BOTTOM LINE: US sales of previously owned homes slowed in July, leaving the rate of purchases at the third-highest on record as low interest rates and growing employment supported demand, Bloomberg reported. The median price of an existing home rose .5% to $218,000 in July. The median price is 14% above year-ago levels. Re-sales fell 7.5% in the West, 3.3% in the Northeast and 1.8% in the Midwest. The South was unchanged. The supply of homes for sale increased to 4.6 months’ worth, the highest since November 2003, from 4.4 months’ worth in June. I continue to believe the rate of home price appreciation will slow over the coming months, not plunge.
Tuesday, August 23, 2005
Existing Home Sales Slow Modestly
- Existing Home Sales for July fell to 7.16M versus estimates of 7.25M and 7.35M in June.
Tuesday Watch
Late-Night Headlines
Bloomberg:
- Newmont Mining, Phelps Dodge and Barrick Gold, faced with surging energy costs, are building their own power plants, locking in fuel prices and using bigger trucks to reduce expenses.
Financial Times:
- CSFB may win an advisory role in China Construction Bank’s $5 billion IPO.
- KPMG LLP may announce a settlement with the US authorizing authorities over past sales of tax avoidance schemes as soon as this week.
Automotive News:
- The US will announce new rules tomorrow to boost fuel economy requirements for sport-utility vehicles, pickup trucks and minivans by as much as 6%.
Telegraph:
- Former UK Chancellor of the Exchequer Ken Clarke said the euro has been “a failure” and there had never “been a time when the British could have joined with complete security and confidence.”
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on EBAY, AMLN and PFE.
Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated +.05%.
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
TTC/.69
WSM/.26
WIND/.06
Upcoming Splits
KIM 2-for-1
Economic Releases
10:00 am EST
- Existing Home Sales for July are estimated to fall to 7.25M versus 7.33M in June.
Bloomberg:
- Newmont Mining, Phelps Dodge and Barrick Gold, faced with surging energy costs, are building their own power plants, locking in fuel prices and using bigger trucks to reduce expenses.
Financial Times:
- CSFB may win an advisory role in China Construction Bank’s $5 billion IPO.
- KPMG LLP may announce a settlement with the US authorizing authorities over past sales of tax avoidance schemes as soon as this week.
Automotive News:
- The US will announce new rules tomorrow to boost fuel economy requirements for sport-utility vehicles, pickup trucks and minivans by as much as 6%.
Telegraph:
- Former UK Chancellor of the Exchequer Ken Clarke said the euro has been “a failure” and there had never “been a time when the British could have joined with complete security and confidence.”
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on EBAY, AMLN and PFE.
Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated +.05%.
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
TTC/.69
WSM/.26
WIND/.06
Upcoming Splits
KIM 2-for-1
Economic Releases
10:00 am EST
- Existing Home Sales for July are estimated to fall to 7.25M versus 7.33M in June.
BOTTOM LINE: Asian indices are mixed, as gains in Japan are being offset by losses in Chinese shares. I expect US equities to open mixed as energy fears offset economic optimism. The Portfolio is 50% net long heading into the day.
Monday, August 22, 2005
Stocks Finish Slightly Higher as Oil Reverses
Indices
S&P 500 1,221.73 +.17%
DJIA 10,569.89 +.10%
NASDAQ 2,141.41 +.27%
Russell 2000 657.47 +.76%
DJ Wilshire 5000 12,173.35 +.21%
S&P Barra Growth 584.58 +.14%
S&P Barra Value 632.86 +.19%
Morgan Stanley Consumer 584.89 +.01%
Morgan Stanley Cyclical 743.27 +.30%
Morgan Stanley Technology 496.80 -.08%
Transports 3,725.32 +.18%
Utilities 396.67 +.55%
Put/Call .90 -13.46%
NYSE Arms 1.15 -.77%
Volatility(VIX) 13.42 unch.
ISE Sentiment 159.00 +32.50%
US Dollar 88.14 -.52%
CRB 317.12 +.62%
Futures Spot Prices
Crude Oil 65.40 -.38%
Unleaded Gasoline 185.60 -.30%
Natural Gas 9.56 unch.
