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Tuesday, January 03, 2006
Monday, January 02, 2006
Tuesday Watch
Weekend Headlines
Bloomberg:
- Bill Miller, manager of the Legg Mason Value Trust, beat the S&P 500 for a record 15th straight year.
- The US dollar gained against the euro and yen in 2005, rising about 15% versus both currencies as the US economy continued outperforming Europe and Japan.
- Wal-Mart Stores(WMT) said December US same-store sales rose about 2.2%.
- Antidepressants such as Wyeth’s(WYE) Effexor and Eli Lilly’s(LLY) Prozac don’t appear to post a higher risk of suicide in the six months after they’re prescribed, a study says.
- Bank of America(BAC) became the No.1 US credit-card issuer today as it completed its $34.2 billion acquisition of MBNA Corp(KRB).
- US employers added another 200,000 jobs last month as companies remained optimistic that the new year will bring more corporate investment and solid economic growth, according to a survey of economists.
- Viacom(CBS/A), the entertainment company controlled by Sumner Redstone, completed a plan to split itself into two companies, CBS Corp.(CBS) and Viacom, its said in a statement.
- Owens Corning, the largest US insulation maker, filed a new bankruptcy reorganization plan aimed at wiping out the company’s estimated $10.2 billion in asbestos liabilities.
- HBOS Plc, Britain’s fourth-largest lender and one of the foreign-exchange market’s biggest dollar bulls in 2005, expects the US currency to extend its gain.
- Samsung and its nearest rival LG.Philips LCD began production at their newest plants ahead of schedule to meet demand for televisions.
- Overweight people are nearly twice as likely as thinner folk to develop kidney disease and the risk for the morbidly obese is 700% higher, a study says.
MarketWatch:
- Don Hays, of Hays Advisory, expects the S&P 500 to rise 30% during the next 12 months, the price of oil to fall to $42 and interest rates to remain at low levels.
NY Times:
- Crime in NYC has declined for the 17th straight year, with the number of murders at their lowest point since 1963, citing NYPD stats.
- Smaller US schools such as Allegheny College are luring bright students to their campuses offering merit scholarships to keep them from going to more sought-after institutions.
- Home prices in many areas of New Orleans are the same as or higher than they were before Hurricane Katrina struck the city in August.
- People are likely to start using their mobile phones for shopping this year.
- Suburban homeowners in cities such as NY, Chicago and San Francisco are spending more money renovating their houses than previous generations of homeowners.
- Technological convergence, whereby people can have electronic devices such as computers, televisions and telephones communicate with each other, may become a reality this year.
- Advertisements placed in movies and television programs with computer graphics allow companies to show products to customers who have learned to block commercials.
San Francisco Chronicle:
- Yahoo!(YHOO) will broadcast a reality television show on the most-visited Web site in coming months as the company expands into video offered on line.
Washington Post:
- US government contractors, such as CGI-AMS Inc. and Northrop Grumman(NOC), are moving jobs to rural Virginia instead of overseas to cut costs.
- The Bush administration will seek no new funds for rebuilding Iraq when it submits its budget request to Congress in February.
AP:
- US consumers may get more tax credits in 2006 for purchasing cars and pickup trucks that run on gasoline and electricity, for which there are already waiting lists.
Telegraph:
- Reinsurance rates are set to rise following a series of natural disasters in 2005.
AFP:
- The US has written off $280 million of debt owed by Zambia after the African country completed economic reforms recommended by the International Monetary Fund.
La Gaceta de Los Negocios:
- Germany and France have natural gas stockpiles of 75 days and 45 days respectively should a possible Russian cut off of supplies to Ukraine disrupt flows of the gas to western Europe.
Xinhua News Agency:
- China’s State Administration of Foreign Exchange approved a first group of 13 banks to be market-makers in yuan trading.
Economic Daily:
- Benq and AU Optronics(AUO) will double their sales of flat-panel televisions and television displays this year boosted by US demand, citing KY Lee, chairman of both.
