognizes that near-record crude oil prices may hurt importing nations and can increase supply if needed, Bloomberg reported. The U.S. Department of Health and Human Services plans to speed up investigations of marketing practices by medical-device makers and may bring more charges of fraud and abuse, the Boston Globe reported. More than 100 companies are planning to submit offers for a five-year contract to provide phone and Internet connections for New York City agencies, in the first open-bid process, the New York Daily News reported. Pharmaceutical companies, seeking to cut costs and find new medicines as patents expire, are merging at a record pace this year, making the $430 billion global drug industry the most active acquisition market behind banking, Bloomberg said. Merrill Lynch picked Morningstar and BNY Jaywalk to provide research to its clients as part of the company's settlement with regulators over biased stock advice, Bloomberg reported. Manmohan Singh will form a Congress-led government to run India for the next five years after Sonia Gandhi, who led the party to a surprise election victory, said she wouldn't become prime minister, Bloomberg said. An index of U.S. mortgage applications fell 12% last week as home purchases slowed for the first time in more than a month and loan refinancing dropped to the lowest level since early January, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a very good day today as my Chinese cyclical and tech longs are rising substantially. Rising interest rates and energy prices are keeping U.S. stocks from rising even more. Volume and breadth are pretty good today and I would like to see stocks rally into the close as shorts cover and investors sense they have missed the bottom. I have not traded today and the Portfolio is still 125% net long.
Wednesday Watch
Earnings of Note
Company/Estimate
BRCD/.03
EV/.50
INTU/1.16
SNPS/.33
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on MDT, BIIB, ROH, GLK, CCU, ADP and FDC. GS reiterated Underperform on SKS and TFX.
Late-Night News
Asian indices are sharply higher on falling oil prices, U.S. technology earnings reports and optimism over the political situations in India and Taiwan. Al-Qaeda may be planning a chemical or biological attack on U.S. soil in an attempt to alter the outcome of the election in November, the top intelligence officer at the Homeland Security Department said, the AP reported. At least one soldier has been arrested in connection with faked pictures of Iraqi prisoners allegedly being abused by British servicemen, the BBC reported. Research reported in a conference in New Orleans found that a form of cancer of the esophagus has increased more than five times in the U.S. over the past 25 years in correlation with higher consumption of carbonated beverages, Reuters said. Taiwan President Chen Shui-bian will probably avoid making provocative statements in his inauguration speech that may futher strain relations with China, ETTV reported, citing U.S. Deputy Secretary of State Richard Armitage. Aluminum Corp. of China(ACH) said it's in talks to buy as much as 300,000 metric tons of capacity this year, snapping up assets from rivals weakened by soaring raw material costs, Bloomberg said. Indian stocks rose for a second day on optimism Manmohan Singh, the former finance minister who cut state controls and encouraged foreign investment, will be prime minister after Sonia Gandhi declined the post, Bloomberg reported.
Late-Night Trading
Asian Indices +2.50% to +4.5% on average.
S&P 500 indicated +.65%.
NASDAQ indicated +.93%.
BOTTOM LINE: I expect U.S. stocks to rally again tomorrow on strong corporate earnings, falling energy prices, positive developments in Asia and stabilizing interest rates. Tomorrow should confirm that last Wednesday marked the beginning of a short to intermediate-term rally. I am looking for a 2%+ broad-based rally tomorrow on good volume. In the last week the S&P 500's 04 P/E has fallen from 17.25 to 16.95, while stocks have risen, as many major U.S. companies are beating quarterly estimates and raising 04 forecasts. AMAT, the largest semi-equipment maker in the world, is down 26% from its recent high. The company posted sales growth of 82% and net income beat estimates by 16%. The CFO said on a conference call that "Under-investment in the past three years has created pent-up demand" and hinted that order growth is accelerating. Its valuation appears very reasonable considering this kind of growth from a global industry leader. I continue to believe that this semiconductor cycle will last substantially longer than analysts currently anticipate. AMAT joins MOT, EBAY, DELL, YHOO, QCOM, JNPR, BRCM, MU, ERTS, FLEX, A, XLNX, TXN, VRTSE, AMZN, CSCO and INTC, all major U.S. technology companies that reported 20%+ sales growth in their most recent quarters. Corporate spending on technology has improved significantly from last year and should accelerate throughout 04 for a variety of reasons. The Portfolio is 125% net long heading into trading tomorrow.
