Indices
S&P 500 1,294.83 +4.21%
DJIA 11,109.32 +4.24%
NASDAQ 2,339.79 +6.38%
Russell 2000 765.14 +13.95%
DJ Wilshire 5000 13,121.56 +5.0%
S&P Equity Long/Short Index 1,165.57 +5.0%
S&P Barra Growth 609.95 +2.25%
S&P Barra Value 681.66 +5.27%
Morgan Stanley Consumer 607.81 +2.76%
Morgan Stanley Cyclical 813.87 +3.67%
Morgan Stanley Technology 548.10 +5.11%
Transports 4,568.00 +8.87%
Utilities 389.01 -3.97%
S&P 500 Cum A/D Line 8,408.00 +10.0%
Bloomberg Crude Oil % Bulls 48.0 +77.58%
Put/Call .80 +5.3%
NYSE Arms 1.66 +.61%
Volatility(VIX) 11.39 -5.63%
ISE Sentiment 120.0 -26.38%
AAII % Bulls 37.21 -.24%
AAII % Bears 32.56 -10.82%
US Dollar 89.73 -1.58%
CRB 333.18 +.41%
Futures Spot Prices
Crude Oil 66.35 +2.31%
Unleaded Gasoline 187.47 -1.07%
Natural Gas 7.21 -29.1%
Heating Oil 185.60 +3.40%
Gold 583.50 +8.64%
Base Metals 177.22 +16.28%
Copper 245.90 +23.82%
10-year US Treasury Yield 4.84% +10.25%
Average 30-year Mortgage Rate 6.35% +2.09%
Leading Sectors
Steel +40.81%
I-Banks +16.86%
Oil Service +14.39%
Networking +13.87%
REITs +13.98%
Lagging Sectors
Foods +2.34%
Hospitals +1.22%
Insurance -1.72%
Broadcasting -3.10%
Oil Tankers -6.38%
This Year’s Winners
This Year’s Losers
*3-Month % Change
Friday, March 31, 2006
Stocks Mixed into Final Hour as Lower Oil Prices Offset Quarter-end Profit-taking
BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Internet longs, Retail longs, Networking longs and Biotech longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is mixed as the advance/decline line is slightly higher, sector performance is mixed and volume is below average. The ECRI Weekly Leading Index rose to 137.00 this week from 136.20 the prior week. This is off of cycle highs of 138.50 set the third week of January, but is still solidly higher from a reading of 132.00 during the last week of May 2005 and the long-term average of 128.90. This gauge of future economic activity is still forecasting healthy, but decelerating, U.S. growth. I expect US stocks to trade mixed into the close from current levels as short-covering offsets profit-taking at quarter’s end.
Today's Headlines
Bloomberg:
- Hard Rock Intl. is planning a $1 billion casino hotel in Atlantic City, New Jersey, the 13th in that city.
- General Motors(GM) may announce an agreement Monday to sell control of its finance unit to investors led by Cerberus Capital.
- Paris strikes and riots may scare away tourists during peak tourist season.
- Barton Biggs said US stocks may rise more than 20% this year, led by larger US technology companies such as Intel(INTC) and Cisco Systems(CSCO) as capital spending increases.
- Crude oil is falling the most in almost two weeks as concern eased over supply disruptions from Iran and as a damaged pipeline in Nigeria was repaired.
Wall Street Journal:
- China faces rising protectionist sentiment at home as growing foreign investment puts more Chinese companies under competitive pressure.
- Chinese telecom companies are resisting a government suggestion that domestic technology should be used to update wireless telephone systems over the next two years.
- China has become a world force in the use of solar power to provide hot water in homes.
- More US households are giving up traditional phones in favor of mobiles, citing Forrester Research.
- Hewlett-Packard(HPQ) flat-panel televisions incorporating Internet-ready technology will be sold at Best Buy(BBY) stores beginning next month.
NY Times:
- Federated Dept. Stores’(FD) Macy’s, Nordstrom(JWN) and QVC Inc. have begun selling clothes from women using a new universal size system, in an experiment to standardize how items fit.
- US African Americans are increasingly gaining access to, and becoming comfortable with, the Internet, signaling the closing of the so-called digital divide.
- Some personnel at ESPN disagree with the cable sports network’s decision to televise a reality series about San Francisco Giants outfielder Barry Bonds.
- Insurers that offer supplemental insurance for Medicare recipients are using the new prescription drug benefit to attract new customers.
