S&P 500 1,107.39 +.21%
NASDAQ 1,862.02 +.49%
Leading Sectors
Biotech +1.20%
Disk Drives +1.19%
Semis +.95%
Lagging Sectors
Restaurants -.36%
I-Banks -.49%
Airlines -3.67%
Other
Crude Oil 43.01 -.21%
Natural Gas 5.16 -.56%
Gold 404.80 -1.17%
Base Metals 108.20 -.21%
U.S. Dollar 89.69 +.44%
10-Yr. T-note Yield 4.19% -.28%
VIX 14.90 -.07%
Put/Call .97 +19.75%
NYSE Arms .93 -7.0%
Market Movers
CHIR -7.9% after saying it will delay shipments of its Fluvirin flu shots until October because testing indicated some products might not be sterile.
LCAV +10.2% after Raymond James upgrade to Strong Buy.
NX +4.6% after beating 3Q estimates, raising 04 outlook, boosting dividend and announcing 1M share buyback.
CHTT +6.9% saying it won final court approval of a settlement of as much as $76M in claims that an additive in its Dexatrim diet drug had caused some users to have strokes and raising 3Q forecast.
OSIS -17.9% after beating 4Q estimates and lowering 1Q guidance.
JUPM -11.4% after saying CEO and COO sold 1M shares.
KWD -6.11% after missing 2Q estimates and lowering 3Q forecast.
Economic Data
Preliminary GDP for 2Q rose 2.8% versus estimates of 2.7% and 3.0% prior.
Preliminary Personal Consumption for 2Q increased 1.6% versus estimates of 1.3% and 1.0% prior.
GDP Price Deflator for 2Q rose 3.2% versus estimates of 3.2% and 3.2% prior.
Final Univ. of Mich. Consumer Confidence for August was 95.9 versus estimates of 94.0 and a prior reading of 94.0.
Recommendations
Citi SmithBarney said to Buy PNR, target $40. Citi reiterated Buy on CHS, target $48. Citi reiterated Buy on FLEX, target $22. CRK raised to Sector Outperform at CIBC. LCAV raised to Strong Buy at Raymond James, target $27. Goldman Sachs reiterated Outperform on MON.
Mid-day News
U.S. stocks are quietly higher mid-day as economic data met expectations and oil prices continue to fall. France's new foreign minister, Michel Barnier, told a conference of the country's ambassadors yesterday that France "is not great when it is arrogant" and "not strong if it is alone," the NY Times reported. About half of video game players say they reduced their tv viewing this year, or plan to next year, the NY Post reported. California legislators scrapped a proposal to build a Las Vegas-style casino near San Francisco, the LA Times reported. Hewlett-Packard plans to unveil printer ink today that it hopes will brand ink like Intel's "Intel Inside" advertising campaign branded computer chips, the LA Times reported. The Bond Market Association has stepped up political contributions to Republicans, the Bond Buyer said. The U.S. dollar headed for its biggest weekly advance against the euro in a month as policy makers at the Federal Reserve said a slowdown in the U.S. economy during the second quarter won't last and oil prices retreated, Bloomberg reported. Russia's security service said it found traces of explosives in the wreckage of one of two Russian planes that crashed on Tuesday night, killing 89 people, Bloomberg reported. Iraqi Foreign Minister Zebari said he's "optimistic" the crisis in Najaf has been resolved after three weeks of clashes between militiamen loyal to al-Sadr and U.S.-led coalition forces, Bloomberg said. GE's NBC will get 20% less for advertising time on its spin-off comedy, "Joey," this year than it did for the show's predecessor, "Friends," Bloomberg reported.
BOTTOM LINE: The Portfolio is unchanged mid-day as my longs are slightly higher and my shorts are rising. I added a few new longs this morning, bringing the Portfolio's market exposure to 100% net long. One of my new longs is LRCX and I am using a $21.75 stop-loss on this position. The market continues to consolidate recent gains in an orderly fashion. The CRB Index is falling again and the Put/Call ratio is spiking which are positives. As well, interest rates and oil prices are still declining. I continue to anticipate a resumption of the recent rally next week. The main worries of investors are improving. Energy prices are falling, interest rates are declining, inflation fears are falling, Iraq is improving, Bush's poll numbers are rising, terrorism fears are subsiding and economic growth is stabilizing. I expect U.S. stocks to rise modestly into the close on short-covering.
