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Monday, December 05, 2005
Sunday, December 04, 2005
Monday Watch
Weekend Headlines
Bloomberg:
- Toshiba Corp. won the reversal of a $465.4 million verdict awarded to Lexar Media in a trade secrets dispute over flash-memory technology.
- Voters is Kazakhstan, the second-largest oil producer in the former Soviet Union after Russia, are going to the polls today to choose who will rule the country through 2012 and oversee a near tripling of crude oil output.
- US Treasury yields show investors are the most confident about the outlook for inflation since Hurricane Katrina sent oil prices to a record high.
- The US dollar, buoyed by international demand for US assets and a surging economy, is on the verge of having its biggest annual gain against the yen since 1979.
- Investment funds tracking commodity indexes drew $15 billion more cash in the past five months as investors chased alternatives to stocks and bonds.
- Japan’s third-quarter capital spending climbed more than expected as investment by manufacturers surged, signaling that the economy will keep expanding in the final three months of the year.
Wall Street Journal:
- Wal-Mart Stores added about 70,000 workers to its health-care plans for next year.
- Gap Inc. said Jeff Jones, head of marketing for its Gap store, will leave at month’s end.
- Donald Trump is considering starting a “Trump Shopping Network.”
Financial Times:
- Companies are spending $23 billion on market research amid concern that traditional advertising channels are losing their effectiveness, citing a report by ZenithOptimedia, a UK buyer of advertising space.
NY Times:
- Medicare, the US government health insurance program for the elderly, won’t cover the cost of some used of Johnson & Johnson’s heart drug Natrecor.
- Payless ShoeSource plans to change the way it designs shoes and remake its stores to reverse a market-share decline, the discount chain’s CEO said.
- US Lieutenant General Martin Dempsey said the Iraqi military and security forces will achieve their 2006 and 2007 headcount goals.
- Health-care coverage for US children has steadily improved during the past few years.
- Sales of impotence drugs have declined as fewer men are willing to use the medications and as oft-televised commercials for the products become less effective.
Chicago Tribune:
- A federal judge on Friday ruled that an Illinois law that would ban the sale of sexually explicit and violent video games to minors violates constitutional protections on freedom of speech.
LA Times:
- MoveOn.org, known for its opposition to the war in Iraq and its support of liberal Democratic politicians, is protesting job cuts at newspapers owned by Tribune Co.
Washington Post:
- GM and Ford are requesting tens of billions of dollars in assistance from the federal government, ranging from catastrophic health insurance coverage for their workers to tax write-offs.
Rocky Mountain News:
- Wells Fargo, the fifth biggest US bank by assets, is being dropped by Christian group Focus on the Family, because of the bank’s “pro-homosexual agenda.”
Sunday Telegraph:
- Richard Branson plans to take control of NTL Group to add its cable TV and telephone businesses to his Virgin Mobile Holdings Plc, in a combination worth $7.8 billion.
De Telegraaf:
- The Netherlands and other countries like Germany and France are being targets by al-Qaeda as locations for a terrorist attack, citing a document by imprisoned terrorist Abu Musab al-Suri.
Nihon Keizai:
- Japan and the US agreed to cooperate on United Nations reforms and Japan’s financial contributions to the organization.
Finanz & Wirtschaft:
- Medtronic is winning market share in the stent business and expects to control more of the market than analysts are estimating, CEO Collins said.
the Business:
- Boeing may win the largest share of a $15 billion order from Qantas Airways Ltd.
Xinhua News Agency:
- China plans to ease over-capacity in some industries next year, citing National Development and Reform Commission Minister Ma Kai.
- A pair of surveys released Thursday pointed to excess capacity as a growing problem in China's economy, although they gave mixed signals about the overall health of the manufacturing sector.
Middle East Economic Digest:
- Foster Wheeler Ltd., Technip SA and JGC Corp. are among companies that will be invited to bid for contracts worth $11 billion to boost output from Saudi Aramco’s Khurais oil field.
Weekend Recommendations
Barron's:
- Had positive comments on CVS, COH and FOSL.
- Had negative comments on GPS.
Goldman Sachs:
- Reiterated Outperform on IDIX, BSX and DHR.
Night Trading
Asian indices are -.25% to +.75% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.12%.
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/Estimate
BSG/.17
JOSB/.31
URI/.66
Upcoming Splits
- None of note
Economic Releases
10:00 am EST
- ISM Non-Manufacturing for November is estimated to fall to 59.0 versus a reading of 60.0 in October.
Bloomberg:
- Toshiba Corp. won the reversal of a $465.4 million verdict awarded to Lexar Media in a trade secrets dispute over flash-memory technology.