Company/Estimate
BRCD/.03
EV/.50
INTU/1.16
SNPS/.33
Splits
None of note.
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on MDT, BIIB, ROH, GLK, CCU, ADP and FDC. GS reiterated Underperform on SKS and TFX.
Late-Night News
Asian indices are sharply higher on falling oil prices, U.S. technology earnings reports and optimism over the political situations in India and Taiwan. Al-Qaeda may be planning a chemical or biological attack on U.S. soil in an attempt to alter the outcome of the election in November, the top intelligence officer at the Homeland Security Department said, the AP reported. At least one soldier has been arrested in connection with faked pictures of Iraqi prisoners allegedly being abused by British servicemen, the BBC reported. Research reported in a conference in New Orleans found that a form of cancer of the esophagus has increased more than five times in the U.S. over the past 25 years in correlation with higher consumption of carbonated beverages, Reuters said. Taiwan President Chen Shui-bian will probably avoid making provocative statements in his inauguration speech that may futher strain relations with China, ETTV reported, citing U.S. Deputy Secretary of State Richard Armitage. Aluminum Corp. of China(ACH) said it's in talks to buy as much as 300,000 metric tons of capacity this year, snapping up assets from rivals weakened by soaring raw material costs, Bloomberg said. Indian stocks rose for a second day on optimism Manmohan Singh, the former finance minister who cut state controls and encouraged foreign investment, will be prime minister after Sonia Gandhi declined the post, Bloomberg reported.
Late-Night Trading
Asian Indices +2.50% to +4.5% on average.
S&P 500 indicated +.65%.
NASDAQ indicated +.93%.
BOTTOM LINE: I expect U.S. stocks to rally again tomorrow on strong corporate earnings, falling energy prices, positive developments in Asia and stabilizing interest rates. Tomorrow should confirm that last Wednesday marked the beginning of a short to intermediate-term rally. I am looking for a 2%+ broad-based rally tomorrow on good volume. In the last week the S&P 500's 04 P/E has fallen from 17.25 to 16.95, while stocks have risen, as many major U.S. companies are beating quarterly estimates and raising 04 forecasts. AMAT, the largest semi-equipment maker in the world, is down 26% from its recent high. The company posted sales growth of 82% and net income beat estimates by 16%. The CFO said on a conference call that "Under-investment in the past three years has created pent-up demand" and hinted that order growth is accelerating. Its valuation appears very reasonable considering this kind of growth from a global industry leader. I continue to believe that this semiconductor cycle will last substantially longer than analysts currently anticipate. AMAT joins MOT, EBAY, DELL, YHOO, QCOM, JNPR, BRCM, MU, ERTS, FLEX, A, XLNX, TXN, VRTSE, AMZN, CSCO and INTC, all major U.S. technology companies that reported 20%+ sales growth in their most recent quarters. Corporate spending on technology has improved significantly from last year and should accelerate throughout 04 for a variety of reasons. The Portfolio is 125% net long heading into trading tomorrow.
Tuesday, May 18, 2004
Tuesday Close
S&P 500 1,091.53 +.69%
NASDAQ 1,897.82 +1.13%
Leading Sectors
Iron/Steel +6.15%
Airlines +3.66%
Gaming +2.45%
Lagging Sectors
Tobacco +.06%
Energy -1.49%
Oil Service -1.71%
Other
Crude Oil 40.43 -.27%
Natural Gas 6.17 +.23%
Gold 376.50 +.16%
Base Metals 100.69 +.77%
U.S. Dollar 91.19 +.21%
10-Yr. T-note Yield 4.73% +.93%
VIX 19.33 -3.16%
Put/Call .93 -23.77%
NYSE Arms .81 -69.66%
After-hours Movers
KROL +29.89% after announcing that MMC would acquire it for $1.9B in cash.
HPQ +4.64% after beating 2Q revenue estimates and boosting 2nd half revenue by $1B.
ADSK -4.87% after beating 1Q estimates and lowering 2Q forecast.
