Indices
S&P 500 1,226.42 -.63%
DJIA 10,558.03 -.78%
NASDAQ 2,177.91 -.32%
Russell 2000 662.79 -2.49%
DJ Wilshire 5000 12,231.53 -.83%
S&P Equity Long/Short Index 1,055.45 +.97%
S&P Barra Growth 588.90 -.51%
S&P Barra Value 633.11 -.75%
Morgan Stanley Consumer 584.96 -.88%
Morgan Stanley Cyclical 752.69 -1.14%
Morgan Stanley Technology 502.18 +.33%
Transports 3,731.66 -1.80%
Utilities 395.91 -.35%
S&P 500 Cum A/D Line 8,307.00 -4.57%
Bloomberg Crude Oil % Bulls 35.0 -30.0%
Put/Call 1.16 +31.82%
NYSE Arms 1.08 -23.40%
Volatility(VIX) 12.48 +7.86%
ISE Sentiment 206.00 +24.10%
AAII % Bulls 47.83 -16.85%
US Dollar 88.06 -1.47%
CRB 316.67 +1.50%
Futures Spot Prices
Crude Oil 62.31 +2.65%
Unleaded Gasoline 183.22 +5.97%
Natural Gas 8.70 +10.27%
Heating Oil 173.12 +3.05%
Gold 442.70 +1.12%
Base Metals 127.91 +1.18%
Copper 165.05 -.75%
10-year US Treasury Yield 4.38% +2.57%
Average 30-year Mortgage Rate 5.82% +.87%
Leading Sectors
Gold & Silver +4.53%
Oil Service +2.62%
HMOs +1.98%
Lagging Sectors
Broadcasting -4.27%
Homebuilders -4.54%
Airlines -6.50%
*5-Day % Change
Friday, August 05, 2005
Stocks Modestly Lower Mid-day on Worries Over Rising Rates
Indices
S&P 500 1,227.96 -.72%
DJIA 10,565.75 -.42%
NASDAQ 2,179.82 -.52%
Russell 2000 662.45 -1.40%
DJ Wilshire 5000 12,234.19 -.84%
S&P Barra Growth 589.47 -.45%
S&P Barra Value 633.02 -.99%
Morgan Stanley Consumer 584.86 -.45%
Morgan Stanley Cyclical 752.44 -.55%
Morgan Stanley Technology 502.17 -.57%
Transports 3,741.05 -.67%
Utilities 396.17 -1.62%
Put/Call 1.10 +5.77%
NYSE Arms .99 -21.08%
Volatility(VIX) 12.90 +3.04%
ISE Sentiment 188.00 -8.29%
US Dollar 88.19 +.43%
CRB 315.65 -.03%
Futures Spot Prices
Crude Oil 62.05 +1.09%
Unleaded Gasoline 183.00 +1.65%
Natural Gas 8.62 +1.76%
Heating Oil 172.00 +.71%
Gold 443.10 -.14%
Base Metals 127.91 +.07%
Copper 164.70 -.45%
10-year US Treasury Yield 4.38% +1.77%
Leading Sectors
Internet -.02%
Software -.16%
Semis -.20%
Lagging Sectors
Oil Tankers -2.66%
Homebuilders -3.44%
Broadcasting -4.53%
S&P 500 1,227.96 -.72%
DJIA 10,565.75 -.42%
NASDAQ 2,179.82 -.52%
Russell 2000 662.45 -1.40%
DJ Wilshire 5000 12,234.19 -.84%
S&P Barra Growth 589.47 -.45%
S&P Barra Value 633.02 -.99%
Morgan Stanley Consumer 584.86 -.45%
Morgan Stanley Cyclical 752.44 -.55%
Morgan Stanley Technology 502.17 -.57%
Transports 3,741.05 -.67%
Utilities 396.17 -1.62%
Put/Call 1.10 +5.77%
NYSE Arms .99 -21.08%
Volatility(VIX) 12.90 +3.04%
ISE Sentiment 188.00 -8.29%
US Dollar 88.19 +.43%
CRB 315.65 -.03%
Futures Spot Prices
Crude Oil 62.05 +1.09%
Unleaded Gasoline 183.00 +1.65%
Natural Gas 8.62 +1.76%
Heating Oil 172.00 +.71%
Gold 443.10 -.14%
Base Metals 127.91 +.07%
Copper 164.70 -.45%
10-year US Treasury Yield 4.38% +1.77%
Leading Sectors
Internet -.02%
Software -.16%
Semis -.20%
Lagging Sectors
Oil Tankers -2.66%
Homebuilders -3.44%
Broadcasting -4.53%
BOTTOM LINE: The Portfolio is slightly lower mid-day on losses in my Homebuilding, Internet and Retail longs. I took profits in a few longs this morning and added to my IWM and QQQQ shorts, thus leaving the Portfolio 50% net long. The tone of the market is negative as the advance/decline line is lower, every sector is lower and volume is below average. Measures of investor anxiety are mostly higher. Today’s overall market action is mildly negative considering the rise in rates/oil and recent gains. Semiconductors are outperforming today, barely down, which is a positive. I expect US stocks to mixed from current levels into the close as short-covering offsets higher rates.
