Earnings of Note
Company/Estimate
ADBL/.00
CEPH/.39
CKFR/.29
EDMC/.18
EMR/.75
IACI/.21
MSO/-.32
MBI/1.30
Q/-.13
PRU/.78
PDLI/-.12
TYC/.41
VSH/.24
OATS/.07
Splits
None of note.
Economic Data
Personal Income for June estimated +.3% versus +.6% in May.
Personal Spending for June estimated -.1% versus +1.0% in May.
PCE Deflator(YoY) for June estimated +2.6% versus +2.5% in May.
PCE Core(YoY) for June estimated +1.7% versus +1.6% in May.
Total Vehicles Sales for July estimated at 16.8M versus 15.4M in June.
Domestic Vehicle Sales for July estimated at 13.3M versus 12.2M in June.
Recommendations
Goldman Sachs reiterated Outperform on GILD and AGN.
Late-Night News
Asian indices are mostly higher as strength in the U.S. markets boosted optimism in the region. U.S. Internet advertising spending will grow by 9.5% a year between 2004 and 2008, making it the fastest-growing advertising medium, Dow Jones reported. Taiwan's five flat-panel display makers' sales in July are expected to be about 15% lower than June's because of oversupply and declines in panel prices, Economic Daily News said. The National Aeronautics and Space Administration extended a $3.6 billion contract with United Space Alliance, a joint venture between Boeing and Lockheed Martin that prepares space shuttle for launch, Bloomberg said. New York Life Insurance, which has a partnership with Haier Group, China's largest household appliance maker, is seeking more investments in China public works projects, Oriental Morning Post said. Oil shipments on supertankers leaving the Persian Gulf surged 22% in July to a three-month high as OPEC boosted output to meet increasing demand, led by China and the U.S., Bloomberg reported.
Late-Night Trading
Asian Indices are -.25% to +1.0% on average.
S&P 500 indicated -.15%.
NASDAQ 100 indicated -.21%
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on stronger corporate earnings reports and better economic data. The Portfolio is 100% net long heading into tomorrow.
Tuesday, August 03, 2004
Monday, August 02, 2004
Monday Close
S&P 500 1,106.62 +.44%
NASDAQ 1,892.09 +.25%
Leading Sectors
Homebuilders +1.69%
Defense +1.32%
Wireless +1.06%
Lagging Sectors
Software -.90%
Biotech -1.21%
Airlines -1.61%
Other
Crude Oil 43.80 -.05%
Natural Gas 5.83 +.21%
Gold 394.30 -.03%
Base Metals 111.49 -.57%
U.S. Dollar 89.77 -.21%
10-Yr. T-note Yield 4.45% -.57%
VIX 15.37 +.33%
Put/Call .77 +20.31%
NYSE Arms .92 -29.77%
After-hours Movers
BEAS +6.86% on bargain-hunting after missing 2Q estimates.
ADBE +5.08% after boosting 3Q forecast substantially.
QGENF +5.21% after beating 2Q estimates and boosting 04 outlook.
SNIC -9.15% after missing 1Q revenue estimates.
PCLN -12.01% after meeting 2Q estimates and lowering 3Q forecast.
Recommendations
Goldman Sachs reiterated Outperform on FS, KO, PG and IGT. Goldman reiterated Underperform on GM and F.
After-hours News
U.S. stocks finished modestly higher today on short covering after the weekend's terror news failed to send stocks lower. After the close, BellSouth will announce tomorrow that it will offer DirectTV service to customers in nine states, CNBC reported. BMW is recalling some X3 sport-utility vehicles amid concerns over power steering systems, Focus Online said. The U.S. government plans to borrow a net $89 billion from July through September, less than it initially predicted, as higher tax receipts reduce the federal budget-deficit forecast, Bloomberg said. Franklin Advisers will pay $50 million to settle claims that it allowed some clients to engage in improper mutual fund trading, the SEC said. Adobe Systems, the world's biggest maker of graphic-design software, said third-quarter profit will rise more than forecast. "People are not only upgrading, they are upgrading to the premium versions of Adobe software," said analyst Zorovic at Oppenheimer. Acid rain caused by the burning of fossil fuels may cut methane emissions from wetlands and help combat global warming, according to a study in the Proceedings of the National Academy of Sciences. Lockheed Martin was selected by the U.S. Army over a team led by Northrop Grumman to start development and production of a new military spy plane, Bloomberg reported. IBM won a seven-year contract to manage Dow Chemical's computers, replacing Electronic Data Systems, Bloomberg said.