NTAP -5.80% after beating 4Q revenue estimates and lowering 05 forecast.
Recommendations
UN raised to Overweight at Prudential, target $74. Goldman Sachs reiterated Outperform on GDT, KO, PG, TIF, HD and SPLS. Jim Cramer, of TheStreet.com, wrote a positive column on KMRT.
After-hours News
U.S. stocks finished higher Tuesday on a drop in energy prices and optimism that Asian growth is still in tact after a stellar Japanese economic report. After the close, Jim Lennon of Macquarie Bank said that China's iron-ore imports and steel consumption will slow down sharply for the rest of the year, Reuters reported. Applied Materials, the world's largest maker of semi-equipment, said second quarter sales rose 82% to $2.02 billion, its biggest gain since the tech sector collapsed in 2000, Bloomberg reported. Hewlett-Packard said second-quarter sales rose 12% to $20.1 billion, above analysts' estimates, Bloomberg said.
BOTTOM LINE: The Portfolio had a good day today as a few of my biotech and Chinese ADR longs rose substantially. I added a few new longs in the base metal and tech sectors in the afternoon, bringing the Portfolio's market exposure to 125% net long. Volume was not very good today, but the tone of the market was much improved from recent action.
NASDAQ 1,897.82 +1.13%
Leading Sectors
Iron/Steel +6.15%
Airlines +3.66%
Gaming +2.45%
Lagging Sectors
Tobacco +.06%
Energy -1.49%
Oil Service -1.71%
Other
Crude Oil 40.43 -.27%
Natural Gas 6.17 +.23%
Gold 376.50 +.16%
Base Metals 100.69 +.77%
U.S. Dollar 91.19 +.21%
10-Yr. T-note Yield 4.73% +.93%
VIX 19.33 -3.16%
Put/Call .93 -23.77%
NYSE Arms .81 -69.66%
After-hours Movers
KROL +29.89% after announcing that MMC would acquire it for $1.9B in cash.
HPQ +4.64% after beating 2Q revenue estimates and boosting 2nd half revenue by $1B.
ADSK -4.87% after beating 1Q estimates and lowering 2Q forecast.
NTAP -5.80% after beating 4Q revenue estimates and lowering 05 forecast.
Recommendations
UN raised to Overweight at Prudential, target $74. Goldman Sachs reiterated Outperform on GDT, KO, PG, TIF, HD and SPLS. Jim Cramer, of TheStreet.com, wrote a positive column on KMRT.
After-hours News
U.S. stocks finished higher Tuesday on a drop in energy prices and optimism that Asian growth is still in tact after a stellar Japanese economic report. After the close, Jim Lennon of Macquarie Bank said that China's iron-ore imports and steel consumption will slow down sharply for the rest of the year, Reuters reported. Applied Materials, the world's largest maker of semi-equipment, said second quarter sales rose 82% to $2.02 billion, its biggest gain since the tech sector collapsed in 2000, Bloomberg reported. Hewlett-Packard said second-quarter sales rose 12% to $20.1 billion, above analysts' estimates, Bloomberg said.
BOTTOM LINE: The Portfolio had a good day today as a few of my biotech and Chinese ADR longs rose substantially. I added a few new longs in the base metal and tech sectors in the afternoon, bringing the Portfolio's market exposure to 125% net long. Volume was not very good today, but the tone of the market was much improved from recent action.
Mid-day Update
S&P 500 1,091.82 +.71%
NASDAQ 1,897.31 +1.10%
Leading Sectors
Iron/Steel +2.50%
Retail +2.24%
Gaming +2.21%
Lagging Sectors
Restaurants -.01%
Energy -1.94%
Oil Service -1.95%
Other
Crude Oil 40.70 -2.05%
Natural Gas 6.20 -3.49%
Gold 377.00 -.68%
Base Metals 100.69 +.77%
U.S. Dollar 91.14 +.15%
10-Yr. Long-Bond Yield 4.72% +.76%
VIX 19.34 -3.11%
Put/Call .82 -32.79%
NYSE Arms .90 -66.29%
Market Movers
GILD +8.5% after saying regulators will decide on the company's application to sell a two-drug combination pill for HIV by 9/12, earlier than expected.
