S&P 500 1,100.47 +.46%
NASDAQ 1,879.44 +1.14%
Leading Sectors
HMO's +3.66%
Airlines +3.41%
Semis +3.22%
Lagging Sectors
Consumer -.31%
Foods -.32%
Iron/Steel -3.74%
Other
Crude Oil 42.72 -.42%
Natural Gas 6.19 +.78%
Gold 390.30 -.38%
Base Metals 110.86 +.70%
U.S. Dollar 89.90 +.17%
10-Yr. T-note Yield 4.57% -.35%
VIX 15.71 -2.72%
Put/Call .63 -5.97%
NYSE Arms .94 -15.18%
Market Movers
ESRX -11.9% after the company said 19 states are investigating its business practices.
CCE -15.5% after missing 2Q estimates and giving weak guidance.
MVL -14.3% after beating 2Q estimates and giving weaker guidance.
TARO -22.6% after disappointing 2Q results.
INSP +28.5% after substantially beating 2Q estimates, raising 3Q/04 guidance and multiple upgrades.
SFNT +21.7% after beating 2Q estimates and raising 3Q/04 outlook.
ALDA +21.3% after better-than-expected 2Q.
OCLR +19.3% after announcing it is being acquired by COO for about $1.2B.
LAVA +21.8% after beating 1Q estimates, raising 2Q guidance and authorizing 1M share buyback.
PRX +17.7% on better-than-expected 2Q.
EQIX +13.2% after beating 2Q estimates and raising 3Q guidance.
BC +10.5% after beating 2Q estimates and raising 3Q forecast.
KKD -10.8% after saying the SEC is investigating how the company accounted for the repurchase of franchises and earnings forecasts.
FCN -10.6% after meeting 2Q estimates, but lowering 3Q/04 outlook.
ULBI -18.4% on profit-taking after beating 2Q estimates and maintaining 04 outlook.
Economic Data
2Q Employment Cost Index rose .9% versus expectations of a .9% rise and a 1.1% rise in 1Q.
Initial Jobless Claims last week rose to 345K versus estimates of 340K and an upwardly revised 341K prior week.
Continuing Claims were 2960K versus estimates of 2875K and a downwardly revised 2786K prior.
Help Wanted Index for June was 38 versus estimates of 40 and a reading of 39 in May.
Recommendations
Goldman Sachs reiterated Underperform on KMG, CAN, BMY, MKL, LVLT, TCO, EDS and GSIC. Goldman reiterated Outperform on NEM, ISG, BC, BHI, CMX, MDT, GDT, SPG and BIIB. Goldman's IT survey leads them to believe a trading bottom is near in tech. Goldman downgraded GM to Underperform. Citi SmithBarney said to Buy RJR now, target $77. Citi reiterated Buy on TYC, target $38. Citi reiterated Buy on IGT, target $50. Citi reiterated Buy on RCL, target $52. Citi reiterated Buy on EEFT, target $23. Citi reiterated Buy on CAM, target $63. Citi reiterated Buy on APD, target $57. Citi reiterated Buy on RSG, target $35. Citi reiterated Buy on SRCL, target $56. Citi reiterated Buy on QSFT, target $16. Citi reiterated Buy on WFR, target $14. Citi reiterated Buy on ACLS, target $15. Citi reiterated Buy on NEM, target $50. Citi reiterated Buy on SSI, target $54. CENX raised to Overweight at JP Morgan. BLDP raised to Buy at UBS, target $9. YHOO rated Sector Outperform at CIBC, target $36. IBM rated Outperform at CSFB, target $100. GPS rated Outperform at CSFB, target $27. GTK cut to Underperform at Morgan Stanley. NILE raised to Outperform at Bear Stearns, target $37.
