There are a few important economic reports and a number of significant corporate earnings reports scheduled for release this week. Economic reports this week include the NAHB Housing Market Index, Housing Starts, Building Permits, Initial Jobless Claims and Leading Indicators. Housing Starts and Leading Indicators both have market-moving potential.
3M(MMM), Delta Air(DAL), Lexmark(LXK), Corning(GLW), Phillip Morris(MO), EMC Corp.(EMC), Ford Motor(F), Forest Labs(FRX), Taser(TASR), Motorola(MOT), Texas Instruments(TXN), D.R. Horton(DHI), Fannie Mae(FNM), General Dynamics(GD), General Motors(GM), Harrah's Entertainment(HET), ImClone(IMCL), Schlumberger(SLB), Microsoft(MSFT), United Parcel Service(UPS), Amazon(AMZN), Broadcom(BRCM), Office Depot(ODP), International Game Technology(IGT), Nextel Communications(NXTL), SAP AG(SAP) and Qualcomm(QCOM) are some of the more important companies that release quarterly earnings this week. There are also a few other events that have market-moving potential. The SEMI Book-to-Bill report, Strategic Research Institute Energy Technology Conference and Greenspan's congressional testimony could also impact trading this week.
Bottom Line: I expect U.S. stocks to rise modestly this week on a bounce in technology stocks from oversold levels, Greenspan's comments, better earnings reports, falling interest rates and a decline in oil. My short-term trading indicators are giving sell signals and the Portfolio is 25% net short heading into the week.
Sunday, July 18, 2004
Saturday, July 17, 2004
Weekly Scoreboard*
Indices
S&P 500 1,101.39 -1.03%
Dow 10,139.78 -.72%
NASDAQ 1883.15 -3.2%
Russell 2000 555.48 -1.46%
S&P Equity Long/Short Index 970.26 -.25%
Put/Call 1.09 +47.3%
NYSE Arms 1.84 +80.39%
Volatility(VIX) 14.34 -9.1%
AAII % Bulls 47.37 -14.03%
US Dollar 87.14 -.24%
CRB 272.30 -.14%
Futures Spot Prices
Gold 406.80 -.32%
Crude Oil 41.30 +3.09%
Unleaded Gasoline 130.05 -1.48%
Natural Gas 5.88 -4.04%
Base Metals 113.03 -.26%
10-year US Treasury Yield 4.35% -2.47%
Average 30-year Mortgage Rate 6.0 -.17%
Leading Sectors
Iron/Steel +6.62%
HMO's +4.72%
Oil Service +4.1%
Lagging Sectors
Software -4.09%
Semis -9.02%
Airlines -9.65%
*% Gain or loss for the week
S&P 500 1,101.39 -1.03%
Dow 10,139.78 -.72%
NASDAQ 1883.15 -3.2%
Russell 2000 555.48 -1.46%
S&P Equity Long/Short Index 970.26 -.25%
Put/Call 1.09 +47.3%
NYSE Arms 1.84 +80.39%
Volatility(VIX) 14.34 -9.1%
AAII % Bulls 47.37 -14.03%
US Dollar 87.14 -.24%
CRB 272.30 -.14%
Futures Spot Prices
Gold 406.80 -.32%
Crude Oil 41.30 +3.09%
Unleaded Gasoline 130.05 -1.48%
Natural Gas 5.88 -4.04%
Base Metals 113.03 -.26%
10-year US Treasury Yield 4.35% -2.47%
Average 30-year Mortgage Rate 6.0 -.17%
Leading Sectors
Iron/Steel +6.62%
HMO's +4.72%
Oil Service +4.1%
Lagging Sectors
Software -4.09%
Semis -9.02%
Airlines -9.65%
*% Gain or loss for the week
Friday, July 16, 2004
***Alert***
There will not be a Mid-day Update today, Economic Week in Review or Market Week in Review. I will be traveling over the weekend and will try and post the Weekly Outlook and Monday Watch on Sunday evening.
Bottom Line: The Portfolio is up substantially today as my retail shorts are falling and Chinese ADR longs are rising. A few of my long stop-losses were triggered this morning, leaving the Portfolio 25% net short. The market's reaction to today's fall in interest rates is very disappointing. I expect stocks to move slightly higher into the close as investors digest the recent fall in rates and oil stabilizes.
Bottom Line: The Portfolio is up substantially today as my retail shorts are falling and Chinese ADR longs are rising. A few of my long stop-losses were triggered this morning, leaving the Portfolio 25% net short. The market's reaction to today's fall in interest rates is very disappointing. I expect stocks to move slightly higher into the close as investors digest the recent fall in rates and oil stabilizes.
Thursday, July 15, 2004
Friday Watch
Earnings of Note
Company/Estimate
CVTX/-1.16
HAS/.07
JBHT/.45
KEY/.56
NCC/.69
NVR/13.88
SMSI/.01
VANS/-.11
GWW/.68
Splits
MGPI 2-for-1
SWBT 2-for-1
Economic Data
Consumer Price Index for June estimated +.2% versus +.6% in May.
CPI Ex Food & Energy for June estimate +.2% versus +.2% in May.
Preliminary Univ. of Michigan Consumer Confidence for July estimated at 97.0 versus 95.6 in June.