- Voters is Kazakhstan, the second-largest oil producer in the former Soviet Union after Russia, are going to the polls today to choose who will rule the country through 2012 and oversee a near tripling of crude oil output.
- US Treasury yields show investors are the most confident about the outlook for inflation since Hurricane Katrina sent oil prices to a record high.
- The US dollar, buoyed by international demand for US assets and a surging economy, is on the verge of having its biggest annual gain against the yen since 1979.
- Investment funds tracking commodity indexes drew $15 billion more cash in the past five months as investors chased alternatives to stocks and bonds.
- Japan’s third-quarter capital spending climbed more than expected as investment by manufacturers surged, signaling that the economy will keep expanding in the final three months of the year.
Wall Street Journal:
- Wal-Mart Stores added about 70,000 workers to its health-care plans for next year.
- Gap Inc. said Jeff Jones, head of marketing for its Gap store, will leave at month’s end.
- Donald Trump is considering starting a “Trump Shopping Network.”
Financial Times:
- Companies are spending $23 billion on market research amid concern that traditional advertising channels are losing their effectiveness, citing a report by ZenithOptimedia, a UK buyer of advertising space.
NY Times:
- Medicare, the US government health insurance program for the elderly, won’t cover the cost of some used of Johnson & Johnson’s heart drug Natrecor.
- Payless ShoeSource plans to change the way it designs shoes and remake its stores to reverse a market-share decline, the discount chain’s CEO said.
- US Lieutenant General Martin Dempsey said the Iraqi military and security forces will achieve their 2006 and 2007 headcount goals.
- Health-care coverage for US children has steadily improved during the past few years.
- Sales of impotence drugs have declined as fewer men are willing to use the medications and as oft-televised commercials for the products become less effective.
Chicago Tribune:
- A federal judge on Friday ruled that an Illinois law that would ban the sale of sexually explicit and violent video games to minors violates constitutional protections on freedom of speech.
LA Times:
- MoveOn.org, known for its opposition to the war in Iraq and its support of liberal Democratic politicians, is protesting job cuts at newspapers owned by Tribune Co.
Washington Post:
- GM and Ford are requesting tens of billions of dollars in assistance from the federal government, ranging from catastrophic health insurance coverage for their workers to tax write-offs.
Rocky Mountain News:
- Wells Fargo, the fifth biggest US bank by assets, is being dropped by Christian group Focus on the Family, because of the bank’s “pro-homosexual agenda.”
Sunday Telegraph:
- Richard Branson plans to take control of NTL Group to add its cable TV and telephone businesses to his Virgin Mobile Holdings Plc, in a combination worth $7.8 billion.
De Telegraaf:
- The Netherlands and other countries like Germany and France are being targets by al-Qaeda as locations for a terrorist attack, citing a document by imprisoned terrorist Abu Musab al-Suri.
Nihon Keizai:
- Japan and the US agreed to cooperate on United Nations reforms and Japan’s financial contributions to the organization.
Finanz & Wirtschaft:
- Medtronic is winning market share in the stent business and expects to control more of the market than analysts are estimating, CEO Collins said.
the Business:
- Boeing may win the largest share of a $15 billion order from Qantas Airways Ltd.
Xinhua News Agency:
- China plans to ease over-capacity in some industries next year, citing National Development and Reform Commission Minister Ma Kai.
- A pair of surveys released Thursday pointed to excess capacity as a growing problem in China's economy, although they gave mixed signals about the overall health of the manufacturing sector.
Middle East Economic Digest:
- Foster Wheeler Ltd., Technip SA and JGC Corp. are among companies that will be invited to bid for contracts worth $11 billion to boost output from Saudi Aramco’s Khurais oil field.
Weekend Recommendations
Barron's:
- Had positive comments on CVS, COH and FOSL.
- Had negative comments on GPS.
Goldman Sachs:
- Reiterated Outperform on IDIX, BSX and DHR.
Night Trading
Asian indices are -.25% to +.75% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.12%.
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/Estimate
BSG/.17
JOSB/.31
URI/.66
Upcoming Splits
- None of note
Economic Releases
10:00 am EST
- ISM Non-Manufacturing for November is estimated to fall to 59.0 versus a reading of 60.0 in October.
BOTTOM LINE: Asian Indices are mostly higher, led by energy-related shares in the region after oil climbed for a fourth day. I expect US stocks to open modestly higher and maintain gains throughout the day. The Portfolio is 100% net long heading into the week.