Weekend Recommendations
Barron's:
- Had positive comments on (K) and (PBI).
Goldman Sachs:
- Reiterated Outperform on (ACN) and (EBAY).
- Reiterated Underperform on (TFX).
Night Trading
Asian indices are -.25% to +.50% on average.
S&P 500 indicated +.15%.
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
(WAG).33
Upcoming Splits
(CELL) 3-for-2
(ORI) 5-for-4
(SIE) 2-for-1
Economic Releases
10:00 am EST
- Construction Spending for November is estimated to rise .7% versus a .7% increase in October.
- ISM Manufacturing for December is estimated to fall to 57.5 versus a reading of 58.1 in November.
- ISM Prices Paid for December is estimated to fall to 68.7 versus a reading of 74.0 in November.
2:00 pm EST
- Minutes of Dec. 13 FOMC Meeting.
Bloomberg:
- Bill Miller, manager of the Legg Mason Value Trust, beat the S&P 500 for a record 15th straight year.
- The US dollar gained against the euro and yen in 2005, rising about 15% versus both currencies as the US economy continued outperforming Europe and Japan.
- Wal-Mart Stores(WMT) said December US same-store sales rose about 2.2%.
- Antidepressants such as Wyeth’s(WYE) Effexor and Eli Lilly’s(LLY) Prozac don’t appear to post a higher risk of suicide in the six months after they’re prescribed, a study says.
- Bank of America(BAC) became the No.1 US credit-card issuer today as it completed its $34.2 billion acquisition of MBNA Corp(KRB).
- US employers added another 200,000 jobs last month as companies remained optimistic that the new year will bring more corporate investment and solid economic growth, according to a survey of economists.
- Viacom(CBS/A), the entertainment company controlled by Sumner Redstone, completed a plan to split itself into two companies, CBS Corp.(CBS) and Viacom, its said in a statement.
- Owens Corning, the largest US insulation maker, filed a new bankruptcy reorganization plan aimed at wiping out the company’s estimated $10.2 billion in asbestos liabilities.
- HBOS Plc, Britain’s fourth-largest lender and one of the foreign-exchange market’s biggest dollar bulls in 2005, expects the US currency to extend its gain.
- Samsung and its nearest rival LG.Philips LCD began production at their newest plants ahead of schedule to meet demand for televisions.
- Overweight people are nearly twice as likely as thinner folk to develop kidney disease and the risk for the morbidly obese is 700% higher, a study says.
MarketWatch:
- Don Hays, of Hays Advisory, expects the S&P 500 to rise 30% during the next 12 months, the price of oil to fall to $42 and interest rates to remain at low levels.
NY Times:
- Crime in NYC has declined for the 17th straight year, with the number of murders at their lowest point since 1963, citing NYPD stats.
- Smaller US schools such as Allegheny College are luring bright students to their campuses offering merit scholarships to keep them from going to more sought-after institutions.
- Home prices in many areas of New Orleans are the same as or higher than they were before Hurricane Katrina struck the city in August.
- People are likely to start using their mobile phones for shopping this year.
- Suburban homeowners in cities such as NY, Chicago and San Francisco are spending more money renovating their houses than previous generations of homeowners.
- Technological convergence, whereby people can have electronic devices such as computers, televisions and telephones communicate with each other, may become a reality this year.
- Advertisements placed in movies and television programs with computer graphics allow companies to show products to customers who have learned to block commercials.
San Francisco Chronicle:
- Yahoo!(YHOO) will broadcast a reality television show on the most-visited Web site in coming months as the company expands into video offered on line.
Washington Post:
- US government contractors, such as CGI-AMS Inc. and Northrop Grumman(NOC), are moving jobs to rural Virginia instead of overseas to cut costs.
- The Bush administration will seek no new funds for rebuilding Iraq when it submits its budget request to Congress in February.
AP:
- US consumers may get more tax credits in 2006 for purchasing cars and pickup trucks that run on gasoline and electricity, for which there are already waiting lists.
