Tuesday, September 20, 2005
***Alert***
I am unable to post the mid-day scoreboard due to trading. The Portfolio is higher today and I am 50% net long.
Today's Headlines
Bloomberg:
- The United Nations should rid itself of corruption or the US Congress may stop funding it, Senator Norm Coleman said.
- Japanese stocks climbed last night, with the Nikkei 225 closing above 13,000 for the first time in more than four years.
- OPEC plans to offer to pump as much oil as needed, seeking to prevent shortages as prices surge and a new storm threatens US rigs.
- Julian Robertson, who once ran the world’s largest hedge fund, put $25 million in a fund that targets insurance companies, now facing record losses from Katrina.
- Crude oil and gas are falling on speculation that the threat Hurricane Rita poses to Gulf of Mexico oil production and refining doesn’t justify yesterday’s surge.
Wall Street Journal:
- Europe’s Airbus and Boeing, the two leading manufacturers of airliners, are enjoying a boom in sales and orders, despite the fact that the global airline industry faces losses of as much as $8 billion this year.
- The FCC may recommend SBC Communications’ takeover of AT&T and Verizon’s merger with MCI as early as tomorrow.
- Acer Inc. has fought its way up to fourth place in worldwide PC shipments, and is now set to attack the US market.
- Sun Microsystems is introducing five server systems today with about twice as much performance of its existing machines at the same price.
- US companies and universities are adding paid-leave programs to let workers volunteer for Hurricane Katrina recovery efforts.
NY Times:
- Many US women working and studying at top colleges say they have decided to choose raising their children over their careers, citing interviews with more than a dozen faculty members and administrators.
NY Post:
- MBA graduates from Dartmouth College’s Tuck School of Business say they would rather buy stocks than invest in residential real estate.
Star-Ledger:
- US sales of generic drugs may rise to $28 billion this year, about 65% more than expected.
San Francisco Chronicle:
- Soaring prices in San Francisco for housing stems from low interest rates, strong income growth and low prices during the mid-1990s, rather than from a speculative frenzy, citing a new study.
Financial Times:
- GM doesn’t expect to make any money from hybrid petrol-electric vehicles for the time being, but is going ahead with them to help its environmental image.
International Herald Tribune:
- European regulators are considering whether to take new action against Microsoft in the wake of “informal” complaints filed by competitors.
AFP:
- China is producing oil or gas in disputed fields in the East China Sea in an area where Chinese warships have been seen, citing a Japanese government official.
Reuters:
- Google plans to offer its own high-speed wireless Internet service, citing the company’s Web site.
AP:
- Champion Enterprises and other mobile-home manufacturers are waiting for FEMA to respond to their bids to provide housing after Hurricane Katrina.
- The United Nations should rid itself of corruption or the US Congress may stop funding it, Senator Norm Coleman said.
- Japanese stocks climbed last night, with the Nikkei 225 closing above 13,000 for the first time in more than four years.
- OPEC plans to offer to pump as much oil as needed, seeking to prevent shortages as prices surge and a new storm threatens US rigs.
- Julian Robertson, who once ran the world’s largest hedge fund, put $25 million in a fund that targets insurance companies, now facing record losses from Katrina.
- Crude oil and gas are falling on speculation that the threat Hurricane Rita poses to Gulf of Mexico oil production and refining doesn’t justify yesterday’s surge.
Wall Street Journal:
- Europe’s Airbus and Boeing, the two leading manufacturers of airliners, are enjoying a boom in sales and orders, despite the fact that the global airline industry faces losses of as much as $8 billion this year.
- The FCC may recommend SBC Communications’ takeover of AT&T and Verizon’s merger with MCI as early as tomorrow.
- Acer Inc. has fought its way up to fourth place in worldwide PC shipments, and is now set to attack the US market.
- Sun Microsystems is introducing five server systems today with about twice as much performance of its existing machines at the same price.
- US companies and universities are adding paid-leave programs to let workers volunteer for Hurricane Katrina recovery efforts.
NY Times:
- Many US women working and studying at top colleges say they have decided to choose raising their children over their careers, citing interviews with more than a dozen faculty members and administrators.
NY Post:
- MBA graduates from Dartmouth College’s Tuck School of Business say they would rather buy stocks than invest in residential real estate.
Star-Ledger:
- US sales of generic drugs may rise to $28 billion this year, about 65% more than expected.
San Francisco Chronicle:
- Soaring prices in San Francisco for housing stems from low interest rates, strong income growth and low prices during the mid-1990s, rather than from a speculative frenzy, citing a new study.
Financial Times:
- GM doesn’t expect to make any money from hybrid petrol-electric vehicles for the time being, but is going ahead with them to help its environmental image.