Mid-day News
U.S. stocks are rising mid-day on strength in technology shares, stronger earnings reports and a slight decline in oil prices. Apria Healthcare(AHC), which provides respiratory therapy and home medical equipment, is considering a sale of the company, the NY Post reported. China imported 2.08 million tons of flat steel products in June, or 35% less than a year ago, the Tex Report said. Canada stepped up security at the U.S. border, searching travelers leaving the country over concern about the possibility of a terrorist attack on the Democratic Convention, the National Post reported. Two computer glitches at CIBC led to account errors for more than 66,000 clients at Canada's third-largest bank, the Toronto Star reported. California Pizza Kitchen founders Rosenfield and Flax, who regained control of the pizza chain a year ago, plan to open new outlets and will redesign stores to attract bigger dinner crowds, the LA Times reported. The Saudi Arabian government agreed to give $1 billion in aid to Iraq, Sky News said. LA County property assessments rose 7.6% in 2003 to a record high of $781 billion as of Jan. 1, the LA Times reported. Fortune Brands's Jim Beam unit and Starbucks will introduce next week a liqueur combining the companies' bourbon and coffee, the Rocky Mountain News reported. California's Fremont Police Dept. is acquiring stun guns made by Taser, and expects the weapons to be in use by Sept., the San Jose Mercury News reported. Crude oil prices are falling after Russia's Justice Ministry said OAO Yukos Oil can keep producing and selling oil, Bloomberg reported.
BOTTOM LINE: The Portfolio is substantially higher today on strength in my technology longs. I added a few new longs this morning, bringing the Portfolio's market exposure to 125% net long. One of my new longs is ANDW and I am keeping a $10.25 stop-loss on this position. I expect U.S. stocks to remain near current levels into the afternoon. However, tomorrow should see another positive day with the end of the Democratic Convention without terror attacks, better-than-expected economic reports and short-covering.
Thursday, July 29, 2004
Thursday Watch
Earnings of Note
Company/Estimate
ADPT/.04
AET/1.66
APCC/.19
BZH/4.06
BHI/.31
BMY/.39
CMX/.30
CNXT/.02
COX/.11
XOM/.88
GP/.92
G/.41
IM/.15
IRF/.51
KLAC/.45
LIZ/.43
MGAM/.33
NOC/.75
PTEN/.14
THQI/.11
Splits
None of note.
Economic Data
2Q Employment Cost Index estimated +.9% versus +1.1% in 1Q.
Initial Jobless Claims for last week estimated at 340K versus 339K prior week.
Continuing Claims estimated at 2875K versus 2797K prior.
Help Wanted Index for June estimated at 40 versus 39 in May.
Recommendations
Goldman Sachs reiterated Outperform on PFGC, ROH, AFL, MUR, PPL, SBC and NFX. Goldman Sachs reiterated Underperform on ACAI and JDSU.
Late-Night News
Asian indices are mostly lower on weakness in technology shares. Goldman Sachs won approval from the Chinese government to start a local investment banking venture, becoming the first overseas firm allowed to arrange bond and stock sales through a business it controls, the Financial Times reported. Siemens AG, Germany's biggest engineering company, set internal targets to increase U.S. sales by up to $2.5 billion in a 30 months strategy, the Financial Times said. ATI Technologies will increase computer-chip orders at Taiwan Semiconductor Manufacturing and United Microelectronics on expectations of sales growth in the second half of this year, the Commercial Times reported. China is willing to risk damage to its economic growth and the failure of the 2008 Beijing Olympics if it needs to take action to prevent Taiwan from declaring its independence, China Daily reported. Time Warner's International Cinemas teamed up with a third partner in China to tap the growing market for movie entertainment, Oriental Morning Post reported. Cooper Companies, which makes surgical instruments, agreed to purchase Ocular Sciences for about $1.2 billion to become the world's third-largest maker of contact lenses, Bloomberg said.
Late-Night Trading
Asian Indices are -1.25% to unch. on average.
S&P 500 indicated -.15%.
NASDAQ 100 indicated -.07%
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning on weakness in Asia and anti-business political rhetoric. I continue to believe the major indices are in the midst of an oversold tradable rally. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
ADPT/.04
AET/1.66
APCC/.19
BZH/4.06
BHI/.31
BMY/.39
CMX/.30
CNXT/.02
COX/.11
XOM/.88
GP/.92
G/.41
IM/.15
IRF/.51
KLAC/.45
LIZ/.43
MGAM/.33
NOC/.75
PTEN/.14
THQI/.11
Splits
None of note.
Economic Data
2Q Employment Cost Index estimated +.9% versus +1.1% in 1Q.
Initial Jobless Claims for last week estimated at 340K versus 339K prior week.
Continuing Claims estimated at 2875K versus 2797K prior.
Help Wanted Index for June estimated at 40 versus 39 in May.
Recommendations
Goldman Sachs reiterated Outperform on PFGC, ROH, AFL, MUR, PPL, SBC and NFX. Goldman Sachs reiterated Underperform on ACAI and JDSU.
