Indices
S&P 500 1,267.32 +.63%
DJIA 10,875.59 +.90%
NASDAQ 2,252.48 -.19%
Russell 2000 683.09 -.83%
DJ Wilshire 5000 12,667.59 +.41%
S&P Equity Long/Short Index 1,105.46 +.52%
S&P Barra Growth 606.51 +.73%
S&P Barra Value 656.41 +.54%
Morgan Stanley Consumer 599.30 +1.44%
Morgan Stanley Cyclical 786.81 +.78%
Morgan Stanley Technology 534.61 +.39%
Transports 4,142.49 +.98%
Utilities 417.82 +1.95%
S&P 500 Cum A/D Line 8,624.00 -.59%
Bloomberg Crude Oil % Bulls 41.0 -21.15%
Put/Call .80 unch.
NYSE Arms .96 -5.88%
Volatility(VIX) 10.68 -8.64%
ISE Sentiment 186.00 -5.10%
AAII % Bulls 46.15 -6.71%
US Dollar 89.71 -1.74%
CRB 326.36 -.44%
Futures Spot Prices
Crude Oil 58.06 -2.42%
Unleaded Gasoline 156.89 -2.37%
Natural Gas 13.63 -4.66%
Heating Oil 173.20 -.06%
Gold 506.20 -4.72%
Base Metals 153.29 -.54%
Copper 202.55 +1.83%
10-year US Treasury Yield 4.43% -1.99%
Average 30-year Mortgage Rate 6.30% -.32%
Leading Sectors
Airlines +7.01%
Drugs +3.11%
Homebuilders +2.98%
Lagging Sectors
Oil Service -2.11%
Steel -2.26%
Oil Tankers -2.87%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day % Change
Friday, December 16, 2005
Stocks Slightly Lower Mid-day on Expiration and Rebalancing
Indices
S&P 500 1,269.17 -.14%
DJIA 10,885.11 +.04%
NASDAQ 2,254.86 -.26%
Russell 2000 682.71 -.30%
DJ Wilshire 5000 12,682.16 -.17%
S&P Barra Growth 607.43 -.16%
S&P Barra Value 657.27 -.13%
Morgan Stanley Consumer 599.59 +.41%
Morgan Stanley Cyclical 787.83 +.07%
Morgan Stanley Technology 535.17 -.09%
Transports 4,147.04 +.03%
Utilities 418.90 +.24%
Put/Call .83 +38.33%
NYSE Arms .96 +15.83%
Volatility(VIX) 10.54 -1.77%
ISE Sentiment 195.00 -10.55%
US Dollar 89.79 -.26%
CRB 326.20 -.73%
Futures Spot Prices
Crude Oil 58.30 -2.82%
Unleaded Gasoline 156.25 -3.36%
Natural Gas 13.68 -.73%
Heating Oil 173.50 -3.15%
Gold 505.90 -.14%
Base Metals 153.29 +1.97%
Copper 202.90 +1.40%
10-year US Treasury Yield 4.44% -.40%
Leading Sectors
Airlines +3.27%
Drugs +.78%
Software +.55%
Lagging Sectors
Coal -1.30%
Oil Service -1.49%
Energy -1.87%
S&P 500 1,269.17 -.14%
DJIA 10,885.11 +.04%
NASDAQ 2,254.86 -.26%
Russell 2000 682.71 -.30%
DJ Wilshire 5000 12,682.16 -.17%
S&P Barra Growth 607.43 -.16%
S&P Barra Value 657.27 -.13%
Morgan Stanley Consumer 599.59 +.41%
Morgan Stanley Cyclical 787.83 +.07%
Morgan Stanley Technology 535.17 -.09%
Transports 4,147.04 +.03%
Utilities 418.90 +.24%
Put/Call .83 +38.33%
NYSE Arms .96 +15.83%
Volatility(VIX) 10.54 -1.77%
ISE Sentiment 195.00 -10.55%
US Dollar 89.79 -.26%
CRB 326.20 -.73%
Futures Spot Prices
Crude Oil 58.30 -2.82%
Unleaded Gasoline 156.25 -3.36%
Natural Gas 13.68 -.73%
Heating Oil 173.50 -3.15%
Gold 505.90 -.14%
Base Metals 153.29 +1.97%
Copper 202.90 +1.40%
10-year US Treasury Yield 4.44% -.40%
Leading Sectors
Airlines +3.27%
Drugs +.78%
Software +.55%
Lagging Sectors
Coal -1.30%
Oil Service -1.49%
Energy -1.87%
BOTTOM LINE: The Portfolio is higher mid-day on gains in my Internet longs, Airline longs and Energy shorts. I covered some of my IWM and QQQQ shorts this morning, thus leaving the Portfolio 75% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are lower and volume is heavy. Measures of investor anxiety are mostly higher. Overall, today’s market action is negative considering the decline in long-term rates and energy prices. A partnership with Google (GOOG) would be ideal for AOL, in my opinion. Google would provide the "out-of-the-box" type of thinking that AOL is lacking. I don't believe Microsoft (MSFT) could do that. I am convinced that there is tremendous value that can be unlocked in AOL under the right circumstances. This deal would be very big for both parties. I expect US stocks to trade mixed into the close from current levels as rebalancing offsets lower energy prices.