International Herald Tribune:
- European regulators are considering whether to take new action against Microsoft in the wake of “informal” complaints filed by competitors.
AFP:
- China is producing oil or gas in disputed fields in the East China Sea in an area where Chinese warships have been seen, citing a Japanese government official.
Reuters:
- Google plans to offer its own high-speed wireless Internet service, citing the company’s Web site.
AP:
- Champion Enterprises and other mobile-home manufacturers are waiting for FEMA to respond to their bids to provide housing after Hurricane Katrina.
Housing Starts Slow on Wet Weather
- Housing Starts for August fell to 2009K versus estimates of 2025K and 2035K in July.
- Building Permits for August fell to 2124K versus estimates of 2130K and 2171K in July.
- Building Permits for August fell to 2124K versus estimates of 2130K and 2171K in July.
BOTTOM LINE: US housing starts fel 1.3% last month, keeping construction on pace to surpass last year’s total, which was the highest since 1978, Bloomberg reported. Weather may have held down starts to an extent. August was the ninth-wettest month on record in the South and the sixth-wetting in the Central US. Starts fell 5.2% in the Midwest, 4.1% in the Northeast and 6.6% in the South. Starts rose 13% in the West. Starts in September will be negatively impacted by Hurricane Katrina.
Tuesday Watch
Late-Night Headlines
Bloomberg:
- North Koreas said it won’t end its nuclear weapons program unit it gets a light-water reactor for nuclear weapons program until it gets a light-water reactor for producing power, a day after pledging to give up its arms.
- Tropical storm Rita is expected to turn into a hurricane as it moves over southern Florida toady on a path that would reach Texas and Louisiana late this week.
Wall Street Journal:
- Wilbur L. Ross, who says he has $4.5 billion to fund a new venture, may buy beleaguered auto-parts makers such as some unprofitable units of Visteon Corp. that the company is about to jettison.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on EL and EBAY.
- Reiterated Underperform on HRB.
Night Trading
Asian Indices are +.50% to +1.0% on average.
S&P 500 indicated +.06%.
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
CC/-.03
CKR/.19
GS/2.38
Upcoming Splits
None of note
Economic Releases
8:30 am EST
- Housing Starts for August are estimated to fall to 2025K from 2042K in July.
- Building Permits for August are estimated to fall to 2130K from 2171K in July.
2:15 pm EST
- The FOMC is expected to raise the benchmark rate to 3.75% from 3.5%.
Bloomberg:
- North Koreas said it won’t end its nuclear weapons program unit it gets a light-water reactor for nuclear weapons program until it gets a light-water reactor for producing power, a day after pledging to give up its arms.
- Tropical storm Rita is expected to turn into a hurricane as it moves over southern Florida toady on a path that would reach Texas and Louisiana late this week.
Wall Street Journal:
- Wilbur L. Ross, who says he has $4.5 billion to fund a new venture, may buy beleaguered auto-parts makers such as some unprofitable units of Visteon Corp. that the company is about to jettison.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on EL and EBAY.
- Reiterated Underperform on HRB.
Night Trading
Asian Indices are +.50% to +1.0% on average.
S&P 500 indicated +.06%.
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
CC/-.03
CKR/.19
GS/2.38
Upcoming Splits
None of note
Economic Releases
8:30 am EST
- Housing Starts for August are estimated to fall to 2025K from 2042K in July.
- Building Permits for August are estimated to fall to 2130K from 2171K in July.
2:15 pm EST
- The FOMC is expected to raise the benchmark rate to 3.75% from 3.5%.
BOTTOM LINE: Asian indices are higher on gains in commodity-related shares in the region. I expect US equities to open modestly lower and to rally later in the afternoon. The Fed will probably boost the Fed Funds rate 25 basis points to 3.75%. I expect the policy statement will contain language that overtly states they will “pause” temporarily to allow for further evaluation of data in the aftermath of Katrina. The Portfolio is market neutral heading into the day.
Monday, September 19, 2005
Stocks Finish Lower as Tropical Storm Rita Approaches Gulf
Indices
S&P 500 1,231.02 -.56%
DJIA 10,557.63 -.79%
NASDAQ 2,145.26 -.70%
Russell 2000 667.02 -.74%
DJ Wilshire 5000 12,289.08 -.53%
S&P Barra Growth 587.12 -.50%
S&P Barra Value 639.70 -.61%
Morgan Stanley Consumer 582.65 -.95%
Morgan Stanley Cyclical 728.19 -1.10%
Morgan Stanley Technology 501.85 -.51%
Transports 3,589.75 -1.21%
Utilities 429.97 +.26%
Put/Call .92 +13.58%
NYSE Arms 1.04 +38.37%
Volatility(VIX) 12.14 +8.20%
ISE Sentiment 194.00 +79.63%
US Dollar 88.51 +.51%
CRB 327.41 +3.81%
Futures Spot Prices
Crude Oil 67.02 -.55%
Unleaded Gasoline 204.50 +.11%
Natural Gas 12.70 +.30%
Heating Oil 203.80 -.02%
Gold 467.50 -.62%
Base Metals 124.20 -.89%
Copper 165.25 -.12%
10-year US Treasury Yield 4.24% -.64%
Leading Sectors
Oil Service +3.20%
Energy +2.61%
Oil Tankers +1.81%
Lagging Sectors
Restaurants -1.67%
Retail -1.71%
Airlines -3.39%
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:
- Reiterated Outperform on TYC, NKE and WAG.
