Indices
S&P 500 1,230.39 +.32%
DJIA 10,600.31 +.40%
NASDAQ 2,156.90 -.96%
Russell 2000 660.00 -.96%
DJ Wilshire 5000 12,260.13 +.23%
S&P Equity Long/Short Index 1,056.15 +.07%
S&P Barra Growth 589.69 +.13%
S&P Barra Value 636.34 +.51%
Morgan Stanley Consumer 588.53 +.61%
Morgan Stanley Cyclical 756.76 +.54%
Morgan Stanley Technology 500.10 -.41%
Transports 3,747.81 +.43%
Utilities 396.06 +.04%
S&P 500 Cum A/D Line 8,296.00 -.60%
Bloomberg Crude Oil % Bulls 56.0 +61.76%
Put/Call 1.28 +10.34%
NYSE Arms 1.39 +28.70%
Volatility(VIX) 12.74 +2.08%
ISE Sentiment 140.00 -32.04%
AAII % Bulls 39.74 -16.91%
US Dollar 86.98 -1.16%
CRB 322.96 +1.99%
Futures Spot Prices
Crude Oil 66.86 +7.10%
Unleaded Gasoline 200.48 +9.25%
Natural Gas 9.59 +9.58%
Heating Oil 190.55 +9.95%
Gold 451.50 +2.57%
Base Metals 130.20 +1.79%
Copper 167.80 +1.82%
10-year US Treasury Yield 4.24% -1.85%
Average 30-year Mortgage Rate 5.89% +1.20%
Leading Sectors
Gold & Silver +5.36%
Steel +4.21%
I-Banks +2.89%
Lagging Sectors
Semis -1.77%
Broadcasting -1.96%
Airlines -2.37%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day % Change
Friday, August 12, 2005
Stocks Sharply Lower Mid-day on Dell Report and Disappointing Economic Data
Indices
S&P 500 1,228.12 -.78%
DJIA 10,583.41 -.96%
NASDAQ 2,148.40 -1.19%
Russell 2000 656.93 -1.42%
DJ Wilshire 5000 12,228.65 -.81%
S&P Barra Growth 588.47 -.86%
S&P Barra Value 635.15 -.73%
Morgan Stanley Consumer 587.97 -.71%
Morgan Stanley Cyclical 754.28 -.62%
Morgan Stanley Technology 498.39 -1.06%
Transports 3,735.46 -.73%
Utilities 394.97 -.56%
Put/Call .93 +1.09%
NYSE Arms 1.36 +95.28%
Volatility(VIX) 12.95 +4.27%
ISE Sentiment 157.00 +30.83%
US Dollar 86.99 +.13%
CRB 322.81 +.09%
Futures Spot Prices
Crude Oil 66.70 +1.37%
Unleaded Gasoline 199.60 +2.37%
Natural Gas 9.55 +2.68%
Heating Oil 191.50 +.87%
Gold 451.70 +.18%
Base Metals 130.20 +2.09%
Copper 167.60 +1.76%
10-year US Treasury Yield 4.25% -1.31%
Leading Sectors
Broadcasting -.13%
Retail -.19%
HMOs -.20%
Lagging Sectors
Gaming -1.74%
Semis -1.90%
Restaurants -2.40%
S&P 500 1,228.12 -.78%
DJIA 10,583.41 -.96%
NASDAQ 2,148.40 -1.19%
Russell 2000 656.93 -1.42%
DJ Wilshire 5000 12,228.65 -.81%
S&P Barra Growth 588.47 -.86%
S&P Barra Value 635.15 -.73%
Morgan Stanley Consumer 587.97 -.71%
Morgan Stanley Cyclical 754.28 -.62%
Morgan Stanley Technology 498.39 -1.06%
Transports 3,735.46 -.73%
Utilities 394.97 -.56%
Put/Call .93 +1.09%
NYSE Arms 1.36 +95.28%
Volatility(VIX) 12.95 +4.27%
ISE Sentiment 157.00 +30.83%
US Dollar 86.99 +.13%
CRB 322.81 +.09%
Futures Spot Prices
Crude Oil 66.70 +1.37%
Unleaded Gasoline 199.60 +2.37%
Natural Gas 9.55 +2.68%
Heating Oil 191.50 +.87%
Gold 451.70 +.18%
Base Metals 130.20 +2.09%
Copper 167.60 +1.76%
10-year US Treasury Yield 4.25% -1.31%
Leading Sectors
Broadcasting -.13%
Retail -.19%
HMOs -.20%
Lagging Sectors
Gaming -1.74%
Semis -1.90%
Restaurants -2.40%
BOTTOM LINE: The Portfolio is slightly higher mid-day on gains in my Oil Tanker and Computer shorts. I added to my IWM and QQQQ shorts this morning, thus leaving the Portfolio 25% net long. The tone of the market is negative as the advance/decline line is substantially lower, every sector is lower and volume is below average. Measures of investor anxiety are mostly higher. Today’s overall market action is negative considering the fall in long-term rates. Apple Computer (AAPL), one of my long positions, is breaking out today on decent volume with the rest of tech getting smacked. It is a beneficiary of Dell’s woes. The stock is approaching highs of $45.44 reached on Feb. 17, 2005. I expect US stocks to trade modestly higher from current levels into the close on lower long-term rates.