Telegraph:
- Reinsurance rates are set to rise following a series of natural disasters in 2005.
AFP:
- The US has written off $280 million of debt owed by Zambia after the African country completed economic reforms recommended by the International Monetary Fund.
La Gaceta de Los Negocios:
- Germany and France have natural gas stockpiles of 75 days and 45 days respectively should a possible Russian cut off of supplies to Ukraine disrupt flows of the gas to western Europe.
Xinhua News Agency:
- China’s State Administration of Foreign Exchange approved a first group of 13 banks to be market-makers in yuan trading.
Economic Daily:
- Benq and AU Optronics(AUO) will double their sales of flat-panel televisions and television displays this year boosted by US demand, citing KY Lee, chairman of both.
Weekend Recommendations
Barron's:
- Had positive comments on (K) and (PBI).
Goldman Sachs:
- Reiterated Outperform on (ACN) and (EBAY).
- Reiterated Underperform on (TFX).
Night Trading
Asian indices are -.25% to +.50% on average.
S&P 500 indicated +.15%.
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
(WAG).33
Upcoming Splits
(CELL) 3-for-2
(ORI) 5-for-4
(SIE) 2-for-1
Economic Releases
10:00 am EST
- Construction Spending for November is estimated to rise .7% versus a .7% increase in October.
- ISM Manufacturing for December is estimated to fall to 57.5 versus a reading of 58.1 in November.
- ISM Prices Paid for December is estimated to fall to 68.7 versus a reading of 74.0 in November.
2:00 pm EST
- Minutes of Dec. 13 FOMC Meeting.
BOTTOM LINE: Asian Indices are mostly higher, boosted by commodity producing companies in the region. I expect US stocks to open modestly higher and to fall later in the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the week.
Weekly Outlook
The Week Ahead via Reuters
There are some important economic reports and a few significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - US Markets Closed for New Years
Tues. - Construction Spending, ISM Manufacturing, ISM Prices Paid, FOMC Minutes
Wed. - Factory Orders, Total Vehicle Sales
Thur. - Initial Jobless Claims, ISM Non-manufacturing, Pending Home Sales
Fri. - Change in Non-farm Payrolls, Unemployment Rate, Average Hourly Earnings
A few of the more noteworthy companies that release quarterly earnings this week are:
Mon. - US markets closed for New Years
Tues. - BISYS Group(BSG), Flowserve(FLS), Key Energy Services(KEGS), Walgreen(WAG)
Wed. - Sonic Corp.(SONC)
Thur. - Accenture Ltd.(ACN), Constellation Brands(STZ), Dana Corp.(DCN), Monsanto(MON), Ruby Tuesday(RI), Take Two Interactive(TTWO)
Fri. - Shaw Group(SGR)
Other events that have market-moving potential this week include:
Mon. - US markets closed for New Years
Tue. - None of note
Wed. - None of note
Thur. - None of note
Fri. - Fed’s Fisher & Minehan speak
There are some important economic reports and a few significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - US Markets Closed for New Years
Tues. - Construction Spending, ISM Manufacturing, ISM Prices Paid, FOMC Minutes
Wed. - Factory Orders, Total Vehicle Sales
Thur. - Initial Jobless Claims, ISM Non-manufacturing, Pending Home Sales
Fri. - Change in Non-farm Payrolls, Unemployment Rate, Average Hourly Earnings
A few of the more noteworthy companies that release quarterly earnings this week are:
Mon. - US markets closed for New Years
Tues. - BISYS Group(BSG), Flowserve(FLS), Key Energy Services(KEGS), Walgreen(WAG)
Wed. - Sonic Corp.(SONC)
Thur. - Accenture Ltd.(ACN), Constellation Brands(STZ), Dana Corp.(DCN), Monsanto(MON), Ruby Tuesday(RI), Take Two Interactive(TTWO)
Fri. - Shaw Group(SGR)
Other events that have market-moving potential this week include:
Mon. - US markets closed for New Years
Tue. - None of note
Wed. - None of note
Thur. - None of note
Fri. - Fed’s Fisher & Minehan speak
BOTTOM LINE: I expect US stocks to finish the week modestly lower as continued profit-taking, fears over the slowdown in housing and worries over recent poor equity performances during January more than offset lower energy prices, less hawkish Fed commentary and healthy economic reports. My trading indicators are now giving mostly bearish signals and the Portfolio is 50% net long heading into the week.