Afternoon/Evening Headlines
Bloomberg:
- Neiman Marcus Group’s credit ratings will be cut to junk when the company’s buyout by Texas Pacific Group and Warburg Pincus LLC is completed, S&P said.
- Homebuilders in the US were less optimistic for the third straight month in September as the costs of energy and lumber rose in the aftermath of Katrina, a survey showed.
- Toyota Motor plans a US ad campaign to promote its hybrid power system as the company brings out more of the fuel-efficient vehicles.
- The euro touched a seven-week low against the dollar after Germany’s election ended in a stalemate, raising concern the government will fail to enact policy changes to bolster faltering economic growth.
- Crude oil traded near $67/bbl. after jumping 7% today on forecasts Tropical Storm Rita will strengthen into a hurricane before crossing the Gulf of Mexico and striking Texas near the refining center of Houston.
Nikkei English News:
- Honda Motor will double the number of North American auto parts manufacturers it works with to 40, and work with them on all of its models.
S&P 500 1,231.02 -.56%
DJIA 10,557.63 -.79%
NASDAQ 2,145.26 -.70%
Russell 2000 667.02 -.74%
DJ Wilshire 5000 12,289.08 -.53%
S&P Barra Growth 587.12 -.50%
S&P Barra Value 639.70 -.61%
Morgan Stanley Consumer 582.65 -.95%
Morgan Stanley Cyclical 728.19 -1.10%
Morgan Stanley Technology 501.85 -.51%
Transports 3,589.75 -1.21%
Utilities 429.97 +.26%
Put/Call .92 +13.58%
NYSE Arms 1.04 +38.37%
Volatility(VIX) 12.14 +8.20%
ISE Sentiment 194.00 +79.63%
US Dollar 88.51 +.51%
CRB 327.41 +3.81%
Futures Spot Prices
Crude Oil 67.02 -.55%
Unleaded Gasoline 204.50 +.11%
Natural Gas 12.70 +.30%
Heating Oil 203.80 -.02%
Gold 467.50 -.62%
Base Metals 124.20 -.89%
Copper 165.25 -.12%
10-year US Treasury Yield 4.24% -.64%
Leading Sectors
Oil Service +3.20%
Energy +2.61%
Oil Tankers +1.81%
Lagging Sectors
Restaurants -1.67%
Retail -1.71%
Airlines -3.39%
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:
- Reiterated Outperform on TYC, NKE and WAG.
Afternoon/Evening Headlines
Bloomberg:
- Neiman Marcus Group’s credit ratings will be cut to junk when the company’s buyout by Texas Pacific Group and Warburg Pincus LLC is completed, S&P said.
- Homebuilders in the US were less optimistic for the third straight month in September as the costs of energy and lumber rose in the aftermath of Katrina, a survey showed.
- Toyota Motor plans a US ad campaign to promote its hybrid power system as the company brings out more of the fuel-efficient vehicles.
- The euro touched a seven-week low against the dollar after Germany’s election ended in a stalemate, raising concern the government will fail to enact policy changes to bolster faltering economic growth.
- Crude oil traded near $67/bbl. after jumping 7% today on forecasts Tropical Storm Rita will strengthen into a hurricane before crossing the Gulf of Mexico and striking Texas near the refining center of Houston.
Nikkei English News:
- Honda Motor will double the number of North American auto parts manufacturers it works with to 40, and work with them on all of its models.
BOTTOM LINE: The Portfolio finished slightly lower today on losses in my Energy-related shorts and Retail longs. I did not trade in the afternoon, thus leaving the Portfolio market neutral. The tone of the market was negative today as the advance/decline line finished substantially lower, most sectors declined and volume was below average. Measures of investor anxiety were mostly higher into the close. Overall, today’s market action was slightly negative. Currently, TradeSports.com is showing a 51% chance that Tropical Storm Rita makes first landfall as a Category 1 or higher in Texas. There is a 34% chance for Louisiana. I would expect to see more of a negative reaction from investors if it becomes apparent that Rita will definitely hit Texas or Louisiana.
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