Reuters:
- Comcast(CMCSK) and Time Warner(TWX) executives said they support Cablevision Systems’(CVC) plan to allow subscribers to record programs on the company’s computer servers.
Moscow Times:
- Russia’s Cabinet approved measures to draft more men into the military.
AFP:
- Iran will not use its crude oil supplies as a lever in a dispute with western countries over its nuclear program, citing Foreign Minister Mottaki.
- Hard Rock Intl. is planning a $1 billion casino hotel in Atlantic City, New Jersey, the 13th in that city.
- General Motors(GM) may announce an agreement Monday to sell control of its finance unit to investors led by Cerberus Capital.
- Paris strikes and riots may scare away tourists during peak tourist season.
- Barton Biggs said US stocks may rise more than 20% this year, led by larger US technology companies such as Intel(INTC) and Cisco Systems(CSCO) as capital spending increases.
- Crude oil is falling the most in almost two weeks as concern eased over supply disruptions from Iran and as a damaged pipeline in Nigeria was repaired.
Wall Street Journal:
- China faces rising protectionist sentiment at home as growing foreign investment puts more Chinese companies under competitive pressure.
- Chinese telecom companies are resisting a government suggestion that domestic technology should be used to update wireless telephone systems over the next two years.
- China has become a world force in the use of solar power to provide hot water in homes.
- More US households are giving up traditional phones in favor of mobiles, citing Forrester Research.
- Hewlett-Packard(HPQ) flat-panel televisions incorporating Internet-ready technology will be sold at Best Buy(BBY) stores beginning next month.
NY Times:
- Federated Dept. Stores’(FD) Macy’s, Nordstrom(JWN) and QVC Inc. have begun selling clothes from women using a new universal size system, in an experiment to standardize how items fit.
- US African Americans are increasingly gaining access to, and becoming comfortable with, the Internet, signaling the closing of the so-called digital divide.
- Some personnel at ESPN disagree with the cable sports network’s decision to televise a reality series about San Francisco Giants outfielder Barry Bonds.
- Insurers that offer supplemental insurance for Medicare recipients are using the new prescription drug benefit to attract new customers.
Reuters:
- Comcast(CMCSK) and Time Warner(TWX) executives said they support Cablevision Systems’(CVC) plan to allow subscribers to record programs on the company’s computer servers.
Moscow Times:
- Russia’s Cabinet approved measures to draft more men into the military.
AFP:
- Iran will not use its crude oil supplies as a lever in a dispute with western countries over its nuclear program, citing Foreign Minister Mottaki.
Personal Income Rises Almost Twice Inflation, Spending Slows, Inflation Decelerates, Manfuacturing Mixed
- Personal Income for February rose .3% versus estimates of a .4% increase and a .7% gain in January.
- Personal Spending for February rose .1% versus estimates of unchanged and a .8% rise in January.
- PCE Core for February rose .1% versus estimates of a .1% gain and a .2% rise in January.
- Final Univ. of Mich. Consumer Confidence for March rose to 88.9 versus estimates of 86.9 and a prior reading of 86.7.
- Chicago Purchasing Manager for March rose to 60.4 versus estimates of 57.0 and a reading of 54.9 in February.
- Factory Orders for February rose .2% versus estimates of a 1.3% gain and a 3.9% decline in January.
- Personal Spending for February rose .1% versus estimates of unchanged and a .8% rise in January.
- PCE Core for February rose .1% versus estimates of a .1% gain and a .2% rise in January.
- Final Univ. of Mich. Consumer Confidence for March rose to 88.9 versus estimates of 86.9 and a prior reading of 86.7.
- Chicago Purchasing Manager for March rose to 60.4 versus estimates of 57.0 and a reading of 54.9 in February.
- Factory Orders for February rose .2% versus estimates of a 1.3% gain and a 3.9% decline in January.
BOTTOM LINE: Consumer spending rose .1% in February, the smallest gain since August, as Americans took a breather after splurging a month earlier, Bloomberg said. The PCE core, the Fed’s favorite inflation gauge, rose 1.8% y-o-y, the same as the prior month. Incomes rose 5.6% y-o-y, almost twice most inflation measures. I expect incomes to remain healthy, spending to moderate and inflation to decelerate mostly through year-end.
Confidence among US consumers increased more than expected in March as higher wages and job creation left people with more money in their pockets, Bloomberg reported. The expectations index rose to 76 from 74.5 last month. Confidence remains irrationally low given the current economic backdrop. I expect this measure to rise to cycle highs before year’s end.
