BOTTOM LINE: The energy inventory numbers were once again bearish for energy. So far there is little reaction in the trading pit. I continue to believe that oil pricing is in the grips of a mania and is not supported by the underlying fundamentals. The substantial second-half decline in oil prices I predicted at the beginning of the year will likely begin around the first half of September as terrorism and hurricane fears peak.
Wednesday, August 10, 2005
Distillate Inventories Rise More Than Estimates
- The EIA reported crude inventories rose 2.8M barrels vs. estimates of a 1.0M barrel decline. Gasoline inventories declined 2.09M barrels vs. estimates of a 2.0M barrel fall. Distillate inventories rose 2.6M barrels vs. estimates of a 1.75M barrel rise.
Wednesday Watch
Late-Night Headlines
Bloomberg:
- The US dollar, euro, yen and South Korean won are the main currencies in a basket referenced against the yuan in China’s new exchange rate regime, the central bank said.
- China will delay the purchase of crude oil for its stockpile after prices surged, a government official said.
- Asian contract prices for coal used in power generation may fall about 8% next year on slowing growth in demand and increased production, said Goldman Sachs.
Financial Times:
- China may have surplus generating capacity next year as new power stations start production.
Guardian:
- London’s popularity as a tourist destination has not been harmed by last month’s terrorist attacks.
United Daily News:
- Yahoo! may use shares in its China unit to pay for a 35% stake in Chinese online commerce company Alibaba.com.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on DDR, DISH, GILD, AIG, CBB and FDC.
- Reiterated Underperform on IHR and PPS.
Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.05%.
NASDAQ 100 indicated -.06%.
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
FD/.84
TOM/.29
RMK/.37
AVT/.36
Upcoming Splits
None of note
Economic Releases
10:30 am EST
- Platt's is estimating crude inventories to fall 1.3 million barrels, gasoline inventories to fall 1.95 million barrels and distillate inventories to rise 1.5 million barrels. They are also expecting refinery utilization to drop 1%.
2:00 pm EST
- The Monthly Budget Deficit for July is estimated to shrink to -$57.0B from -$69.2B in June.
Bloomberg:
- The US dollar, euro, yen and South Korean won are the main currencies in a basket referenced against the yuan in China’s new exchange rate regime, the central bank said.
- China will delay the purchase of crude oil for its stockpile after prices surged, a government official said.
- Asian contract prices for coal used in power generation may fall about 8% next year on slowing growth in demand and increased production, said Goldman Sachs.
Financial Times:
- China may have surplus generating capacity next year as new power stations start production.
Guardian:
- London’s popularity as a tourist destination has not been harmed by last month’s terrorist attacks.
United Daily News:
- Yahoo! may use shares in its China unit to pay for a 35% stake in Chinese online commerce company Alibaba.com.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on DDR, DISH, GILD, AIG, CBB and FDC.
- Reiterated Underperform on IHR and PPS.
Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.05%.
NASDAQ 100 indicated -.06%.
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
FD/.84
TOM/.29
RMK/.37
AVT/.36
Upcoming Splits
None of note
Economic Releases
10:30 am EST
- Platt's is estimating crude inventories to fall 1.3 million barrels, gasoline inventories to fall 1.95 million barrels and distillate inventories to rise 1.5 million barrels. They are also expecting refinery utilization to drop 1%.
2:00 pm EST
- The Monthly Budget Deficit for July is estimated to shrink to -$57.0B from -$69.2B in June.
BOTTOM LINE: Asian indices are mostly higher as exporters in the region gain after the US Fed did not increase hawkish rhetoric as expected. I expect US equities to open modestly higher and to strengthen throughout the day as oil and interest rates stabilize. The Portfolio is 75% net long heading into the day.
Tuesday, August 09, 2005
Stocks Finish Higher on a Modest Decline in Oil and Long-term Rates
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
BOTTOM LINE: Due to a scheduling conflict I am posting an abbreviated Evening Review. I finished the day 75% net long by covering existing shorts. I will post the Wednesday Watch later this evening.
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
BOTTOM LINE: Due to a scheduling conflict I am posting an abbreviated Evening Review. I finished the day 75% net long by covering existing shorts. I will post the Wednesday Watch later this evening.