Recommendations
Goldman Sachs reiterated Outperform on PFE and Underperform on DJ. Shares of DOW will increase by more than 20% because of rising prices from less-than-expected supply from Middle East competitors, Business Week reported. ENCY may get a boost when the drug developer releases new trial results early next year, Business Week reported.
Late-Night News
Asian indices are mostly higher, led by Chinese and Indian shares. Henry Blodget, Merrill Lynch's former Internet analyst, has established Cherry Hill Research in New York to provide industry analysis and consulting services, Business Week reported. ABN Amro, Citigroup and Merrill Lynch are in a final competition to arrange the sale of Jinro, South Korea's largest liquor maker, Korea Economic Daily said. China will soon allow insurance companies to invest up to 5% of their total assets directly in the stock market, Shanghai Securities News reported. Sun Microsystems CEO McNealy is being blamed by current and former company executives for the decline of Sun, which has lost 86% of its value since the end of 2000, Business Week reported. The U.K. and European biotechnology companies are lagging the U.S. on almost every financial measure, the Financial Times said. A wildfire that has burned 8,500 acres of dry brush, grass and timber near Carson City, Nevada, is threatening 550 homes and businesses, the AP reported. Telewest Global stock will start U.S. trading on Monday, ending the U.K. cable operator's two-year upheaval that consumed two chief executives and will convert 7.4 billion of debt into new equity, Bloomberg reported. The U.S. International Trade Commission ruled that U.S. makers of plastic bags and ironing boards are being hurt by surging imports from China, a final decision that will result in tariffs on those goods, Bloomberg said. The U.S. Senate agreed to sweeping changes for the cigarette industry, granting the FDA the power to regulate tobacco, and approving a $12 billion industry-financed buyout for farmers, Bloomberg said. China's economic growth unexpectedly slowed in the second quarter, suggesting government lending curbs are cooling the world's fastest-growing major economy, Bloomberg reported. The U.S. House of Representatives voted to cut financial aid to Saudi Arabia, as lawmakers registered their protest over the level of cooperation on terrorism form the world's largest oil producer, Bloomberg reported. The U.S. dollar fell from its strongest in a month against the yen and shed gains against the euro after Fed Governor Bies said the U.S. currency "needs to adjust" to the current-account deficit, Bloomberg reported.
Late-Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.19%.
NASDAQ 100 indicated +.39%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on receding inflation fears, better earnings reports and strength in Asia. The Portfolio is market neutral heading into tomorrow.
Company/Estimate
CVTX/-1.16
HAS/.07
JBHT/.45
KEY/.56
NCC/.69
NVR/13.88
SMSI/.01
VANS/-.11
GWW/.68
Splits
MGPI 2-for-1
SWBT 2-for-1
Economic Data
Consumer Price Index for June estimated +.2% versus +.6% in May.
CPI Ex Food & Energy for June estimate +.2% versus +.2% in May.
Preliminary Univ. of Michigan Consumer Confidence for July estimated at 97.0 versus 95.6 in June.
Recommendations
Goldman Sachs reiterated Outperform on PFE and Underperform on DJ. Shares of DOW will increase by more than 20% because of rising prices from less-than-expected supply from Middle East competitors, Business Week reported. ENCY may get a boost when the drug developer releases new trial results early next year, Business Week reported.
Late-Night News
Asian indices are mostly higher, led by Chinese and Indian shares. Henry Blodget, Merrill Lynch's former Internet analyst, has established Cherry Hill Research in New York to provide industry analysis and consulting services, Business Week reported. ABN Amro, Citigroup and Merrill Lynch are in a final competition to arrange the sale of Jinro, South Korea's largest liquor maker, Korea Economic Daily said. China will soon allow insurance companies to invest up to 5% of their total assets directly in the stock market, Shanghai Securities News reported. Sun Microsystems CEO McNealy is being blamed by current and former company executives for the decline of Sun, which has lost 86% of its value since the end of 2000, Business Week reported. The U.K. and European biotechnology companies are lagging the U.S. on almost every financial measure, the Financial Times said. A wildfire that has burned 8,500 acres of dry brush, grass and timber near Carson City, Nevada, is threatening 550 homes and businesses, the AP reported. Telewest Global stock will start U.S. trading on Monday, ending the U.K. cable operator's two-year upheaval that consumed two chief executives and will convert 7.4 billion of debt into new equity, Bloomberg reported. The U.S. International Trade Commission ruled that U.S. makers of plastic bags and ironing boards are being hurt by surging imports from China, a final decision that will result in tariffs on those goods, Bloomberg said. The U.S. Senate agreed to sweeping changes for the cigarette industry, granting the FDA the power to regulate tobacco, and approving a $12 billion industry-financed buyout for farmers, Bloomberg said. China's economic growth unexpectedly slowed in the second quarter, suggesting government lending curbs are cooling the world's fastest-growing major economy, Bloomberg reported. The U.S. House of Representatives voted to cut financial aid to Saudi Arabia, as lawmakers registered their protest over the level of cooperation on terrorism form the world's largest oil producer, Bloomberg reported. The U.S. dollar fell from its strongest in a month against the yen and shed gains against the euro after Fed Governor Bies said the U.S. currency "needs to adjust" to the current-account deficit, Bloomberg reported.
Late-Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.19%.
NASDAQ 100 indicated +.39%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on receding inflation fears, better earnings reports and strength in Asia. The Portfolio is market neutral heading into tomorrow.
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