Thursday, May 20, 2004
***Special Report***
Please read this recent report by GlobalInsight entitled "What if Oil Prices Stay at $40?", by Nigel Gault.
Thursday Watch
Earnings of Note
Company/Estimate
ARO/.09
CIEN/-.07
ELBO/.09
GPS/.32
MRVL/.32
JWN/.43
PETM/.21
Splits
SFCC 3-for-2
Economic Data
Initial Jobless Claims for last week estimated at 325K versus 331K the prior week.
Continuing Claims estimated at 2950K versus 2974K prior.
Leading Indicators for April estimated +.2% versus +.3% in March.
Philadelphia Fed. for May estimated at 31.0 versus 32.5 in April.
Recommendations
Goldman Sachs reiterated Outperform on TPX, BIIB, IP, DTC, ABK, PETC and SPP.
Late-Night News
Asian indices are lower on concerns over the political situation in Taiwan and rising energy prices. Hynix Semiconductor of South Korea plans to double shipments of so-called NAND flash memory chips to 2 million units a month by the end of June, Digitimes reported. China's coal shortages have left some power plants with sufficient inventories to keep them running for a day and forced others to shut down, the China Daily reported. HSBC Holdings, Europe's largest bank by market value, may consider buying a U.S. deposit and savings bank to boost its presence in the U.S., the Financial Times said. President Bush reiterated that the U.S.-led coalition would complete a full transfer of sovereignty in Iraq by June 30, Bloomberg reported. OPEC may as soon as this weekend approve Saudi Arabia's plan to boost oil output quotas because of concerns that near record-high prices will slow economic growth, Bloomberg said. Taiwan President Chen Shui-bian said he will press ahead with constitutional revisions without mentioning his plan to put the changes to a public vote, a referendum China has denounced as a ruse to declare independence, Bloomberg reported.
Late-Night Trading
Asian Indices -1.75% to -.25% on average.
S&P 500 indicated -.15%.
NASDAQ indicated -.36%.
BOTTOM LINE: U.S. stocks will likely fall tomorrow morning on weakness in Asia and higher energy prices. Oil would have to reach $78/bbl. on an inflation-adjusted basis to equal levels seen during the Iran hostage crisis in the early 80's. The price of oil has barely risen over the last 23 years while other goods and services have risen continuously. The U.S. CPI is expected to rise just 2.2% this year, below its 84-year average of 3.0%. Worldwide inflation is projected to rise at its slowest pace ever this year. According to GlobalInsight.com, a well-repected economic consultant, $40/bbl. oil for the next 2 years would only shave .3% off of GDP growth each year. Under this scenario, the U.S. CPI would rise 2.1% next year and 1.9% in 06, still well below the 84-year average.
Company/Estimate
ARO/.09
CIEN/-.07
ELBO/.09
GPS/.32
MRVL/.32
JWN/.43
PETM/.21
Splits
SFCC 3-for-2
Economic Data
Initial Jobless Claims for last week estimated at 325K versus 331K the prior week.
Continuing Claims estimated at 2950K versus 2974K prior.
Leading Indicators for April estimated +.2% versus +.3% in March.
Philadelphia Fed. for May estimated at 31.0 versus 32.5 in April.
Recommendations
Goldman Sachs reiterated Outperform on TPX, BIIB, IP, DTC, ABK, PETC and SPP.
Late-Night News
Asian indices are lower on concerns over the political situation in Taiwan and rising energy prices. Hynix Semiconductor of South Korea plans to double shipments of so-called NAND flash memory chips to 2 million units a month by the end of June, Digitimes reported. China's coal shortages have left some power plants with sufficient inventories to keep them running for a day and forced others to shut down, the China Daily reported. HSBC Holdings, Europe's largest bank by market value, may consider buying a U.S. deposit and savings bank to boost its presence in the U.S., the Financial Times said. President Bush reiterated that the U.S.-led coalition would complete a full transfer of sovereignty in Iraq by June 30, Bloomberg reported. OPEC may as soon as this weekend approve Saudi Arabia's plan to boost oil output quotas because of concerns that near record-high prices will slow economic growth, Bloomberg said. Taiwan President Chen Shui-bian said he will press ahead with constitutional revisions without mentioning his plan to put the changes to a public vote, a referendum China has denounced as a ruse to declare independence, Bloomberg reported.
Late-Night Trading
Asian Indices -1.75% to -.25% on average.
S&P 500 indicated -.15%.
NASDAQ indicated -.36%.
BOTTOM LINE: U.S. stocks will likely fall tomorrow morning on weakness in Asia and higher energy prices. Oil would have to reach $78/bbl. on an inflation-adjusted basis to equal levels seen during the Iran hostage crisis in the early 80's. The price of oil has barely risen over the last 23 years while other goods and services have risen continuously. The U.S. CPI is expected to rise just 2.2% this year, below its 84-year average of 3.0%. Worldwide inflation is projected to rise at its slowest pace ever this year. According to GlobalInsight.com, a well-repected economic consultant, $40/bbl. oil for the next 2 years would only shave .3% off of GDP growth each year. Under this scenario, the U.S. CPI would rise 2.1% next year and 1.9% in 06, still well below the 84-year average.
Wednesday, May 19, 2004
Wednesday Close
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.
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.
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.
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