I am unable to post this evening due to a scheduling conflict. I will post the Tuesday watch at its regular time tonight.
Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play
Monday, August 01, 2005
Stocks Higher Mid-day, Shrugging Off Rising Energy Prices and Interest Rates
Indices
S&P 500 1,238.47 +.35%
DJIA 10,647.20 +.06%
NASDAQ 2,199.73 +.67%
Russell 2000 684.72 +.73%
DJ Wilshire 5000 12,379.65 +.38%
S&P Barra Growth 594.22 +.39%
S&P Barra Value 639.83 +.31%
Morgan Stanley Consumer 590.10 -.01%
Morgan Stanley Cyclical 762.82 +.19%
Morgan Stanley Technology 502.80 +.45%
Transports 3,814.12 +.40%
Utilities 393.72 -.90%
Put/Call 1.0 +13.64%
NYSE Arms .81 -42.51%
Volatility(VIX) 12.02 +3.89%
ISE Sentiment 207.00 +24.70%
US Dollar 88.77 -.66%
CRB 314.96 +.94%
Futures Spot Prices
Crude Oil 61.90 +2.20%
Unleaded Gasoline 176.80 +2.43%
Natural Gas 8.15 +3.49%
Heating Oil 172.00 +2.49%
Gold 437.70 -.02%
Base Metals 127.16 +.59%
Copper 166.10 unch.
10-year US Treasury Yield 4.32% +.93%
Leading Sectors
HMOs +1.86%
Oil Service +1.80%
Biotech +1.49%
Lagging Sectors
Tobacco -.42%
Oil Tankers -.89%
Utilities -.91%
S&P 500 1,238.47 +.35%
DJIA 10,647.20 +.06%
NASDAQ 2,199.73 +.67%
Russell 2000 684.72 +.73%
DJ Wilshire 5000 12,379.65 +.38%
S&P Barra Growth 594.22 +.39%
S&P Barra Value 639.83 +.31%
Morgan Stanley Consumer 590.10 -.01%
Morgan Stanley Cyclical 762.82 +.19%
Morgan Stanley Technology 502.80 +.45%
Transports 3,814.12 +.40%
Utilities 393.72 -.90%
Put/Call 1.0 +13.64%
NYSE Arms .81 -42.51%
Volatility(VIX) 12.02 +3.89%
ISE Sentiment 207.00 +24.70%
US Dollar 88.77 -.66%
CRB 314.96 +.94%
Futures Spot Prices
Crude Oil 61.90 +2.20%
Unleaded Gasoline 176.80 +2.43%
Natural Gas 8.15 +3.49%
Heating Oil 172.00 +2.49%
Gold 437.70 -.02%
Base Metals 127.16 +.59%
Copper 166.10 unch.
10-year US Treasury Yield 4.32% +.93%
Leading Sectors
HMOs +1.86%
Oil Service +1.80%
Biotech +1.49%
Lagging Sectors
Tobacco -.42%
Oil Tankers -.89%
Utilities -.91%
BOTTOM LINE: The Portfolio is higher mid-day on gains in my Medical Information Systems, Medical and Biotechnology longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is modestly higher, most sectors are higher and volume is below average. Measures of investor anxiety are mixed. Today’s overall market action is positive considering the rise in energy prices and interest rates. With 55% of the S&P 500 reporting, profits are rising 14% vs. estimates of a 6.6% increase just three weeks ago. I believe better-than-expected earnings and a P/E multiple expansion will continue to boost stocks through year-end. I expect stocks to rise modestly from current levels into the close on short-covering and stabilizing interest rates.
Today's Headlines
Bloomberg:
- GM will cut prices on 30 of its 2006 models to attract new customers as the company stop giving employee discounts to all buyers.
- US corporations posted better-than-expected profit growth of 14% in the second quarter.
- Atkins Nutritionals filed for bankruptcy protection in NY as consumer interest in low-carb weight-loss programs faded.
- Crude oil is rising within 25 cents of an all-time high after the death of Saudi Arabia’s King Fahd heightened concern about the stability of the world’s largest oil exporter.
- US Treasuries are falling, pushing 10-year yields to the highest since mid-April, as a manufacturing index for July rose more than forecast.