Today's Headlines
Bloomberg:
- Texas Instruments CEO Templeton said he expects “strong” demand for cell phones as the largest handset makers fill rising orders for the newest models.
- The French economy grew .1% in the three months through June, lagging behind the dozen nations sharing the euro for a second quarter as consumer spending was damped by surging oil prices and concern about job losses.
- Shares of Fannie Mae fell to a four-month low amid investor concerns the company will need a year to complete an earnings restatement that may total as much as $10.8 billion.
- Oil is rising to another record for a fifth straight day, touching $66.95/bbl. in NY on speculation that increased fuel demand may outpace production capacity.
- The US dollar is gaining against the euro after the US reported a trade deficit for June that was better than some traders expected.
Wall Street Journal:
- According to a recent WSJ Online poll, 54% of the economists surveyed believed the Fed’s Open Market Committee will go too far in raising rates whilst 46% were concerned it will keep them too low.
- Billionaire investor Carl Icahn’s alliance with hedge funds to get Time Warner to sell assets and boost a buyback gives him a new platform to go after some of the biggest US corporations.
- DKT International, a non-profit US AIDS-prevention group, sued the US government in federal court for refusing the group federal funding because it won’t endorse President Bush’s policies against prostitution.
NY Times:
- The FBI said there is the potential for terrorist attacks in New York, LA and Chicago around the Sept. 11 anniversary.
NY Post:
- Employees at investment banks, asset management companies and securities brokerages in the US may see as much as a 10% boost in bonuses this year.
Reuters:
- Maytag’s board of directors is set to back Whirlpool’s takeover offer of about $1.7B, or $21 a share.
Il Giornale:
- The European Central Bank must cut interest rates to spur growth in Europe, Deputy Finance Minister Baldassarri said.
- Texas Instruments CEO Templeton said he expects “strong” demand for cell phones as the largest handset makers fill rising orders for the newest models.
- The French economy grew .1% in the three months through June, lagging behind the dozen nations sharing the euro for a second quarter as consumer spending was damped by surging oil prices and concern about job losses.
- Shares of Fannie Mae fell to a four-month low amid investor concerns the company will need a year to complete an earnings restatement that may total as much as $10.8 billion.
- Oil is rising to another record for a fifth straight day, touching $66.95/bbl. in NY on speculation that increased fuel demand may outpace production capacity.
- The US dollar is gaining against the euro after the US reported a trade deficit for June that was better than some traders expected.
Wall Street Journal:
- According to a recent WSJ Online poll, 54% of the economists surveyed believed the Fed’s Open Market Committee will go too far in raising rates whilst 46% were concerned it will keep them too low.
- Billionaire investor Carl Icahn’s alliance with hedge funds to get Time Warner to sell assets and boost a buyback gives him a new platform to go after some of the biggest US corporations.
- DKT International, a non-profit US AIDS-prevention group, sued the US government in federal court for refusing the group federal funding because it won’t endorse President Bush’s policies against prostitution.
NY Times:
- The FBI said there is the potential for terrorist attacks in New York, LA and Chicago around the Sept. 11 anniversary.
NY Post:
- Employees at investment banks, asset management companies and securities brokerages in the US may see as much as a 10% boost in bonuses this year.
Reuters:
- Maytag’s board of directors is set to back Whirlpool’s takeover offer of about $1.7B, or $21 a share.
Il Giornale:
- The European Central Bank must cut interest rates to spur growth in Europe, Deputy Finance Minister Baldassarri said.
Trade Deficit Widens, Import Prices Rise, Consumer Confidence Falls
- The Trade Deficit for June widened to -$58.8B versus estimates of -$57.2B and -$55.4B in May.
- The Import Price Index for July rose 1.1% versus estimates of a .6% increase and a 1.0% gain in June.
- The Preliminary Univ. of Mich. Consumer Confidence for August fell to 92.7 versus estimates of 96.3 and a reading of 96.5 in July.
