Bottom Line: The Portfolio is higher mid-day on gains in my internet, security and software longs. I added a few new longs from various sectors this morning, thus bringing the Portfolio to 125% net long exposure. One of my new longs is AUDC and I am using a $15.25 stop-loss on this new position. The tone of the market is slightly positive today and I expect stocks to rise into the afternoon on falling energy prices/interest rates, short-covering, more optimism and year-end positioning.
Thursday, December 30, 2004
***Alert***
There will not be a mid-day report today due to a scheduling conflict.
Thursday Watch
Earnings of Note
Company/Estimate
None of note.
Splits
BEBE 3-for-2
Economic Data
Initial Jobless Claims for last week estimated at 335K versus 333K the prior week.
Continuing Claims estimated at 2729K versus 2721 prior.
Chicago Purchasing Manager for December estimated at 63.0 versus 65.2 in November.
Recommendations
Affiliated Managers Group(AMG), a US company that owns stakes in 30 money management firms, will benefit from cash it invests in new companies, Business Week reported. Barr Pharmaceuticals(BRL) may benefit from $30 billion in patents that will expire by the end of 2007, Business Week reported.
Late-Night News
Asian indices are higher on optimism for exporters in the region. Lockheed Martin and Kerr McGee have set aside funds to pay for possible cleanups of perchlorate, an ingredient in rocket fuel and fireworks, Business Week reported. China's top planning agency set an 8% ceiling on coal price increases next year amid an electricity shortage that's fueling demand for the commodity, the China Securities Journal reported. Tyco Intl.'s CEO Breen and Xerox Corp.'s CEO Mulcahy are among the best managers of 2004, Business Week said, after surveying its more than 130 writers and editors worldwide. China Life Insurance faces a formal investigation into its IPO by the US SEC, after the regulator stepped up its probe from an informal inquiry, the Financial Times reported. China will destroy imports from Taiwan with labels that designate the island as a nation, the Commercial Times reported. New prescriptions of Pfizer's painkiller Celebrex fell 56% last week, the Wall Street Journal reported. Bankruptcy filings by US public companies reached a 10-year low in 2004 as low interest rates, a strong economy and better access to financing helped troubled businesses amass cash and pay debts, Bloomberg reported. The Australian dollar is poised for its biggest drop in almost three weeks against the US dollar, tracking declines in the price of gold, copper and other commodity exports the currency is closely correlated with, Bloomberg said. Fannie Mae sold $5 billion of preferred stock after its regulator said it broke accounting rules and is "significantly undercapitalized," Bloomberg reported. Amazon.com, Starbucks, Coca-Cola, FedEx and Pfizer are among US companies that have taken steps to provide aid to the survivors of the earthquake and tsunamis that struck South Asia on Dec. 26, Bloomberg said. India put coastal states and islands on alert against a "possible" tsunami and asked residents of low-lying areas to move to safer areas, Bloomberg reported.
Late-Night Trading
Asian Indices are +.25% to +1.0% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated +.03%.
Company/Estimate
None of note.
Splits
BEBE 3-for-2
Economic Data
Initial Jobless Claims for last week estimated at 335K versus 333K the prior week.
Continuing Claims estimated at 2729K versus 2721 prior.
Chicago Purchasing Manager for December estimated at 63.0 versus 65.2 in November.
Recommendations
Affiliated Managers Group(AMG), a US company that owns stakes in 30 money management firms, will benefit from cash it invests in new companies, Business Week reported. Barr Pharmaceuticals(BRL) may benefit from $30 billion in patents that will expire by the end of 2007, Business Week reported.