MLNM +9.07% after saying its Velcade medicine helped people with a blood cancer called multiple myeloma live longer.
HD +3.53% after beating 1Q estimates and raising 04 guidance.
TXU +10.5% after saying Cap Gemini will run its customer services for 10 years, reducing operating costs by $175M.
CSC +8.76% after beating 4Q estimates and raising 1Q/04 forecast.
ENDP -7.57%after saying it had decided to launch it oxycodone extended-release tablets after an appellate court decision.
TNP -5.83% after selling 2.5M shares at $28.75.
Economic Data
Housing Starts for April 1969K versus estimates of 1985K and 2011K in March.
Building Permits for April 1999K versus estimates of 1960K and 1975K in March.
Recommendations
Goldman Sachs upgraded integrated oil/E&P/R&M sector to Attractive. Goldman upgraded ETN and IR to Outperform. NAV cut to underperform at Goldman. Goldman reiterated Outperform on BSX, GILD, AGN and HD. Citi SmithBarney said to Sell SUP, target $29. Citi reiterated Buy on CI, target $75. Citi reiterated Sell on AMD, target $12. Citi reiterated Sell on MU, target $12. Citi reiterated Buy on INTC, target $33. Citi reiterated Buy on CY, target $21. Citi reiterated Buy on NSM, target $24. Citi reiterated Buy on LLTC, target $45. Citi reiterated Buy on MXIM, target $56. Citi reiterated Buy on LOW, target $67. Citi reiterated Buy on MATK, target $90. LDG rated Overweight at JP Morgan. THQI raised to Buy at UBS, target $26. SOTR rated Buy at Deutsche Bank, target $36. RF rated Buy at Deutsche Bank, target $39. CTSH raised to Buy at Legg Mason, target $53. SRX raised to Buy at Legg Mason, target $44. CNO rated Outperform at CSFB, target $24.
Mid-day News
U.S. stocks are higher mid-day as strong earnings reports and a fall in oil prompted bargain hunting by investors. Stephen Cutler, director of enforcement for the SEC told CNBC that the pace of new cases has slowed since the WorldCom and Enron scandals. Sales of low-carbohydrate products have declined at health-food and specialty stores, leading some food industry analysts to say the dieting trend may be waning, the Washington Post reported. New York Attorney General Eliot Spitzer's office has issued subpoenas to several major insurance companies in his probe of fees received by insurance brokers, the NY Times said. Four people were arrested in connection with the beheading of Nick Berg, an American seeking work in Iraq, Agence France-Presse reported. UTStarcom and Sina say power failures in China are disrupting business, Bloomberg reported. OPEC said it's ready to make more oil available to meet demand as it forecast oil consumption in 04 will rise by the biggest rate since 97 because of the vigorous world economy, Bloomberg reported. Home Depot reported a sales gain of 16% for the first quarter, its best in 2 years, as strong demand for John Deere lawn tractors and remodeled stores boosted customer traffic. Time Warner will consider buying bankrupt cable operator Adelphia Communications, Bloomberg reported. Sentiment among global money mangers this month dropped the most in three years on concerns about slowing growth in China and rising U.S. interest rates, a Merrill Lynch survey showed. The SEC should move slowly in extending its oversight to the $800 billion hedge fund industry, said Representative Michael Oxley, Chairman of the House Financial Services Committee. The Fed's Broaddus said the risk of accelerating inflation is manageable because increased global competition and considerable excess capacity in many areas are also likely to discourage aggressive price increases. Broaddus also said the Fed won't have to act as aggressively as it did in 1994, Bloomberg reported. President Bush said he plans to re-nominate Alan Greenspan as chairman of the Fed, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a good day today as a few of my China ADRs and Biotech longs are rising substantially. I added a few new tech longs this morning, bringing the Portfolio's market exposure to 100% net long. One of my new longs is VECO and I have a $23.00 stop-loss on the position. I expect US stocks to remain neutral to higher into the close as bonds rally and oil weakens.