BOTTOM LINE: The Portfolio finished lower today on weakness in my technology and alternative energy longs. I exited a few longs in the afternoon as my stop-losses were triggered, bringing the Portfolio's market exposure to 100% net long. While it was definitely a positive that stocks rallied strongly off the lows, the advance/decline line was poor and most measures of investor complacency remained at high levels. I expect U.S. stocks to put in a short-term top at some point this week or early next week.
NASDAQ 1,892.09 +.25%
Leading Sectors
Homebuilders +1.69%
Defense +1.32%
Wireless +1.06%
Lagging Sectors
Software -.90%
Biotech -1.21%
Airlines -1.61%
Other
Crude Oil 43.80 -.05%
Natural Gas 5.83 +.21%
Gold 394.30 -.03%
Base Metals 111.49 -.57%
U.S. Dollar 89.77 -.21%
10-Yr. T-note Yield 4.45% -.57%
VIX 15.37 +.33%
Put/Call .77 +20.31%
NYSE Arms .92 -29.77%
After-hours Movers
BEAS +6.86% on bargain-hunting after missing 2Q estimates.
ADBE +5.08% after boosting 3Q forecast substantially.
QGENF +5.21% after beating 2Q estimates and boosting 04 outlook.
SNIC -9.15% after missing 1Q revenue estimates.
PCLN -12.01% after meeting 2Q estimates and lowering 3Q forecast.
Recommendations
Goldman Sachs reiterated Outperform on FS, KO, PG and IGT. Goldman reiterated Underperform on GM and F.
After-hours News
U.S. stocks finished modestly higher today on short covering after the weekend's terror news failed to send stocks lower. After the close, BellSouth will announce tomorrow that it will offer DirectTV service to customers in nine states, CNBC reported. BMW is recalling some X3 sport-utility vehicles amid concerns over power steering systems, Focus Online said. The U.S. government plans to borrow a net $89 billion from July through September, less than it initially predicted, as higher tax receipts reduce the federal budget-deficit forecast, Bloomberg said. Franklin Advisers will pay $50 million to settle claims that it allowed some clients to engage in improper mutual fund trading, the SEC said. Adobe Systems, the world's biggest maker of graphic-design software, said third-quarter profit will rise more than forecast. "People are not only upgrading, they are upgrading to the premium versions of Adobe software," said analyst Zorovic at Oppenheimer. Acid rain caused by the burning of fossil fuels may cut methane emissions from wetlands and help combat global warming, according to a study in the Proceedings of the National Academy of Sciences. Lockheed Martin was selected by the U.S. Army over a team led by Northrop Grumman to start development and production of a new military spy plane, Bloomberg reported. IBM won a seven-year contract to manage Dow Chemical's computers, replacing Electronic Data Systems, Bloomberg said.
BOTTOM LINE: The Portfolio finished lower today on weakness in my technology and alternative energy longs. I exited a few longs in the afternoon as my stop-losses were triggered, bringing the Portfolio's market exposure to 100% net long. While it was definitely a positive that stocks rallied strongly off the lows, the advance/decline line was poor and most measures of investor complacency remained at high levels. I expect U.S. stocks to put in a short-term top at some point this week or early next week.
Mid-day Update
S&P 500 1,100.93 -.07%
NASDAQ 1,876.10 -.60%
Leading Sectors
Tobacco +1.06%
Defense +.85%
Homebuilders +.57%
Lagging Sectors
Disk Drives -1.55%
Biotech -1.74%
Airlines -2.42%
Other
Crude Oil 43.52 -.64%
Natural Gas 5.82 -4.70%
Gold 394.00 +.10%
Base Metals 111.49 -.57%
U.S. Dollar 89.75 -.24%
10-Yr. T-note Yield 4.46% -.40%
VIX 16.06 +4.83%
Put/Call .78 +21.87%
NYSE Arms 1.11 -15.27%
Market Movers
COCO -43.2% after lowering 4Q, 04 and 05 forecasts. Education stocks down across the board on the news.