Late-Night News
Asian indices are higher on optimism for exporters in the region. Lockheed Martin and Kerr McGee have set aside funds to pay for possible cleanups of perchlorate, an ingredient in rocket fuel and fireworks, Business Week reported. China's top planning agency set an 8% ceiling on coal price increases next year amid an electricity shortage that's fueling demand for the commodity, the China Securities Journal reported. Tyco Intl.'s CEO Breen and Xerox Corp.'s CEO Mulcahy are among the best managers of 2004, Business Week said, after surveying its more than 130 writers and editors worldwide. China Life Insurance faces a formal investigation into its IPO by the US SEC, after the regulator stepped up its probe from an informal inquiry, the Financial Times reported. China will destroy imports from Taiwan with labels that designate the island as a nation, the Commercial Times reported. New prescriptions of Pfizer's painkiller Celebrex fell 56% last week, the Wall Street Journal reported. Bankruptcy filings by US public companies reached a 10-year low in 2004 as low interest rates, a strong economy and better access to financing helped troubled businesses amass cash and pay debts, Bloomberg reported. The Australian dollar is poised for its biggest drop in almost three weeks against the US dollar, tracking declines in the price of gold, copper and other commodity exports the currency is closely correlated with, Bloomberg said. Fannie Mae sold $5 billion of preferred stock after its regulator said it broke accounting rules and is "significantly undercapitalized," Bloomberg reported. Amazon.com, Starbucks, Coca-Cola, FedEx and Pfizer are among US companies that have taken steps to provide aid to the survivors of the earthquake and tsunamis that struck South Asia on Dec. 26, Bloomberg said. India put coastal states and islands on alert against a "possible" tsunami and asked residents of low-lying areas to move to safer areas, Bloomberg reported.
Late-Night Trading
Asian Indices are +.25% to +1.0% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated +.03%.
BOTTOM LINE: I expect U.S. equities to open mixed and move modestly higher throughout the day on strong economic reports, lower energy prices, strength in Asia, stabilizing US dollar/interest rates, short-covering, year-end positioning and more optimism. The Portfolio is 100% net long heading into tomorrow.
Wednesday, December 29, 2004
Wednesday Close
S&P 500 1,213.45 -.01%
NASDAQ 2,177.19 -.01%
Leading Sectors
Oil Service +1.39%
Semis +.89%
Disk Drives +.70%
Lagging Sectors
Wireless -.54%
I-Banks -.55%
Defense -1.62%
Other
Crude Oil 43.65 +.02%
Natural Gas 6.44 +.67%
Gold 437.30 +.07%
Base Metals 124.19 +1.35%
U.S. Dollar 80.88 +.20
10-Yr. T-note Yield 4.32% +.73%.
VIX 11.62 -3.17%
Put/Call 1.14 +67.65%
NYSE Arms .90 +47.54%
After-hours Movers
Recommendations
After-hours News
NASDAQ 2,177.19 -.01%
Leading Sectors
Oil Service +1.39%
Semis +.89%
Disk Drives +.70%
Lagging Sectors
Wireless -.54%
I-Banks -.55%
Defense -1.62%
Other
Crude Oil 43.65 +.02%
Natural Gas 6.44 +.67%
Gold 437.30 +.07%
Base Metals 124.19 +1.35%
U.S. Dollar 80.88 +.20
10-Yr. T-note Yield 4.32% +.73%.
VIX 11.62 -3.17%
Put/Call 1.14 +67.65%
NYSE Arms .90 +47.54%
After-hours Movers
Recommendations
After-hours News
BOTTOM LINE: The Portfolio finished higher today on gains in my security and semi-equipment longs. I did not trade in the afternoon, thus leaving the Portfolio 100% net long. The overall tone of the market improved throughout the day with the advance/decline line finishing at its daily highs. Volume fell slightly as stocks consolidated recent gains. Considering the rise in energy prices and interest rates, today's action was positive.
Mid-day Report
S&P 500 1,212.20 -.11%
NASDAQ 2,175.81 -.06%
Leading Sectors
Oil Service +1.02%
Semis +.82%
Disk Drives +.61%
Lagging Sectors
Wireless -.62%
Gaming -.72%
Defense -1.63%
Other
Crude Oil 42.00 +.55%
Natural Gas 6.38 +.54%
Gold 436.00 -2.09%
Base Metals 123.48 +.78%
U.S. Dollar 81.10 +.47%
10-Yr. T-note Yield 4.32% +.59%
VIX 11.77 -1.92%
Put/Call 1.36 +100%
NYSE Arms .90 +47.54%
Market Movers
TASR +4.1% on positive comments from President yesterday.