Late-Night News
Asian indices are mostly lower on weakness in technology shares. Goldman Sachs won approval from the Chinese government to start a local investment banking venture, becoming the first overseas firm allowed to arrange bond and stock sales through a business it controls, the Financial Times reported. Siemens AG, Germany's biggest engineering company, set internal targets to increase U.S. sales by up to $2.5 billion in a 30 months strategy, the Financial Times said. ATI Technologies will increase computer-chip orders at Taiwan Semiconductor Manufacturing and United Microelectronics on expectations of sales growth in the second half of this year, the Commercial Times reported. China is willing to risk damage to its economic growth and the failure of the 2008 Beijing Olympics if it needs to take action to prevent Taiwan from declaring its independence, China Daily reported. Time Warner's International Cinemas teamed up with a third partner in China to tap the growing market for movie entertainment, Oriental Morning Post reported. Cooper Companies, which makes surgical instruments, agreed to purchase Ocular Sciences for about $1.2 billion to become the world's third-largest maker of contact lenses, Bloomberg said.
Late-Night Trading
Asian Indices are -1.25% to unch. on average.
S&P 500 indicated -.15%.
NASDAQ 100 indicated -.07%
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning on weakness in Asia and anti-business political rhetoric. I continue to believe the major indices are in the midst of an oversold tradable rally. The Portfolio is 100% net long heading into tomorrow.
Wednesday, July 28, 2004
Wednesday Close
S&P 500 1,095.42 +.05%
NASDAQ 1,858.26 -.58%
Leading Sectors
Iron/Steel +8.25%
Cyclicals +1.38%
Transports +1.22%
Lagging Sectors
Airlines -1.27%
Hospitals -1.68%
Disk Drives -2.35%
Other
Crude Oil 42.66 -.56%
Natural Gas 6.12 -.28%
Gold 391.60 -.05%
Base Metals 110.09 +1.62%
U.S. Dollar 89.79 unch.
10-Yr. T-note Yield 4.58% -.60%
VIX 16.15 -2.42%
Put/Call .67 -6.94%
NYSE Arms 1.12 +43.59%
After-hours Movers
CNCT +6.37% after beating 2Q estimates and raising 3Q/04 guidance.
JDSU +6.67% after beating 4Q estimates and maintaining 1Q outlook.
SFNT +13.84% after beating 2Q estimates and raising 3Q guidance.
ALDA +17.3% after reporting better-than-expected 2Q.
INSP +27.23% after substantially beating 2Q estimates and raising 3Q/04 guidance.
WFMI -5.05% after missing 3Q estimates, but raising 04 outlook.
ESRX -13.1% after missing 2Q estimates, lowering 04 outlook and announcing it is being investigated by 19 states.
Recommendations
Goldman Sachs reiterated Underperform on HMT, AVP, AG and Outperform on SAP, VZ. OMC rated Focus 1 stock of the week at Merrill Lynch.
After-hours News
U.S. stocks finished mixed today as a short-covering rally boosted shares this afternoon. After the close, Saudi Arabia proposed deployment to Iraq of a military force drawn from Islamic nations to supplement and perhaps eventually replace the U.S.-led coalition, Saudi Foreign Minister Saud al-Faisal said. The U.S. plans to spend $53 million over five years on a multinational program to capture methane from coal mines and landfills in developing countries to provide energy and reduce the gas' affect on global warming, Bloomberg reported. JDS Uniphase, the world's largest maker of parts for fiber-optic networks, said its fourth-quarter net loss narrowed to $24.3 million after sales rose for the first time in 12 quarters, Bloomberg said.
BOTTOM LINE: The Portfolio finished unchanged today on the addition of a few new longs in the afternoon, leaving market exposure at 100% net long. One of my new longs is CYMI and I am using a stop-loss of $25.50 on this position. While not a great day by any means, it could have been much worse and should be viewed as a positive. Barring any domestic terror attacks, U.S. stocks should rally through week's end.
NASDAQ 1,858.26 -.58%
Leading Sectors
Iron/Steel +8.25%
Cyclicals +1.38%
Transports +1.22%
Lagging Sectors
Airlines -1.27%
Hospitals -1.68%
Disk Drives -2.35%
Other
Crude Oil 42.66 -.56%
Natural Gas 6.12 -.28%
Gold 391.60 -.05%
Base Metals 110.09 +1.62%
U.S. Dollar 89.79 unch.
