Indices
S&P 500 1,195.90 -2.68%
DJIA 10,292.31 -2.61%
NASDAQ 2,090.35 -2.85%
Russell 2000 644.33 -3.51%
DJ Wilshire 5000 11,941.59 -2.78%
S&P Equity Long/Short Index 1,072.91 +.09%
S&P Barra Growth 572.42 -2.50%
S&P Barra Value 619.33 -2.85%
Morgan Stanley Consumer 578.48 -1.50%
Morgan Stanley Cyclical 705.80 -3.37%
Morgan Stanley Technology 495.10 -2.26%
Transports 3,678.75 -1.65%
Utilities 413.82 -4.29%
S&P 500 Cum A/D Line 6,799.00 -9.46%
Bloomberg Crude Oil % Bulls 27.0% -23.27%
Put/Call .93 +13.41%
NYSE Arms .88 +3.53%
Volatility(VIX) 14.59 +22.4%
ISE Sentiment 160.00 -5.89%
AAII % Bulls 50.0 +56.84%
US Dollar 89.17 -.30%
CRB 325.21 -2.33%
Futures Spot Prices
Crude Oil 61.84 -6.59%
Unleaded Gasoline 182.92 -13.72%
Natural Gas 13.23 -5.19%
Heating Oil 196.01 -7.76%
Gold 477.80 +1.83%
Base Metals 133.61 +3.17%
Copper 180.90 +2.78%
10-year US Treasury Yield 4.35% +.46%
Average 30-year Mortgage Rate 5.98% +1.18%
Leading Sectors
Airlines +6.36%
Gold & Silver -.05%
Restaurants -.38%
Lagging Sectors
Energy -7.63%
Oil Service -7.79%
Steel -8.20%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day % Change
Friday, October 07, 2005
Stocks Modestly Higher Mid-day as Long-term Rates Move Lower
Indices
S&P 500 1,194.40 +.24%
DJIA 10,295.27 +.07%
NASDAQ 2,090.16 +.29%
Russell 2000 644.24 +.75%
DJ Wilshire 5000 11,927.21 +.30%
S&P Barra Growth 571.89 +.22%
S&P Barra Value 618.25 +.25%
Morgan Stanley Consumer 578.93 -.21%
Morgan Stanley Cyclical 704.35 +.85%
Morgan Stanley Technology 494.89 +.50%
Transports 3,674.61 +.68%
Utilities 411.88 +.79%
Put/Call .87 -18.69%
NYSE Arms .79 -28.68%
Volatility(VIX) 14.58 -2.54%
ISE Sentiment 149.00 -9.70%
US Dollar 89.09 +.48%
CRB 324.35 +.15%
Futures Spot Prices
Crude Oil 61.25 -.18%
Unleaded Gasoline 180.50 -1.93%
Natural Gas 13.32 -.41%
Heating Oil 194.00 -.55%
Gold 477.30 +.48%
Base Metals 133.61 +.64%
Copper 180.90 +1.46%
10-year US Treasury Yield 4.34% -.95%
Leading Sectors %
Steel +2.34%
Gold & Silver +1.77%
Energy +1.73%
Lagging Sectors
Restaurants -.74%
REITs -1.04%
Broadcasting -1.24%
S&P 500 1,194.40 +.24%
DJIA 10,295.27 +.07%
NASDAQ 2,090.16 +.29%
Russell 2000 644.24 +.75%
DJ Wilshire 5000 11,927.21 +.30%
S&P Barra Growth 571.89 +.22%
S&P Barra Value 618.25 +.25%
Morgan Stanley Consumer 578.93 -.21%
Morgan Stanley Cyclical 704.35 +.85%
Morgan Stanley Technology 494.89 +.50%
Transports 3,674.61 +.68%
Utilities 411.88 +.79%
Put/Call .87 -18.69%
NYSE Arms .79 -28.68%
Volatility(VIX) 14.58 -2.54%
ISE Sentiment 149.00 -9.70%
US Dollar 89.09 +.48%
CRB 324.35 +.15%
Futures Spot Prices
Crude Oil 61.25 -.18%
Unleaded Gasoline 180.50 -1.93%
Natural Gas 13.32 -.41%
Heating Oil 194.00 -.55%
Gold 477.30 +.48%
Base Metals 133.61 +.64%
Copper 180.90 +1.46%
10-year US Treasury Yield 4.34% -.95%
Leading Sectors %
Steel +2.34%
Gold & Silver +1.77%
Energy +1.73%
Lagging Sectors
Restaurants -.74%
REITs -1.04%
Broadcasting -1.24%
BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Retail longs and Medical longs are offsetting losses in my Steel shorts and Energy-related shorts. I have not traded this morning, thus leaving the Portfolio 50% net long. The tone of the market is positive as the advance/decline line is substantially higher, most sectors are rising and volume is about average. Measures of investor anxiety are mostly lower. Today’s overall market action is neutral given the decline in long-term rates and natural gas prices and recent market losses. The average 30-year mortgage rate rose to 5.98% this week. This is still slightly down from 6.04% on April 1 and only 77 basis points away from record lows set in June 2003. The Homebuilding Index is down 12.3% from its all-time high set July 29. The yield on the 10-year Treasury note is falling to 4.34% today, even with the much better-than-expected jobs report. It appears to me that the 10-year will rally from here, at least short-term. I expect US stocks to trade mixed-to-lower from current levels into the close as worries over earnings offset lower rates.