BIVN +9.8% after US regulators approved a cancer drug the company licensed to Genzyme, the first new medicine for children with leukemia in more than a decade.
CSPI +27.5% after reporting strong 4Q results.
SNDA +7.0% on no news.
PKZ +8.6% on bargain-hunting after saying oil production at Turgai Petroleum was curtailed by a dispute over marketing.
VIP +7.4% after the company received a 2002 tax claim that was less than analysts expected.
VSAT +8.5% after saying it won an order from the Space and Naval Warfare Systems Command expected to be valued at about $60 million.
REY +6.0% after raising its 1Q profit forecast because of stronger cost management and foreign exchange gains.
MSO -6.2% after reporting top shareholders have sold 4 million shares since mid-November.
*Oil Tanker stocks down across the board after supertanker rates fell to their lowest in more than three months, pushing shipowner's earnings below the $100,000/day mark.
Economic Data
Existing Home Sales for November rose to 6.94M versus estimates of 6.75M and 6.76M in October.
Recommendations
None of note.
Mid-day News
U.S. stocks are quietly lower mid-day on a slight rise in energy prices and interest rates. Lockheed Martin faces cuts in the production of F/A-22 Raptor stealth fighter-bombers as the Dept. of Defense seeks to lower costs, the NY Times reported. Manhattan District Attorney Morgenthau's office created a unit to target identity theft last month, Dow Jones Newswires reported. A US court upheld a ruling that barred Minnesota from regulating Internet-based phone calls, the NY Times reported. Resource Connection has gained from demand by companies seeking to comply with US accounting governance laws, the Wall Street Journal reported. Nucor may offer to buy Vitkovice Steel from the Czech government, Reuters reported. Ukrainian Prime Minister Yanukovych appealed his loss to rival Yushchenko in the Dec. 26 presidential election, as the winner met advisers for the first time to discuss forming a new government, Bloomberg reported. Oracle has taken control of PeopleSoft, ending an 18-month fight and making Oracle the world's No. 2 maker of business-management software, Bloomberg said. Time Warner's cable-tv unit said it may start offering mobile phone service through an agreement with Sprint, Bloomberg reported. Fannie Mae is considering two sales of preferred stock totaling up to $4 billion, Bloomberg said. Gold prices in New York fell the most in three weeks as a gain in the dollar's value against the euro eroded the appeal of the precious metal as an alternative to US stocks and bonds, Bloomberg reported. Relief agencies struggled to combat disease and homelessness as the death toll from the weekend's earthquake and tsunamis in Asia approached 80,000, Bloomberg reported. Crude oil is rising modestly after the Energy Dept. reported that US inventories of distillate fuels fell last week, Bloomberg said. US sales of previously owned homes rose to a record in November, buoyed by job and income growth, making 2004 the best year ever for the industry, Bloomberg reported.
NASDAQ 2,175.81 -.06%
Leading Sectors
Oil Service +1.02%
Semis +.82%
Disk Drives +.61%
Lagging Sectors
Wireless -.62%
Gaming -.72%
Defense -1.63%
Other
Crude Oil 42.00 +.55%
Natural Gas 6.38 +.54%
Gold 436.00 -2.09%
Base Metals 123.48 +.78%
U.S. Dollar 81.10 +.47%
10-Yr. T-note Yield 4.32% +.59%
VIX 11.77 -1.92%
Put/Call 1.36 +100%
NYSE Arms .90 +47.54%
Market Movers
TASR +4.1% on positive comments from President yesterday.
BIVN +9.8% after US regulators approved a cancer drug the company licensed to Genzyme, the first new medicine for children with leukemia in more than a decade.
CSPI +27.5% after reporting strong 4Q results.
SNDA +7.0% on no news.
PKZ +8.6% on bargain-hunting after saying oil production at Turgai Petroleum was curtailed by a dispute over marketing.
VIP +7.4% after the company received a 2002 tax claim that was less than analysts expected.
VSAT +8.5% after saying it won an order from the Space and Naval Warfare Systems Command expected to be valued at about $60 million.
REY +6.0% after raising its 1Q profit forecast because of stronger cost management and foreign exchange gains.
MSO -6.2% after reporting top shareholders have sold 4 million shares since mid-November.