Today's Headlines
Bloomberg:
- S&P will introduce a series of “growth” and “value” indices today that are tied to its US market benchmarks, including the S&P 500.
- GM CEO Wagoner said there’s been “ample interest” in his finance unit and he is confident the automaker can find a buyer after some of the nation’s biggest banks declined to bid.
- US 10-year Treasuries are rising, heading for the biggest weekly gain since November, on speculation the Fed is almost done raising interest rates.
- United Nations Deputy Secretary-General Louise Frechette, who was criticized by former US Fed Chairman Volcker for failing to properly manage the scandal-plagued Iraq oil-for-food program, announced her resignation today.
- Crude oil, heating oil and natural gas are falling on forecasts showing that warmer weather will move across the northern US, reducing demand.
- Google is discussing a 5% stake in AOL for $1 billion that would exclude Microsoft.
Wall Street Journal:
- Yahoo! has signed an agreement with Marketing Management Analytics research firm to offer advertisers the chance to buy detailed research on the effectiveness of their Web advertisement.
- Google is struggling to reconcile its goal of making information “universally accessible and useful” with its aim of expanding in China as it wrestles with Chinese censors.
- A group including Cerberus Capital Management, Kimco Realty and supermarket chain SuperValu may win the auction to buy Albertson’s for about $9.6 billion, or $26 a share.
- Iraq’s struggle toward democracy will require patience and sacrifice, which necessitates the support of the international community, four Eastern European ambassadors to the US wrote.
NY Post:
- Apollo Management’s $1.3 billion takeover of Linens ‘n Things may fall apart in the next two weeks if the retailer fails to meet the earnings goal set for the acquisition.
Washington Post:
- Saudi Arabia’s new ambassador to the US rejected the Iranian president’s description of the Nazi Holocaust during WW II as a myth, saying the “horrific genocide” isn’t in dispute.
NY Times:
- Sid Richardson Energy Services, a gas pipeline company owned by the Bass family of Fort Worth, Texas, yesterday agreed to be acquired by Southern Union for $1.6 billion in cash.
- The participation of Sunni Arabs, a minority, in Iraq’s national election yesterday will raise hopes of a reconciliation with the ruling Shiite parties that came to power in Janurary.
TheDeal.com:
- Fresh Del Monte Produce is looking for a buyer and could be sold for about $1.8 billion.
- S&P will introduce a series of “growth” and “value” indices today that are tied to its US market benchmarks, including the S&P 500.
- GM CEO Wagoner said there’s been “ample interest” in his finance unit and he is confident the automaker can find a buyer after some of the nation’s biggest banks declined to bid.
- US 10-year Treasuries are rising, heading for the biggest weekly gain since November, on speculation the Fed is almost done raising interest rates.
- United Nations Deputy Secretary-General Louise Frechette, who was criticized by former US Fed Chairman Volcker for failing to properly manage the scandal-plagued Iraq oil-for-food program, announced her resignation today.
- Crude oil, heating oil and natural gas are falling on forecasts showing that warmer weather will move across the northern US, reducing demand.
- Google is discussing a 5% stake in AOL for $1 billion that would exclude Microsoft.
Wall Street Journal:
- Yahoo! has signed an agreement with Marketing Management Analytics research firm to offer advertisers the chance to buy detailed research on the effectiveness of their Web advertisement.
- Google is struggling to reconcile its goal of making information “universally accessible and useful” with its aim of expanding in China as it wrestles with Chinese censors.
- A group including Cerberus Capital Management, Kimco Realty and supermarket chain SuperValu may win the auction to buy Albertson’s for about $9.6 billion, or $26 a share.
- Iraq’s struggle toward democracy will require patience and sacrifice, which necessitates the support of the international community, four Eastern European ambassadors to the US wrote.
NY Post:
- Apollo Management’s $1.3 billion takeover of Linens ‘n Things may fall apart in the next two weeks if the retailer fails to meet the earnings goal set for the acquisition.
Washington Post:
- Saudi Arabia’s new ambassador to the US rejected the Iranian president’s description of the Nazi Holocaust during WW II as a myth, saying the “horrific genocide” isn’t in dispute.
NY Times:
- Sid Richardson Energy Services, a gas pipeline company owned by the Bass family of Fort Worth, Texas, yesterday agreed to be acquired by Southern Union for $1.6 billion in cash.
- The participation of Sunni Arabs, a minority, in Iraq’s national election yesterday will raise hopes of a reconciliation with the ruling Shiite parties that came to power in Janurary.
TheDeal.com:
- Fresh Del Monte Produce is looking for a buyer and could be sold for about $1.8 billion.
Current Account Deficit Shrinks
- The 3Q Current Account Deficit shrunk to -$195.8 billion versus estimates of -$205.0 billion and -$197.8 billion in 2Q.
