Indices
S&P 500 1,234.18 +.04%
DJIA 10,640.91 -.10%
NASDAQ 2,184.83 +.23%
Russell 2000 679.75 +.29%
DJ Wilshire 5000 12,333.31 +.18%
S&P Equity Long/Short Index 1,045.30 +.31%
S&P Barra Growth 591.91 -.01%
S&P Barra Value 637.87 +.09%
Morgan Stanley Consumer 590.13 +.61%
Morgan Stanley Cyclical 761.37 +.38%
Morgan Stanley Technology 500.54 +.36%
Transports 3,799.95 +.53%
Utilities 397.29 +1.11%
S&P 500 Cum A/D Line 8,705.00 +5.94%
Bloomberg Crude Oil % Bulls 50.0 +146.67%
Put/Call .88 +10.0%
NYSE Arms 1.41 +38.23%
Volatility(VIX) 11.57 +9.98%
ISE Sentiment 166.00 +3.75%
AAII % Bulls 57.52 +39.68%
US Dollar 89.35 -.35%
CRB 312.00 +2.55%
Futures Spot Prices
Crude Oil 60.57 +3.27%
Unleaded Gasoline 172.61 +2.26%
Natural Gas 7.88 +6.12%
Heating Oil 167.62 +2.52%
Gold 435.30 +.79%
Base Metals 126.42 +1.35%
Copper 164.45 +1.70%
10-year US Treasury Yield 4.28% +1.35%
Average 30-year Mortgage Rate 5.77% +.70%
Leading Sectors
Wireless +2.87%
Telecom +2.60%
Networking +2.16%
Lagging Sectors
Computer Hardware -2.53%
Gold & Silver -2.60%
Oil Tankers -3.28%
*5-Day % Change
Friday, July 29, 2005
Stocks Modestly Lower Mid-day on Rising Rates and Energy
Indices
S&P 500 1,240.02 -.30%
DJIA 10,693.61 +.10%
NASDAQ 2,192.48 -.27%
Russell 2000 681.35 -.25%
DJ Wilshire 5000 12,383.64 26%
S&P Barra Growth 594.91 -.35%
S&P Barra Value 640.96 -.20%
Morgan Stanley Consumer 592.29 -.09%
Morgan Stanley Cyclical 764.96 -.33%
Morgan Stanley Technology 502.11 -.50%
Transports 3,806.79 -.28%
Utilities 398.71 +.36%
Put/Call .88 +12.82%
NYSE Arms 1.13 +11.69%
Volatility(VIX) 11.33 +7.70%
ISE Sentiment 202.00 +36.49%
US Dollar 89.33 -.01%
CRB 311.56 +.33%
Futures Spot Prices
Crude Oil 60.30 +.60%
Unleaded Gasoline 175.10 +1.68%
Natural Gas 7.85 +2.03%
Heating Oil 164.00 -.33%
Gold 435.80 +.58%
Base Metals 126.42 +.32%
Copper 164.45 -.27%
10-year US Treasury Yield 4.29% +2.50%
Leading Sectors
Restaurants +1.73%
Papers +1.23%
Airlines +1.17%
Lagging Sectors
I-Banks -.88%
Software -.99%
Homebuilders -1.29%
S&P 500 1,240.02 -.30%
DJIA 10,693.61 +.10%
NASDAQ 2,192.48 -.27%
Russell 2000 681.35 -.25%
DJ Wilshire 5000 12,383.64 26%
S&P Barra Growth 594.91 -.35%
S&P Barra Value 640.96 -.20%
Morgan Stanley Consumer 592.29 -.09%
Morgan Stanley Cyclical 764.96 -.33%
Morgan Stanley Technology 502.11 -.50%
Transports 3,806.79 -.28%
Utilities 398.71 +.36%
Put/Call .88 +12.82%
NYSE Arms 1.13 +11.69%
Volatility(VIX) 11.33 +7.70%
ISE Sentiment 202.00 +36.49%
US Dollar 89.33 -.01%
CRB 311.56 +.33%
Futures Spot Prices
Crude Oil 60.30 +.60%
Unleaded Gasoline 175.10 +1.68%
Natural Gas 7.85 +2.03%
Heating Oil 164.00 -.33%
Gold 435.80 +.58%
Base Metals 126.42 +.32%
Copper 164.45 -.27%
10-year US Treasury Yield 4.29% +2.50%
Leading Sectors
Restaurants +1.73%
Papers +1.23%
Airlines +1.17%
Lagging Sectors
I-Banks -.88%
Software -.99%
Homebuilders -1.29%
BOTTOM LINE: The Portfolio is lower mid-day on losses in my Homebuilding, Medical and Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, most sectors are lower and volume is below average. Measures of investor anxiety are mostly higher. Today’s overall market action is neutral considering the rise in energy prices and interest rates. The ECRI Weekly Leading Index remained at 134.50 this week, the same as last week. This is still up from 132.00 during the last week of May and near cycle highs of 135.90 set in mid-March. It is still forecasting healthy growth.