10-Yr. T-note Yield 4.58% -.60%
VIX 16.15 -2.42%
Put/Call .67 -6.94%
NYSE Arms 1.12 +43.59%
After-hours Movers
CNCT +6.37% after beating 2Q estimates and raising 3Q/04 guidance.
JDSU +6.67% after beating 4Q estimates and maintaining 1Q outlook.
SFNT +13.84% after beating 2Q estimates and raising 3Q guidance.
ALDA +17.3% after reporting better-than-expected 2Q.
INSP +27.23% after substantially beating 2Q estimates and raising 3Q/04 guidance.
WFMI -5.05% after missing 3Q estimates, but raising 04 outlook.
ESRX -13.1% after missing 2Q estimates, lowering 04 outlook and announcing it is being investigated by 19 states.
Recommendations
Goldman Sachs reiterated Underperform on HMT, AVP, AG and Outperform on SAP, VZ. OMC rated Focus 1 stock of the week at Merrill Lynch.
After-hours News
U.S. stocks finished mixed today as a short-covering rally boosted shares this afternoon. After the close, Saudi Arabia proposed deployment to Iraq of a military force drawn from Islamic nations to supplement and perhaps eventually replace the U.S.-led coalition, Saudi Foreign Minister Saud al-Faisal said. The U.S. plans to spend $53 million over five years on a multinational program to capture methane from coal mines and landfills in developing countries to provide energy and reduce the gas' affect on global warming, Bloomberg reported. JDS Uniphase, the world's largest maker of parts for fiber-optic networks, said its fourth-quarter net loss narrowed to $24.3 million after sales rose for the first time in 12 quarters, Bloomberg said.
BOTTOM LINE: The Portfolio finished unchanged today on the addition of a few new longs in the afternoon, leaving market exposure at 100% net long. One of my new longs is CYMI and I am using a stop-loss of $25.50 on this position. While not a great day by any means, it could have been much worse and should be viewed as a positive. Barring any domestic terror attacks, U.S. stocks should rally through week's end.
Mid-day Update
S&P 500 1,085.32 -.88%
NASDAQ 1,837.04 -1.72%
Leading Sectors
Iron/Steel +2.13%
Oil Service +1.71%
Commodity +.75%
Lagging Sectors
Semis -2.69%
Airlines -3.26%
Disk Drives -3.42%
Other
Crude Oil 42.85 +2.41%
Natural Gas 6.05 +1.02%
Gold 392.00 +.56%
Base Metals 110.09 +1.62%
U.S. Dollar 89.73 -.07%
10-Yr. T-note Yield 4.60% -.26%
VIX 17.15 +3.63%
Put/Call .71 -1.39%
NYSE Arms 1.15 +47.44%
Market Movers
CECO -23.4% after beating 2Q estimates, lowering 3Q sales forecast and multiple downgrades.
UTSI -28.8% after missing 2Q forecast, lowering 3Q/04 outlook and multiple downgrades.
TEVA -6.5% after a U.S. court blocked final approval for Alpharma's gabapentin capsule.
ZRAN +15.6% after beating 2Q estimates and raising 3Q/04 outlook.
CELL +15.2% after reporting strong 2Q results.
WBSN +14.2% after beating 2Q estimates, raising 3Q guidance and multiple upgrades.
KRON +11.77% after beating 3Q estimates and raising 4Q guidance.
AV +11.4% after beating 3Q estimates and giving positive outlook.
GRMN +11.0% after beating 2Q estimates and raising 3Q guidance.
X +5.2% after beating 2Q estimates, giving positive outlook and Prudential upgrade to Overweight.
ALD +7.4% after beating 2Q forecast.
CREE +8.4% after beating 4Q estimates and raising 1Q guidance.
WIRE -27.2% after weaker-than-expected 2Q.
ASCA -19.3% after missing 2Q estimates and lowering 3Q forecast.
NILE -18.3% after beating 2Q estimates and lowering 3Q/04 guidance.
EEFT -21.3% after beating 2Q estimates and lowering 3Q outlook.
WMGI -17.6% after meeting 2Q estimates, lowering 3Q/04 outlook and multiple downgrades.
LSCP -17.8% after beating 2Q estimates, but giving disappointing guidance.
Economic Data
Durable Goods Orders for June rose .7% versus estimates of a 1.5% rise and an upwardly revised decline of .9% in May.