Today's Headlines
Bloomberg:
- UK Prime Minister Tony Blair said foreign nationals who encourage terrorism anywhere in the world will be deported, following two waves of bomb attacks in London last month that left 56 dead.
- The US Navy is airlifting an underwater robot across the Pacific to try to free seven Russian submariners trapped on the seafloor off the Kamchatka Peninsula with less than 24 hours of air.
- Billionaire investor Warren Buffett’s bet against the US dollar may have hurt Berkshire Hathaway’s profit for the second straight quarter as the dollar strengthened against foreign currencies.
- US telecommunications regulators scrapped rules that telephone companies say limit their ability to compete with cable-tv operators in selling high-speed Internet service.
- US Treasuries are falling after a report showed the economy created more jobs last month than forecast.
- The US dollar is rising against the euro for the first day this week after a government report showed the US economy added more jobs than forecast, boosting speculation the Fed will keep raising rates.
- Shares of China’s Baidu.com, a search engine that models itself on Google, tripled after the company raised $109 million in its US IPO.
Wall Street Journal:
- International Business Machines has doubled the speed of its silicon-germanium semiconductor chips.
- Velvet has returned to fashion for the coming fall season as first deliveries at Saks Fifth Avenue, Bloomingdale’s and Neiman Marcus bring in array of velvet blazers.
- Medicare is being sued by a group of seniors seeking to recover billions of dollars spent on smoking-related diseases.
NY Times:
- Kinetic Concepts, Smith & Smith & Nephew Plc and Johnson & Johnson may benefit from increased demand for products that help with slow-healing wounds.
Property Week:
- CB Richard Ellis Group, the world’s largest global commercial real-estate services firm, is in talks to buy Trammell Crow for $1 billion.
Houston Chronicle:
- BP Plc, whose Texas City, Texas, plant has had two explosions since March, will upgrade equipment at the company’s five US refineries to improve safety.
- UK Prime Minister Tony Blair said foreign nationals who encourage terrorism anywhere in the world will be deported, following two waves of bomb attacks in London last month that left 56 dead.
- The US Navy is airlifting an underwater robot across the Pacific to try to free seven Russian submariners trapped on the seafloor off the Kamchatka Peninsula with less than 24 hours of air.
- Billionaire investor Warren Buffett’s bet against the US dollar may have hurt Berkshire Hathaway’s profit for the second straight quarter as the dollar strengthened against foreign currencies.
- US telecommunications regulators scrapped rules that telephone companies say limit their ability to compete with cable-tv operators in selling high-speed Internet service.
- US Treasuries are falling after a report showed the economy created more jobs last month than forecast.
- The US dollar is rising against the euro for the first day this week after a government report showed the US economy added more jobs than forecast, boosting speculation the Fed will keep raising rates.
- Shares of China’s Baidu.com, a search engine that models itself on Google, tripled after the company raised $109 million in its US IPO.
Wall Street Journal:
- International Business Machines has doubled the speed of its silicon-germanium semiconductor chips.
- Velvet has returned to fashion for the coming fall season as first deliveries at Saks Fifth Avenue, Bloomingdale’s and Neiman Marcus bring in array of velvet blazers.
- Medicare is being sued by a group of seniors seeking to recover billions of dollars spent on smoking-related diseases.
NY Times:
- Kinetic Concepts, Smith & Smith & Nephew Plc and Johnson & Johnson may benefit from increased demand for products that help with slow-healing wounds.
Property Week:
- CB Richard Ellis Group, the world’s largest global commercial real-estate services firm, is in talks to buy Trammell Crow for $1 billion.
Houston Chronicle:
- BP Plc, whose Texas City, Texas, plant has had two explosions since March, will upgrade equipment at the company’s five US refineries to improve safety.
US Employers Added More Workers Than Expected in July
- The Unemployment Rate for July remained at 5.0% versus estimates of 5.0% and 5.0% in June.
- Average Hourly Earnings for July rose .4% versus estimates of a .2% increase and a .2% gain in June.
- The Change in Non-farm Payrolls for July was 207K versus estimates of 180K and an upwardly revised 166K in June.