Today's Headlines
Bloomberg:
- Energy stocks are headed for their biggest weekly losses in more than three years as falling demand sent crude-oil prices tumbling.
- Warren Buffett’s Berkshire Hathaway said Ronald Ferguson, former CEO of its General Re reinsurance unit, may be sued by the Securities and Exchange Commission.
- The International Atomic Energy Agency and its director general, Egyptian Mohamed ElBaradei, won this year’s Nobel Peace prize for their work to prevent the military use of nuclear energy even as Iran and North Korea threaten to destabilize the world with recent advances in their nuclear capabilities.
- US 10-year Treasuries are rising after yields exceeded 4.4%, the highest since April and a level some traders said represented a buying opportunity.
- Delphi stock and bonds plunged to record lows on speculation that the biggest US maker of auto parts will file for bankruptcy as soon as today and as prospects dimmed for concessions from the United Auto Workers union.
- A US appeals court rejected a bid by Research in Motion for another chance to challenge a patent infringement ruling that may block the Canadian company from selling its BlackBerry e-mail device in the US.
- The US dollar is rising for the first day in three after the US economy’s job losses last month were less than a quarter of the number forecast by economists.
Wall Street Journal:
- Time Warner and Microsoft restarted talks from earlier this year about a partnership between Internet units AOL and MSN.
- New Orleans may have to destroy as many as 50,000 homes as a result of damage caused by Hurricane Katrina.
Washington Post:
- Former FBI Director Louis Freeh said he didn’t trust President Clinton when he was in office and stayed in his post as long as he did so Clinton couldn’t name his successor, citing a forthcoming book and appearance on CBS’ “60 minutes” by Freeh.
NY Times:
- Al-Qaeda deputy leader Ayman al-Zawahiri has warned Abu Musab al-Zarqawi, the group’s self-described leader in Iraq, that videotaped beheadings posted on the Internet and attacks on Iraqi civilians may undermine their cause.
Chicago Tribune:
- Real estate prices for retailers on Chicago’s State Street, a major downtown shopping area, have risen in the past year as construction approaches for two new projects.
San Francisco Chronicle:
- San Francisco’s vacancy rate for commercial real estate fell to 13.1% in the third quarter, the eighth straight quarterly decline since the beginning of 2003.
Handelsblatt:
- Hewlett-Packard plans acquisitions in areas including enterprise storage systems, printers and services.
- Energy stocks are headed for their biggest weekly losses in more than three years as falling demand sent crude-oil prices tumbling.
- Warren Buffett’s Berkshire Hathaway said Ronald Ferguson, former CEO of its General Re reinsurance unit, may be sued by the Securities and Exchange Commission.
- The International Atomic Energy Agency and its director general, Egyptian Mohamed ElBaradei, won this year’s Nobel Peace prize for their work to prevent the military use of nuclear energy even as Iran and North Korea threaten to destabilize the world with recent advances in their nuclear capabilities.
- US 10-year Treasuries are rising after yields exceeded 4.4%, the highest since April and a level some traders said represented a buying opportunity.
- Delphi stock and bonds plunged to record lows on speculation that the biggest US maker of auto parts will file for bankruptcy as soon as today and as prospects dimmed for concessions from the United Auto Workers union.
- A US appeals court rejected a bid by Research in Motion for another chance to challenge a patent infringement ruling that may block the Canadian company from selling its BlackBerry e-mail device in the US.
- The US dollar is rising for the first day in three after the US economy’s job losses last month were less than a quarter of the number forecast by economists.
Wall Street Journal:
- Time Warner and Microsoft restarted talks from earlier this year about a partnership between Internet units AOL and MSN.
- New Orleans may have to destroy as many as 50,000 homes as a result of damage caused by Hurricane Katrina.
Washington Post:
- Former FBI Director Louis Freeh said he didn’t trust President Clinton when he was in office and stayed in his post as long as he did so Clinton couldn’t name his successor, citing a forthcoming book and appearance on CBS’ “60 minutes” by Freeh.
NY Times:
- Al-Qaeda deputy leader Ayman al-Zawahiri has warned Abu Musab al-Zarqawi, the group’s self-described leader in Iraq, that videotaped beheadings posted on the Internet and attacks on Iraqi civilians may undermine their cause.
Chicago Tribune:
- Real estate prices for retailers on Chicago’s State Street, a major downtown shopping area, have risen in the past year as construction approaches for two new projects.