Friday, August 27, 2004
Friday Watch
Earnings of Note
Company/Estimate
None of note.
Splits
PGTV 2-for-1
Economic Data
Preliminary 2Q GDP estimated up 2.7% versus 3.0% prior.
Preliminary 2Q Personal Consumption estimated up 1.3% versus 1.0% prior.
Preliminary 2Q Price Deflator estimated up 3.2% versus 3.2% prior.
Final Univ. of Mich. Consumer Confidence reading for August estimated at 94.0 versus 94.0 prior.
Recommendations
Goldman Sachs reiterated Outperform on MDT and Underperform on GCO. Shares of BE Aerospace(BEAV), the world's biggest maker of interiors for airlines, may rise more than 50% over the next year as airlines pick up spending on their fleets, Business Week reported. Shares of Angiotech Pharmaceuticals(ANPI), which licenses its stent-coating technology to Boston Scientific, may rise because the company is a pioneer in drug-coated medical devices, Business Week reported. Manpower(MAN) and Monster Worldwide(MNST) shares will rise after a sell-off from weak job reports in June and July left the stocks undervalued, Business Week reported.
Late-Night News
Asian indices are quietly mixed as optimism over falling energy prices is mostly offset by terrorism concerns. Lazard LLC Chairman Michel David-Weill and other partners who together control 36% of the investment-banking partnership would demand to be bought out as a condition for approving an IPO, Business Week reported. Microsoft will start an internet music store allowing customers to purchase and download music tracks to their computers, the Financial Times reported. Two Russia airline crashes minutes apart of Tuesday were probably caused by terrorism, the AP said. Crude oil's five-day plunge since failing to reach $50/bbl. has convinced more traders and analysts that the price will continue to fall, according to a Bloomberg survey. Tyco International CEO Breen, who runs businesses touching at least a dozen industries, said higher commodity prices are constraining profits and may reduce U.S. economic growth by about .5 percentage points, Bloomberg reported.
Late-Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated +.25%
BOTTOM LINE: I expect U.S. equities to open modestly lower on weaker economic data. However, stocks should rise into the afternoon on short-covering ahead of potential positive catalysts next week. The Portfolio is 75% net long heading into tomorrow.
Company/Estimate
None of note.
Splits
PGTV 2-for-1
Economic Data
Preliminary 2Q GDP estimated up 2.7% versus 3.0% prior.
Preliminary 2Q Personal Consumption estimated up 1.3% versus 1.0% prior.
Preliminary 2Q Price Deflator estimated up 3.2% versus 3.2% prior.
Final Univ. of Mich. Consumer Confidence reading for August estimated at 94.0 versus 94.0 prior.
Recommendations
Goldman Sachs reiterated Outperform on MDT and Underperform on GCO. Shares of BE Aerospace(BEAV), the world's biggest maker of interiors for airlines, may rise more than 50% over the next year as airlines pick up spending on their fleets, Business Week reported. Shares of Angiotech Pharmaceuticals(ANPI), which licenses its stent-coating technology to Boston Scientific, may rise because the company is a pioneer in drug-coated medical devices, Business Week reported. Manpower(MAN) and Monster Worldwide(MNST) shares will rise after a sell-off from weak job reports in June and July left the stocks undervalued, Business Week reported.
Late-Night News
Asian indices are quietly mixed as optimism over falling energy prices is mostly offset by terrorism concerns. Lazard LLC Chairman Michel David-Weill and other partners who together control 36% of the investment-banking partnership would demand to be bought out as a condition for approving an IPO, Business Week reported. Microsoft will start an internet music store allowing customers to purchase and download music tracks to their computers, the Financial Times reported. Two Russia airline crashes minutes apart of Tuesday were probably caused by terrorism, the AP said. Crude oil's five-day plunge since failing to reach $50/bbl. has convinced more traders and analysts that the price will continue to fall, according to a Bloomberg survey. Tyco International CEO Breen, who runs businesses touching at least a dozen industries, said higher commodity prices are constraining profits and may reduce U.S. economic growth by about .5 percentage points, Bloomberg reported.