Saturday, December 31, 2005
Year-end Scoreboard*
Indices
S&P 500 1,248.29 +4.91%
DJIA 10,717.50 +1.72%
NASDAQ 2,205.32 +2.13%
Russell 2000 673.22 +4.64%
DJ Wilshire 5000 12,497.18 +4.57%
S&P Equity Long/Short Index 1,109.58 +9.04%
S&P Barra Growth 596.52 +4.01%
S&P Barra Value 647.55 +5.85%
Morgan Stanley Consumer 591.50 +2.21%
Morgan Stanley Cyclical 785.05 +2.17%
Morgan Stanley Technology 522.21 +3.37%
Transports 4,196.03 +11.65%
Utilities 405.11 +25.12%
S&P 500 Cum A/D Line 7,613 +8.0%
Bloomberg Crude Oil % Bulls 27.03 -33.2%
Put/Call .76 -11.63%
NYSE Arms 1.65 +37.5%
Volatility(VIX) 12.07 -9.18%
ISE Sentiment 163.00 -23.47%
AAII % Bulls 37.30 -35.31%
AAII % Bears 36.51 +108.39%
US Dollar 91.07 +12.63%
CRB 331.83 +16.88%
ECRI Weekly Leading Index 135.00 +.52%
Futures Spot Prices
Crude Oil 61.04 +47.08%
Unleaded Gasoline 172.74 +56.36%
Natural Gas 11.22 +82.44%
Heating Oil 176.98 +65.40%
Gold 519.70 +18.11%
Base Metals 152.41 +21.35%
Copper 203.20 +61.27%
10-year US Treasury Yield 4.39% +4.03%
Average 30-year Mortgage Rate 6.22% +7.06%
Leading Sectors
Energy +40.51%
HMOs +37.14%
Gold & Silver +30.55%
I-Banks +29.84%
Utilities +25.12%
Lagging Sectors
Foods -4.04%
Telecom -5.71%
Computer Hardware -7.34%
Airlines -9.34%
Broadcasting -20.12%
This Year’s Winners
This Year’s Losers
*1 Year Total Return
S&P 500 1,248.29 +4.91%
DJIA 10,717.50 +1.72%
NASDAQ 2,205.32 +2.13%
Russell 2000 673.22 +4.64%
DJ Wilshire 5000 12,497.18 +4.57%
S&P Equity Long/Short Index 1,109.58 +9.04%
S&P Barra Growth 596.52 +4.01%
S&P Barra Value 647.55 +5.85%
Morgan Stanley Consumer 591.50 +2.21%
Morgan Stanley Cyclical 785.05 +2.17%
Morgan Stanley Technology 522.21 +3.37%
Transports 4,196.03 +11.65%
Utilities 405.11 +25.12%
S&P 500 Cum A/D Line 7,613 +8.0%
Bloomberg Crude Oil % Bulls 27.03 -33.2%
Put/Call .76 -11.63%
NYSE Arms 1.65 +37.5%
Volatility(VIX) 12.07 -9.18%
ISE Sentiment 163.00 -23.47%
AAII % Bulls 37.30 -35.31%
AAII % Bears 36.51 +108.39%
US Dollar 91.07 +12.63%
CRB 331.83 +16.88%
ECRI Weekly Leading Index 135.00 +.52%
Futures Spot Prices
Crude Oil 61.04 +47.08%
Unleaded Gasoline 172.74 +56.36%
Natural Gas 11.22 +82.44%
Heating Oil 176.98 +65.40%
Gold 519.70 +18.11%
Base Metals 152.41 +21.35%
Copper 203.20 +61.27%
10-year US Treasury Yield 4.39% +4.03%
Average 30-year Mortgage Rate 6.22% +7.06%
Leading Sectors
Energy +40.51%
HMOs +37.14%
Gold & Silver +30.55%
I-Banks +29.84%
Utilities +25.12%
Lagging Sectors
Foods -4.04%
Telecom -5.71%
Computer Hardware -7.34%
Airlines -9.34%
Broadcasting -20.12%
This Year’s Winners
This Year’s Losers
*1 Year Total Return
Friday, December 30, 2005
