BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Semi longs, Internet longs and Networking longs. I covered some of my (IWM) and (QQQQ) shorts today, thus leaving the Portfolio 75% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are gaining and volume is heavy. The ISE Sentiment Index is falling 16% today to a below-average 143.0. Moreover, the spread between the index’s 10-day moving-average and its 200-day is the largest since Sept. 2004. These depressed levels come even as the S&P 500 approaches 6-year highs and has risen 74% from Oct. 2002 lows. The relatively low levels of investor complacency shown in many gauges of sentiment have to big a big worry for the bears. I expect US stocks to trade mixed-to-higher into the close from current levels on lower energy prices, lower long-term rates and short-covering.
Wednesday, March 22, 2006
Stocks Modestly Higher into Final Hour as Oil Reverses Lower
Today's Headlines
Bloomberg:
- China’s finance ministry said it will raise its automobile and motorcycle taxes 20% to spur the use of small vehicles that burn less fuel, part of a wider move to tax luxury goods and control energy consumption.
- Elan Corp.(ELN) and partner Biogen Idec(BIIB) said US regulators extended the review of their recalled multiple sclerosis treatment Tysabri for as long as 90 days to study the companies’ plan for restarting sales of the product.
- David Shaw, founder of the world’s largest hedge fund firm, said investment returns probably will worsen because of all the money pouring into the industry.
- Illinois Tool Works(ITW) CEO Speer said the company is winning more orders from Asian automakers including Toyota Motor and Honda Motor that will help spur sales growth for its ball joints, suspension systems and door handles.
- Shares of Bristol-Myers Squibb(BMY) and partner Sanofi-Aventis SA surged after the drugmakers settled a patent lawsuit against Apotex Inc. to keep a generic version of the blood thinner Plavix off the market until 2011.
- FedEx Corp.(FDX) said fiscal third-quarter profit rose 35%, more than analysts expected, as strong demand enabled the company to raise prices.
Wall Street Journal:
- The SEC is pursuing several initiatives that will change the way companies and mutual funds report earnings, empowering financial markets to discipline laggards as an alternative to government regulation.
- Microsoft(MSFT) plans a management shake-up at its Windows group.
- EchoStar Communications(DISH) will spend more than $1.6 billion in the next few years to boost its satellite fleet.
- US academics have established a new method of comparing mutual funds, moving away from the tradition of comparison against a benchmark index.
- Tennis matches will try to eliminate inaccurate line calls using technology that provides computerized instant replays.
- US hospital guidelines are setting private rooms as the new standard, amid growing evidence that shared rooms cause more infections, medical errors, privacy violations and stress.
- The liberal watchdog group Public Citizens has filed a lawsuit that may threaten the $39 billion in US budget cuts approved last month under the Deficit Reduction Act.
NY Post:
- Inter-Tel(INTL), which focuses on telephone services to small and medium-sized businesses, may seek a sale as it faces a possible bid from its former chief executive officer to regain control.
- NY police are installing 505 video cameras around the city to watch over 253 tourist and high-crime spots.
AP:
- Millions of NY commuters who ride Metropolitan Transportation Authority subways daily will soon be able to tell how long until the next train arrives, starting with the L line.
Financial Times:
- A proposed French parliamentary bill that would force companies with exclusive copyright protection to supply rivals with information needed to make compatible systems could hurt many companies, not just Apple Computer(AAPL).
China Securities Journal:
- China’s consumption of the copper tubing used in air conditioners has fallen 30% over the past year, citing a survey by a leading maker of the part.
- China’s finance ministry said it will raise its automobile and motorcycle taxes 20% to spur the use of small vehicles that burn less fuel, part of a wider move to tax luxury goods and control energy consumption.
- Elan Corp.(ELN) and partner Biogen Idec(BIIB) said US regulators extended the review of their recalled multiple sclerosis treatment Tysabri for as long as 90 days to study the companies’ plan for restarting sales of the product.
- David Shaw, founder of the world’s largest hedge fund firm, said investment returns probably will worsen because of all the money pouring into the industry.
- Illinois Tool Works(ITW) CEO Speer said the company is winning more orders from Asian automakers including Toyota Motor and Honda Motor that will help spur sales growth for its ball joints, suspension systems and door handles.
- Shares of Bristol-Myers Squibb(BMY) and partner Sanofi-Aventis SA surged after the drugmakers settled a patent lawsuit against Apotex Inc. to keep a generic version of the blood thinner Plavix off the market until 2011.