Today's Headlines
Bloomberg:
- The People’s Bank of China will release some “technical” details of the yuan’s currency basket.
- NY Governor Patakki ordered “hundreds” of additional National Guard troops to active duty today to augment security for NYC trains and subways according to a statement from his office.
- Six-nation talks to end North Korea’s nuclear arms program have “entered a new phase” with all sides in broad agreement on solving the crisis.
- President Bush signed legislation to reduce the number of patient injuries and deaths caused by medical mistakes.
- Crude oil is rising near $61/bbl. in NY after a fire at BP’s Texas City refinery heightened concern that fuel producers will struggle to meet increasing demand.
- US Treasuries are falling, heading for their biggest monthly drop since November, after a report suggested the economy may be growing fast enough for the Fed to keep raising interest rates beyond year-end.
- The deadline for investors to get money from Wall Street’s $1.4 billion settlement over biased research is today – and almost half may have failed to file claims.
Wall Street Journal:
- The US bond market’s muted response to the revaluation of China’s yuan indicates that the influence of Asian central banks over the US economy is overrated.
- An Iraqi radio station dedicated to promoting women’s rights is leading a fight in the country for gender equality.
- Proposed new fuel-efficiency standards for light trucks sold in the US may hurt manufacturers such as Toyota Motor and benefit larger truckmakers, including Ford Motor.
NY Times:
- US Senate majority leader Bill Frist is expected to back a bill that would increase federal funding for embryonic stem-cell research.
NY Daily News:
- Hotel occupancy in NYC is up 5% so far this year, with June bookings at a record 90.4% of capacity.
- The People’s Bank of China will release some “technical” details of the yuan’s currency basket.
- NY Governor Patakki ordered “hundreds” of additional National Guard troops to active duty today to augment security for NYC trains and subways according to a statement from his office.
- Six-nation talks to end North Korea’s nuclear arms program have “entered a new phase” with all sides in broad agreement on solving the crisis.
- President Bush signed legislation to reduce the number of patient injuries and deaths caused by medical mistakes.
- Crude oil is rising near $61/bbl. in NY after a fire at BP’s Texas City refinery heightened concern that fuel producers will struggle to meet increasing demand.
- US Treasuries are falling, heading for their biggest monthly drop since November, after a report suggested the economy may be growing fast enough for the Fed to keep raising interest rates beyond year-end.
- The deadline for investors to get money from Wall Street’s $1.4 billion settlement over biased research is today – and almost half may have failed to file claims.
Wall Street Journal:
- The US bond market’s muted response to the revaluation of China’s yuan indicates that the influence of Asian central banks over the US economy is overrated.
- An Iraqi radio station dedicated to promoting women’s rights is leading a fight in the country for gender equality.
- Proposed new fuel-efficiency standards for light trucks sold in the US may hurt manufacturers such as Toyota Motor and benefit larger truckmakers, including Ford Motor.
NY Times:
- US Senate majority leader Bill Frist is expected to back a bill that would increase federal funding for embryonic stem-cell research.
NY Daily News:
- Hotel occupancy in NYC is up 5% so far this year, with June bookings at a record 90.4% of capacity.
Recent US Growth Best in 19 Years, Inflation Contained, Confidence Improving, Manufacturing Rebounding Vigorously
- 2Q Advance GDP rose 3.4% versus estimates of a 3.5% rise and a 3.8% gain in 1Q.