- The Change in Manufacturing Payrolls for July was -4K versus estimates of -5K and an upwardly revised -21K in June.
- Average Hourly Earnings for July rose .4% versus estimates of a .2% increase and a .2% gain in June.
- The Change in Non-farm Payrolls for July was 207K versus estimates of 180K and an upwardly revised 166K in June.
- The Change in Manufacturing Payrolls for July was -4K versus estimates of -5K and an upwardly revised -21K in June.
BOTTOM LINE: US employers added 207,000 workers in July, a bigger increase than expected, suggesting companies are gaining confidence as the economy accelerates, Bloomberg reported. Moreover, the Unemployment Rate remained at 5.0%, near a 4-year low. Average monthly job growth is 191,000 this year versus 183,000 last year. The strong employment report is sending long-term rates higher, thus pressuring stocks.
Friday Watch
Late-Night Headlines
Bloomberg:
- Crude oil may fall for the first week in four on expectations higher oil imports will increase inventories and gasoline demand will fall as the US summer driving season winds down, a Bloomberg survey showed.
Wall Street Journal:
- Amazon.com has had discussions with record companies about licensing music in order to sell a digital music service on its Web site by the end of the year.
London-based Times:
- London Underground’s weekend travel business has declined 30% since the July 7 bomb attacks compared with last year.
Asian Wall Street Journal:
- China is restricting media coverage on Cnooc’s failed bid to buy Unocal to muffle criticism of the US before a meeting between Chinese President Hu Jintao and President Bush next month.
Beijing News:
- Boeing will upgrade its representative office in China to a shareholding company to help it expand business in the country.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on DEX.
- Reiterated Underperform on DRI and CSC.
Business Week:
- Shares of Charles Schwab(SCH) may gain as much as 48% by the end of the year because of rising profit and its decreasing percentage of revenue from trading services, which can be unpredictable.
- Brink’s(BCO), which provides armored truck and home-security services, will likely sell BAX Global, its air-freight delivery business, which has weighed on earnings
Night Trading
Asian Indices are -1.0% to +.50% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.03%.
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
CAH/.89
L/.02
NOV/.44
Upcoming Splits
None of note
Economic Releases
8:30 am EST
- The Unemployment Rate for July is estimated to remain at 5.0% versus 5.0% in June.
- Average Hourly Earnings for July are estimated to rise .2% versus a .2% increase in June.
- The Change in Non-farm Payrolls for July is estimated at 180K versus 146K in June.
- The Change in Manufacturing Payrolls for July is estimated at -5K versus -24K in June.
3:00 pm EST
- Consumer Credit for June is estimated to rise to $6.0B versus -$3.0B in May.
Bloomberg:
- Crude oil may fall for the first week in four on expectations higher oil imports will increase inventories and gasoline demand will fall as the US summer driving season winds down, a Bloomberg survey showed.
Wall Street Journal:
- Amazon.com has had discussions with record companies about licensing music in order to sell a digital music service on its Web site by the end of the year.
London-based Times:
- London Underground’s weekend travel business has declined 30% since the July 7 bomb attacks compared with last year.
Asian Wall Street Journal:
- China is restricting media coverage on Cnooc’s failed bid to buy Unocal to muffle criticism of the US before a meeting between Chinese President Hu Jintao and President Bush next month.
Beijing News:
- Boeing will upgrade its representative office in China to a shareholding company to help it expand business in the country.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on DEX.
- Reiterated Underperform on DRI and CSC.
Business Week:
- Shares of Charles Schwab(SCH) may gain as much as 48% by the end of the year because of rising profit and its decreasing percentage of revenue from trading services, which can be unpredictable.
- Brink’s(BCO), which provides armored truck and home-security services, will likely sell BAX Global, its air-freight delivery business, which has weighed on earnings
Night Trading
Asian Indices are -1.0% to +.50% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.03%.
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
CAH/.89
L/.02
NOV/.44
Upcoming Splits
None of note
Economic Releases
8:30 am EST
- The Unemployment Rate for July is estimated to remain at 5.0% versus 5.0% in June.
- Average Hourly Earnings for July are estimated to rise .2% versus a .2% increase in June.
- The Change in Non-farm Payrolls for July is estimated at 180K versus 146K in June.
- The Change in Manufacturing Payrolls for July is estimated at -5K versus -24K in June.
3:00 pm EST
- Consumer Credit for June is estimated to rise to $6.0B versus -$3.0B in May.
BOTTOM LINE: Asian indices are mostly lower on worries that rising energy prices will curtail growth in the region. I expect US equities to open modestly lower and to rally later in the afternoon. The Portfolio is 75% net long heading into the day.
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