NASDAQ 1,897.31 +1.10%
Leading Sectors
Iron/Steel +2.50%
Retail +2.24%
Gaming +2.21%
Lagging Sectors
Restaurants -.01%
Energy -1.94%
Oil Service -1.95%
Other
Crude Oil 40.70 -2.05%
Natural Gas 6.20 -3.49%
Gold 377.00 -.68%
Base Metals 100.69 +.77%
U.S. Dollar 91.14 +.15%
10-Yr. Long-Bond Yield 4.72% +.76%
VIX 19.34 -3.11%
Put/Call .82 -32.79%
NYSE Arms .90 -66.29%
Market Movers
GILD +8.5% after saying regulators will decide on the company's application to sell a two-drug combination pill for HIV by 9/12, earlier than expected.
MLNM +9.07% after saying its Velcade medicine helped people with a blood cancer called multiple myeloma live longer.
HD +3.53% after beating 1Q estimates and raising 04 guidance.
TXU +10.5% after saying Cap Gemini will run its customer services for 10 years, reducing operating costs by $175M.
CSC +8.76% after beating 4Q estimates and raising 1Q/04 forecast.
ENDP -7.57%after saying it had decided to launch it oxycodone extended-release tablets after an appellate court decision.
TNP -5.83% after selling 2.5M shares at $28.75.
Economic Data
Housing Starts for April 1969K versus estimates of 1985K and 2011K in March.
Building Permits for April 1999K versus estimates of 1960K and 1975K in March.
Recommendations
Goldman Sachs upgraded integrated oil/E&P/R&M sector to Attractive. Goldman upgraded ETN and IR to Outperform. NAV cut to underperform at Goldman. Goldman reiterated Outperform on BSX, GILD, AGN and HD. Citi SmithBarney said to Sell SUP, target $29. Citi reiterated Buy on CI, target $75. Citi reiterated Sell on AMD, target $12. Citi reiterated Sell on MU, target $12. Citi reiterated Buy on INTC, target $33. Citi reiterated Buy on CY, target $21. Citi reiterated Buy on NSM, target $24. Citi reiterated Buy on LLTC, target $45. Citi reiterated Buy on MXIM, target $56. Citi reiterated Buy on LOW, target $67. Citi reiterated Buy on MATK, target $90. LDG rated Overweight at JP Morgan. THQI raised to Buy at UBS, target $26. SOTR rated Buy at Deutsche Bank, target $36. RF rated Buy at Deutsche Bank, target $39. CTSH raised to Buy at Legg Mason, target $53. SRX raised to Buy at Legg Mason, target $44. CNO rated Outperform at CSFB, target $24.
Mid-day News
U.S. stocks are higher mid-day as strong earnings reports and a fall in oil prompted bargain hunting by investors. Stephen Cutler, director of enforcement for the SEC told CNBC that the pace of new cases has slowed since the WorldCom and Enron scandals. Sales of low-carbohydrate products have declined at health-food and specialty stores, leading some food industry analysts to say the dieting trend may be waning, the Washington Post reported. New York Attorney General Eliot Spitzer's office has issued subpoenas to several major insurance companies in his probe of fees received by insurance brokers, the NY Times said. Four people were arrested in connection with the beheading of Nick Berg, an American seeking work in Iraq, Agence France-Presse reported. UTStarcom and Sina say power failures in China are disrupting business, Bloomberg reported. OPEC said it's ready to make more oil available to meet demand as it forecast oil consumption in 04 will rise by the biggest rate since 97 because of the vigorous world economy, Bloomberg reported. Home Depot reported a sales gain of 16% for the first quarter, its best in 2 years, as strong demand for John Deere lawn tractors and remodeled stores boosted customer traffic. Time Warner will consider buying bankrupt cable operator Adelphia Communications, Bloomberg reported. Sentiment among global money mangers this month dropped the most in three years on concerns about slowing growth in China and rising U.S. interest rates, a Merrill Lynch survey showed. The SEC should move slowly in extending its oversight to the $800 billion hedge fund industry, said Representative Michael Oxley, Chairman of the House Financial Services Committee. The Fed's Broaddus said the risk of accelerating inflation is manageable because increased global competition and considerable excess capacity in many areas are also likely to discourage aggressive price increases. Broaddus also said the Fed won't have to act as aggressively as it did in 1994, Bloomberg reported. President Bush said he plans to re-nominate Alan Greenspan as chairman of the Fed, Bloomberg reported.