COX +20.5% after James Cox Kennedy, whose family controls Cox, offered $7.9 billion to take the fourth-largest U.S. cable-tv operator private.
NTMD +27.0% after Deutsche Bank initiated coverage with a Buy rating, citing the "blockbuster potential" for the company's heart drug for African-Americans.
QCOM +3.4% after Bank of America upgrade to Buy.
RIGL +37.4% after saying its first experimental drug, dubbed R112, showed promise in alleviating the symptoms of hay fever in its first large test.
PG +3.2% after beating 4Q estimates and giving positive 05 outlook.
SNPS -16.4% after lowering 3Q forecast.
INVN -13.2% as looming investigations by the Dept. of Justice and SEC may delay GE's $900 million acquisition of the company.
Economic Data
Construction Spending for June fell .3% versus estimates of unch. and up .1% in June.
ISM Manufacturing for July was 62.0 versus estimates of 62.0 and 61.1 in June.
ISM Prices Paid for July was 77.0 versus estimates of 79.0 and 81.0 in June.
Recommendations
NFX raised to Overweight at JP Morgan. ARDI cut to Underweight at JP Morgan. PPP cut to Underweight at JP Morgan. QCOM raised to Buy at Bank of America, target $90. NTMD rated new Buy at Deutsche Bank, target $38. CBG rated Outperform at CSFB, target $26. COCO cut to Underweight at JP Morgan. Goldman Sachs reiterated Outperform on CBL, WMT, FD, NOI, RSE, PG, STA, MMP, FDC, CRE, EBAY, CAL and COH. Goldman reiterated Underperform on DTE and FHCC. Goldman rated JTX Outperform. Goldman upgraded SANM to Outperform. Goldman reiterated Cautious view on REITs. NT raised to Buy at Citi SmithBarney, target $5. Citi reiterated Buy on TXT, target $70. FCX reiterated Buy on FCX, target $50. Citi reiterated Buy on PEG, target $45. Citi reiterated Buy on CI, target $75.
Mid-day News
U.S. stocks are modestly lower mid-day on fears over domestic terrorism. An overseas Web gambling industry has sprung up in recent years that the U.S. wants to curb because betting via the phone or Internet is illegal in the U.S., the Wall Street Journal reported. Absolut vodka has begun sponsoring social-networking text messages on entertainment locations, in a bid to boost its brand, the Wall Street Journal reported. The shares of OAO Yukos Oil, Russia's largest oil exporter, jumped as much as 20% as government officials said the company may get more than the two months allowed by law to pay a $3.4 billion tax bill, Bloomberg said. DirectTV agreed to buy Pegasus Satellite TV's broadcast satellite business for about $938 million, Bloomberg said. Fifth Third Bancorp, the 11th largest U.S. bank, said it agreed to buy First National Bankshares of Florida for $1.58 billion in stock to help it expand into five new markets in Florida, Bloomberg said. Companies in the S&P 500 have reported a 31% rise in profits for the 2nd quarter so far, above the 21% expected increase and the best performance in at least 6 years, Bloomberg reported. The Institute of Supply Management's factory index for last month rose to 62.0, near the 20-year high reading of 63.6 set in January, Bloomberg reported. President Bush said he supports two key recommendations of the commission that studied the Sept. 11 attacks: creating the post of national intelligence director and an office to coordinate all U.S. efforts to combat terrorism, Bloomberg said. According to Tradesports.com, President Bush's chances of re-election have risen 4 percentage points since the Democratic Convention to 53.3%.
BOTTOM LINE: The Portfolio is lower today as most of my longs are declining. I have not traded and the Portfolio is still 125% net long. While the major indices are lower, the mildly negative reaction to the weekend's terror news is a positive for the Bulls. As well, oil is falling despite the news and violence in Iraq over the weekend. I expect U.S. stocks to rise modestly into the close.