Durable Goods Orders Less Transportation for June fell .6% versus estimates of a 1.1% rise and an upwardly revised .6% decline in May.
Recommendations
PENN raised to Buy at Deutsche Bank, target $45. MDCA rated Sector Outperform at CIBC, target $16. BBBB rated Outperform at Thomas Weisel. X raised to Overweight at Prudential, target $45. ABX cut to Underweight at Prudential, target $15. CB raised to Overweight at Prudential, target $80. MTSN raised to Overweight at JP Morgan. VRTS raised to Sector Outperform at CIBC, target $25. WBSN raised to Outperform at Raymond James, target $41. Goldman Sachs reiterated Outperform on AMGN, BIIB, DNA, AVP, AGN, IR, ETN, MERQ and LIZ. Goldman reiterated Underperform on LSI, AG and EW. Citi SmithBarney said to Buy Auto Suppliers for a trade, favorites are AXL, MGA and LEA. Citi reiterated Buy on VZ, target $43. Citi reiterated Buy on ATH, target $113. Citi reiterated Buy on WLP, target $140. Citi rated BRCD Buy, target $6.30. Citi reiterated Buy on SBUX, target $54. Citi reiterated Buy on BCII, target $30. Citi reiterated Buy on VRTS, target $24. Citi reiterated Buy on LLY, target $82.
Mid-day News
U.S. stocks are falling mid-day on rising oil prices, weaker-than-expected economic data and a few disappointing earnings reports. US Air will change its flight system later this year, including taking apart its Pittsburgh hub, to stay solvent and compete against low-fare carriers in its major East Coast markets, the New York Times reported. Paul Volcker, the head of a UN panel investigating corruption in its Iraq oil-for-food program, won't share information with U.S. congressional committees that also are conducting inquiries, the NY Times reported. California's proposed budget agreement would restore millions of dollars to the Univ. of California and allow it to offer admission to 5,800 freshmen whose entry would have been deferred for two years, the San Francisco Chronicle reported. Vice President Cheney drew the loudest cheers on his first bus tour of the 2004 election when he told audiences that trial lawyers wreck good companies, wipe out jobs and saddle doctors with costs they pass to patients, Bloomberg reported. A homicide car bomber today drove into a crowd of Iraqi civilians waiting in line for jobs in the central Iraqi city of Baqubah, killing 68 and wounding 56, the AP reported. OAO Yukos Oil, Russia's biggest oil exporter, said the government ordered a halt to production from its main Siberian unit as court bailiffs seek to recover $3.4 billion in back taxes and fines. This sent crude oil futures to a record, Bloomberg said.
BOTTOM LINE: The Portfolio is lower today on weakness in my technology longs. I sold several tech positions this morning as they hit stop-losses, bringing the Portfolio's market exposure to 50% net long. Another disappointing day for the Bulls as the averages are unable to hold even one day's gains. However, any slight pullback in oil prices should result in a tradable rally. I still believe the markets will form a short-term bottom this week as the Democratic Convention concludes with no domestic terror attacks. I expect U.S. stocks to rise modestly into the close on short-covering.
NASDAQ 1,837.04 -1.72%
Leading Sectors
Iron/Steel +2.13%
Oil Service +1.71%
Commodity +.75%
Lagging Sectors
Semis -2.69%
Airlines -3.26%
Disk Drives -3.42%
Other
Crude Oil 42.85 +2.41%
Natural Gas 6.05 +1.02%
Gold 392.00 +.56%
Base Metals 110.09 +1.62%
U.S. Dollar 89.73 -.07%
10-Yr. T-note Yield 4.60% -.26%
VIX 17.15 +3.63%
Put/Call .71 -1.39%
NYSE Arms 1.15 +47.44%
Market Movers
CECO -23.4% after beating 2Q estimates, lowering 3Q sales forecast and multiple downgrades.
UTSI -28.8% after missing 2Q forecast, lowering 3Q/04 outlook and multiple downgrades.
TEVA -6.5% after a U.S. court blocked final approval for Alpharma's gabapentin capsule.
ZRAN +15.6% after beating 2Q estimates and raising 3Q/04 outlook.
CELL +15.2% after reporting strong 2Q results.
WBSN +14.2% after beating 2Q estimates, raising 3Q guidance and multiple upgrades.