- FedEx Corp.(FDX) said fiscal third-quarter profit rose 35%, more than analysts expected, as strong demand enabled the company to raise prices.
Wall Street Journal:
- The SEC is pursuing several initiatives that will change the way companies and mutual funds report earnings, empowering financial markets to discipline laggards as an alternative to government regulation.
- Microsoft(MSFT) plans a management shake-up at its Windows group.
- EchoStar Communications(DISH) will spend more than $1.6 billion in the next few years to boost its satellite fleet.
- US academics have established a new method of comparing mutual funds, moving away from the tradition of comparison against a benchmark index.
- Tennis matches will try to eliminate inaccurate line calls using technology that provides computerized instant replays.
- US hospital guidelines are setting private rooms as the new standard, amid growing evidence that shared rooms cause more infections, medical errors, privacy violations and stress.
- The liberal watchdog group Public Citizens has filed a lawsuit that may threaten the $39 billion in US budget cuts approved last month under the Deficit Reduction Act.
NY Post:
- Inter-Tel(INTL), which focuses on telephone services to small and medium-sized businesses, may seek a sale as it faces a possible bid from its former chief executive officer to regain control.
- NY police are installing 505 video cameras around the city to watch over 253 tourist and high-crime spots.
AP:
- Millions of NY commuters who ride Metropolitan Transportation Authority subways daily will soon be able to tell how long until the next train arrives, starting with the L line.
Financial Times:
- A proposed French parliamentary bill that would force companies with exclusive copyright protection to supply rivals with information needed to make compatible systems could hurt many companies, not just Apple Computer(AAPL).
China Securities Journal:
- China’s consumption of the copper tubing used in air conditioners has fallen 30% over the past year, citing a survey by a leading maker of the part.
Tuesday, March 21, 2006
Wednesday Watch
Late-Night Headlines
Bloomberg:
- China National Petroleum, the nation’s biggest oil producer, plans to increase output of crude oil and natural gas 25% in the next five years.
Wall Street Journal:
- The Washington, DC, area accounts for 9.6% of all US venture capital invested in seed and start-ups, up from 3.6% a decade ago, citing the National Venture Capital Association.
LA Times:
- Iran’s government, which says it has religious and political differences with the Islamic extremist group al-Qaeda, may be aiding the group’s leaders.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are -1.25% to +.25% on average.
S&P 500 indicated -.13%.
NASDAQ 100 indicated -.83%.
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
- (ATU)/.62
- (ADBE)/.29
- (FDX)/1.30
- (FUL)/.27
- (MLHR)/.32
- (IPG)/-.40
- (JBIL)/.37
- (KBH)/1.96
- (MS)/1.21
- (WOR)/.35
Upcoming Splits
- (RJF) 3-for-2
Economic Releases
- None of note
Bloomberg:
- China National Petroleum, the nation’s biggest oil producer, plans to increase output of crude oil and natural gas 25% in the next five years.
Wall Street Journal:
- The Washington, DC, area accounts for 9.6% of all US venture capital invested in seed and start-ups, up from 3.6% a decade ago, citing the National Venture Capital Association.
LA Times:
- Iran’s government, which says it has religious and political differences with the Islamic extremist group al-Qaeda, may be aiding the group’s leaders.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are -1.25% to +.25% on average.
S&P 500 indicated -.13%.
NASDAQ 100 indicated -.83%.
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
- (ATU)/.62
- (ADBE)/.29
- (FDX)/1.30
- (FUL)/.27
- (MLHR)/.32
- (IPG)/-.40
- (JBIL)/.37
- (KBH)/1.96
- (MS)/1.21
- (WOR)/.35
Upcoming Splits
- (RJF) 3-for-2
Economic Releases
- None of note
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology shares in the region after Microsoft delayed the release of its next generation operating system. I expect US equities to open lower and to trade mixed into the afternoon, finishing lower. The Portfolio is 50% net long heading into the day.
Stocks Finish at Session Lows on Worries Over Fed Rate Hikes
Indices
S&P 500 1,297.23 -.60%
DJIA 11,235.47 -.35%
NASDAQ 2,294.23 -.86%
Russell 2000 736.10 -1.28%
Wilshire 5000 13,048.14 -.68%
S&P Barra Growth 612.68 -.53%
S&P Barra Value 681.12 -.68%
Morgan Stanley Consumer 613.36 -.44%
Morgan Stanley Cyclical 803.26 -.91%
Morgan Stanley Technology 536.83 -.24%
Transports 4,561.21 -.57%
Utilities 399.08 -1.08%
Put/Call .95 +9.20%
NYSE Arms .97 -15.05%
Volatility(VIX) 11.62 -1.44%
ISE Sentiment 169.00 +11.92%
US Dollar 89.62 unch.