Heating Oil 180.50 -.36%
Gold 442.80 -.05%
Base Metals 131.54 +1.95%
Copper 164.10 unch.
10-year US Treasury Yield 4.21% +.05%
Leading Sectors
Steel +2.18%
Semis +1.18%
Wireless +1.10%
Lagging Sectors
Tobacco -.69%
Internet -.75%
Oil Service -.80%
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
Afternoon Recommendations
Goldman Sachs:
- None of note
Afternoon/Evening Headlines
Bloomberg:
- Intel plans to use Research in Motion’s battery technology.
- Iraq’s lawmakers deferred for three days a final vote on a draft constitution, to narrow differences among Sunnis, Kurds and Shiites.
- Harrah’s Entertainment agreed to acquire the Imperial Palace Hotel & Casino on the Las Vegas Strip for $370 million to give it space to grow in the No. 1 gambling market.
- General Electric said its partnership with Rolls-Royce Group Plc won a $2.47 billion contract extension from the US Navy to develop an engine for the Joint Strike Fighter.
Australian Newspaper:
- Australian Treasurer Costello urged radical Muslim clerics to leave the country if they don’t share its values of democracy, a secular society and equality for women.
S&P 500 1,221.73 +.17%
DJIA 10,569.89 +.10%
NASDAQ 2,141.41 +.27%
Russell 2000 657.47 +.76%
DJ Wilshire 5000 12,173.35 +.21%
S&P Barra Growth 584.58 +.14%
S&P Barra Value 632.86 +.19%
Morgan Stanley Consumer 584.89 +.01%
Morgan Stanley Cyclical 743.27 +.30%
Morgan Stanley Technology 496.80 -.08%
Transports 3,725.32 +.18%
Utilities 396.67 +.55%
Put/Call .90 -13.46%
NYSE Arms 1.15 -.77%
Volatility(VIX) 13.42 unch.
ISE Sentiment 159.00 +32.50%
US Dollar 88.14 -.52%
CRB 317.12 +.62%
Futures Spot Prices
Crude Oil 65.40 -.38%
Unleaded Gasoline 185.60 -.30%
Natural Gas 9.56 unch.
Heating Oil 180.50 -.36%
Gold 442.80 -.05%
Base Metals 131.54 +1.95%
Copper 164.10 unch.
10-year US Treasury Yield 4.21% +.05%
Leading Sectors
Steel +2.18%
Semis +1.18%
Wireless +1.10%
Lagging Sectors
Tobacco -.69%
Internet -.75%
Oil Service -.80%
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
Afternoon Recommendations
Goldman Sachs:
- None of note
Afternoon/Evening Headlines
Bloomberg:
- Intel plans to use Research in Motion’s battery technology.
- Iraq’s lawmakers deferred for three days a final vote on a draft constitution, to narrow differences among Sunnis, Kurds and Shiites.
- Harrah’s Entertainment agreed to acquire the Imperial Palace Hotel & Casino on the Las Vegas Strip for $370 million to give it space to grow in the No. 1 gambling market.
- General Electric said its partnership with Rolls-Royce Group Plc won a $2.47 billion contract extension from the US Navy to develop an engine for the Joint Strike Fighter.
Australian Newspaper:
- Australian Treasurer Costello urged radical Muslim clerics to leave the country if they don’t share its values of democracy, a secular society and equality for women.
BOTTOM LINE: The Portfolio finished unchanged today as gains in my Medical longs offset losses in my Internet longs. I did not trade in the afternoon, thus leaving the Portfolio 50% net long. The tone of the market was modestly positive today as the advance/decline line finished higher, sector performance was mixed and volume was below average. Measures of investor anxiety were mostly lower into the close. Overall, today’s market action was slightly negative. Overall, it was a pretty uninspiring, choppy day. I expect this to remain the case for several more weeks. However, the odds are increasing of a temporary spike in fear, which should provide the catalyst for a very positive fourth quarter. This possible temporary anxiety spike will likely be related to terrorism or oil, not earnings or economic data.