Stocks Lower Mid-day on Year-end Profit-taking and Rising Energy Prices
Indices
S&P 500 1,249.86 -.36%
DJIA 10,735.03 -.46%
NASDAQ 2,207.90 -.46%
Russell 2000 674.81 -.50%
DJ Wilshire 5000 12,507.36%
S&P Barra Growth 597.02 -.37%
S&P Barra Value 647.48 -.46%
Morgan Stanley Consumer 592.46 -.62%
Morgan Stanley Cyclical 785.55 -.57%
Morgan Stanley Technology 522.54 -.54%
Transports 4,208.48 -.77%
Utilities 404.65 -.48%
Put/Call .80 -11.11%
NYSE Arms 1.47 +22.79%
Volatility(VIX) 11.74 +1.12%
ISE Sentiment 162.00 -1.0%
US Dollar 91.22 +.13%
CRB 331.78 +.75%
Futures Spot Prices
Crude Oil 61.04%
Unleaded Gasoline 171.00 +3.49%
Natural Gas 11.22 +.02%
Heating Oil 172.80 +1.47%
Gold 519.50 +.39%
Base Metals 152.41 -.37%
Copper 203.30 -.61%
10-year US Treasury Yield 4.38% +.81%
Leading Sectors
Oil Service +1.74%
Energy +1.15%
Disk Drives +.53%
Lagging Sectors
Gold & Silver -1.01%
Restaurants -1.06%
HMOs -1.08%
S&P 500 1,249.86 -.36%
DJIA 10,735.03 -.46%
NASDAQ 2,207.90 -.46%
Russell 2000 674.81 -.50%
DJ Wilshire 5000 12,507.36%
S&P Barra Growth 597.02 -.37%
S&P Barra Value 647.48 -.46%
Morgan Stanley Consumer 592.46 -.62%
Morgan Stanley Cyclical 785.55 -.57%
Morgan Stanley Technology 522.54 -.54%
Transports 4,208.48 -.77%
Utilities 404.65 -.48%
Put/Call .80 -11.11%
NYSE Arms 1.47 +22.79%
Volatility(VIX) 11.74 +1.12%
ISE Sentiment 162.00 -1.0%
US Dollar 91.22 +.13%
CRB 331.78 +.75%
Futures Spot Prices
Crude Oil 61.04%
Unleaded Gasoline 171.00 +3.49%
Natural Gas 11.22 +.02%
Heating Oil 172.80 +1.47%
Gold 519.50 +.39%
Base Metals 152.41 -.37%
Copper 203.30 -.61%
10-year US Treasury Yield 4.38% +.81%
Leading Sectors
Oil Service +1.74%
Energy +1.15%
Disk Drives +.53%
Lagging Sectors
Gold & Silver -1.01%
Restaurants -1.06%
HMOs -1.08%
BOTTOM LINE: The Portfolio is lower mid-day on losses in my Medical longs, Semi longs and Energy-related shorts. I exiting a long and added 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 light. Measures of investor anxiety are mostly higher. Overall, today’s market action is negative considering recent losses and lack of year-end leadership. It looks as if the S&P 500 is going to finish the year with around a 5% total gain including dividends, short of my 10% projection. Next year has the potential to be much better. I will try and post a Year-End Scoreboard later this evening. I expect US stocks to trade higher from current levels into the close on short-covering and seasonal strength.
Today's Headlines
Bloomberg:
- Bill Miller, manager of the Legg Mason Value Trust, is about to beat the S&P 500 for a record 15th consecutive year.