Late-Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated +.25%
BOTTOM LINE: I expect U.S. equities to open modestly lower on weaker economic data. However, stocks should rise into the afternoon on short-covering ahead of potential positive catalysts next week. The Portfolio is 75% net long heading into tomorrow.
Thursday, August 26, 2004
Thursday Close
S&P 500 1,105.09 +.01%
NASDAQ 1,852.92 -.42%
Leading Sectors
Oil Service +1.88%
Gaming +1.05%
I-Banks +.78%
Lagging Sectors
Semis -1.01%
Iron/Steel -1.02%
Disk Drives -2.40%
Other
Crude Oil 43.14 +.09%
Natural Gas 5.14 -.94%
Gold 408.60 -.24%
Base Metals 108.43 +.49%
U.S. Dollar 89.30 -.13%
10-Yr. T-note Yield 4.21% -1.23%
VIX 14.91 -.47%
Put/Call .81 +3.85%
NYSE Arms 1.0 +26.58%
After-hours Movers
TECD +4.27% after beating 2Q estimates and raising 3Q forecast.
COH +3.17% after announcing it would replace Charter One Financial in S&P 500.
CHS -4.28% on profit-taking after beating 2Q estimates and making positive comments.
CHIR -6.30% after saying it will delay shipments of its Fluvirin flu shots until October because testing indicated some products might not be sterile.
Recommendations
Goldman reiterated Outperform on FS, GDT and GILD.
After-hours News
U.S. stocks finished mostly lower today as investor apprehension over terrorism rose ahead of the Republican convention, offsetting a continuing fall in energy prices. After the close, Rebel cleric al-Sadr's militia is set to leave the Imam Ali Mosque in Najaf today, abandoning the focal point of a three-week siege involving U.S. and Iraqi forces, Agence France-Presse reported. U.S. authorities arrested or obtained convictions of 156 people since June 1 in an investigation of economic crimes committed on the Internet, Attorney General John Ashcroft said. Health insurers including Aetna, Kaiser Permanente and WellPoint Health are considering discouraging use of Merck's Vioxx painkiller because of concerns about the drug's heart risk, Bloomberg reported. The U.S. women's soccer team beat Brazil 2-1 in extra time for its second Olympic title, hitting the winning goal with eight minutes left, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today as my technology and restaurant longs declined. A few of my longs hit stop-losses in the afternoon and I exited the positions, leaving the Portfolio 75% net long. Volume was very light today and the market's tone remains positive. Further gains are likely next week, barring any domestic terrorism. Natural Gas futures are now down 24% from their recent highs. This is very positive and, as usual, is barely mentioned by the mainstream press.
NASDAQ 1,852.92 -.42%
Leading Sectors
Oil Service +1.88%
Gaming +1.05%
I-Banks +.78%
Lagging Sectors
Semis -1.01%
Iron/Steel -1.02%
Disk Drives -2.40%
Other
Crude Oil 43.14 +.09%
Natural Gas 5.14 -.94%
Gold 408.60 -.24%
Base Metals 108.43 +.49%
U.S. Dollar 89.30 -.13%
10-Yr. T-note Yield 4.21% -1.23%
VIX 14.91 -.47%
Put/Call .81 +3.85%
NYSE Arms 1.0 +26.58%
After-hours Movers
TECD +4.27% after beating 2Q estimates and raising 3Q forecast.
COH +3.17% after announcing it would replace Charter One Financial in S&P 500.
CHS -4.28% on profit-taking after beating 2Q estimates and making positive comments.
CHIR -6.30% after saying it will delay shipments of its Fluvirin flu shots until October because testing indicated some products might not be sterile.
Recommendations
Goldman reiterated Outperform on FS, GDT and GILD.