NASDAQ 1,876.10 -.60%
Leading Sectors
Tobacco +1.06%
Defense +.85%
Homebuilders +.57%
Lagging Sectors
Disk Drives -1.55%
Biotech -1.74%
Airlines -2.42%
Other
Crude Oil 43.52 -.64%
Natural Gas 5.82 -4.70%
Gold 394.00 +.10%
Base Metals 111.49 -.57%
U.S. Dollar 89.75 -.24%
10-Yr. T-note Yield 4.46% -.40%
VIX 16.06 +4.83%
Put/Call .78 +21.87%
NYSE Arms 1.11 -15.27%
Market Movers
COCO -43.2% after lowering 4Q, 04 and 05 forecasts. Education stocks down across the board on the news.
COX +20.5% after James Cox Kennedy, whose family controls Cox, offered $7.9 billion to take the fourth-largest U.S. cable-tv operator private.
NTMD +27.0% after Deutsche Bank initiated coverage with a Buy rating, citing the "blockbuster potential" for the company's heart drug for African-Americans.
QCOM +3.4% after Bank of America upgrade to Buy.
RIGL +37.4% after saying its first experimental drug, dubbed R112, showed promise in alleviating the symptoms of hay fever in its first large test.
PG +3.2% after beating 4Q estimates and giving positive 05 outlook.
SNPS -16.4% after lowering 3Q forecast.
INVN -13.2% as looming investigations by the Dept. of Justice and SEC may delay GE's $900 million acquisition of the company.
Economic Data
Construction Spending for June fell .3% versus estimates of unch. and up .1% in June.
ISM Manufacturing for July was 62.0 versus estimates of 62.0 and 61.1 in June.
ISM Prices Paid for July was 77.0 versus estimates of 79.0 and 81.0 in June.
Recommendations
NFX raised to Overweight at JP Morgan. ARDI cut to Underweight at JP Morgan. PPP cut to Underweight at JP Morgan. QCOM raised to Buy at Bank of America, target $90. NTMD rated new Buy at Deutsche Bank, target $38. CBG rated Outperform at CSFB, target $26. COCO cut to Underweight at JP Morgan. Goldman Sachs reiterated Outperform on CBL, WMT, FD, NOI, RSE, PG, STA, MMP, FDC, CRE, EBAY, CAL and COH. Goldman reiterated Underperform on DTE and FHCC. Goldman rated JTX Outperform. Goldman upgraded SANM to Outperform. Goldman reiterated Cautious view on REITs. NT raised to Buy at Citi SmithBarney, target $5. Citi reiterated Buy on TXT, target $70. FCX reiterated Buy on FCX, target $50. Citi reiterated Buy on PEG, target $45. Citi reiterated Buy on CI, target $75.
Mid-day News
U.S. stocks are modestly lower mid-day on fears over domestic terrorism. An overseas Web gambling industry has sprung up in recent years that the U.S. wants to curb because betting via the phone or Internet is illegal in the U.S., the Wall Street Journal reported. Absolut vodka has begun sponsoring social-networking text messages on entertainment locations, in a bid to boost its brand, the Wall Street Journal reported. The shares of OAO Yukos Oil, Russia's largest oil exporter, jumped as much as 20% as government officials said the company may get more than the two months allowed by law to pay a $3.4 billion tax bill, Bloomberg said. DirectTV agreed to buy Pegasus Satellite TV's broadcast satellite business for about $938 million, Bloomberg said. Fifth Third Bancorp, the 11th largest U.S. bank, said it agreed to buy First National Bankshares of Florida for $1.58 billion in stock to help it expand into five new markets in Florida, Bloomberg said. Companies in the S&P 500 have reported a 31% rise in profits for the 2nd quarter so far, above the 21% expected increase and the best performance in at least 6 years, Bloomberg reported. The Institute of Supply Management's factory index for last month rose to 62.0, near the 20-year high reading of 63.6 set in January, Bloomberg reported. President Bush said he supports two key recommendations of the commission that studied the Sept. 11 attacks: creating the post of national intelligence director and an office to coordinate all U.S. efforts to combat terrorism, Bloomberg said. According to Tradesports.com, President Bush's chances of re-election have risen 4 percentage points since the Democratic Convention to 53.3%.