BOTTOM LINE: The Portfolio is having a good day today as a few of my China ADRs and Biotech longs are rising substantially. I added a few new tech longs this morning, bringing the Portfolio's market exposure to 100% net long. One of my new longs is VECO and I have a $23.00 stop-loss on the position. I expect US stocks to remain neutral to higher into the close as bonds rally and oil weakens.
Tuesday Watch
Earnings of Note
Company/Estimate
AMAT/.19
ADSK/.30
BKS/.12
BGP/.02
BJ/.22
HPQ/.34
DKS/.18
HD/.43
JCP/.34
NTAP/.12
SKS/.17
SPLS/.32
WIND/-.03
ZLC/.43
Splits
BWA 2-for-1
TK 2-for-1
Economic Data
Housing Starts in April estimated at 1985K versus 2007K in March.
Building Permits in April estimated at 1960K versus 1976K in March.
Recommendations
Goldman Sachs reiterated Attractive View on Paper sector, favorites are IP, DTC and SPP. GS reiterated Outperform on A and AFL. GS reiterated Underperform on TWMC and JDSU.
Late-Night News
Asian indices are higher on a very strong Japanese economic report and a rebounding stock market in India. Pakistan is committed to peace with India and will work with the new government of Sonia Gandhi, who will be sworn in as prime minister tomorrow, Agence France-Presse reported. BHP Billiton, U.S. Steel and six Chinese companies agreed to form a venture to raise as much as $725M by selling shares to fund the production of coke, a raw material used in steelmaking, the China Daily reported. The U.S. criticized China's announcement that the mainland may use force on Taiwan should the island press for independence, saying the statement was "unhelpful," Bloomberg reported. Japan's economy grew at a 5.6% annual pace in the first three months of the year, better than economists' forecasts of 3.8% growth, Bloomberg said.
Late-Night Trading
Asian Indices -.50% to 2.0%.
S&P 500 indicated +.35%.
NASDAQ indicated +.61%.
BOTTOM LINE: I expect U.S. stocks to rally tomorrow as much-better-than-expected growth in Japan should calm investors' fears of collapsing Asian economies. Many earnings reports should provide further evidence of the strength of the U.S. economy as well. The Portfolio is 75% long and I will look to add market exposure into any unexpected weakness in the morning.
Company/Estimate
AMAT/.19
ADSK/.30
BKS/.12
BGP/.02
BJ/.22
HPQ/.34
DKS/.18
HD/.43
JCP/.34
NTAP/.12
SKS/.17
SPLS/.32
WIND/-.03
ZLC/.43
Splits
BWA 2-for-1
TK 2-for-1
Economic Data
Housing Starts in April estimated at 1985K versus 2007K in March.
Building Permits in April estimated at 1960K versus 1976K in March.
Recommendations
Goldman Sachs reiterated Attractive View on Paper sector, favorites are IP, DTC and SPP. GS reiterated Outperform on A and AFL. GS reiterated Underperform on TWMC and JDSU.
Late-Night News
Asian indices are higher on a very strong Japanese economic report and a rebounding stock market in India. Pakistan is committed to peace with India and will work with the new government of Sonia Gandhi, who will be sworn in as prime minister tomorrow, Agence France-Presse reported. BHP Billiton, U.S. Steel and six Chinese companies agreed to form a venture to raise as much as $725M by selling shares to fund the production of coke, a raw material used in steelmaking, the China Daily reported. The U.S. criticized China's announcement that the mainland may use force on Taiwan should the island press for independence, saying the statement was "unhelpful," Bloomberg reported. Japan's economy grew at a 5.6% annual pace in the first three months of the year, better than economists' forecasts of 3.8% growth, Bloomberg said.
Late-Night Trading
Asian Indices -.50% to 2.0%.
S&P 500 indicated +.35%.
NASDAQ indicated +.61%.
BOTTOM LINE: I expect U.S. stocks to rally tomorrow as much-better-than-expected growth in Japan should calm investors' fears of collapsing Asian economies. Many earnings reports should provide further evidence of the strength of the U.S. economy as well. The Portfolio is 75% long and I will look to add market exposure into any unexpected weakness in the morning.
Subscribe to:
Posts (Atom)