After-hours News
U.S. stocks finished mostly lower today as investor apprehension over terrorism rose ahead of the Republican convention, offsetting a continuing fall in energy prices. After the close, Rebel cleric al-Sadr's militia is set to leave the Imam Ali Mosque in Najaf today, abandoning the focal point of a three-week siege involving U.S. and Iraqi forces, Agence France-Presse reported. U.S. authorities arrested or obtained convictions of 156 people since June 1 in an investigation of economic crimes committed on the Internet, Attorney General John Ashcroft said. Health insurers including Aetna, Kaiser Permanente and WellPoint Health are considering discouraging use of Merck's Vioxx painkiller because of concerns about the drug's heart risk, Bloomberg reported. The U.S. women's soccer team beat Brazil 2-1 in extra time for its second Olympic title, hitting the winning goal with eight minutes left, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today as my technology and restaurant longs declined. A few of my longs hit stop-losses in the afternoon and I exited the positions, leaving the Portfolio 75% net long. Volume was very light today and the market's tone remains positive. Further gains are likely next week, barring any domestic terrorism. Natural Gas futures are now down 24% from their recent highs. This is very positive and, as usual, is barely mentioned by the mainstream press.
Mid-day Update
S&P 500 1,104.09 -.08%
NASDAQ 1,852.40 -.45%
Leading Sectors
Oil Service +1.68%
Fashion +.88%
Gaming +.80%
Lagging Sectors
Restaurants -.85%
Semis -1.24%
Disk Drives -1.55%
Other
Crude Oil 43.18 -.67%
Natural Gas 5.12 -3.36%
Gold 409.30 -.17%
Base Metals 108.43 +.49%
U.S. Dollar 89.39 -.03%
10-Yr. T-note Yield 4.22% -.96%
VIX 15.02 +.27%
Put/Call .83 +6.41%
NYSE Arms .92 +16.46%
Market Movers
SBUX -5.9% after saying August same-store-sales rose 8%, less than the 11% average gain in the first 11 months of its fiscal year.
APOL +8.9% after reiterating 1Q guidance and raising 05 outlook.
TASR +6.7% after saying it won four additional orders from police departments valued at more than $1 million.
WFI +33.0% after saying it agreed to be purchased by WesBanco(WSBC) for $102.5 million in cash and stock.
SAM -15.7% after lowering 04 estimates and Prudential downgrade to Neutral Weight.
FRED -11.11% after missing 2Q estimates and giving weak guidance.
KKD -10.8% after missing 2Q estimates and lowering 05 outlook.
AOS -9.42% on Robert W. Baird downgrade to Neutral.
Economic Data
Initial Jobless Claims for last week were 343K versus estimates of 335K and 333K the prior week.
Continuing Claims were 2897K versus estimates of 2885K and 2892K prior.
Help Wanted Index for July was 37 versus estimates of 38 and 38 in June.
Recommendations
Goldman Sachs reiterated Underperform on Newspaper industry. Goldman reiterated Outperform on UST, IR, FS, HOT, GCI and FON. Goldman reiterated Underperform on DJ and CVH. Citi SmithBarney said to Buy PEP on weakness, target $60. Recent Citi CIO survey points to strength at BEAS, VRTS, RSAS, COGN and MSTR. Citi reiterated Buy on TOL, target $62. Citi reiterated Buy on AFC, target $40. BAX cut to Reduce at UBS. EFX and WW cut to Sector Underperform at CIBC. KLAC rated Buy at Deutsche Bank, target $44. CCI rated Buy at Bank of America, target $18. SSI rated Buy at Bank of America, target $51. PSYS raised to Strong Buy at Raymond James, target $30. Mario Gabelli, founder and chief executive officer of Gabelli Assest Management, told CNBC that investors should buy oil stocks. Gabelli also said investors should buy shares of LBTYA.