Weekly Outlook
There are a few important economic reports and some significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - ISM Non-manufacturing
Tues. - Non-farm Productivity, Unit Labor Costs, Factory Orders, Pending Home Sales
Wed. - Consumer Credit
Thur. - Initial Jobless Claims,
Fri. - Univ. of Mich. Consumer Confidence, Wholesale Inventories
A few of the more noteworthy companies that release quarterly earnings this week are:
Mon. - JOS A Bank Clothiers(JOSB), United Rentals(URI), BISYS Group(BSG)
Tues. - Autozone(AZO), Comverse Technology(CMVT), Flowserve Corp.(FLS), Kroger Co.(KR), Pall Corp.(PLL), Sears Holdings(SHLD), Dana Corp.(DCN), Hovnanian Enterprises(HOV), Toro Company(TTC), Costco Wholesale(COST)
Wed. - National Semiconductor(NSM), Toll Brothers(TOL)
Thur. - Ciena Corp.(CIEN)
Fri. - Martek Biosciences(MATK), Shuffle Master(SHFL)
Other events that have market-moving potential this week include:
Mon. - Thomas Weisel Security Technology Conference, Bear Stearns Real Estate Conference, CSFB Media Week, Goldman Financial Services CEO Conference
Tue. - Bear Stearns Real Estate Conference, First Albany Growth Conference, UBS Media Conference, CSFB Aerospace/Defense Conference, Citigroup Chemical Conference
Wed. - CSFB Aerospace/Defense Conference, Bear Stearns Commodities Conference, Citigroup Chemicals Conference, UBS Media Conference, First Albany Growth Conference, Lehman Brothers Global Tech Conference, TXN Mid-quarter Update
Thur. - Bear Stearns Commodities Conference, Lehman Brothers Global Tech Conference, CIBC Communications Software Conference, INTC Mid-quarter Update, SG Cowen Internet Conference, CSFB Global Media Week
Fri. - Lehman Brothers Global Tech Conference
Economic reports for the week include:
Mon. - ISM Non-manufacturing
Tues. - Non-farm Productivity, Unit Labor Costs, Factory Orders, Pending Home Sales
Wed. - Consumer Credit
Thur. - Initial Jobless Claims,
Fri. - Univ. of Mich. Consumer Confidence, Wholesale Inventories
A few of the more noteworthy companies that release quarterly earnings this week are:
Mon. - JOS A Bank Clothiers(JOSB), United Rentals(URI), BISYS Group(BSG)
Tues. - Autozone(AZO), Comverse Technology(CMVT), Flowserve Corp.(FLS), Kroger Co.(KR), Pall Corp.(PLL), Sears Holdings(SHLD), Dana Corp.(DCN), Hovnanian Enterprises(HOV), Toro Company(TTC), Costco Wholesale(COST)
Wed. - National Semiconductor(NSM), Toll Brothers(TOL)
Thur. - Ciena Corp.(CIEN)
Fri. - Martek Biosciences(MATK), Shuffle Master(SHFL)
Other events that have market-moving potential this week include:
Mon. - Thomas Weisel Security Technology Conference, Bear Stearns Real Estate Conference, CSFB Media Week, Goldman Financial Services CEO Conference
Tue. - Bear Stearns Real Estate Conference, First Albany Growth Conference, UBS Media Conference, CSFB Aerospace/Defense Conference, Citigroup Chemical Conference
Wed. - CSFB Aerospace/Defense Conference, Bear Stearns Commodities Conference, Citigroup Chemicals Conference, UBS Media Conference, First Albany Growth Conference, Lehman Brothers Global Tech Conference, TXN Mid-quarter Update
Thur. - Bear Stearns Commodities Conference, Lehman Brothers Global Tech Conference, CIBC Communications Software Conference, INTC Mid-quarter Update, SG Cowen Internet Conference, CSFB Global Media Week
Fri. - Lehman Brothers Global Tech Conference
BOTTOM LINE: I expect US stocks to finish the week higher on increasing optimism over US economic growth, short-covering, moderating inflation fears and increasing inflows. After a healthy consolidation, the major US indices likely began another push higher late last week. My trading indicators are still giving bullish signals and the Portfolio is 100% net long heading into the week.
Saturday, December 03, 2005
Friday, December 02, 2005
Market Week in Review
S&P 500 1,265.08 -.25%*
Click here for the Weekly Wrap by Briefing.com.
*5-day % Change
Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was slightly positive considering recent gains, the bounce in long-term rates and the jump in natural gas prices. The advance/decline line rose, sector performance was mixed and volume was above average on the week. Measures of investor anxiety were mostly higher. The average 30-year mortgage rate declined for the second week in a row, falling to 6.26%. This is 105 basis points above all-time lows set in June 2003. I continue to believe mortgage rates will head modestly lower over the intermediate-term. However, the benchmark 10-year T-note yield rose 9 basis points on the week as most economic reports exceeded optimistic expectations, resulting in less hope for an imminent Fed “pause.”