Stocks Mixed Mid-day with Small-caps Outperforming
Indices
S&P 500 1,220.06 +.03%
DJIA 10,561.05 +.02%
NASDAQ 2,137.59 +.10%
Russell 2000 655.63 +.48%
DJ Wilshire 5000 12,155.73 +.06%
S&P Barra Growth 583.69 -.01%
S&P Barra Value 632.27 +.05%
Morgan Stanley Consumer 584.12 -.12%
Morgan Stanley Cyclical 742.33 +.17%
Morgan Stanley Technology 496.14 -.20%
Transports 3,730.51 +.04%
Utilities 396.40 +.49%
Put/Call .87 -16.35%
NYSE Arms 1.26 +8.66%
Volatility(VIX) 13.63 +1.56%
ISE Sentiment 165.00 +37.50%
US Dollar 88.17 -.49%
CRB 317.83 +.84%
Futures Spot Prices
Crude Oil 65.55 +.31%
Unleaded Gasoline 186.00 -2.31%
Natural Gas 9.60 +5.37%
Heating Oil 182.25 -.02%
Gold 443.20 +.23%
Base Metals 131.54 +1.95%
Copper 164.10 +1.80%
10-year US Treasury Yield 4.20% unch.
Leading Sectors
Steel +1.97%
Wireless +.86%
Broadcasting +.82%
Lagging Sectors
Internet -.77%
Tobacco -.88%
Oil Service -1.53%
S&P 500 1,220.06 +.03%
DJIA 10,561.05 +.02%
NASDAQ 2,137.59 +.10%
Russell 2000 655.63 +.48%
DJ Wilshire 5000 12,155.73 +.06%
S&P Barra Growth 583.69 -.01%
S&P Barra Value 632.27 +.05%
Morgan Stanley Consumer 584.12 -.12%
Morgan Stanley Cyclical 742.33 +.17%
Morgan Stanley Technology 496.14 -.20%
Transports 3,730.51 +.04%
Utilities 396.40 +.49%
Put/Call .87 -16.35%
NYSE Arms 1.26 +8.66%
Volatility(VIX) 13.63 +1.56%
ISE Sentiment 165.00 +37.50%
US Dollar 88.17 -.49%
CRB 317.83 +.84%
Futures Spot Prices
Crude Oil 65.55 +.31%
Unleaded Gasoline 186.00 -2.31%
Natural Gas 9.60 +5.37%
Heating Oil 182.25 -.02%
Gold 443.20 +.23%
Base Metals 131.54 +1.95%
Copper 164.10 +1.80%
10-year US Treasury Yield 4.20% unch.
Leading Sectors
Steel +1.97%
Wireless +.86%
Broadcasting +.82%
Lagging Sectors
Internet -.77%
Tobacco -.88%
Oil Service -1.53%
BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Medical and Semi longs are offsetting losses in my Internet and Retail longs. I pared back a few longs and added IWM/QQQQ trading shorts again this morning, thus leaving the Portfolio 50% net long. The tone of the market is modestly positive as the advance/decline line is slightly higher, sector performance is mixed and volume is light. Measures of investor anxiety are mixed. Today’s overall market action is neutral, considering the decline in the US dollar and increased merger activity. During the week ended Aug. 19, the information technology industry saw the greatest net insider selling in the S&P 500 again. Insiders sold $87,612,256 worth of stock and bought $109,650. Insider buying in the financial industry picked up to $21,484,464 for the week. However, insiders still sold $47,626,000 worth of stock. I expect US stocks to trade mixed-to-weaker from current levels into the close on worries over high energy prices.
Today's Headlines
Bloomberg:
- Israeli forces began evacuating the last Gaza Strip settlement, clearing the way for a military pullout and a handover of the territory held since 1967 to the Palestinians.
- China National Petroleum, the nation’s biggest oil company, agreed to buy PetroKazakhstan for $4.8 billion, topping a bid by an Indian producer and securing supplies for the world’s fastest-growing major economy.
- Kohlberg Kravis Roberts and Permira Advisers Ltd. agreed to buy SBS Broadcasting SA, Europe’s second-largest television broadcaster, for about $2.1 billion to tap growth in Scandinavia and Eastern Europe.
- Shares of OSI Pharmaceuticals fell 12% after the company agreed to pay $935 million for Eyetech Pharmaceuticals, acquiring an eye treatment that may have a more potent rival by 2007.