Mid-day News
U.S. stocks are quietly lower mid-day as investor apprehension over terrorism rises ahead of the Republican Convention. Democratic U.S. Senator Daschle faces a close re-election race, with allegations that, as Senate Minority Leader, he helped block President Bush's judicial nominees and Republican-backed legislation in a state where Bush is popular, the Washington Post reported. General Electric's NBC has sold $20 million to $30 million in tv ads in recent days, due to the popularity of the Olympics, the New York Daily News reported. Fifty of the U.S.'s leading anarchists are expected to be in NYC for next week's Republican Convention, some with histories of violent and disruptive tactics, the New York Daily News reported. Illegal immigrants cost the U.S. government more than $10 billion annually and efforts to legalize them would boost the cost to $29 billion a year, the LA Times reported. Workers at Southern Peru Copper Corp., Peru's biggest copper miner, plan to strike Tuesday, Platts reported. UPS plans to deliver packages using a van with the latest fuel-cell technology starting today, the LA Times said. Nearly 300 anti-Semitic acts have been recorded in France so far this year, 67 of them involving physical or verbal assaults on individual Jews, LCI tv reported. Bonds of Toys "R" Us Inc. are being shunned by investors on speculation a corporate restructuring may leave the securities with a more heavily indebted entity, Bloomberg reported. Crude oil futures declined for a fifth straight session, the longest period in 10 months, as a cease-fire in Najaf eased concern that shipments from Iraq will be disrupted, Bloomberg said. President Bush took a 3 percentage point lead over Senator Kerry in a recent poll by the LA Times for the first time this year, Bloomberg reported. U.S. initial jobless claims rose for the first time in four weeks, boosted by more filings related to Hurricane Charley, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly lower mid-day as my declining technology and restaurant longs are more than offsetting my declining steel shorts. I have not traded today and the Portfolio is 100% net long. Oil, Natural Gas and Gasoline futures are all falling and interest rates are declining again today. I continue to believe inflation worries have peaked for at least the intermediate-term and that U.S. economic growth will accelerate in the fourth quarter. Oil prices should drift lower throughout the remainder of the year as supply catches up to demand and the terror premium erodes. The major U.S. indices appear to be consolidating recent gains before a move higher next week. I expect stocks to remain mixed-to-weaker through tomorrow morning and begin rising later tomorrow on short-covering.
NASDAQ 1,852.40 -.45%
Leading Sectors
Oil Service +1.68%
Fashion +.88%
Gaming +.80%
Lagging Sectors
Restaurants -.85%
Semis -1.24%
Disk Drives -1.55%
Other
Crude Oil 43.18 -.67%
Natural Gas 5.12 -3.36%
Gold 409.30 -.17%
Base Metals 108.43 +.49%
U.S. Dollar 89.39 -.03%
10-Yr. T-note Yield 4.22% -.96%
VIX 15.02 +.27%
Put/Call .83 +6.41%
NYSE Arms .92 +16.46%
Market Movers
SBUX -5.9% after saying August same-store-sales rose 8%, less than the 11% average gain in the first 11 months of its fiscal year.
APOL +8.9% after reiterating 1Q guidance and raising 05 outlook.
TASR +6.7% after saying it won four additional orders from police departments valued at more than $1 million.
WFI +33.0% after saying it agreed to be purchased by WesBanco(WSBC) for $102.5 million in cash and stock.
SAM -15.7% after lowering 04 estimates and Prudential downgrade to Neutral Weight.
FRED -11.11% after missing 2Q estimates and giving weak guidance.
KKD -10.8% after missing 2Q estimates and lowering 05 outlook.
AOS -9.42% on Robert W. Baird downgrade to Neutral.
Economic Data
Initial Jobless Claims for last week were 343K versus estimates of 335K and 333K the prior week.
Continuing Claims were 2897K versus estimates of 2885K and 2892K prior.
Help Wanted Index for July was 37 versus estimates of 38 and 38 in June.
Recommendations
Goldman Sachs reiterated Underperform on Newspaper industry. Goldman reiterated Outperform on UST, IR, FS, HOT, GCI and FON. Goldman reiterated Underperform on DJ and CVH. Citi SmithBarney said to Buy PEP on weakness, target $60. Recent Citi CIO survey points to strength at BEAS, VRTS, RSAS, COGN and MSTR. Citi reiterated Buy on TOL, target $62. Citi reiterated Buy on AFC, target $40. BAX cut to Reduce at UBS. EFX and WW cut to Sector Underperform at CIBC. KLAC rated Buy at Deutsche Bank, target $44. CCI rated Buy at Bank of America, target $18. SSI rated Buy at Bank of America, target $51. PSYS raised to Strong Buy at Raymond James, target $30. Mario Gabelli, founder and chief executive officer of Gabelli Assest Management, told CNBC that investors should buy oil stocks. Gabelli also said investors should buy shares of LBTYA.