KRON +11.77% after beating 3Q estimates and raising 4Q guidance.
AV +11.4% after beating 3Q estimates and giving positive outlook.
GRMN +11.0% after beating 2Q estimates and raising 3Q guidance.
X +5.2% after beating 2Q estimates, giving positive outlook and Prudential upgrade to Overweight.
ALD +7.4% after beating 2Q forecast.
CREE +8.4% after beating 4Q estimates and raising 1Q guidance.
WIRE -27.2% after weaker-than-expected 2Q.
ASCA -19.3% after missing 2Q estimates and lowering 3Q forecast.
NILE -18.3% after beating 2Q estimates and lowering 3Q/04 guidance.
EEFT -21.3% after beating 2Q estimates and lowering 3Q outlook.
WMGI -17.6% after meeting 2Q estimates, lowering 3Q/04 outlook and multiple downgrades.
LSCP -17.8% after beating 2Q estimates, but giving disappointing guidance.
Economic Data
Durable Goods Orders for June rose .7% versus estimates of a 1.5% rise and an upwardly revised decline of .9% in May.
Durable Goods Orders Less Transportation for June fell .6% versus estimates of a 1.1% rise and an upwardly revised .6% decline in May.
Recommendations
PENN raised to Buy at Deutsche Bank, target $45. MDCA rated Sector Outperform at CIBC, target $16. BBBB rated Outperform at Thomas Weisel. X raised to Overweight at Prudential, target $45. ABX cut to Underweight at Prudential, target $15. CB raised to Overweight at Prudential, target $80. MTSN raised to Overweight at JP Morgan. VRTS raised to Sector Outperform at CIBC, target $25. WBSN raised to Outperform at Raymond James, target $41. Goldman Sachs reiterated Outperform on AMGN, BIIB, DNA, AVP, AGN, IR, ETN, MERQ and LIZ. Goldman reiterated Underperform on LSI, AG and EW. Citi SmithBarney said to Buy Auto Suppliers for a trade, favorites are AXL, MGA and LEA. Citi reiterated Buy on VZ, target $43. Citi reiterated Buy on ATH, target $113. Citi reiterated Buy on WLP, target $140. Citi rated BRCD Buy, target $6.30. Citi reiterated Buy on SBUX, target $54. Citi reiterated Buy on BCII, target $30. Citi reiterated Buy on VRTS, target $24. Citi reiterated Buy on LLY, target $82.
Mid-day News
U.S. stocks are falling mid-day on rising oil prices, weaker-than-expected economic data and a few disappointing earnings reports. US Air will change its flight system later this year, including taking apart its Pittsburgh hub, to stay solvent and compete against low-fare carriers in its major East Coast markets, the New York Times reported. Paul Volcker, the head of a UN panel investigating corruption in its Iraq oil-for-food program, won't share information with U.S. congressional committees that also are conducting inquiries, the NY Times reported. California's proposed budget agreement would restore millions of dollars to the Univ. of California and allow it to offer admission to 5,800 freshmen whose entry would have been deferred for two years, the San Francisco Chronicle reported. Vice President Cheney drew the loudest cheers on his first bus tour of the 2004 election when he told audiences that trial lawyers wreck good companies, wipe out jobs and saddle doctors with costs they pass to patients, Bloomberg reported. A homicide car bomber today drove into a crowd of Iraqi civilians waiting in line for jobs in the central Iraqi city of Baqubah, killing 68 and wounding 56, the AP reported. OAO Yukos Oil, Russia's biggest oil exporter, said the government ordered a halt to production from its main Siberian unit as court bailiffs seek to recover $3.4 billion in back taxes and fines. This sent crude oil futures to a record, Bloomberg said.
BOTTOM LINE: The Portfolio is lower today on weakness in my technology longs. I sold several tech positions this morning as they hit stop-losses, bringing the Portfolio's market exposure to 50% net long. Another disappointing day for the Bulls as the averages are unable to hold even one day's gains. However, any slight pullback in oil prices should result in a tradable rally. I still believe the markets will form a short-term bottom this week as the Democratic Convention concludes with no domestic terror attacks. I expect U.S. stocks to rise modestly into the close on short-covering.