BOTTOM LINE: The Portfolio is lower today as most of my longs are declining. I have not traded and the Portfolio is still 125% net long. While the major indices are lower, the mildly negative reaction to the weekend's terror news is a positive for the Bulls. As well, oil is falling despite the news and violence in Iraq over the weekend. I expect U.S. stocks to rise modestly into the close.
Monday Watch
Earnings of Note
Company/Estimate
ASE/.12
AMT/-.16
AVNX/-.18
MVSN/.18
NKTR/-.29
MNT/.34
NTES/.39
PCLN/.31
PG/.48
RJR/1.24
Splits
GTK 2-for-1
VAR 2-for-1
Economic Data
Construction Spending for June estimated unch. versus a .3% rise in May.
ISM Manufacturing for July estimated at 62.0 versus 61.1 in June.
ISM Prices Paid for July estimated at 79.0 versus 81.0 in June.
Weekend Recommendations
Forbes on Fox had guests that were positive on AMGN, DBD and QLGC. Bulls and Bears had guests that were positive on HNZ, ANF, AW, HMC, CRA, mixed on BUD, BA, KO, VZ and negative on IBM, BMY. Cashin' In had guests that were positive on WSM, SBUX, mixed on TEVA, LPNT, XMSR and negative on CSCO. Wall St. Week w/Fortune had guests that were positive on ERES and WM. Barron's had positive comments on BSC, CBH, JJZ and negative comments on MDTL. Goldman Sachs reiterated Outperform on NOI, MET and Underperform on FRNT, UNM, DTE.
Weekend News
Getty Images, the world's largest provider of moving and still images to businesses, has set aside $400 million to expand in Asia and Europe, the London-based Times reported. Bristol-Myers Squibb is close to concluding its legal process with the SEC, the Financial Times reported. The ACLU board is split over a pledge made to U.S. officials that it wouldn't knowingly employ people whose names appear on terrorism watch lists, the New York Times reported. Illinois Governor Blagojevich signed a law that prohibits suits against restaurants from customers that blame them for their obesity, the Chicago Tribune reported. Triarc Cos., which operates Arby's fast-food restaurants, wants to make additional acquisitions in the money-management industry after agreeing to buy a majority stake in an investment company, the New York Times reported. The U.S. federal agency that insures company pensions may face a wave of bankruptcies and defaults on pensions in the airline industry, the New York Times reported. The al-Qaeda terrorist network is planning suicide attacks against corporations based in New York City, ABC News reported. The U.S. has been assigning hundreds of detainees to Iraqi courts for trial to take advantage of a new national criminal court for terrorism suspects, the NY Times said. New Jersey's gain in employment to an all-time high was led by the southern part of the state, particularly by new jobs in Burlington, Camden and Gloucester counties as well as Monmouth and Ocean counties, the Philadelphia Inquirer reported. AT&T may become the target of a takeover by Bellsouth or a foreign telecom company, the Star-Ledger reported. Afghanistan has registered 90% of its estimated 9.8 million eligible voters for presidential elections in October, the BBC said. Police in Newark, NJ, put up metal fences around the Prudential Financial building and blocked off two streets after federal authorities said the building is a terrorist target, the AP reported. The Port Authority of NY and NJ will close the Holland Tunnel to eastbound commercial traffic starting at midnight tonight, CNN said. Unisys may say today that it will offer the Linux operating system, as well as Microsoft's Windows, on its ES 7000 servers, the Wall Street Journal reported. U.S. special forces have been hunting Saudi Arabian terrorists who have re-established secret al-Qaeda training camps in the north eastern quarter of Sudan, the Sunday Telegraph said. Pfizer and Cleveland Clinic researchers may have uncovered a new route to keep the body from making a substance that clogs the brain in Alzheimer's disease, according to a study in the Aug. 1 Nature Medicine. Aluminum Corp. of China may be forced to cut prices as importers of the semi-finished product used to make aluminum metal sell it at a 16% discount, Bloomberg said. Senator Kerry lost ground in his race against President Bush in a CNN/USA Today/Gallup poll after accepting the Democratic presidential nomination, though Kerry gained in a Newsweek survey, Bloomberg reported. Kerry would be the first candidate since 1972 to lose ground after a national convention in a Gallup Poll, USA Today said. Cox Enterprises, which owns 62% of Cox Communications, said it wants to pay $7.9 billion for the shares of the fourth-largest U.S. cable-tv company it doesn't already own, Bloomberg reported. Sun Micro may boost growth by making acquisitions and has looked at buying software maker Novell, the Wall Street Journal reported.
