Thursday, March 09, 2006

***Alert***

Due to a scheduling conflict I am unable to post the Thursday Close. I will post the Friday Watch later this evening. I finished the day positioned 25% net long.

Stocks Lower into Final Hour on Bounce in Oil and Rising Apprehension

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Internet longs, Computer longs and Retail longs. I added to my (IWM)/(QQQQ) shorts and added (EEM) and (ATHR) shorts, thus leaving the Portfolio 25% net long. The tone of the market is negative as the advance/decline line is lower, sector performance is mostly negative and volume is above average. The market's reaction to National Semiconductor's (NSM) positive report, a reversal lower in long-term rates and the DP World news is disappointing. It appears the major averages have more work to do before another push higher can commence. I expect US stocks to trade mixed-to-lower into the close from current levels on weakness in the tech sector and rising apprehension ahead of tomorrow’s employment report.

Today's Headlines

Bloomberg:
- A newspaper editor in Yemen who republished Danish cartoons depicting Islam’s founding prophet Muhammad said Yemeni prosecutors are calling for his execution.
- Microsoft(MSFT) unveiled a compact laptop computer to tap demand for machines that are smaller, lighter and mobile.
- Intuit(INTU) raised its fiscal third-quarter forecasts on higher-than-expected orders for its online TurboTax products.
- Measles deaths fell by almost 50% globally over five years after children were targeted for vaccination in 45 countries, world health officials said.
- Dubai-owned DP World, facing congressional opposition to its operation of six US ports, will “transfer” its ownership of those terminals to a US entity.
- Bill Miller, the Legg Mason fund manager who’s beaten the S&P 500 for 15 straight years, loaded up on US homebuilder stocks as other investors were dumping them.
- Gasoline futures are rising more than 4% a report showing a greater-than-expected decrease in US refinery output signaled reduced supplies.

Wall Street Journal:
- Many US real estate investment trusts, or REITS, are disappearing form the stock market because they say they are better appreciated by private investors and securities analysts consistently undervalue their companies.
- Liberty Media(L) is in talks to swap part of its 4% stake in Time Warner(TWX) for operating assets, Liberty’s CEO said.
- The EPA, the auto industry and environmental groups agreed to start a national program to collect mercury switches from scrapped cars as they seek to reduce harmful mercury emissions.
- Apple Computer’s(AAPL) new Mac Mini computer allows users to stream music and videos from any networked computer to their home entertainment center.
- Foreign companies manage most terminals at US ports, a consequence of the hold global shipping lines have over the loading and unloading of cargoes.
- Las Vegas Sands(LVS) has seen its shares soar 87% since October, mainly because it has a casino in Macau, on China’s southern coast, but it will soon face tougher competition.

USA Today:
- Knight Ridder(KRI) is expected to receive bids from McClatchy Co. and a partnership of Gannett Co.(GCI) and Medianews Group.

NY Times:
- The Chinese Communist Party is running a Maoist-style campaign in a bid to improve its reputation among China’s people.

Mysteel.com:
- China’s February exports of steel products rose 25% to 1.86 million metric tons from a year earlier.

Trade Deficit Widens Even as US Exports Hit Another Record, Labor Market Still Healthy

- The Trade Deficit for January widened to -$68.5 billion versus estimates of -$66.5 billion and -$65.1 billion in December.
- Initial Jobless Claims for last week rose to 303K versus estimates of 290K and 295K the prior week.
- Continuing Claims rose to 2506K versus estimates of 2489K and 2477K prior.
BOTTOM LINE: The US trade deficit widened in January as the oil-import bill rose and purchases of inexpensive Chinese goods increased, Bloomberg reported. US exports rose 2.5% as record numbers of industrial supplies, vehicles and capital goods were shipped. However, imports rose 3.5% as the US economy remains stronger than most of its major trading partners. The deficit with OPEC countries widened 11.6% in January. I expect the trade deficit to improve only modestly over the intermediate-term as relatively strong US growth offsets most of the benefits from falling commodity prices.

First-time claims for US unemployment benefits unexpectedly rose last week while staying at a level that signals strength in the labor market, Bloomberg said. The four-week average of initial jobless claims rose to 293,500 versus 287,250 the prior week. According to a Bloomberg survey, payrolls in February probably rose by 210,000 up from 193,000 in January. I continue to believe the labor market will remain relatively healthy over the intermediate-term without generating substantial unit labor cost increases.

Links of Interest

Market Snapshot
Detailed Market Summary
Market Internals
Economic Commentary
Movers & Shakers
Today in IBD
NYSE OrderTrac
I-Watch Sector Overview
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Option Dragon
Real-time Intraday Chart/Quote

Wednesday, March 08, 2006

Thursday Watch

Late-Night Headlines
Bloomberg:
- United Technologies(UTX) named Pratt & Whitney head Louis Chenevert president and chief operating officer, putting him in line to replace CEO George David in about two years.
- Brazil’s central bank cut the benchmark lending rate to a 17-month low in a bid to fuel faster growth in Latin America’s biggest economy.
- The US and its European allies will take a gradual approach in the UN Security Council to building pressure on Iran to suspend uranium enrichment, envoys said after the UN’s nuclear agency cleared the way for council action on the issue.

Wall Street Journal:
- Delphi Corp.(DPHIQ) and General Motors(GM) are close to agreeing on the broad points of a potential deal with the UAW union.
- Cia. Vale do Rio Doce, the world’s largest iron-ore producer, may accept an increase in prices at the lower end of analyst forecasts.

ESPN:
- National Football League owners approved a new six-year collective bargaining agreement that keeps a salary cap.

USA Today:
- US military bases were ordered to reduce energy consumption by 2% a year by using sources such as wind and solar energy because of rising fuel costs.

China Daily:
- China, the world’s largest buyer of cotton, is expected to import 1.5 million tons of cotton this year, down from 2.57 million a year earlier, as domestic output rises.

AFP:
- Afghanistan’s government sent soldiers into the southern province of Helmand to begin destroying opium poppy fields in the world’s biggest opium producing country.

Hankyoreh:
- North Korea offered to exchange information with the US in an attempt to apprehend criminals involved in manufacturing counterfeit US currency.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on (USB), (XOM) and (GOOG).
- Reiterated Underperform on (INFA).

Night Trading
Asian Indices are unch. to +.75% on average.
S&P 500 indicated +.16%.
NASDAQ 100 indicated +.15%.

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
- (ARO)/.74
- (BBI)/.15
- (CLE)/.68
- (DWA)/.42
- (FMT)/1.20
- (HANS)/.62
- (IDCC)/.05
- (LFB)/.08
- (MCDTA)/.06
- (NSM)/.32
- (PA)/.18
- (ZQK)/.18
- (RCI)/.53
- (SGY)/1.27
- (URBN)/.21
- (USM)/.39

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- The Trade Deficit for January is estimated to widen to -$66.5 billion versus -$65.7 billion in December.
- Initial Jobless Claims for last week are estimated to fall to 290K versus 294K the prior week.
- Continuing Claims are estimated to rise to 2492K versus 2486K prior.

BOTTOM LINE: Asian indices are higher, boosted by technology shares in the region. I expect US equities to open mixed and to rise modestly into the afternoon. The Portfolio is 75% net long heading into the day.