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Monday, April 03, 2006
Monday Watch
Weekend Headlines
Bloomberg:
- Wal-Mart Stores(WMT) said March same-store sales in the US rose about 1.3% as customers curtailed spending because of higher fuel costs and a later Easter.
- President Bush renewed his push for making his first-term tax cuts permanent and said Democrats who oppose the move would weaken the US economy.
- Alcatel SA(ALA) agreed to merge with Lucent Technologies(LU), creating a company with a combined market value of $36 billion to compete with Ericsson AB(ERICY) and Cisco Systems(CSCO).
- The Bank of Japan may keep interest rates low “for a long time” to allow consumer prices to reach levels they would have attained had the country not experienced more than seven years of deflation, said Paul McCulley, a managing director at PIMCO.
- Confidence among Japan’s largest manufactures unexpectedly fell in March in the first survey since the Bank of Japan ended its five-year deflation-fighting policy.
EE Times:
- For the first time in history, the optoelectronics market this year is projected to surpass the discrete semiconductor business and become the second largest segment in the semiconductor industry behind integrated circuits, according to IC Insights.
NY Times:
- Sherwin-Williams(SHW) and two other former makers of lead-based paint potentially face having to pay billions of dollars to repaint or renovate Rhode Island homes after losing a case in February.
- US conservation groups such as the Nature Conservancy and the Conservation Fund are trying to work out agreements with companies to buy up timberland to protect them from further development.
- The Tampa Bay Devil Rays baseball team have Wall Street experience in the front office where financial models and data mining join scouting and trades.
Reuters:
- Harrah’s Entertainment(HET), the world’s largest casino operator, said it would cost more than $3 billion to build a gaming resort in Singapore if its bid proved to be a winner.
Financial Times:
- Texas Pacific Group may this month say it has raised over $14 billion for a new buy-out fund.
- Time Warner’s(TWX) Time Warner Cable unit will aim to boost its mobile phone services by purchasing wireless spectrum or through acquisitions, citing an interview with CEO Parsons.
- Mergers and acquisitions are proving to be more successful and are creating greater investor value than during previous periods of high activity, citing a survey by London’s Cass Business School and consultants Towers Perrin.
Independent:
- Richard Branson, the UK billionaire who controls Virgin Group Ltd., plans to invest $400 million in factories producing ethanol, which may be used as fuel for his trains and planes.
AFP:
- US Secretary of State Condoleezza Rice and UK Foreign Secretary Jack Straw arrived in Baghdad on a surprise visit today to put pressure on Iraqi leaders to speed up the formation of a new government.
Middle East Economic Digest:
- Fluor Corp.(FLR) may win a contract worth $500 million to build a petrochemical plant in Saudi Arabia.
Weekend Recommendations
Barron's:
- Had positive comments on (ADM), (HSP), (TUP) and (MSFT).
Night Trading
Asian indices are +.50% to +1.25% on average.
S&P 500 indicated +.45%.
NASDAQ 100 indicated +.47%.
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
- (IMGC)/.18
- (JOSB)/.98
- (MU)/.06
- (TARO)/.11
Upcoming Splits
- (DBRN) 2-for-1
- (NX) 3-for-2
- (FCEN) 3-for-2
- (BHE) 3-for-2
- (BWS) 3-for-2
Economic Releases
10:00 am EST
- Construction Spending for February is estimated to rise .5% versus a .2% gain in January.
- Pending Home Sales for February are estimated to fall .5% versus a 1.1% decline in January.
- ISM Manufacturing for March is estimated to rise to 57.5 versus a reading of 56.7 in February.
- ISM Prices Paid for March is estimated to fall to 61.0 versus a reading of 62.5 in February.
Afternoon
- Total Vehicle Sales for March are estimated to rise to 16.7M versus 16.6M in February.
Bloomberg:
- Wal-Mart Stores(WMT) said March same-store sales in the US rose about 1.3% as customers curtailed spending because of higher fuel costs and a later Easter.
- President Bush renewed his push for making his first-term tax cuts permanent and said Democrats who oppose the move would weaken the US economy.
- Alcatel SA(ALA) agreed to merge with Lucent Technologies(LU), creating a company with a combined market value of $36 billion to compete with Ericsson AB(ERICY) and Cisco Systems(CSCO).
- The Bank of Japan may keep interest rates low “for a long time” to allow consumer prices to reach levels they would have attained had the country not experienced more than seven years of deflation, said Paul McCulley, a managing director at PIMCO.
- Confidence among Japan’s largest manufactures unexpectedly fell in March in the first survey since the Bank of Japan ended its five-year deflation-fighting policy.