BOTTOM LINE: The US current-account deficit unexpectedly narrowed from July through September, Bloomberg reported. The shortfall was the smallest since 3Q 2001. I expect the current account deficit to improve modestly going forward.
Thursday, December 15, 2005
Friday Watch
Late-Night Headlines
Bloomberg:
- Merck moved closer to winning the world’s first approval of a vaccine for the painful shingles infection by gaining the backing of US government advisers.
- Japan’s central bank held interest rates near zero and maintained the pace at which it floods the banking system with cash as it struggles to squeeze the last vestiges of deflation from the world’s second-biggest economy.
NY Times:
- As many as 11 million voters may have taken part in Iraq’s election for a National Assembly, boosted by the participation of the Sunni community. Initial indications are that overall turnout may reach 70%.
China Daily:
- China’s most expensive property market has been deflating since June, when new taxes aimed at speculators halted a six-year boom during which prices almost tripled. The amount of new apartment space on sale in Shanghai jumped to 9.66 million square meters as of Tuesday, almost three times the 3.59 million square meters on the market at the end of 2004.
Hankook Ilbo:
- South Korean steelmakers may have their most difficult year in 2006 because of an oversupply by their Chinese rivals, citing Lee Ku Taek, CEO of Posco.
Economic Daily News:
- Dell Inc. plans to raise the number of monitors it buys from Taiwan by 15% in 2006 from this year, citing the company’s global monitor purchasing chief. The computer maker plans to increase orders from the island because of the improved outlook for sales of PCs, laptops and liquid-crystal display televisions.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on CAH, MAR and ALK.
- Reiterated Underperform on PBG, MAXY and DRI.
Business Week:
- DR Horton(DHI) shares may reach $45 in a year, citing Peter Zuleba, portfolio manager at Glenmede Trust Co. which owns the stock.
- Montpelier Re Holdings Ltd.(MRH), a Bermuda-based re-insurer, may benefit as the annual frequency of hurricanes reverts back to two to three a year, citing John Maloney of M&R Capital Management.
- Western Digital(WDC) may benefit as its products are used in consumer electronics, citing Bernie Schaeffer of Schaeffer’s Investment Research.
Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated +.10%.
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/EPS Estimate
CCL/.41
GTK/.38
ZQK/.27
SCHL/1.80
SCS/.14
Upcoming Splits
CAM 2-for-1
VLO 2-for-1
Economic Releases
8:30 am EST
- The 3Q Current Account Deficit is estimated to widen to -$205.0 billion versus -$195.7 billion in 2Q.
Bloomberg:
- Merck moved closer to winning the world’s first approval of a vaccine for the painful shingles infection by gaining the backing of US government advisers.
- Japan’s central bank held interest rates near zero and maintained the pace at which it floods the banking system with cash as it struggles to squeeze the last vestiges of deflation from the world’s second-biggest economy.
NY Times:
- As many as 11 million voters may have taken part in Iraq’s election for a National Assembly, boosted by the participation of the Sunni community. Initial indications are that overall turnout may reach 70%.
China Daily:
- China’s most expensive property market has been deflating since June, when new taxes aimed at speculators halted a six-year boom during which prices almost tripled. The amount of new apartment space on sale in Shanghai jumped to 9.66 million square meters as of Tuesday, almost three times the 3.59 million square meters on the market at the end of 2004.
Hankook Ilbo:
- South Korean steelmakers may have their most difficult year in 2006 because of an oversupply by their Chinese rivals, citing Lee Ku Taek, CEO of Posco.
Economic Daily News:
- Dell Inc. plans to raise the number of monitors it buys from Taiwan by 15% in 2006 from this year, citing the company’s global monitor purchasing chief. The computer maker plans to increase orders from the island because of the improved outlook for sales of PCs, laptops and liquid-crystal display televisions.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on CAH, MAR and ALK.
- Reiterated Underperform on PBG, MAXY and DRI.
Business Week:
- DR Horton(DHI) shares may reach $45 in a year, citing Peter Zuleba, portfolio manager at Glenmede Trust Co. which owns the stock.
- Montpelier Re Holdings Ltd.(MRH), a Bermuda-based re-insurer, may benefit as the annual frequency of hurricanes reverts back to two to three a year, citing John Maloney of M&R Capital Management.
- Western Digital(WDC) may benefit as its products are used in consumer electronics, citing Bernie Schaeffer of Schaeffer’s Investment Research.
Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated +.10%.
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/EPS Estimate
CCL/.41
GTK/.38
ZQK/.27
SCHL/1.80
SCS/.14
Upcoming Splits
CAM 2-for-1
VLO 2-for-1
Economic Releases
8:30 am EST
- The 3Q Current Account Deficit is estimated to widen to -$205.0 billion versus -$195.7 billion in 2Q.
BOTTOM LINE: Asian indices are mixed as gains in financial shares are offsetting losses in commodity stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon. The Portfolio is 50% net long heading into the day.
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