*Oil Tanker stocks down across the board after supertanker rates fell to their lowest in more than three months, pushing shipowner's earnings below the $100,000/day mark.
Economic Data
Existing Home Sales for November rose to 6.94M versus estimates of 6.75M and 6.76M in October.
Recommendations
None of note.
Mid-day News
U.S. stocks are quietly lower mid-day on a slight rise in energy prices and interest rates. Lockheed Martin faces cuts in the production of F/A-22 Raptor stealth fighter-bombers as the Dept. of Defense seeks to lower costs, the NY Times reported. Manhattan District Attorney Morgenthau's office created a unit to target identity theft last month, Dow Jones Newswires reported. A US court upheld a ruling that barred Minnesota from regulating Internet-based phone calls, the NY Times reported. Resource Connection has gained from demand by companies seeking to comply with US accounting governance laws, the Wall Street Journal reported. Nucor may offer to buy Vitkovice Steel from the Czech government, Reuters reported. Ukrainian Prime Minister Yanukovych appealed his loss to rival Yushchenko in the Dec. 26 presidential election, as the winner met advisers for the first time to discuss forming a new government, Bloomberg reported. Oracle has taken control of PeopleSoft, ending an 18-month fight and making Oracle the world's No. 2 maker of business-management software, Bloomberg said. Time Warner's cable-tv unit said it may start offering mobile phone service through an agreement with Sprint, Bloomberg reported. Fannie Mae is considering two sales of preferred stock totaling up to $4 billion, Bloomberg said. Gold prices in New York fell the most in three weeks as a gain in the dollar's value against the euro eroded the appeal of the precious metal as an alternative to US stocks and bonds, Bloomberg reported. Relief agencies struggled to combat disease and homelessness as the death toll from the weekend's earthquake and tsunamis in Asia approached 80,000, Bloomberg reported. Crude oil is rising modestly after the Energy Dept. reported that US inventories of distillate fuels fell last week, Bloomberg said. US sales of previously owned homes rose to a record in November, buoyed by job and income growth, making 2004 the best year ever for the industry, Bloomberg reported.
Bottom Line: The Portfolio is unchanged mid-day as gains in my security and semi longs are offsetting losses in my internet and software longs. I took profits in a few longs from various sectors this morning, thus leaving the Portfolio 100% net long. The overall tone is a bit weaker today, however mild losses appear to be the result of a lack of buyers rather than significant selling. The Put/Call and Arms readings are spiking. The better-than-expected existing home sales report should put to rest the notion of an imminent decline in the housing market. I expect US stocks to trade modestly higher into the close.
Wednesday Watch
Earnings of Note
Company/Estimate
None of note.
Splits
None of note.
Economic Data
Existing Home Sales for November estimated at 6.75M versus 6.75M in October.
Recommendations
None of note.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in China and Japan. Thai tourist arrivals may fall by as much as 3.2 million next year should travelers not visit tsunami-hit areas until March, the end of the peak tourist season, the Bangkok Post reported. China's economy will grow by between 8% and 8.5% in 2005, from 9.1% this year, because investment and exports may slow, China Securities Journal said. Merrill Lynch, which is trying to catch up with Goldman Sachs setting up a Chinese investment banking venture, is in talks with Huaan Securities and other mainland firms, Bloomberg said. The US Postal Service said delays and problems that beset US airlines this past week also disrupted the delivery of thousands of letters and packages, the NY Times reported. Top stockholders of Martha Stewart Living Omnimedia have reported selling more than 4 million company shares since mid-November, valued at $90 million, the Wall Street Journal said. Goldman Sachs and JP Morgan are among banks financing buyouts that have left some European companies with debt levels that haven't been seen since the days of Michael Milken, Bloomberg reported. The Tel Aviv Stock Exchange will probably attract foreign investors because of better prospects for Israeli-Palestinian peace talks and economic "stabilization," Bloomberg said. Morgan Stanley and Lone Star Funds bought $2.5 billion worth of Tokyo office space in the second half of 2004, betting the country's three-year economic recovery will halt a decline in property values of 80% since 1990, Bloomberg reported. News Corp.'s Fox television network is charging a record average of $2.4 million for advertisements on the Super Bowl in February, 6.7% more than last season's NFL championship game, Bloomberg said.