- The US dollar is dropping the most in almost three weeks against the euro on speculation the US currency’s 11% rally this year reflects higher interest rates and faster growth in the US than in Europe.
Wall Street Journal:
- Joe Eberhardt, a German marketing expert, is one candidate to succeed Eckhard Cordes as head of DaimlerChrysler’s Mercedes-Benz division.
- Guidant may say today that it’s returning to the market’s fastest-growing segment, that of treating patients with congestive heart failure.
- Cisco Systems, Internet Security Systems and US cybersecurity officials have been working over the weekend to avert possible attacks on Internet routers, after a public presentation on how system weaknesses could be exploited.
- Summit Partners, a private equity fund, will buy a one-third stake in hedge fund Coast Asset Management for $127 million.
- More investors in 401(k) US retirement plans will face charges for moving investments between mutual funds.
- The Central American Free Trade Agreement is likely to help the economy in Florida, where international trade provides 13% of the economy, citing local officials.
- Reality TV producer Mark Burnett appears to have made a serious mistake with his new reality series “Rock Star: INXS” on Viacom’s CBS.
NY Times:
- Television networks are offering more Internet programming for US viewers as demand for online advertising increases.
Washington Post:
- The number of mosques in the suburbs of Washington, DC is growing as the Muslim community in the region almost doubled during the 1990s.
Austin American-Statesman:
- Texas’s House of Representatives approved selling $41.1 million of bonds to finance a stem-cell research facility in Houston that may help the state compete in studies of the technology to treat diseases.
- GM will cut prices on 30 of its 2006 models to attract new customers as the company stop giving employee discounts to all buyers.
- US corporations posted better-than-expected profit growth of 14% in the second quarter.
- Atkins Nutritionals filed for bankruptcy protection in NY as consumer interest in low-carb weight-loss programs faded.
- Crude oil is rising within 25 cents of an all-time high after the death of Saudi Arabia’s King Fahd heightened concern about the stability of the world’s largest oil exporter.
- US Treasuries are falling, pushing 10-year yields to the highest since mid-April, as a manufacturing index for July rose more than forecast.
- The US dollar is dropping the most in almost three weeks against the euro on speculation the US currency’s 11% rally this year reflects higher interest rates and faster growth in the US than in Europe.
Wall Street Journal:
- Joe Eberhardt, a German marketing expert, is one candidate to succeed Eckhard Cordes as head of DaimlerChrysler’s Mercedes-Benz division.
- Guidant may say today that it’s returning to the market’s fastest-growing segment, that of treating patients with congestive heart failure.
- Cisco Systems, Internet Security Systems and US cybersecurity officials have been working over the weekend to avert possible attacks on Internet routers, after a public presentation on how system weaknesses could be exploited.
- Summit Partners, a private equity fund, will buy a one-third stake in hedge fund Coast Asset Management for $127 million.
- More investors in 401(k) US retirement plans will face charges for moving investments between mutual funds.
- The Central American Free Trade Agreement is likely to help the economy in Florida, where international trade provides 13% of the economy, citing local officials.
- Reality TV producer Mark Burnett appears to have made a serious mistake with his new reality series “Rock Star: INXS” on Viacom’s CBS.
NY Times:
- Television networks are offering more Internet programming for US viewers as demand for online advertising increases.
Washington Post:
- The number of mosques in the suburbs of Washington, DC is growing as the Muslim community in the region almost doubled during the 1990s.
Austin American-Statesman:
- Texas’s House of Representatives approved selling $41.1 million of bonds to finance a stem-cell research facility in Houston that may help the state compete in studies of the technology to treat diseases.
Construction Spending Slows Temporarily, Manufacturing Jumps, Pending Home Sales High
- Construction Spending for June fell .3% versus estimates of a .7% increase and a 1.7% decline in May.
- ISM Manufacturing for July rose to 56.6 versus estimates of 54.5 and a reading of 53.8 in June.
- ISM Prices Paid for July fell to 48.5 versus estimates of 52.5 and a reading of 50.5 in June.
- Pending Home Sales for June rose .6% versus estimates of a .8% increase and a 1.5% decline in May.