Mid-day News
U.S. stocks are quietly lower mid-day as investor apprehension over terrorism rises ahead of the Republican Convention. Democratic U.S. Senator Daschle faces a close re-election race, with allegations that, as Senate Minority Leader, he helped block President Bush's judicial nominees and Republican-backed legislation in a state where Bush is popular, the Washington Post reported. General Electric's NBC has sold $20 million to $30 million in tv ads in recent days, due to the popularity of the Olympics, the New York Daily News reported. Fifty of the U.S.'s leading anarchists are expected to be in NYC for next week's Republican Convention, some with histories of violent and disruptive tactics, the New York Daily News reported. Illegal immigrants cost the U.S. government more than $10 billion annually and efforts to legalize them would boost the cost to $29 billion a year, the LA Times reported. Workers at Southern Peru Copper Corp., Peru's biggest copper miner, plan to strike Tuesday, Platts reported. UPS plans to deliver packages using a van with the latest fuel-cell technology starting today, the LA Times said. Nearly 300 anti-Semitic acts have been recorded in France so far this year, 67 of them involving physical or verbal assaults on individual Jews, LCI tv reported. Bonds of Toys "R" Us Inc. are being shunned by investors on speculation a corporate restructuring may leave the securities with a more heavily indebted entity, Bloomberg reported. Crude oil futures declined for a fifth straight session, the longest period in 10 months, as a cease-fire in Najaf eased concern that shipments from Iraq will be disrupted, Bloomberg said. President Bush took a 3 percentage point lead over Senator Kerry in a recent poll by the LA Times for the first time this year, Bloomberg reported. U.S. initial jobless claims rose for the first time in four weeks, boosted by more filings related to Hurricane Charley, Bloomberg said.
BOTTOM LINE: The Portfolio is slightly lower mid-day as my declining technology and restaurant longs are more than offsetting my declining steel shorts. I have not traded today and the Portfolio is 100% net long. Oil, Natural Gas and Gasoline futures are all falling and interest rates are declining again today. I continue to believe inflation worries have peaked for at least the intermediate-term and that U.S. economic growth will accelerate in the fourth quarter. Oil prices should drift lower throughout the remainder of the year as supply catches up to demand and the terror premium erodes. The major U.S. indices appear to be consolidating recent gains before a move higher next week. I expect stocks to remain mixed-to-weaker through tomorrow morning and begin rising later tomorrow on short-covering.
Wednesday, August 25, 2004
Thursday Watch
Earnings of Note
Company/Estimate
CHS/.38
DG/.20
MCRS/.60
KKD/.22
SFD/.47
TSA/.44
TECD/.49
VIP/1.69
Splits
WOOF 2-for-1
ZBRA 3-for-2
Economic Data
Initial Jobless Claims for last week are estimated at 335K versus 331K the prior week.
Continuing Claims are estimated at 2885K versus 2904K prior.
Help Wanted Index for July estimated at 38 versus 38 in June.
Recommendations
Goldman Sachs reiterated Underperform on CMOS.
Late-Night News
Asian indices are mostly higher as crude oil futures had their steepest decline in three months. Career Education is the subject of a grand jury investigation by the U.S. Justice Department and could face criminal charges, the Financial Times reported. Toronto-Dominion Bank, Canada's second-largest bank by assets, may announce a deal as early as tomorrow to buy a majority stake of Banknorth Group, the Wall Street Journal reported. Taiwan's Nanya Technology Corp., ProMOS Technologies Inc. and Powerchip Semiconductor Corp. are expected to make a combined $440 million in the third quarter because a typhoon caused a worldwide shortage of dynamic random access memory chips and pushed up prices, the Economic Daily News said. Russian President Putin ordered security controls at the country's airports to be taken over by the Interior Ministry, Interfax reported.