Late-Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated +.12%.
Company/Estimate
None of note.
Splits
None of note.
Economic Data
Existing Home Sales for November estimated at 6.75M versus 6.75M in October.
Recommendations
None of note.
Late-Night News
Asian indices are mixed as strength in Taiwan is being offset by weakness in China and Japan. Thai tourist arrivals may fall by as much as 3.2 million next year should travelers not visit tsunami-hit areas until March, the end of the peak tourist season, the Bangkok Post reported. China's economy will grow by between 8% and 8.5% in 2005, from 9.1% this year, because investment and exports may slow, China Securities Journal said. Merrill Lynch, which is trying to catch up with Goldman Sachs setting up a Chinese investment banking venture, is in talks with Huaan Securities and other mainland firms, Bloomberg said. The US Postal Service said delays and problems that beset US airlines this past week also disrupted the delivery of thousands of letters and packages, the NY Times reported. Top stockholders of Martha Stewart Living Omnimedia have reported selling more than 4 million company shares since mid-November, valued at $90 million, the Wall Street Journal said. Goldman Sachs and JP Morgan are among banks financing buyouts that have left some European companies with debt levels that haven't been seen since the days of Michael Milken, Bloomberg reported. The Tel Aviv Stock Exchange will probably attract foreign investors because of better prospects for Israeli-Palestinian peace talks and economic "stabilization," Bloomberg said. Morgan Stanley and Lone Star Funds bought $2.5 billion worth of Tokyo office space in the second half of 2004, betting the country's three-year economic recovery will halt a decline in property values of 80% since 1990, Bloomberg reported. News Corp.'s Fox television network is charging a record average of $2.4 million for advertisements on the Super Bowl in February, 6.7% more than last season's NFL championship game, Bloomberg said.
Late-Night Trading
Asian Indices are -.25% to +.75% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated +.12%.
BOTTOM LINE: I expect U.S. equities to open modestly higher and stay firm throughout the day on a decrease in energy prices, more optimism, short-covering, year-end positioning and a stabilizing US dollar/interest rates. The Portfolio is 125% net long heading into tomorrow.
Tuesday, December 28, 2004
Tuesday Close
S&P 500 1,213.54 +.72%
NASDAQ 2,177.19 +1.07%
Leading Sectors
Homebuilders +2.36%
Restaurants +1.8%
Biotech +1.71%
Lagging Sectors
Wireless +.37%
Disk Drives +.36%
Telecom +.31%
Other
Crude Oil 41.88 +1.36%
Natural Gas 6.6.21 +.86%
Gold 444.80 -.31%
Base Metals 122.53 +.76%
U.S. Dollar 80.72 unch.
10-Yr. T-note Yield 4.29% -.14%.
VIX 12.0 -1.15%
Put/Call .68 -19.05%
NYSE Arms .61 -45.05%
After-hours Movers
Recommendations
After-hours News
NASDAQ 2,177.19 +1.07%
Leading Sectors
Homebuilders +2.36%
Restaurants +1.8%
Biotech +1.71%
Lagging Sectors
Wireless +.37%
Disk Drives +.36%
Telecom +.31%
Other
Crude Oil 41.88 +1.36%
Natural Gas 6.6.21 +.86%
Gold 444.80 -.31%
Base Metals 122.53 +.76%
U.S. Dollar 80.72 unch.
10-Yr. T-note Yield 4.29% -.14%.
VIX 12.0 -1.15%
Put/Call .68 -19.05%
NYSE Arms .61 -45.05%
After-hours Movers
Recommendations
After-hours News
BOTTOM LINE: The Portfolio finished substantially higher today on gains in my security, restaurant and internet longs. I did not trade in the afternoon, thus leaving the Portfolio 125% net long. The tone of the market improved throughout the day as volume improved and the advance/decline line finished at its daily highs. Every major sector was higher today with several making ALL-TIME highs again. As well, long-term interest rates fell in the afternoon and energy prices/US dollar stabilized. On the negative side, measures of investor anxiety fell again.
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