ECRI Weekly Leading Index 131.40 -.23%
Existing Home Sales for July were 6.72 million versus estimates of 6.81 million and 6.92 million in June. The 2.9% decline from June's record-high was the first drop in seven months, Bloomberg reported. The median sales price was $191,300, up 8.7% from July of last year. Economists attributed the higher prices to tight supply. Ted Wieseman, an economist at Morgan Stanley, said that a six month supply of houses is required for a balanced market, compared with the 4.3 months of supply NAR reported for July. "I've been looking for these numbers to fade for several months now, because they've been so incredibly high," said Joel Naroff, chief economist at Naroff Economic Advisors. Re-sales account for 85% of the residential real estate market. New home sales, which had their best months ever in May and June, account for the rest, Bloomberg reported.
Durable Goods Orders for July rose 1.7% versus estimates of a 1.0% rise and an increase of 1.1% in June. Durable Goods Less Transportation rose .1% in July versus estimates of a 1.3% increase and a .3% decline in June. The report showed bookings surged for commercial aircraft and demand increased for business equipment. Businesses, flush with profits amid rising sales, are using the cash to replace aging equipment and replenish inventories, Bloomberg reported. Orders waiting to be filled rose the most since March. Excluding defense hardware, which fell 16.2% last month, orders increased 2.7%, the biggest rise since March, as well. "We are very confident going forward," said Michael Splinter, CEO of Applied Materials.
New Home Sales for July were 1.13 million versus estimates of 1.3 million and 1.21 million in June. "Mortgage rates have been much lower recently, and I wouldn't write off the housing market until we see a clear turn," said Michael Englund, chief economist at Action Economics. The median selling price of new homes increased 9% from July of last year. The inventory of new homes for sale rose to a 4.2 month supply, Bloomberg reported.
Initial Jobless Claims for last week rose to 343K versus estimates of 335K and 333K the prior week. Continuing Claims rose to 2897K versus estimates of 2885K and 2892K prior. This was the first time claims rose in four weeks, boosted by more filings related to Hurricane Charley, Bloomberg said. "We may see some additional upward pressure for another two weeks," from job losses related to the hurricane, said Henry Willmore, chief U.S. economist at Barclays Capital. Hurricane recovery efforts are expected to create more jobs in Southwest Florida than are lost over the longer-run, Bloomberg reported.
Preliminary 2Q GDP rose 2.8% versus expectations of a 2.7% increase and a prior estimate of 3.0%. Preliminary 2Q Personal Consumption rose 1.6% versus estimates of a 1.3% rise and a prior estimate of 1.3%. Preliminary GDP Price Deflator rose 3.2% versus estimates of a 3.2% increase and a prior estimate of 3.2%. Corporate profits after taxes for the quarter rose 17.9% in the 12 months ended in June, Bloomberg said. Business investment in equipment and software was revised up in the quarter to the strongest pace since the third quarter of last year. The core personal consumption expenditures index, the Fed's favorite measure of inflation, rose 1.7% at an annual rate in the second quarter after a 1.8% rise initially reported and a 2.1% pace in the first three months of the year. Nominal GDP rose at a 6.1% annual rate for the second quarter after rising at a 7.4% pace in the first quarter, Bloomberg reported.
The final reading from the University of Michigan's Consumer Confidence Index came in at 95.9 versus estimates of 94.0 and a prior estimate of 94.0. "Confidence is relatively high because we're in the middle of an expansion with fairly rapid growth in the economy and low interest rates," Mike Englund, chief economist at Action Economics. Job gains typically contribute to optimism, and the median forecast of economists suggests that payrolls expanded at a faster pace this month after slowing in July, Bloomberg reported.
Bottom Line: Overall, last week's economic data was mildly negative. While home sales have slowed from their blistering pace earlier in the year, the market remains very healthy. Supply is still low relative to demand. Mortgage rates averaged 6.29% in June when properties closed for the July readings. Since then, rates have fallen 47 basis points to an average mortgage rate of 5.82%. Durable Goods Orders should continue to remain robust through year-end as companies take advantage of tax incentives that are set to expire at the end of the year. Hurricane Charley is currently disrupting readings on jobless claims in a negative way. The hurricane is likely affecting other economic readings, as well. As rebuilding takes hold, the economy should benefit. U.S. GDP has recently slowed as a result of anti-business political rhetoric, less tax-cut stimulus, terrorism fears, higher commodities prices, the slowing Chinese economy, unseasonably wet weather and higher interest rates. Most of these problems are currently diminishing or reversing themselves which should lead to a substantial acceleration in GDP growth during the fourth quarter. Moreover, most of the trouble with the current slowdown is due to inflation, as nominal GDP grew 6.1% in the second quarter. Commodities prices have been the main source of inflation. Most commodities have now entered intermediate-term downtrends, which bodes well for future inflation readings and thus future GDP reports. Consumer confidence remains relatively strong and should rise with improvements in Iraq, subsiding terrorism fears, falling interest rates, declining energy prices and a pick-up in hiring.
Saturday, August 28, 2004
Weekly Scoreboard*
Indices
S&P 500 1,107.77 +.86%
Dow 10,195.01 +.84%
NASDAQ 1,862.09 +1.31%
Russell 2000 551.67 +.68%
S&P Equity Long/Short Index 953.30 +.22%
Put/Call .75 -21.88%
NYSE Arms 1.02 +54.54%
Volatility(VIX) 14.71 -8.06%
AAII % Bulls 41.53 +19.07%
US Dollar 89.77 +1.87%
CRB 270.33 -2.23%
Futures Spot Prices
Gold 405.40 -2.43%
Crude Oil 43.18 -7.58%
Unleaded Gasoline 117.69 -7.13%
Natural Gas 5.19 -8.85%
Base Metals 108.20 -2.30%
10-year US Treasury Yield 4.22% -.14%
Average 30-year Mortgage Rate 5.82% +.17%
Leading Sectors
Fashion +3.46%
Internet +2.06%
Computer Boxmakers +1.90%
Lagging Sectors
Semis -.95%
Broadcasting -2.11%
Iron/Steel -2.17%
*% Gain or loss for the week
S&P 500 1,107.77 +.86%
Dow 10,195.01 +.84%
NASDAQ 1,862.09 +1.31%
Russell 2000 551.67 +.68%
S&P Equity Long/Short Index 953.30 +.22%
Put/Call .75 -21.88%
NYSE Arms 1.02 +54.54%
Volatility(VIX) 14.71 -8.06%
AAII % Bulls 41.53 +19.07%
US Dollar 89.77 +1.87%
CRB 270.33 -2.23%
Futures Spot Prices
Gold 405.40 -2.43%
Crude Oil 43.18 -7.58%
Unleaded Gasoline 117.69 -7.13%
Natural Gas 5.19 -8.85%
Base Metals 108.20 -2.30%
10-year US Treasury Yield 4.22% -.14%
Average 30-year Mortgage Rate 5.82% +.17%
Leading Sectors
Fashion +3.46%
Internet +2.06%
Computer Boxmakers +1.90%
Lagging Sectors
Semis -.95%
Broadcasting -2.11%
Iron/Steel -2.17%
*% Gain or loss for the week
Friday, August 27, 2004
Mid-day Update
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.
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 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.
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