Late-Night Trading
Asian Indices are -.25% to +1.0% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated -.14%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning on continuing optimism over falling energy prices and short-covering. It is likely the rally in U.S. stocks will pause sometime during the next 2 days as apprehension rises on terrorism fears ahead of the Republican Convention. However, barring any domestic terror acts, equities should resume their rise next week. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
CHS/.38
DG/.20
MCRS/.60
KKD/.22
SFD/.47
TSA/.44
TECD/.49
VIP/1.69
Splits
WOOF 2-for-1
ZBRA 3-for-2
Economic Data
Initial Jobless Claims for last week are estimated at 335K versus 331K the prior week.
Continuing Claims are estimated at 2885K versus 2904K prior.
Help Wanted Index for July estimated at 38 versus 38 in June.
Recommendations
Goldman Sachs reiterated Underperform on CMOS.
Late-Night News
Asian indices are mostly higher as crude oil futures had their steepest decline in three months. Career Education is the subject of a grand jury investigation by the U.S. Justice Department and could face criminal charges, the Financial Times reported. Toronto-Dominion Bank, Canada's second-largest bank by assets, may announce a deal as early as tomorrow to buy a majority stake of Banknorth Group, the Wall Street Journal reported. Taiwan's Nanya Technology Corp., ProMOS Technologies Inc. and Powerchip Semiconductor Corp. are expected to make a combined $440 million in the third quarter because a typhoon caused a worldwide shortage of dynamic random access memory chips and pushed up prices, the Economic Daily News said. Russian President Putin ordered security controls at the country's airports to be taken over by the Interior Ministry, Interfax reported.
Late-Night Trading
Asian Indices are -.25% to +1.0% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated -.14%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning on continuing optimism over falling energy prices and short-covering. It is likely the rally in U.S. stocks will pause sometime during the next 2 days as apprehension rises on terrorism fears ahead of the Republican Convention. However, barring any domestic terror acts, equities should resume their rise next week. The Portfolio is 100% net long heading into tomorrow.
Wednesday Close
S&P 500 1,104.96 +.80%
NASDAQ 1,860.72 +1.30%
Leading Sectors
Networking +2.52%
Internet +2.06%
I-Banks +2.04%
Lagging Sectors
Papers -.15%
Fashion -.30%
Homebuilders -.93%
Other
Crude Oil 43.63 +.37%
Natural Gas 5.31 +.32
Gold 409.20 -.20%
Base Metals 107.90 -1.18%
U.S. Dollar 89.42 -.03%
10-Yr. T-note Yield 4.26% -.14%
VIX 14.98 -2.28%
Put/Call .78 -1.27%
NYSE Arms .79 -35.77%
After-hours Movers
CECO -9.71% after saying Robert McNamara Jr., former general counsel to the CIA, will be the company's first senior v.p. of compliance.
CWTR +10.01% after beating 2Q estimates.
SBUX -4.11% after saying August same-store-sales rose 8%, less than the 11% average gain in the first 11 months of its fiscal year.
CYBX -4.48% after raising 2Q profit forecast and lowering 2Q sales guidance.
ZIGO +17.62% after reporting strong 4Q and saying it had entered into an agreement to sell its vacant Westborough, Mass., facility.
Recommendations
Goldman Sachs reiterated Outperform on TU and UNH. Goldman reiterated Underperform on BA.
After-hours News
U.S. stocks finished higher today as the Dow hit a six-week high on optimism over falling oil prices. After the close, Microsoft was fined by Brazil's antitrust regulator the equivalent of 10% of its 1998 sales to the federal government for illegal practices, Bloomberg reported. Iraqi police rounded up dozens of journalists in a Najaf hotel today and took them to the station. "You are brought here because I want to tell you that you never publish the truth," Najaf police Chief Ghaleb al-Jezari told the reporters, Agence France-Presse reported. Crude oil futures plunged 3.9% to $43.47/bbl., the biggest decline in almost three months, after a government reported showed that U.S. gasoline supplies were higher-than-expected. Former Enron director of investor relations, Mark Koenig, pleaded guilty in federal court in Houston to aiding and abetting securities fraud and has agreed to cooperate with prosecutors, Bloomberg reported. Militiamen loyal to Moqtada al-Sadr will suspend fighting in Iraq to market the return of the nation's leading Shiite Muslim cleric, Grand Ayatollah Ali al-Sistani, Bloomberg reported.