Late-Night Trading
Asian indices are mostly lower, -1.25% to unch. on average.
S&P 500 indicated -.39%.
NASDAQ 100 indicated +-.53%.
BOTTOM LINE: I expect U.S. stocks to open lower in the morning on terrorism fears and higher oil prices. However, the major indices will likely rally off the morning lows on better economic reports. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
ASE/.12
AMT/-.16
AVNX/-.18
MVSN/.18
NKTR/-.29
MNT/.34
NTES/.39
PCLN/.31
PG/.48
RJR/1.24
Splits
GTK 2-for-1
VAR 2-for-1
Economic Data
Construction Spending for June estimated unch. versus a .3% rise in May.
ISM Manufacturing for July estimated at 62.0 versus 61.1 in June.
ISM Prices Paid for July estimated at 79.0 versus 81.0 in June.
Weekend Recommendations
Forbes on Fox had guests that were positive on AMGN, DBD and QLGC. Bulls and Bears had guests that were positive on HNZ, ANF, AW, HMC, CRA, mixed on BUD, BA, KO, VZ and negative on IBM, BMY. Cashin' In had guests that were positive on WSM, SBUX, mixed on TEVA, LPNT, XMSR and negative on CSCO. Wall St. Week w/Fortune had guests that were positive on ERES and WM. Barron's had positive comments on BSC, CBH, JJZ and negative comments on MDTL. Goldman Sachs reiterated Outperform on NOI, MET and Underperform on FRNT, UNM, DTE.
Weekend News
Getty Images, the world's largest provider of moving and still images to businesses, has set aside $400 million to expand in Asia and Europe, the London-based Times reported. Bristol-Myers Squibb is close to concluding its legal process with the SEC, the Financial Times reported. The ACLU board is split over a pledge made to U.S. officials that it wouldn't knowingly employ people whose names appear on terrorism watch lists, the New York Times reported. Illinois Governor Blagojevich signed a law that prohibits suits against restaurants from customers that blame them for their obesity, the Chicago Tribune reported. Triarc Cos., which operates Arby's fast-food restaurants, wants to make additional acquisitions in the money-management industry after agreeing to buy a majority stake in an investment company, the New York Times reported. The U.S. federal agency that insures company pensions may face a wave of bankruptcies and defaults on pensions in the airline industry, the New York Times reported. The al-Qaeda terrorist network is planning suicide attacks against corporations based in New York City, ABC News reported. The U.S. has been assigning hundreds of detainees to Iraqi courts for trial to take advantage of a new national criminal court for terrorism suspects, the NY Times said. New Jersey's gain in employment to an all-time high was led by the southern part of the state, particularly by new jobs in Burlington, Camden and Gloucester counties as well as Monmouth and Ocean counties, the Philadelphia Inquirer reported. AT&T may become the target of a takeover by Bellsouth or a foreign telecom company, the Star-Ledger reported. Afghanistan has registered 90% of its estimated 9.8 million eligible voters for presidential elections in October, the BBC said. Police in Newark, NJ, put up metal fences around the Prudential Financial building and blocked off two streets after federal authorities said the building is a terrorist target, the AP reported. The Port Authority of NY and NJ will close the Holland Tunnel to eastbound commercial traffic starting at midnight tonight, CNN said. Unisys may say today that it will offer the Linux operating system, as well as Microsoft's Windows, on its ES 7000 servers, the Wall Street Journal reported. U.S. special forces have been hunting Saudi Arabian terrorists who have re-established secret al-Qaeda training camps in the north eastern quarter of Sudan, the Sunday Telegraph said. Pfizer and Cleveland Clinic researchers may have uncovered a new route to keep the body from making a substance that clogs the brain in Alzheimer's disease, according to a study in the Aug. 1 Nature Medicine. Aluminum Corp. of China may be forced to cut prices as importers of the semi-finished product used to make aluminum metal sell it at a 16% discount, Bloomberg said. Senator Kerry lost ground in his race against President Bush in a CNN/USA Today/Gallup poll after accepting the Democratic presidential nomination, though Kerry gained in a Newsweek survey, Bloomberg reported. Kerry would be the first candidate since 1972 to lose ground after a national convention in a Gallup Poll, USA Today said. Cox Enterprises, which owns 62% of Cox Communications, said it wants to pay $7.9 billion for the shares of the fourth-largest U.S. cable-tv company it doesn't already own, Bloomberg reported. Sun Micro may boost growth by making acquisitions and has looked at buying software maker Novell, the Wall Street Journal reported.