- ISM Manufacturing for July rose to 56.6 versus estimates of 54.5 and a reading of 53.8 in June.
- ISM Prices Paid for July fell to 48.5 versus estimates of 52.5 and a reading of 50.5 in June.
- Pending Home Sales for June rose .6% versus estimates of a .8% increase and a 1.5% decline in May.
BOTTOM LINE: US construction spending unexpectedly declined for a fourth month as the pace of homebuilding slowed, Bloomberg reported. Construction spending is still 7.9% higher year-over-year. The recently passed highway bill should boost construction spending going forward.
US manufacturing accelerated for a second straight month in July to the best level of the year as gains in both orders and production signaled that factories may add more to economic growth this quarter, Bloomberg reported. The new orders component of index rose to 60.6 versus 57.2 in June. The prices paid component of the index fell to 48.5 last month, the lowest level in 3 years, from 50.5 the prior month. The employment component of the index rose to 53.2 versus 49.9 in June. Finally, the new export orders component rose to 55.9 from 50.4 in June. Overall, a very good manufacturing report and further evidence that manufacturing will now add to economic growth going forward.
Contracts to buy previously owned US homes rebounded to the third highest level ever in June as buyers took advantage of the lowest long-term mortgage rates in 15 months, Bloomberg reported. The index increased .7% in the Midwest, 3.5% in the West, .4% in the South and fell 3.2% in the Northeast. This number bodes well for future home sales. I continue to believe home prices will moderate, not plunge.
Monday Watch
Weekend Headlines
Bloomberg:
- The S&P's 500 Index staged its biggest monthly rally this year as second-quarter earnings from companies such as IBM exceeded estimates.
- Wal-Mart Stores said sales at its US stores open at least a year rose about 4.4% in July, the second-highest monthly gain this year.
- The Philadelphia School District, the US's seventh-largest, will become the nation's first to require the study of African-American history, over the objections form critics, including Pennsylvania's most-powerful legislator.
- President Bush, saying he plans to promote the economic progress the US is making, praised the Republican-led Congress for approving energy, trade and highway legislation.
- Take-Two Interactive Software, the third-biggest US video-game maker, said Australia banned sales of the company's "Grand Theft Auto: San Andreas" game because it contains hidden sexual content.
- SAC Capital Advisors LLC, a hedge fund run by Steven A. Cohen, purchased a 5.7% stake in Northwest Airlines.
- Medtronic said it won European approval to sell its Endeavor stent, making it the third player in the $5 billion worldwide market for the drug-coated devices.
- Crude oil is rising in NY to a more than three-week high on concern supply will be disrupted after Iran said it may resume uranium processing and BP Plc cut output at its Texas City refinery.
Barron's:
- Martin Barnes, an economist at Montreal's BCA Research, said he expects low inflation because of little evidence of higher prices globally, as well as greater competition holding down US prices.
New York Times:
- General Electric's board gave executives approval to proceed with talks to buy DreamWorks SKG.
- The US Supreme Court ruing that held local governments have broad powers to take over private property has forced many states to begin weighing changes or constitutional amendments.
- The US Congress gave states the right to impose certain restrictions on predatory towing by truck drivers under the highway bill passed July 29.
- Microsoft is meeting chairman Bill Gates' goal, announced a year ago, of increasing applications for new patents by 50% to 3,000 a year.
- Stocks of utility companies have doubles from the lows hit in October 2002, outpacing the rest of the US stock market as the sector underwent its biggest rally since WWII.
- The Iraq constitution committee agreed to finish drafting the charter by the original deadline of August 15.
Boston Globe:
- The US Dept. of Justice sued the city of Boston for interfering with the voting rights of Hispanic and Asian-Americans with limited English skills.
San Francisco Chronicle:
- Home Depot won approval for its first store in San Francisco after a 10-year battle.
Washington Post:
- US retailers are expanding their efforts to thwart shoplifters with new tracking software, security displays and hangers that lock to jackets or suits.
- Daniel Yergin, of well-respected Cambridge Energy Research, wrote that there will be a large, unprecedented buildup of oil supply during the next few years as capacity rises 20%.