San Francisco Chronicle:
- San Francisco’s vacancy rate for commercial real estate fell to 13.1% in the third quarter, the eighth straight quarterly decline since the beginning of 2003.
Handelsblatt:
- Hewlett-Packard plans acquisitions in areas including enterprise storage systems, printers and services.
Hurricanes' Effects on Job Creation Less-than-expected, Inventories Rise
- The Change in Non-farm Payrolls for September was -35K versus estimates of -150K and an upwardly revised 211K in August.
- The Change in Manufacturing Payrolls for September was -27K versus estimates of -33K and an upwardly revised -9K in August.
- The Unemployment Rate for September rose to 5.1% versus estimates of 5.0% and 4.9% in August.
- Average Hourly Earnings for September rose .2% versus estimates of a .2% increase and a .1% gain in August.
- Wholesale Inventories for August rose .5% versus estimates of a .4% increase and a .1% rise in July.
- The Change in Manufacturing Payrolls for September was -27K versus estimates of -33K and an upwardly revised -9K in August.
- The Unemployment Rate for September rose to 5.1% versus estimates of 5.0% and 4.9% in August.
- Average Hourly Earnings for September rose .2% versus estimates of a .2% increase and a .1% gain in August.
- Wholesale Inventories for August rose .5% versus estimates of a .4% increase and a .1% rise in July.
BOTTOM LINE: Hurricane Katrina pushed the US unemployment rate up to 5.1% in September as the economy lost 35,000 jobs, fewer than expected and evidence that the storm wasn’t strong enough to derail the expansion, Bloomberg reported. The hurricanes Katrina and Rita may have eliminated up to 480,000 jobs temporarily, according to the latest estimates from the Congressional Budget Office. I expect job growth to rebound sharply over the coming months, but not back to recent highs.
Stockpiles at US wholesalers rose in August by the most in four months as companies rebuilt inventories to meet growing demand before the two hurricanes ripped into the Gulf Coast, Bloomberg reported. The inventory-to-sales ratio fell to 1.17 months. I expect inventory rebuilding to add to GDP growth through year-end.
Thursday, October 06, 2005
Friday Watch
Late-Night Headlines
Bloomberg:
- Japan’s 10-year government bonds headed for a fifth week of declines on concern the Bank of Japan will tighten its monetary policy next year.
- Crude oil may decline as US fuel imports increase and demand falls because of near-record prices, a Bloomberg survey showed.
China Daily:
- China’s Ministry of Commerce forecast that the nation’s trade surplus will rise to as much as $100 billion this year, from $32 billion in 2004, adding pressure for a yuan revaluation.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on CVS, GE, FD, MSFT and SYMC.
- Reiterated Underperform on DRI.
Business Week:
- Cheniere Energy(LNG), which develops liquefied natural gas terminals, may benefit as natural gas becomes a bigger component of the US energy market.
- Shares of Encysive Pharmaceuticals(ENCY), whose Thelin drug treats pulmonary arterial hypertension may rise 64% on regulatory approval and interest from potential buyers of the company.
Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated +.15%.
NASDAQ 100 indicated +.13%.
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
SFNT/.39
GY/-.16
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for September is estimated to be -150K versus 169K in August.
- The Unemployment Rate for September is estimated to rise to 5.0% versus 4.9% in August.
- The Change in Manufacturing Payrolls for September is estimated to be -33K versus -14K in August.
- Average Hourly Earnings for September are estimated to rise .2% versus a .1% gain in August.
Bloomberg:
- Japan’s 10-year government bonds headed for a fifth week of declines on concern the Bank of Japan will tighten its monetary policy next year.
- Crude oil may decline as US fuel imports increase and demand falls because of near-record prices, a Bloomberg survey showed.
China Daily:
- China’s Ministry of Commerce forecast that the nation’s trade surplus will rise to as much as $100 billion this year, from $32 billion in 2004, adding pressure for a yuan revaluation.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on CVS, GE, FD, MSFT and SYMC.
- Reiterated Underperform on DRI.
Business Week:
- Cheniere Energy(LNG), which develops liquefied natural gas terminals, may benefit as natural gas becomes a bigger component of the US energy market.
- Shares of Encysive Pharmaceuticals(ENCY), whose Thelin drug treats pulmonary arterial hypertension may rise 64% on regulatory approval and interest from potential buyers of the company.
Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated +.15%.
NASDAQ 100 indicated +.13%.
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
SFNT/.39
GY/-.16
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for September is estimated to be -150K versus 169K in August.
- The Unemployment Rate for September is estimated to rise to 5.0% versus 4.9% in August.
- The Change in Manufacturing Payrolls for September is estimated to be -33K versus -14K in August.
- Average Hourly Earnings for September are estimated to rise .2% versus a .1% gain in August.
BOTTOM LINE: Asian indices are mostly higher, boosted by financial companies in the region after several strong earnings reports. I expect US equities to open mixed and to rise later in the day. The Portfolio is 50% net long heading into the day.
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