Manufacturing in the Chicago area accelerated in March, Bloomberg reported. Inventories at record lows and increased business spending are spurring companies to boost production. The employment component of the index rose to 55.6 from 54.9 in February. The prices paid component fell to 71.1 from 71.6 the prior month. I expect manufacturing to slow to average levels, but still add to economic growth over the coming months.
US factory orders rose less than expected in February, held back by falling demand for machinery and less expensive oil, Bloomberg said. Orders, excluding transportation, fell 2.0%.
Thursday, March 30, 2006
Friday Watch
Late-Night Headlines
Bloomberg:
- Asian central banks have “limited” room to add more euros to their reserves, after increasing the amount in that currency in the second half of last year, according to a Goldman Sachs research report.
- Citigroup(C) led Forbes magazine’s annual Global 2000 company list for a third consecutive year.
- Japan’s consumer prices rose in February for a fourth month, adding to prospects that the Bank of Japan may raise interest rates from near zero this year.
- China “regrets” the decision by the European Union and US to file a joint complaint at the World Trade Organization against that country’s tariffs on imports of car parts.
Daily Telegraph:
- UK Prime Minister Tony Blair, who 18 months ago said he would not serve a fourth term in office, will step down by the end of this year.
Financial Times:
- General Motors(GM) should “show resolve” and make a decision on the development of a mass-market hydrogen-powered car within 18 months to ensure it remains competitive, citing an interview with Larry Burns, the carmaker’s vice president in charge of strategic planning.
Late Buy/Sell Recommendations
JPMorgan:
- Raised NOVL to Buy, target $11.
Night Trading
Asian Indices are unch. to +1.0% 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
- (GY)/-.15
- (GPN)/.34
Upcoming Splits
- (DBRN) 2-for-1
- (NX) 3-for-2
Economic Releases
8:30 am EST
- Personal Income for February is estimated to rise .4% versus a .7% increase in January.
- Personal Spending for February is estimated to remain unchanged versus a .9% increase in January.
- The PCE core for February is estimated to rise .1% versus a .2% increase in January.
9:45 am EST
- Final Univ. of Mich. Consumer Confidence for March is estimated to rise to 86.9 versus a prior estimate of 86.7.
10:00 am EST
- Chicago Purchasing Manager for March is estimated to rise to 57.0 versus a reading of 54.9 in February.
- Factory Orders for February are estimated to rise 1.3% versus a 4.5% decline in January.
Bloomberg:
- Asian central banks have “limited” room to add more euros to their reserves, after increasing the amount in that currency in the second half of last year, according to a Goldman Sachs research report.
- Citigroup(C) led Forbes magazine’s annual Global 2000 company list for a third consecutive year.
- Japan’s consumer prices rose in February for a fourth month, adding to prospects that the Bank of Japan may raise interest rates from near zero this year.
- China “regrets” the decision by the European Union and US to file a joint complaint at the World Trade Organization against that country’s tariffs on imports of car parts.
Daily Telegraph:
- UK Prime Minister Tony Blair, who 18 months ago said he would not serve a fourth term in office, will step down by the end of this year.
Financial Times:
- General Motors(GM) should “show resolve” and make a decision on the development of a mass-market hydrogen-powered car within 18 months to ensure it remains competitive, citing an interview with Larry Burns, the carmaker’s vice president in charge of strategic planning.
Late Buy/Sell Recommendations
JPMorgan:
- Raised NOVL to Buy, target $11.
Night Trading
Asian Indices are unch. to +1.0% 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
- (GY)/-.15
- (GPN)/.34
Upcoming Splits
- (DBRN) 2-for-1
- (NX) 3-for-2
Economic Releases
8:30 am EST
- Personal Income for February is estimated to rise .4% versus a .7% increase in January.
- Personal Spending for February is estimated to remain unchanged versus a .9% increase in January.
- The PCE core for February is estimated to rise .1% versus a .2% increase in January.
9:45 am EST
- Final Univ. of Mich. Consumer Confidence for March is estimated to rise to 86.9 versus a prior estimate of 86.7.
10:00 am EST
- Chicago Purchasing Manager for March is estimated to rise to 57.0 versus a reading of 54.9 in February.
- Factory Orders for February are estimated to rise 1.3% versus a 4.5% decline in January.
BOTTOM LINE: Asian indices are mixed, as gains in commodity shares are offsetting losses in exporting stocks in the region. I expect US equities to open modestly lower and to trade modestly higher into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.
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