Newsweek:
- The US military may reduce the number of American troops in Iraq to about 80,000 by mid-2006, and cut the number back to 40,000 to 60,000 by the end of next year, citing unidentified Pentagon officials.
Financial Times:
- The novelty of buying ring tones for mobile phones is wearing off in Europe and the US, citing industry analysts.
- The US is reviewing its anti-terror policy and collaborating with the UK and France to liaise with moderate Muslim groups in the fight against extremism.
London-based Times:
- A group of British Muslims with links to those who carried out the July 7 bombings in London may be planning a third attack on the city's transport system.
Observer:
- The world advertising market is slowing more rapidly than expected, citing data published by ZenithOptimedia.
AFP:
- Ousted Iraqi dictator Saddam Hussein was involved in a fistfight with an unidentified man who attacked him as he left a Baghdad courtroom on Thursday.
Commercial Times:
- Benq Corp. expects shipments of liquid-crystal display monitors to rise as much as 43% this year from 2004.
Xinhua News Agency:
- China's residential property sales growth is likely to slow to around 15% in the second half from 37.3% during January and February as buyers wait for prices and fees to fall.
Middle East Economic Digest:
- The UAE is planning to raise oil production capacity at its onshore Bab field by two-thirds to 250,000 a day.
Weekend Recommendations
Bulls and Bears:
- Had guests that were positive on FDG, GP, DELL, PTR, CMCSA, DCX, AVP, mixed on DE, TGT, BGP and negative on SHLD.
Forbes on Fox:
- Had guests that were positive on MOT, PNRA, ABT, IR and mixed on SONC, WYE.
Cashin' In:
- Had guests that were positive on AHL, SINA and CYD.
Cavuto on Business:
- Had guests that were positive on SCI, DGX, CSCO, QCOM, INTC, MOT and mixed on STRA.
Barron's:
- Had positive comments on IR.
- Had negative comments on HANS and TGT.
Goldman Sachs:
- Reiterated Outperform on BHI, COH and CCU.
Night Trading
Asian indices are unch. to +.50% on average.
S&P 500 indicated +.14%.
NASDAQ 100 indicated +.28%.
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/Estimate
CECO/.47
DRL/.43
EOP/-.17
GT/.20
HUM/.51
IVX/.20
MVSN/.16
MXIM/.37
PG/.55
TSN/.37
Upcoming Splits
SUN 2-for-1
Economic Releases
10:00 am EST
- Construction Spending for June is estimated to rise .7% versus a .9% decline in May.
- ISM Manufacturing for July is estimated to rise to 54.5 versus a reading of 53.8 in June.
- ISM Prices Paid for July is estimated to rise to 52.3 versus a reading of 50.5 in June.
- Pending Home Sales for June are estimated to rise .8% versus a 2.0% decline in May.
Bloomberg:
- The S&P's 500 Index staged its biggest monthly rally this year as second-quarter earnings from companies such as IBM exceeded estimates.
- Wal-Mart Stores said sales at its US stores open at least a year rose about 4.4% in July, the second-highest monthly gain this year.
- The Philadelphia School District, the US's seventh-largest, will become the nation's first to require the study of African-American history, over the objections form critics, including Pennsylvania's most-powerful legislator.
- President Bush, saying he plans to promote the economic progress the US is making, praised the Republican-led Congress for approving energy, trade and highway legislation.
- Take-Two Interactive Software, the third-biggest US video-game maker, said Australia banned sales of the company's "Grand Theft Auto: San Andreas" game because it contains hidden sexual content.
- SAC Capital Advisors LLC, a hedge fund run by Steven A. Cohen, purchased a 5.7% stake in Northwest Airlines.
- Medtronic said it won European approval to sell its Endeavor stent, making it the third player in the $5 billion worldwide market for the drug-coated devices.
- Crude oil is rising in NY to a more than three-week high on concern supply will be disrupted after Iran said it may resume uranium processing and BP Plc cut output at its Texas City refinery.
Barron's:
- Martin Barnes, an economist at Montreal's BCA Research, said he expects low inflation because of little evidence of higher prices globally, as well as greater competition holding down US prices.
New York Times:
- General Electric's board gave executives approval to proceed with talks to buy DreamWorks SKG.