Wednesday Watch
Earnings of Note
Company/Estimate
ATN/.42
BUD/.83
APPB/.33
ASKJ/.22
AVP/.46
BIIB/.32
BA/.47
CAH/.93
CMCSA/.09
EDS/-.03
ESRX/.94
HLT/.18
INSP/.14
JDSU/.00
NXTP/.05
SOHU/.24
SBL/.09
TWX/.15
ZBRA/.59
ZMH/.55
Splits
None of note.
Economic Data
Durable Goods Orders for June estimated +1.5% versus -1.8% in May.
Durable Goods Orders Less Transportation for June estimated +1.1% versus -1.4% in May.
Fed's Beige Book
Recommendations
Goldman Sachs reiterated Attractive view of non-life insurance industry, favorites are AIG, ALL, ENH, RE and STA. Goldman reiterated Outperform on AUO, DD, NFX and BC. Goldman reiterated Underperform on EDS and FSS.
Late-Night News
Asian indices are mostly higher, led by Japan, on optimism over exports after a report showed U.S. consumer confidence hit a 2-year high. Members of the al-Qaeda terrorist network are traveling through Europe on illegally obtained South African passports, the AP reported. Exxon Mobil is considering selling it 19% stake in China Petroleum & Chemical, raising about $1.2 billion, almost double what it paid four years ago, the Financial Times reported. Afghanistan will have 23 candidates for its presidential election in October, including the incumbent President Hamid Karzai, Agence France-Presse reported. A blood test may help prevent premature births by detecting infections in amniotic fluids, according to a study in the Journal of the AMA. The dollar traded near its highest in about six weeks against the euro and the yen in Asia after the strong U.S. consumer confidence report, Bloomberg reported. Charter Communications, the U.S. cable-tv operator controlled by billionaire Paul Allen, settled a SEC investigation into how it counted subscribers, Bloomberg said.
Late-Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.06%.
NASDAQ 100 indicated +.11%
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on stronger earnings reports, falling energy prices and stabilizing interest rates. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
ATN/.42
BUD/.83
APPB/.33
ASKJ/.22
AVP/.46
BIIB/.32
BA/.47
CAH/.93
CMCSA/.09
EDS/-.03
ESRX/.94
HLT/.18
INSP/.14
JDSU/.00
NXTP/.05
SOHU/.24
SBL/.09
TWX/.15
ZBRA/.59
ZMH/.55
Splits
None of note.
Economic Data
Durable Goods Orders for June estimated +1.5% versus -1.8% in May.
Durable Goods Orders Less Transportation for June estimated +1.1% versus -1.4% in May.
Fed's Beige Book
Recommendations
Goldman Sachs reiterated Attractive view of non-life insurance industry, favorites are AIG, ALL, ENH, RE and STA. Goldman reiterated Outperform on AUO, DD, NFX and BC. Goldman reiterated Underperform on EDS and FSS.
Late-Night News
Asian indices are mostly higher, led by Japan, on optimism over exports after a report showed U.S. consumer confidence hit a 2-year high. Members of the al-Qaeda terrorist network are traveling through Europe on illegally obtained South African passports, the AP reported. Exxon Mobil is considering selling it 19% stake in China Petroleum & Chemical, raising about $1.2 billion, almost double what it paid four years ago, the Financial Times reported. Afghanistan will have 23 candidates for its presidential election in October, including the incumbent President Hamid Karzai, Agence France-Presse reported. A blood test may help prevent premature births by detecting infections in amniotic fluids, according to a study in the Journal of the AMA. The dollar traded near its highest in about six weeks against the euro and the yen in Asia after the strong U.S. consumer confidence report, Bloomberg reported. Charter Communications, the U.S. cable-tv operator controlled by billionaire Paul Allen, settled a SEC investigation into how it counted subscribers, Bloomberg said.
Late-Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.06%.
NASDAQ 100 indicated +.11%
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on stronger earnings reports, falling energy prices and stabilizing interest rates. The Portfolio is 100% net long heading into tomorrow.
Tuesday, July 27, 2004
Tuesday Close
S&P 500 1,094.83 +.99%
NASDAQ 1,869.10 +1.64%
Leading Sectors
Retail +2.91%
Biotech +2.64%
Telecom +2.41%
Lagging Sectors
Hospitals -.51%
Airlines -.78%
HMO's -4.2%
Other
Crude Oil 41.82 -.05%
Natural Gas 5.98 -.10%
Gold 388.00 +.26%
Base Metals 108.33 -.74%
U.S. Dollar 89.73 +.79%
10-Yr. T-note Yield 4.60% +2.68%
VIX 16.55 -4.34%
Put/Call .72 -12.2%
NYSE Arms .78 -32.76%
After-hours Movers
CREE +6.76% after beating 4Q estimates and raising 1Q guidance.