Stocks Modestly Higher Mid-day as Oil Reverses Lower
Indices
S&P 500 1,230.60 +.61%
DJIA 10,607.07 +.67%
NASDAQ 2,174.69 +.47%
Russell 2000 660.74 +.17%
DJ Wilshire 5000 12,247.94 +.50%
S&P Barra Growth 591.02 +.64%
S&P Barra Value 635.18 +.58%
Morgan Stanley Consumer 587.91 +.60%
Morgan Stanley Cyclical 754.67 +.19%
Morgan Stanley Technology 505.61 +.81%
Transports 3,739.16 +.30%
Utilities 391.10 +.73%
Put/Call .95 +13.10%
NYSE Arms .59 -27.0%
Volatility(VIX) 12.32 -6.74%
ISE Sentiment 179.00 +20.95%
US Dollar 88.03 +.13%
CRB 315.32 -.92%
Futures Spot Prices
Crude Oil 63.55 -.53%
Unleaded Gasoline 183.60 -1.13%
Natural Gas 8.63 -.56%
Heating Oil 179.50 +.31%
Gold 439.60 -.16%
Base Metals 125.26 -1.55%
Copper 160.70 -2.40%
10-year US Treasury Yield 4.42% +.14%
Leading Sectors
Internet +2.40%
Semis +1.44%
Networking +1.06%
Lagging Sectors
Airlines -.72%
Oil Service -.93%
Oil Tankers -1.06%
S&P 500 1,230.60 +.61%
DJIA 10,607.07 +.67%
NASDAQ 2,174.69 +.47%
Russell 2000 660.74 +.17%
DJ Wilshire 5000 12,247.94 +.50%
S&P Barra Growth 591.02 +.64%
S&P Barra Value 635.18 +.58%
Morgan Stanley Consumer 587.91 +.60%
Morgan Stanley Cyclical 754.67 +.19%
Morgan Stanley Technology 505.61 +.81%
Transports 3,739.16 +.30%
Utilities 391.10 +.73%
Put/Call .95 +13.10%
NYSE Arms .59 -27.0%
Volatility(VIX) 12.32 -6.74%
ISE Sentiment 179.00 +20.95%
US Dollar 88.03 +.13%
CRB 315.32 -.92%
Futures Spot Prices
Crude Oil 63.55 -.53%
Unleaded Gasoline 183.60 -1.13%
Natural Gas 8.63 -.56%
Heating Oil 179.50 +.31%
Gold 439.60 -.16%
Base Metals 125.26 -1.55%
Copper 160.70 -2.40%
10-year US Treasury Yield 4.42% +.14%
Leading Sectors
Internet +2.40%
Semis +1.44%
Networking +1.06%
Lagging Sectors
Airlines -.72%
Oil Service -.93%
Oil Tankers -1.06%
BOTTOM LINE: The Portfolio is higher mid-day on gains in my Medical, Semiconductor and Biotech longs. I took profits in a few of my IWM and QQQQ shorts, thus leaving the Portfolio 50% net long. The tone of the market is modestly positive as the advance/decline line is slightly higher, most sectors are higher and volume is very light. Measures of investor anxiety are mostly lower. Today’s overall market action is neutral considering the lower-than-expected rise in Unit Labor Costs. The Johnson Redbook same-store sales index rose 4% year over year last week vs. a 4.4% rise the prior week. The last time weekly sales were 4.0% or greater for six consecutive weeks was May/June 2004. This week's gain is also up from a 1.5% increase in late April and the 14th week in a row the index has exceeded 3%. I expect US stocks to trade mixed into the close as higher rates offset lower energy prices.
Today's Headlines
Bloomberg:
- Shares of Elan rose as much as 37% after a review of multiple sclerosis patient data raised speculation that the withdrawn Tysabri medicine may be allowed back on the market.
- Discovery landed safely at Edwards Air Force Base in California, ending a troubled mission that marked the shuttle’s return to space since the destruction of Columbia in 2003.
Wall Street Journal:
- Oil refiners are putting airlines under pressure by increasing the margins they make from processing crude into jet fuel.
- Lenovo Group Ltd., the China-based group that bought IBM’s personal computer-manufacturing unit, will issue results tomorrow that will let investors see how the group is integrating the personal computer business.
- Verizon Communications plans to join an organization studying how to use coaxial wiring to connect televisions, computers and other appliances.
- Labor unions must convince workers that they are committed to their interests to attract new members, John Zogby, chief executive of polling company Zogby International wrote.
NY Times:
- GM has sold this year the most so-called very small vehicles, which aren’t available in the US, boosted by minivan sales in China.
- The SEC is studying whether doctors involved in clinical trials accept money to talk to analysts and investors about the confidential results.
- Boston Scientific has enjoyed huge success with its Taxus stent but the result is that the company derives more than half its profit from just one product.
Philadelphia Inquirer:
- Comcast Corp. is close to reaching a two-year agreement worth more than $100 million to broadcast NHL games this year.
LA Times:
- California workers’ compensation premiums fell 14.6% for policies written or renewed after July 1 because of increased competition among insurers.
Gulf News:
- Saudi Arabia denied there was a threat of a terrorist attack in the kingdom after the US government closed its embassy in the capital, Riyadh, and consulate in Jeddah because of security concerns.
- Shares of Elan rose as much as 37% after a review of multiple sclerosis patient data raised speculation that the withdrawn Tysabri medicine may be allowed back on the market.
- Discovery landed safely at Edwards Air Force Base in California, ending a troubled mission that marked the shuttle’s return to space since the destruction of Columbia in 2003.
Wall Street Journal:
- Oil refiners are putting airlines under pressure by increasing the margins they make from processing crude into jet fuel.
- Lenovo Group Ltd., the China-based group that bought IBM’s personal computer-manufacturing unit, will issue results tomorrow that will let investors see how the group is integrating the personal computer business.
- Verizon Communications plans to join an organization studying how to use coaxial wiring to connect televisions, computers and other appliances.
- Labor unions must convince workers that they are committed to their interests to attract new members, John Zogby, chief executive of polling company Zogby International wrote.
NY Times:
- GM has sold this year the most so-called very small vehicles, which aren’t available in the US, boosted by minivan sales in China.
- The SEC is studying whether doctors involved in clinical trials accept money to talk to analysts and investors about the confidential results.
- Boston Scientific has enjoyed huge success with its Taxus stent but the result is that the company derives more than half its profit from just one product.
Philadelphia Inquirer:
- Comcast Corp. is close to reaching a two-year agreement worth more than $100 million to broadcast NHL games this year.
LA Times:
- California workers’ compensation premiums fell 14.6% for policies written or renewed after July 1 because of increased competition among insurers.
Gulf News:
- Saudi Arabia denied there was a threat of a terrorist attack in the kingdom after the US government closed its embassy in the capital, Riyadh, and consulate in Jeddah because of security concerns.
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