Indices
S&P 500 1,268.66 +.11%
DJIA 10,883.27 +.07%
NASDAQ 2,249.42 -.14%
Russell 2000 686.44 +.49%
DJ Wilshire 5000 12,692.96 +.20%
S&P Equity Long/Short Index 1,108.41 +.27%
S&P Barra Growth 607.15 +.11%
S&P Barra Value 657.12 +.11%
Morgan Stanley Consumer 599.02 -.05%
Morgan Stanley Cyclical 792.81 +.76%
Morgan Stanley Technology 532.92 -.32%
Transports 4,266.75 +3.0%
Utilities 411.65 -1.48%
S&P 500 Cum A/D Line 8,664 unch.
Bloomberg Crude Oil % Bulls 21.9 -57.93%
Put/Call .69 -13.75%
NYSE Arms 1.30 +35.42%
Volatility(VIX) 10.27 -3.84%
ISE Sentiment 160.00 -13.98%
AAII % Bulls 41.03 -11.09%
US Dollar 90.78 +1.19%
CRB 326.31 -.01%
ECRI Weekly Leading Index 135.40 -.07%
Futures Spot Prices
Crude Oil 58.43 -.97%
Unleaded Gasoline 155.05 -.48%
Natural Gas 12.28 -10.01%
Heating Oil 170.53 -1.63%
Gold 505.90 -.16%
Base Metals 153.51 -.14%
Copper 203.50 +.20%
10-year US Treasury Yield 4.38% -1.35%
Average 30-year Mortgage Rate 6.26% -.63%
Leading Sectors
Disk Drives +8.45%
Gaming +2.94%
Drugs +2.92%
Lagging Sectors
Internet -1.33%
Utilities -1.48%
Oil Tankers -2.0%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day % Change
Friday, December 23, 2005
Durable Goods Orders Jump, Consumer Confidence Rises Most in 13 Years Last 2 Months, New Home Sales Weaken
- Durable Goods Orders for November rose 4.4% versus estimates of a 1.2% increase and a 3.0% gain in October.
- Durables Ex Transportation for November fell .6% versus estimates of a 1.0% gain and a .2% decline in October.
- Final Univ. of Mich. Consumer Confidence for December rose to 91.5 versus estimates of 89.0 and a prior estimate of 88.7.
- New Home Sales for November fell to 1245K versus estimates of 1300K and 1404K in October.
- Durables Ex Transportation for November fell .6% versus estimates of a 1.0% gain and a .2% decline in October.
- Final Univ. of Mich. Consumer Confidence for December rose to 91.5 versus estimates of 89.0 and a prior estimate of 88.7.
- New Home Sales for November fell to 1245K versus estimates of 1300K and 1404K in October.
BOTTOM LINE: US orders for durable goods jumped 4.4% in November, the most in six months, propelled by a surge in demand for aircraft, Bloomberg reported. Orders for transportation equipment soared 15.6% versus an 11.2% gain the prior month. Orders for defense hardware plunged 27% in November. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, dropped 2% last month. The decline in durables ex transportation is surprising given record low inventory levels. I would expect to see an increase in this number next month.
US consumer confidence rose in December to the highest since July as lower gas prices and a rising stock market gave Americans more money to spend for the holidays, Bloomberg reported. The expectations component of the index soared to 80.2 from 69.6 the prior month. The current conditions component of the index, which is a gauge of Americans’ perception of their financial situation and if it’s a good time to purchase large items such as cars, jumped to 109.1 from 100.2 in November. Consumer confidence has now surged 17.3 percentage points in two months, the biggest two-month gain since the final two months of 1992. I expect consumer confidence to reach cycle highs over the intermediate-term as rising stock prices, low interest rates, an end to the Fed tightening cycle, falling energy prices, a stable job market and lower inflation readings more than offset a slowing housing market, thus leading to a lifting of the irrational pessimism that has developed since the bursting of the stock market bubble and 9/11 terrorist attacks.
US new home sales in November fell as rising mortgage rates and elevated prices discouraged some buyers, Bloomberg reported. Sales fell 11.3% from an all-time high in October, while the median price of a new home rose slightly to $225,200. The supply of new homes at the current sales rate increased to 4.9 months, the most in 9 years. Sales fell 22.1% in the West, 18.3% in the Midwest and 5.5% in the South. Sales rose 13.4% in the Northeast. I continue to expect the housing market to slow to more healthy, sustainable levels from all-time record highs. This will likely lead to a slowing in the overall US economy to average rates from high rates, which will benefit US stocks.