- UK house prices rose for a fourth month in December, the Nationwide Building Society said, adding to evidence of a sustained pickup in the $6 trillion property market.
- Internet service providers in China, which already use software to monitor user behavior, will soon have to record which Web sites their users visit and what time they logged on, by law.
- Genentech filed for US marketing approval of its Lucentis treatment for age-related macular degeneration, the leading cause of blindness among the elderly.
- Venezuela’s IBC stock index fell the most among the world’s 78 primary equity benchmarks this year, plunging 32%, on concern President Hugo Chavez will divert profits from investors as he seeks to redistribute wealth to the country’s poor.
Wall Street Journal:
- European mergers and acquisitions activity should grow in 2006 as economic and financial conditions become more favorable, citing bankers.
- Wal-Mart Stores plans to offer employee health insurance through Sam’s Club to small business owners.
- NTP Inc., the patent-holding company involved in a dispute with BlackBerry-maker Research in Motion, has obtained a 30-day extension from the US Patent and Trademark Office to file a defense for its claims.
NY Times:
- NY Mayor Michael Bloomberg and Joel Klein, chancellor of NY’s public schools, have convinced many private donors to donate more than $300 million for the city’s schools.
USA Today:
- As many as 56% of high-definition televisions’ purchasers haven’t bought the necessary special set-top box from cable or satellite providers that will enable the high-definition programming, citing surveys by Leichtman Research Group.
Financial Times:
- US legislation passed to encourage donations after Hurricane Katrina will probably make this year the best in history for US charities.
AP:
- The US Justice Department has begun an investigation into the leak of classified information about the National Security Agency’s domestic spy program to monitor overseas terror threats to the US.
NY Post:
- NY Senate Majority Leader Joseph Bruno said yesterday that democratic sate Attorney General Eliot Spitzer should support an independent investigation into the claim by former Goldman Sachs Chairman Whitehead that Spitzer had threatened him.
- Bill Miller, manager of the Legg Mason Value Trust, is about to beat the S&P 500 for a record 15th consecutive year.
- UK house prices rose for a fourth month in December, the Nationwide Building Society said, adding to evidence of a sustained pickup in the $6 trillion property market.
- Internet service providers in China, which already use software to monitor user behavior, will soon have to record which Web sites their users visit and what time they logged on, by law.
- Genentech filed for US marketing approval of its Lucentis treatment for age-related macular degeneration, the leading cause of blindness among the elderly.
- Venezuela’s IBC stock index fell the most among the world’s 78 primary equity benchmarks this year, plunging 32%, on concern President Hugo Chavez will divert profits from investors as he seeks to redistribute wealth to the country’s poor.
Wall Street Journal:
- European mergers and acquisitions activity should grow in 2006 as economic and financial conditions become more favorable, citing bankers.
- Wal-Mart Stores plans to offer employee health insurance through Sam’s Club to small business owners.
- NTP Inc., the patent-holding company involved in a dispute with BlackBerry-maker Research in Motion, has obtained a 30-day extension from the US Patent and Trademark Office to file a defense for its claims.
NY Times:
- NY Mayor Michael Bloomberg and Joel Klein, chancellor of NY’s public schools, have convinced many private donors to donate more than $300 million for the city’s schools.
USA Today:
- As many as 56% of high-definition televisions’ purchasers haven’t bought the necessary special set-top box from cable or satellite providers that will enable the high-definition programming, citing surveys by Leichtman Research Group.
Financial Times:
- US legislation passed to encourage donations after Hurricane Katrina will probably make this year the best in history for US charities.
AP:
- The US Justice Department has begun an investigation into the leak of classified information about the National Security Agency’s domestic spy program to monitor overseas terror threats to the US.
NY Post:
- NY Senate Majority Leader Joseph Bruno said yesterday that democratic sate Attorney General Eliot Spitzer should support an independent investigation into the claim by former Goldman Sachs Chairman Whitehead that Spitzer had threatened him.
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