- The Import Price Index for July rose 1.1% versus estimates of a .6% increase and a 1.0% gain in June.
- The Preliminary Univ. of Mich. Consumer Confidence for August fell to 92.7 versus estimates of 96.3 and a reading of 96.5 in July.
BOTTOM LINE: The US trade deficit widened more than forecast in June as a strengthening US economy prompted companies to import more expensive crude oil and a record amount of goods from China, Bloomberg reported. I continue to believe the trade deficit will only improve modestly by year-end.
Prices of goods imported into the US rose in July by the most in four months, pulled up by record crude oil costs. Excluding oil, import prices fell for a third straight month, Bloomberg reported. Import prices should subside further as oil declines in the fourth quarter.
US consumer confidence fell in August from the highest level of the year as Americans confronted record gasoline prices, Bloomberg said. I expect consumer confidence to begin rebounding in September and hit cycle highs by year-end as economic growth exceeds 4%, inflation decelerates, gas prices fall, interest rates remain relatively low and stock prices rise.
Friday Watch
Late-Night Headlines
Bloomberg:
- Crude oil is trading near a record $66.05/bbl. and gasoline and heating oil set all-time highs after a fire at a Sunoco pipeline heightened concern US refineries may struggle to meet second-half fuel demand.
- Japan’s 10-year bonds had the biggest gain in three weeks after a government report showed the economy expanded less than forecast last quarter.
- The US government said it will refer Iran to the UN Security Council unless it halts its uranium processing program, after the Iranian government rejected calls from a nuclear watchdog to stop the work.
Financial Times:
- A stampede of Chinese companies selling shares for the first time in the US could lead to a “bubble” that would devastate US investors, citing Richard D’Amato, chairman of a US security review.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Underperform on WTW.
Business Week:
- New River Pharmaceuticals(NRPH) is attracting investors who are betting on robust demand for the drug developer’s NRP104 product once it is available for general use.
- Shares of Pier 1 Imports(PIR) are being bought by an investor who has previously benefited from the stock.
- Alpha Natural Resources(ANR) shares may rise as high as $40 in the next year on higher earnings from coal produced in its eastern US mines.
Night Trading
Asian Indices are unch. to +.25% on average.
S&P 500 indicated -.04%.
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
MOVI/.51
PBY/.11
Upcoming Splits
None of note
Economic Releases
8:30 am EST
- The Trade Deficit for June is estimated to widen to -$57.2B versus -$55.3B in May.
- The Import Price Index for July is estimated to rise .6% versus a 1.0% gain in June.
9:45 am EST
- Preliminary Univ. of Mich. Consumer Confidence for August is estimated to fall to 96.3 versus a reading of 96.5 in July.
Bloomberg:
- Crude oil is trading near a record $66.05/bbl. and gasoline and heating oil set all-time highs after a fire at a Sunoco pipeline heightened concern US refineries may struggle to meet second-half fuel demand.
- Japan’s 10-year bonds had the biggest gain in three weeks after a government report showed the economy expanded less than forecast last quarter.
- The US government said it will refer Iran to the UN Security Council unless it halts its uranium processing program, after the Iranian government rejected calls from a nuclear watchdog to stop the work.
Financial Times:
- A stampede of Chinese companies selling shares for the first time in the US could lead to a “bubble” that would devastate US investors, citing Richard D’Amato, chairman of a US security review.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Underperform on WTW.
Business Week:
- New River Pharmaceuticals(NRPH) is attracting investors who are betting on robust demand for the drug developer’s NRP104 product once it is available for general use.
- Shares of Pier 1 Imports(PIR) are being bought by an investor who has previously benefited from the stock.
- Alpha Natural Resources(ANR) shares may rise as high as $40 in the next year on higher earnings from coal produced in its eastern US mines.
Night Trading
Asian Indices are unch. to +.25% on average.
S&P 500 indicated -.04%.
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
MOVI/.51
PBY/.11
Upcoming Splits
None of note
Economic Releases
8:30 am EST
- The Trade Deficit for June is estimated to widen to -$57.2B versus -$55.3B in May.
- The Import Price Index for July is estimated to rise .6% versus a 1.0% gain in June.
9:45 am EST
- Preliminary Univ. of Mich. Consumer Confidence for August is estimated to fall to 96.3 versus a reading of 96.5 in July.
BOTTOM LINE: Asian indices are higher, spurred by economic optimism in the region. I expect US equities to open modestly lower on weakness related to Dell’s earnings report. The Portfolio is 50% net long heading into the day.
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