Friday Watch
Late-Night Headlines
Bloomberg:
- A Washington, DC law aimed at capping pharmaceutical prices was ruled unconstitutional by a federal court.
- Families and friends of the estimated 220,000 people killed or missing after the Indian Ocean tsunami will attend beachside ceremonies marking the first anniversary of the disaster of Dec. 26.
- Samsung Electronics, the world’s largest maker of memory chips and liquid-crystal displays, expects fourth-quarter profit from both products to beat its earlier projections because of cost cuts and flat-panel television demand.
- Asian contract rates for coal used in power plants may fall more than 20% next year as Indonesia and rival mining nations raised output after prices surged, Australia & New Zealand Banking Group Ltd. said.
Financial Times:
- For the first time since 2001, the four largest US investment banks each had more than $1 billion in mergers and acquisitions revenue this year.
- As much as a third of the $590 million spent by the United Nations on aid following last year’s Indian Ocean tsunami went to administrators and related costs.
- Google founders Sergey Brin and Larry Page have been named “Mean of the Year,” citing its own poll.
Dong-a Ilbo:
- Hwang Woo Suk falsified a 2005 landmark study on stem cell research, according to findings by a Seoul National University internal investigation, citing a Seoul National official.
Seoul Economic:
- Samsung Electronics will begin production at its newest liquid-crystal display factory about three months ahead of schedule because of rising demand for LCD televisions.
Nihon Keizai:
- Sony Corp. has developed an 82-inch liquid-crystal display television to compete against market leader Sharp Corp.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Underperform on SBSA.
Night Trading
Asian Indices are +.25% to +.50% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.03%.
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
NDN/.06
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- Durable Goods Orders for November are estimated to rise 1.2% versus a 3.4% gain in October.
- Durables Ex Transportation for November are estimated to rise 1.0% versus a .3% gain in October.
9:45 am EST
- Final Univ. of Mich. Consumer Confidence for December is estimated to rise to 89.0 versus a reading of 88.7 in November.
10:00 am EST
- New Home Sales for November are estimated to fall to 1300K versus 1424K in October.
Bloomberg:
- A Washington, DC law aimed at capping pharmaceutical prices was ruled unconstitutional by a federal court.
- Families and friends of the estimated 220,000 people killed or missing after the Indian Ocean tsunami will attend beachside ceremonies marking the first anniversary of the disaster of Dec. 26.
- Samsung Electronics, the world’s largest maker of memory chips and liquid-crystal displays, expects fourth-quarter profit from both products to beat its earlier projections because of cost cuts and flat-panel television demand.
- Asian contract rates for coal used in power plants may fall more than 20% next year as Indonesia and rival mining nations raised output after prices surged, Australia & New Zealand Banking Group Ltd. said.
Financial Times:
- For the first time since 2001, the four largest US investment banks each had more than $1 billion in mergers and acquisitions revenue this year.
- As much as a third of the $590 million spent by the United Nations on aid following last year’s Indian Ocean tsunami went to administrators and related costs.
- Google founders Sergey Brin and Larry Page have been named “Mean of the Year,” citing its own poll.
Dong-a Ilbo:
- Hwang Woo Suk falsified a 2005 landmark study on stem cell research, according to findings by a Seoul National University internal investigation, citing a Seoul National official.
Seoul Economic:
- Samsung Electronics will begin production at its newest liquid-crystal display factory about three months ahead of schedule because of rising demand for LCD televisions.
Nihon Keizai:
- Sony Corp. has developed an 82-inch liquid-crystal display television to compete against market leader Sharp Corp.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Underperform on SBSA.
Night Trading
Asian Indices are +.25% to +.50% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.03%.
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
NDN/.06
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- Durable Goods Orders for November are estimated to rise 1.2% versus a 3.4% gain in October.
- Durables Ex Transportation for November are estimated to rise 1.0% versus a .3% gain in October.
9:45 am EST
- Final Univ. of Mich. Consumer Confidence for December is estimated to rise to 89.0 versus a reading of 88.7 in November.
10:00 am EST
- New Home Sales for November are estimated to fall to 1300K versus 1424K in October.
BOTTOM LINE: Asian indices are higher, boosted by tech shares in the region after Samsung boosted its earnings forecast. I expect US equities to open higher and to build modestly on gains into the afternoon. The Portfolio is 100% net long heading into the day.
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