- Google introduced a tool that automatically displays Web content such as news and weather on users’ computer screens, posing a threat to products from Microsoft and Yahoo!.
- Crude oil is rising above $66/bbl. in NY after a power failure across Iraq forced the suspension of exports from the country’s southern terminals.
- Maytag accepted a sweetened $1.68 billion offer from Whirlpool, ending a bidding contest with Ripplewood Holdings LLC and creating the world’s largest appliance maker.
- The US dollar is falling against the yen after opinion polls showed increasing approval for Prime Minister Junichiro Koizumi before next month’s election and as Japanese stock indices climbed to a four-year high.
Wall Street Journal:
- Reformists at China’s state-run Central Huijin Investment Co. and the central bank are in a struggle for control of the country’s financial system with the agencies that have traditionally controlled the banks.
- The jury ruling Friday that Merck must pay $253 million for the death of a Vioxx user may prompt the drug industry to fundamentally rethink when and how it brings new drugs to market.
- The NY Merc, the world’s largest energy-futures exchange, may shift most of its electronic-trading operations to the Chicago Merc.
- Titanium Metals vice chairman Harold Simmons has been buying stock in the company even as short-sellers maintain bets that the stock will drop.
- US mutual funds that specialize in small-cap stocks are increasingly turning away would-be investors.
NY Times:
- Iraqi leaders were near a constitutional charter agreement yesterday.
Washington Post:
- The US Veterans Affairs Department has improved its health care system over the last decade and now some see it as a model.
NY Post:
- Motorola wireless phones produce the most potentially cancer-causing emissions when used without headsets among 381 models researched by NY City Councilwoman Eva Moskowitz.
- Israeli forces began evacuating the last Gaza Strip settlement, clearing the way for a military pullout and a handover of the territory held since 1967 to the Palestinians.
- China National Petroleum, the nation’s biggest oil company, agreed to buy PetroKazakhstan for $4.8 billion, topping a bid by an Indian producer and securing supplies for the world’s fastest-growing major economy.
- Kohlberg Kravis Roberts and Permira Advisers Ltd. agreed to buy SBS Broadcasting SA, Europe’s second-largest television broadcaster, for about $2.1 billion to tap growth in Scandinavia and Eastern Europe.
- Shares of OSI Pharmaceuticals fell 12% after the company agreed to pay $935 million for Eyetech Pharmaceuticals, acquiring an eye treatment that may have a more potent rival by 2007.
- Google introduced a tool that automatically displays Web content such as news and weather on users’ computer screens, posing a threat to products from Microsoft and Yahoo!.
- Crude oil is rising above $66/bbl. in NY after a power failure across Iraq forced the suspension of exports from the country’s southern terminals.
- Maytag accepted a sweetened $1.68 billion offer from Whirlpool, ending a bidding contest with Ripplewood Holdings LLC and creating the world’s largest appliance maker.
- The US dollar is falling against the yen after opinion polls showed increasing approval for Prime Minister Junichiro Koizumi before next month’s election and as Japanese stock indices climbed to a four-year high.
Wall Street Journal:
- Reformists at China’s state-run Central Huijin Investment Co. and the central bank are in a struggle for control of the country’s financial system with the agencies that have traditionally controlled the banks.
- The jury ruling Friday that Merck must pay $253 million for the death of a Vioxx user may prompt the drug industry to fundamentally rethink when and how it brings new drugs to market.
- The NY Merc, the world’s largest energy-futures exchange, may shift most of its electronic-trading operations to the Chicago Merc.
- Titanium Metals vice chairman Harold Simmons has been buying stock in the company even as short-sellers maintain bets that the stock will drop.
- US mutual funds that specialize in small-cap stocks are increasingly turning away would-be investors.
NY Times:
- Iraqi leaders were near a constitutional charter agreement yesterday.
Washington Post:
- The US Veterans Affairs Department has improved its health care system over the last decade and now some see it as a model.
NY Post:
- Motorola wireless phones produce the most potentially cancer-causing emissions when used without headsets among 381 models researched by NY City Councilwoman Eva Moskowitz.
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