- 2Q Advance Personal Consumption rose 3.3% versus estimates of a 3.5% increase and a 3.5% gain in 1Q.
- 2Q Advance GDP Price Index rose 2.4% versus estimates of a 2.6% gain and a 3.1% rise in 1Q.
- The 2Q Employment Cost Index rose .7% versus estimates of a .8% increase and a .7% gain in 1Q.
- Final Univ. of Mich. Consumer Confidence for July was 96.5 versus estimates of 96.5 and a prior estimate of 96.5.
- Chicago Purchasing Manager for July rose to 63.5 versus estimates of 55.0 and a reading of 53.6 in June.
- 2Q Advance Personal Consumption rose 3.3% versus estimates of a 3.5% increase and a 3.5% gain in 1Q.
- 2Q Advance GDP Price Index rose 2.4% versus estimates of a 2.6% gain and a 3.1% rise in 1Q.
- The 2Q Employment Cost Index rose .7% versus estimates of a .8% increase and a .7% gain in 1Q.
- Final Univ. of Mich. Consumer Confidence for July was 96.5 versus estimates of 96.5 and a prior estimate of 96.5.
- Chicago Purchasing Manager for July rose to 63.5 versus estimates of 55.0 and a reading of 53.6 in June.
BOTTOM LINE: The US economy grew at a 3.4% annual pace in the second quarter, the ninth straight quarter exceeding 3%, as sales boomed, allowing companies to pare bloated inventories, Bloomberg reported. The string of quarterly growth increases exceeding 3% is the longest since the 13 quarters ended in the first three months of 1986. A measure of demand excluding inventories rose 5.8%, the fastest rate in almost 2 years. The measure of prices paid by consumers for goods and services excluding food and energy increased at a 1.8% annual rate versus a 2.4% increase in 1Q. A narrowing trade deficit added 1.6 percentage points to GDP, the most since the fourth quarter of 1996. I now expect US GDP growth to come in around 4% during 3Q.
Employment costs, the main component of inflation, rose less than expected as benefit costs showed the smallest gain in more than three years. The Fed said in its Beige Book report that wage pressure “remained moderate.” This is more evidence that inflation is contained.
US consumer confidence rose to the highest level this year, boosted by a booming housing market, rising stocks market and a healthy labor market. The current conditions index, which reflects Americans’ perception of their financial situation and whether it’s a good time to buy big-ticket items, rose to 113.5 from 113.2 the prior month. The expectations index rose to 85.5 from 85 in June. This is a positive considering the terrorist bombings in London and record gas prices. I expect confidence to increase through year-end.
The Chicago PMI soared in July by the most since 1983 as manufacturing accelerated from en early year slump. The new-orders index jumped to 69.6 from 56.5. The production index increased to 70.5 from 57.8 and the prices paid index increased modestly to 61.3 from 59.7 the prior month. The manufacturing correction is definitely over and should help boost GDP in subsequent quarters.
Friday Watch
Late-Night Headlines
Bloomberg:
- Google's plan to open a research center in China was disrupted today in Seattle, where a state judge temporarily blocked the company from hiring a former Microsoft executive to head the facility.
- Crude oil is rising to a two-week high and gasoline surged after an explosion and fire at the third-largest US refinery owned by BP Plc in Texas City.
- The US and North Korea will hold a fourth bilateral meeting today in Beijing as six nations try to hammer out an agreement on ending the communist country's nuclear weapons program.
Wall Street Journal:
- Italy may as early as today request indictments of units of Citigroup, UBS, Deutsche Bank and Morgan Stanley units for alleged securities violations connected to Parmalat SpA.
AP:
- New York State's Republican Party chairman, seeking a candidate to succeed Governor Pataki, said his first phone call would be to former NYC Mayor Rudolph Giuliani.
London-based Times:
- London is facing a terror "campaign – not a one-off event," citing Metropolitan Police Commissioner Ian Blair.
Economic Daily News:
- Taiwan Semiconductor Manufacturing received orders from Microsoft to make chips for the company's game consoles.
South China Morning Post:
- Cnooc Ltd. is preparing to withdraw or let its $18.5 billion cash bid for Unocal Corp. lapse because management believes a deal is politically impossible.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on KLAC and DDR.