Small-caps and cyclicals continued to outperform on increasing optimism over the unrelenting strength of the economy. US economic growth has now exceeded 3% for 10 straight quarters, the best streak since March 1986. Moreover, corporate profit growth has reached double-digit rates for 14 quarters in a row, the best run since at least 1936. It is quite possible that there has never before in US history been a greater disconnect between economic perception and reality. A recent poll by American Research Group found 43% of Americans believe the US economy is in a recession. The common definition of a recession is 2 consecutive quarters of economic contraction.
Gold rose again this week on continuing international diversification into the precious metal. I still believe the rise in gold is not a result of increasing inflation fears. Unleaded Gas futures bounced modestly from recent losses, but are still 45% below September highs even as refinery utilization still remains below normal as a result of the hurricanes. Natural gas supplies decreased this week, but remain 6.3% above the 5-year average for this time of year even as a substantial amount of daily Gulf of Mexico production remains shut-in. Natural Gas has now dropped 11% from recent highs. I still believe global energy demand destruction and a substantial increase in supplies into 2006 will continue pushing energy prices substantially lower over the intermediate-term. The S&P 500 is still within striking distance of my mid-year prediction of a double-digit annual gain. The index is currently up 6.2% for the year.
*5-day % Change
Weekly Scoreboard*
Indices
S&P 500 1,265.08 -.25%
DJIA 10,877.51 -.50%
NASDAQ 2,273.37 +.46%
Russell 2000 690.57 +1.02%
DJ Wilshire 5000 12,665.67 -.08%
S&P Equity Long/Short Index 1,084.05 +.53%
S&P Barra Growth 605.99 -.07%
S&P Barra Value 654.69 -.42%
Morgan Stanley Consumer 594.85 -.13%
Morgan Stanley Cyclical 781.34 +.63%
Morgan Stanley Technology 537.07 +.19%
Transports 4,138.55 -.97%
Utilities 403.03 -.24%
S&P 500 Cum A/D Line 8,619.00 +.90%
Bloomberg Crude Oil % Bulls 43.0 +25.4%
Put/Call .85 -4.49%
NYSE Arms 1.23 +38.20%
Volatility(VIX) 11.01 +1.19%
ISE Sentiment 232.00 -27.73%
AAII % Bulls 52.47 -2.16%
US Dollar 91.92 -.14%
CRB 323.38 +2.77%
Futures Spot Prices
Crude Oil 59.32 +1.14%
Unleaded Gasoline 161.13 +5.31%
Natural Gas 13.93 +16.09%
Heating Oil 177.20 +1.11%
Gold 508.20 +1.03%
Base Metals 149.28 +3.43%
Copper 198.70 +3.97%
10-year US Treasury Yield 4.51% +2.04%
Average 30-year Mortgage Rate 6.26% -.32%
Leading Sectors
Steel +5.96%
Semis +4.32%
Disk Drives +3.86%
Lagging Sectors
Gaming -2.0%
Gold & Silver -2.05%
Biotech -2.14%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day % Change
S&P 500 1,265.08 -.25%
DJIA 10,877.51 -.50%
NASDAQ 2,273.37 +.46%
Russell 2000 690.57 +1.02%
DJ Wilshire 5000 12,665.67 -.08%
S&P Equity Long/Short Index 1,084.05 +.53%
S&P Barra Growth 605.99 -.07%
S&P Barra Value 654.69 -.42%
Morgan Stanley Consumer 594.85 -.13%
Morgan Stanley Cyclical 781.34 +.63%
Morgan Stanley Technology 537.07 +.19%
Transports 4,138.55 -.97%
Utilities 403.03 -.24%
S&P 500 Cum A/D Line 8,619.00 +.90%
Bloomberg Crude Oil % Bulls 43.0 +25.4%
Put/Call .85 -4.49%
NYSE Arms 1.23 +38.20%
Volatility(VIX) 11.01 +1.19%
ISE Sentiment 232.00 -27.73%
AAII % Bulls 52.47 -2.16%
US Dollar 91.92 -.14%
CRB 323.38 +2.77%
Futures Spot Prices
Crude Oil 59.32 +1.14%
Unleaded Gasoline 161.13 +5.31%
Natural Gas 13.93 +16.09%
Heating Oil 177.20 +1.11%
Gold 508.20 +1.03%
Base Metals 149.28 +3.43%
Copper 198.70 +3.97%
10-year US Treasury Yield 4.51% +2.04%
Average 30-year Mortgage Rate 6.26% -.32%
Leading Sectors
Steel +5.96%
Semis +4.32%
Disk Drives +3.86%
Lagging Sectors
Gaming -2.0%
Gold & Silver -2.05%
Biotech -2.14%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day % Change
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