BOTTOM LINE: The Portfolio finished slightly higher today as my falling steel shorts and rising alternative energy longs more than offset my declining homebuilding longs. I added a few new technology and restaurant longs in the afternoon, leaving the Portfolio 100% net long. One of my new longs is OSTK and I am using a $30.75 stop-loss on the position. The action in the unleaded gasoline and oil futures is very encouraging and will provide further stimuli to economic demand in the fourth quarter. Many large investors are vacationing this week and many more are planning on leaving NYC during the Republican Convention next week. This leads me to conclude this rally has further to go, barring an act of terror at the convention. The market is also anticipating pro-business political rhetoric and a bounce in the polls for President Bush, which the majority of investors view favorably.
NASDAQ 1,860.72 +1.30%
Leading Sectors
Networking +2.52%
Internet +2.06%
I-Banks +2.04%
Lagging Sectors
Papers -.15%
Fashion -.30%
Homebuilders -.93%
Other
Crude Oil 43.63 +.37%
Natural Gas 5.31 +.32
Gold 409.20 -.20%
Base Metals 107.90 -1.18%
U.S. Dollar 89.42 -.03%
10-Yr. T-note Yield 4.26% -.14%
VIX 14.98 -2.28%
Put/Call .78 -1.27%
NYSE Arms .79 -35.77%
After-hours Movers
CECO -9.71% after saying Robert McNamara Jr., former general counsel to the CIA, will be the company's first senior v.p. of compliance.
CWTR +10.01% after beating 2Q estimates.
SBUX -4.11% after saying August same-store-sales rose 8%, less than the 11% average gain in the first 11 months of its fiscal year.
CYBX -4.48% after raising 2Q profit forecast and lowering 2Q sales guidance.
ZIGO +17.62% after reporting strong 4Q and saying it had entered into an agreement to sell its vacant Westborough, Mass., facility.
Recommendations
Goldman Sachs reiterated Outperform on TU and UNH. Goldman reiterated Underperform on BA.
After-hours News
U.S. stocks finished higher today as the Dow hit a six-week high on optimism over falling oil prices. After the close, Microsoft was fined by Brazil's antitrust regulator the equivalent of 10% of its 1998 sales to the federal government for illegal practices, Bloomberg reported. Iraqi police rounded up dozens of journalists in a Najaf hotel today and took them to the station. "You are brought here because I want to tell you that you never publish the truth," Najaf police Chief Ghaleb al-Jezari told the reporters, Agence France-Presse reported. Crude oil futures plunged 3.9% to $43.47/bbl., the biggest decline in almost three months, after a government reported showed that U.S. gasoline supplies were higher-than-expected. Former Enron director of investor relations, Mark Koenig, pleaded guilty in federal court in Houston to aiding and abetting securities fraud and has agreed to cooperate with prosecutors, Bloomberg reported. Militiamen loyal to Moqtada al-Sadr will suspend fighting in Iraq to market the return of the nation's leading Shiite Muslim cleric, Grand Ayatollah Ali al-Sistani, Bloomberg reported.
BOTTOM LINE: The Portfolio finished slightly higher today as my falling steel shorts and rising alternative energy longs more than offset my declining homebuilding longs. I added a few new technology and restaurant longs in the afternoon, leaving the Portfolio 100% net long. One of my new longs is OSTK and I am using a $30.75 stop-loss on the position. The action in the unleaded gasoline and oil futures is very encouraging and will provide further stimuli to economic demand in the fourth quarter. Many large investors are vacationing this week and many more are planning on leaving NYC during the Republican Convention next week. This leads me to conclude this rally has further to go, barring an act of terror at the convention. The market is also anticipating pro-business political rhetoric and a bounce in the polls for President Bush, which the majority of investors view favorably.
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