Late-Night Trading
Asian indices are mostly lower, -1.25% to unch. on average.
S&P 500 indicated -.39%.
NASDAQ 100 indicated +-.53%.
BOTTOM LINE: I expect U.S. stocks to open lower in the morning on terrorism fears and higher oil prices. However, the major indices will likely rally off the morning lows on better economic reports. The Portfolio is 125% net long heading into tomorrow.
Sunday, August 01, 2004
Chart of the Week
Bottom Line: The VIX, one measure of investor anxiety, is still showing high levels of complacency. I expect this index to approach 25 within the next 2 months as terrorism worries and negative political rhetoric send investor pessimism higher. From a contrarian's standpoint, this is necessary for the strong rally I expect in the fourth quarter.
Weekly Outlook
There are a number of important economic reports and some significant corporate earnings reports scheduled for release this week. Economic reports this week include Construction Spending, ISM Manufacturing/Prices Paid, Personal Income, Personal Spending, PCE Deflator, Vehicle Sales, ISM Non-manufacturing, Factory Orders, Initial Jobless Claims, Unemployment Rate, Average Hourly Earnings, Change in Non-farm Payrolls, Average Weekly Hours and Consumer Credit. ISM Manufacturing/Non-manufacturing, ISM Prices Paid and Change in Non-farm Payrolls all have market-moving potential.
Proctor & Gamble(PG), Priceline.com(PCLN), Emerson Electric(EMR), Quest Communications(Q), Tyco(TYC), IAC/InterActiveCorp.(IACI), Clorox Co.(CLX), CVS Corp.(CVS), Abercrombie and Fitch(ANF), CIGNA Corp.(CI), Goodyear Tire(GT), XM Satellite Radio(XMSR) are some of the more important companies that release quarterly earnings this week. There is also another event that has market-moving potential. The RBC Technology Conference could also impact trading this week.
Bottom Line: I expect U.S. stocks to finish the week mixed as positive news on the economic front is offset by terrorism fears. It is likely that the major U.S. indices will put in a short-term top this week as worries over terrorism come to the fore once again ahead of the Olympics. It is my contention that levels of investor anxiety will spike up within the next 2 months as most stocks weaken, setting the stage for a very good fourth quarter for U.S. equities. I continue to believe that the selling in much the technology sector is overdone and these stocks will lead the vigorous rally I envision for the year's final quarter.
Proctor & Gamble(PG), Priceline.com(PCLN), Emerson Electric(EMR), Quest Communications(Q), Tyco(TYC), IAC/InterActiveCorp.(IACI), Clorox Co.(CLX), CVS Corp.(CVS), Abercrombie and Fitch(ANF), CIGNA Corp.(CI), Goodyear Tire(GT), XM Satellite Radio(XMSR) are some of the more important companies that release quarterly earnings this week. There is also another event that has market-moving potential. The RBC Technology Conference could also impact trading this week.
Bottom Line: I expect U.S. stocks to finish the week mixed as positive news on the economic front is offset by terrorism fears. It is likely that the major U.S. indices will put in a short-term top this week as worries over terrorism come to the fore once again ahead of the Olympics. It is my contention that levels of investor anxiety will spike up within the next 2 months as most stocks weaken, setting the stage for a very good fourth quarter for U.S. equities. I continue to believe that the selling in much the technology sector is overdone and these stocks will lead the vigorous rally I envision for the year's final quarter.
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