VRTS +4.10% after beating 2Q estimates and raising 3Q forecast.
ZRAN +10.04% after beating 2Q estimates and raising 3Q/04 outlook.
MFE +7.84% after beating 2Q estimates and raising 3Q guidance.
UTSI -13.4% after missing 2Q forecast and lowering 3Q/04 outlook.
MNST +6.1% after beating 2Q estimates and lowering 3Q outlook.
Recommendations
Goldman Sachs reiterated Attractive view of Paper sector, favorite is IP. Goldman reiterated Outperform on AMGN, ADP, MSFT and GDT.
After-hours News
U.S. stocks finished higher today on better-than-expected economic reports and strong telecom earnings. After the close, Electronic Data Systems, the world's second-biggest computer-services provider, reduced its quarterly dividend to 5 cents a share, Bloomberg reported. Chubb, the second-biggest liability insurer for U.S. corporate boards, said second-quarter profit climbed 41% as premiums and investment income rose, Bloomberg said. New Jersey faces higher borrowing costs after S&P and Fitch cut credit ratings on more than $18 billion in debt, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly higher today as strength in my biotech, security and technology longs offset my rising retail shorts. I added a few more longs in the afternoon, bringing the Portfolio's market exposure to 100% net long. One of my new longs is ERES and I am using a $22.00 stop-loss on this position. The strength of today's rally was impressive given the extent to which rates rose and oil climbed. The advance/decline line and volume were much improved today as well. Finally, the CRB Index continued its recent slide, breaking down through its 200-day moving-average today, which bodes well for future inflation readings. While the major U.S. averages should continue to rally for awhile longer, recent lows will likely be tested in the coming weeks as investor complacency is still too high for a meaningful bottom.
NASDAQ 1,869.10 +1.64%
Leading Sectors
Retail +2.91%
Biotech +2.64%
Telecom +2.41%
Lagging Sectors
Hospitals -.51%
Airlines -.78%
HMO's -4.2%
Other
Crude Oil 41.82 -.05%
Natural Gas 5.98 -.10%
Gold 388.00 +.26%
Base Metals 108.33 -.74%
U.S. Dollar 89.73 +.79%
10-Yr. T-note Yield 4.60% +2.68%
VIX 16.55 -4.34%
Put/Call .72 -12.2%
NYSE Arms .78 -32.76%
After-hours Movers
CREE +6.76% after beating 4Q estimates and raising 1Q guidance.
VRTS +4.10% after beating 2Q estimates and raising 3Q forecast.
ZRAN +10.04% after beating 2Q estimates and raising 3Q/04 outlook.
MFE +7.84% after beating 2Q estimates and raising 3Q guidance.
UTSI -13.4% after missing 2Q forecast and lowering 3Q/04 outlook.
MNST +6.1% after beating 2Q estimates and lowering 3Q outlook.
Recommendations
Goldman Sachs reiterated Attractive view of Paper sector, favorite is IP. Goldman reiterated Outperform on AMGN, ADP, MSFT and GDT.
After-hours News
U.S. stocks finished higher today on better-than-expected economic reports and strong telecom earnings. After the close, Electronic Data Systems, the world's second-biggest computer-services provider, reduced its quarterly dividend to 5 cents a share, Bloomberg reported. Chubb, the second-biggest liability insurer for U.S. corporate boards, said second-quarter profit climbed 41% as premiums and investment income rose, Bloomberg said. New Jersey faces higher borrowing costs after S&P and Fitch cut credit ratings on more than $18 billion in debt, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly higher today as strength in my biotech, security and technology longs offset my rising retail shorts. I added a few more longs in the afternoon, bringing the Portfolio's market exposure to 100% net long. One of my new longs is ERES and I am using a $22.00 stop-loss on this position. The strength of today's rally was impressive given the extent to which rates rose and oil climbed. The advance/decline line and volume were much improved today as well. Finally, the CRB Index continued its recent slide, breaking down through its 200-day moving-average today, which bodes well for future inflation readings. While the major U.S. averages should continue to rally for awhile longer, recent lows will likely be tested in the coming weeks as investor complacency is still too high for a meaningful bottom.
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