CRB 322.77 +.66%
Futures Spot Prices
Crude Oil 62.15 -.30%
Unleaded Gasoline 180.00 -2.15%
Natural Gas 6.89 +.39%
Heating Oil 176.67 -.31%
Gold 553.10 -.02%
Base Metals 172.74 +.13%
Copper 232.15 -.11%
10-year US Treasury Yield 4.71% -.08%
Leading Sectors
Oil Tankers +.29%
Gaming +.23%
Oil Service +.05%
Lagging Sectors
Biotech -1.79%
Gold & Silver -1.92%
Tobacco -1.99%
Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play
Afternoon Recommendations
- None of note
Afternoon/Evening Headlines
Bloomberg:
- The UN Security Council postponed a second round of talks on how to increase pressure on Iran to stop uranium enrichment to give British and French diplomats time to win the support of China and Russia.
- Cowen Group, the investment banking unit of France’s Societe Generale, plans to raise $100 million in an IPO, the company said today in a filing with the SEC.
- DE Shaw raised its stake in Lexar Media(LEXR) to 7.9%, becoming the third-largest shareholder and signaling it may enter the fight over Micron’s(MU) $680 million bid for the company.
- Microsoft said the next version of its Windows program won’t be generally available until next January.
AP:
- Iran’s supreme leader, Ayatollah Ali Khamenei, said he supports talks with the US about Iraq.
S&P 500 1,297.23 -.60%
DJIA 11,235.47 -.35%
NASDAQ 2,294.23 -.86%
Russell 2000 736.10 -1.28%
Wilshire 5000 13,048.14 -.68%
S&P Barra Growth 612.68 -.53%
S&P Barra Value 681.12 -.68%
Morgan Stanley Consumer 613.36 -.44%
Morgan Stanley Cyclical 803.26 -.91%
Morgan Stanley Technology 536.83 -.24%
Transports 4,561.21 -.57%
Utilities 399.08 -1.08%
Put/Call .95 +9.20%
NYSE Arms .97 -15.05%
Volatility(VIX) 11.62 -1.44%
ISE Sentiment 169.00 +11.92%
US Dollar 89.62 unch.
CRB 322.77 +.66%
Futures Spot Prices
Crude Oil 62.15 -.30%
Unleaded Gasoline 180.00 -2.15%
Natural Gas 6.89 +.39%
Heating Oil 176.67 -.31%
Gold 553.10 -.02%
Base Metals 172.74 +.13%
Copper 232.15 -.11%
10-year US Treasury Yield 4.71% -.08%
Leading Sectors
Oil Tankers +.29%
Gaming +.23%
Oil Service +.05%
Lagging Sectors
Biotech -1.79%
Gold & Silver -1.92%
Tobacco -1.99%
Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play
Afternoon Recommendations
- None of note
Afternoon/Evening Headlines
Bloomberg:
- The UN Security Council postponed a second round of talks on how to increase pressure on Iran to stop uranium enrichment to give British and French diplomats time to win the support of China and Russia.
- Cowen Group, the investment banking unit of France’s Societe Generale, plans to raise $100 million in an IPO, the company said today in a filing with the SEC.
- DE Shaw raised its stake in Lexar Media(LEXR) to 7.9%, becoming the third-largest shareholder and signaling it may enter the fight over Micron’s(MU) $680 million bid for the company.
- Microsoft said the next version of its Windows program won’t be generally available until next January.
AP:
- Iran’s supreme leader, Ayatollah Ali Khamenei, said he supports talks with the US about Iraq.
BOTTOM LINE: The Portfolio finished lower today on losses in my Internet longs, Computer longs and Retail longs. I exited added to my (IWM)/(QQQQ) shorts in the final hour, thus leaving the Portfolio 50% net long. The tone of the market was very negative today as the advance/decline line finished substantially lower, sector performance was mostly negative and volume was heavy. Measures of investor anxiety were mostly lower into the close. Overall, today's market performance was bearish. The reversal higher in oil and 6-basis-point rise in the 10-year yield were the main culprits. As I have said before, there are a record number of market participants that benefit from a bearish or trading range environment. When we have rallies of the magnitude we have recently seen, they are sold vigorously for a short period of time. Today's action appears no different. I expect housing data on Thursday and Friday to calm interest rate jitters.
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