- Reiterated Underperform on MRO and AEIS.
Business Week:
- Symbol Technologies(SBL), the maker of bar-code scanners whose stock has dropped 32% this year, may become an acquisition target.
- TurboChef(OVEN) shares are expected to climb as the maker of high-speed cook-to-order commercial ovens receives a boost in its orders.
- Shares of Stratagene(STGN), which makes testing products for biochemical research, may rise because of higher profit and a possible partner for it DNA testing instrument.
Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.09%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
APC/2.13
ADM/.28
BHI/.54
CVX/1.69
UCL/1.63
Upcoming Splits
None of note
Economic Releases
8:30 am EST
- Advance 2Q GDP is estimated to rise 3.5% versus estimates of a 3.8% gain in 1Q.
- Advance 2Q Personal Consumption is estimated to rise 3.5% versus a 3.8% increase in 1Q.
- Advance 2Q GDP Price Index is estimated to rise 2.6% versus a 2.9% increase in 1Q.
- The 2Q Employment Cost Index is estimated to rise .7% versus a .8% gain in 1Q.
9:45 am EST
- Final Univ. of Mich. Consumer Confidence for July is estimated at 96.5 versus a prior estimate of 96.5.
10:00 am EST
- Chicago Purchasing Manager for July is estimated to rise to 55.0 versus a reading of 53.6 in June.
Bloomberg:
- Google's plan to open a research center in China was disrupted today in Seattle, where a state judge temporarily blocked the company from hiring a former Microsoft executive to head the facility.
- Crude oil is rising to a two-week high and gasoline surged after an explosion and fire at the third-largest US refinery owned by BP Plc in Texas City.
- The US and North Korea will hold a fourth bilateral meeting today in Beijing as six nations try to hammer out an agreement on ending the communist country's nuclear weapons program.
Wall Street Journal:
- Italy may as early as today request indictments of units of Citigroup, UBS, Deutsche Bank and Morgan Stanley units for alleged securities violations connected to Parmalat SpA.
AP:
- New York State's Republican Party chairman, seeking a candidate to succeed Governor Pataki, said his first phone call would be to former NYC Mayor Rudolph Giuliani.
London-based Times:
- London is facing a terror "campaign – not a one-off event," citing Metropolitan Police Commissioner Ian Blair.
Economic Daily News:
- Taiwan Semiconductor Manufacturing received orders from Microsoft to make chips for the company's game consoles.
South China Morning Post:
- Cnooc Ltd. is preparing to withdraw or let its $18.5 billion cash bid for Unocal Corp. lapse because management believes a deal is politically impossible.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on KLAC and DDR.
- Reiterated Underperform on MRO and AEIS.
Business Week:
- Symbol Technologies(SBL), the maker of bar-code scanners whose stock has dropped 32% this year, may become an acquisition target.
- TurboChef(OVEN) shares are expected to climb as the maker of high-speed cook-to-order commercial ovens receives a boost in its orders.
- Shares of Stratagene(STGN), which makes testing products for biochemical research, may rise because of higher profit and a possible partner for it DNA testing instrument.
Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.09%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
APC/2.13
ADM/.28
BHI/.54
CVX/1.69
UCL/1.63
Upcoming Splits
None of note
Economic Releases
8:30 am EST
- Advance 2Q GDP is estimated to rise 3.5% versus estimates of a 3.8% gain in 1Q.
- Advance 2Q Personal Consumption is estimated to rise 3.5% versus a 3.8% increase in 1Q.
- Advance 2Q GDP Price Index is estimated to rise 2.6% versus a 2.9% increase in 1Q.
- The 2Q Employment Cost Index is estimated to rise .7% versus a .8% gain in 1Q.
9:45 am EST
- Final Univ. of Mich. Consumer Confidence for July is estimated at 96.5 versus a prior estimate of 96.5.
10:00 am EST
- Chicago Purchasing Manager for July is estimated to rise to 55.0 versus a reading of 53.6 in June.
BOTTOM LINE: Asian indices are mostly higher on gains in commodity-related shares in the region. I expect US equities to open modestly higher on positive economic reports. However, stocks may consolidate recent gains later in the day. The Portfolio is 100% net long heading into the day.
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