- The US Supreme Court ruing that held local governments have broad powers to take over private property has forced many states to begin weighing changes or constitutional amendments.
- The US Congress gave states the right to impose certain restrictions on predatory towing by truck drivers under the highway bill passed July 29.
- Microsoft is meeting chairman Bill Gates' goal, announced a year ago, of increasing applications for new patents by 50% to 3,000 a year.
- Stocks of utility companies have doubles from the lows hit in October 2002, outpacing the rest of the US stock market as the sector underwent its biggest rally since WWII.
- The Iraq constitution committee agreed to finish drafting the charter by the original deadline of August 15.
Boston Globe:
- The US Dept. of Justice sued the city of Boston for interfering with the voting rights of Hispanic and Asian-Americans with limited English skills.
San Francisco Chronicle:
- Home Depot won approval for its first store in San Francisco after a 10-year battle.
Washington Post:
- US retailers are expanding their efforts to thwart shoplifters with new tracking software, security displays and hangers that lock to jackets or suits.
- Daniel Yergin, of well-respected Cambridge Energy Research, wrote that there will be a large, unprecedented buildup of oil supply during the next few years as capacity rises 20%.
Newsweek:
- The US military may reduce the number of American troops in Iraq to about 80,000 by mid-2006, and cut the number back to 40,000 to 60,000 by the end of next year, citing unidentified Pentagon officials.
Financial Times:
- The novelty of buying ring tones for mobile phones is wearing off in Europe and the US, citing industry analysts.
- The US is reviewing its anti-terror policy and collaborating with the UK and France to liaise with moderate Muslim groups in the fight against extremism.
London-based Times:
- A group of British Muslims with links to those who carried out the July 7 bombings in London may be planning a third attack on the city's transport system.
Observer:
- The world advertising market is slowing more rapidly than expected, citing data published by ZenithOptimedia.
AFP:
- Ousted Iraqi dictator Saddam Hussein was involved in a fistfight with an unidentified man who attacked him as he left a Baghdad courtroom on Thursday.
Commercial Times:
- Benq Corp. expects shipments of liquid-crystal display monitors to rise as much as 43% this year from 2004.
Xinhua News Agency:
- China's residential property sales growth is likely to slow to around 15% in the second half from 37.3% during January and February as buyers wait for prices and fees to fall.
Middle East Economic Digest:
- The UAE is planning to raise oil production capacity at its onshore Bab field by two-thirds to 250,000 a day.
Weekend Recommendations
Bulls and Bears:
- Had guests that were positive on FDG, GP, DELL, PTR, CMCSA, DCX, AVP, mixed on DE, TGT, BGP and negative on SHLD.
Forbes on Fox:
- Had guests that were positive on MOT, PNRA, ABT, IR and mixed on SONC, WYE.
Cashin' In:
- Had guests that were positive on AHL, SINA and CYD.
Cavuto on Business:
- Had guests that were positive on SCI, DGX, CSCO, QCOM, INTC, MOT and mixed on STRA.
Barron's:
- Had positive comments on IR.
- Had negative comments on HANS and TGT.
Goldman Sachs:
- Reiterated Outperform on BHI, COH and CCU.
Night Trading
Asian indices are unch. to +.50% on average.
S&P 500 indicated +.14%.
NASDAQ 100 indicated +.28%.
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/Estimate
CECO/.47
DRL/.43
EOP/-.17
GT/.20
HUM/.51
IVX/.20
MVSN/.16
MXIM/.37
PG/.55
TSN/.37
Upcoming Splits
SUN 2-for-1
Economic Releases
10:00 am EST
- Construction Spending for June is estimated to rise .7% versus a .9% decline in May.
- ISM Manufacturing for July is estimated to rise to 54.5 versus a reading of 53.8 in June.
- ISM Prices Paid for July is estimated to rise to 52.3 versus a reading of 50.5 in June.
- Pending Home Sales for June are estimated to rise .8% versus a 2.0% decline in May.
BOTTOM LINE: Asian Indices are mostly higher on optimism over recent US economic reports. I expect US stocks to open modestly higher after gains in Asia. The Portfolio is 100% net long heading into the week.
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