EE Times:
- For the first time in history, the optoelectronics market this year is projected to surpass the discrete semiconductor business and become the second largest segment in the semiconductor industry behind integrated circuits, according to IC Insights.
NY Times:
- Sherwin-Williams(SHW) and two other former makers of lead-based paint potentially face having to pay billions of dollars to repaint or renovate Rhode Island homes after losing a case in February.
- US conservation groups such as the Nature Conservancy and the Conservation Fund are trying to work out agreements with companies to buy up timberland to protect them from further development.
- The Tampa Bay Devil Rays baseball team have Wall Street experience in the front office where financial models and data mining join scouting and trades.
Reuters:
- Harrah’s Entertainment(HET), the world’s largest casino operator, said it would cost more than $3 billion to build a gaming resort in Singapore if its bid proved to be a winner.
Financial Times:
- Texas Pacific Group may this month say it has raised over $14 billion for a new buy-out fund.
- Time Warner’s(TWX) Time Warner Cable unit will aim to boost its mobile phone services by purchasing wireless spectrum or through acquisitions, citing an interview with CEO Parsons.
- Mergers and acquisitions are proving to be more successful and are creating greater investor value than during previous periods of high activity, citing a survey by London’s Cass Business School and consultants Towers Perrin.
Independent:
- Richard Branson, the UK billionaire who controls Virgin Group Ltd., plans to invest $400 million in factories producing ethanol, which may be used as fuel for his trains and planes.
AFP:
- US Secretary of State Condoleezza Rice and UK Foreign Secretary Jack Straw arrived in Baghdad on a surprise visit today to put pressure on Iraqi leaders to speed up the formation of a new government.
Middle East Economic Digest:
- Fluor Corp.(FLR) may win a contract worth $500 million to build a petrochemical plant in Saudi Arabia.
Weekend Recommendations
Barron's:
- Had positive comments on (ADM), (HSP), (TUP) and (MSFT).
Night Trading
Asian indices are +.50% to +1.25% on average.
S&P 500 indicated +.45%.
NASDAQ 100 indicated +.47%.
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
- (IMGC)/.18
- (JOSB)/.98
- (MU)/.06
- (TARO)/.11
Upcoming Splits
- (DBRN) 2-for-1
- (NX) 3-for-2
- (FCEN) 3-for-2
- (BHE) 3-for-2
- (BWS) 3-for-2
Economic Releases
10:00 am EST
- Construction Spending for February is estimated to rise .5% versus a .2% gain in January.
- Pending Home Sales for February are estimated to fall .5% versus a 1.1% decline in January.
- ISM Manufacturing for March is estimated to rise to 57.5 versus a reading of 56.7 in February.
- ISM Prices Paid for March is estimated to fall to 61.0 versus a reading of 62.5 in February.
Afternoon
- Total Vehicle Sales for March are estimated to rise to 16.7M versus 16.6M in February.
BOTTOM LINE: Asian Indices are higher, boosted by financial shares in the region. I expect US stocks to open higher and to weaken slightly into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the week.
Sunday, April 02, 2006
Weekly Outlook
Click here for The Week Ahead by Reuters
There are some economic reports of note and a few significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - Construction Spending, Pending Home Sales, ISM Manufacturing, ISM Prices Paid, Vehicle Sales
Tues. - None of note
Wed. - ISM Non-Manufacturing
Thur. - Initial Jobless Claims
Fri. - Change in Non-farm Payrolls, Change in Manufacturing Payrolls, Unemployment Rate, Average Hourly Earnings, Wholesale Inventories, Consumer Credit
Some of the more noteworthy companies that release quarterly earnings this week are:
Mon. - Intermagnetics General(IMGC), Jos. A. Bank(JOSB), Micron Technology(MU)
Tues. - Delta & Pine Land(DLP), Dresser-Rand(DRC), Telephone & Data(TDS)
Wed. - Acuity Brands(AYI), Bed, Bath & Beyond(BBBY), Monsanto(MON)
Thur. - American Greetings(AM), Constellation Brands(STZ), Immucor(BLUD), Pier 1 Imports(PIR), Rite Aid(RAD), Stolt Offshore(SOSA), Terex Corp.(TEX), Triarc Companies(TRY)
Fri. - Longview Fiber(LFB), Mills Corp.(MLS), Shaw Group(SGR), Verint Systems(VRNT)
Other events that have market-moving potential this week include:
Mon. - Platts Global Power Markets Conference
Tue. - CIBC Biotech & Specialty Pharma Conference, CSFB Real Estate Conference
Wed. - CIBC Biotech & Specialty Pharma Conference, CSFB Real Estate Conference
Thur. - CSFB Real Estate Conference, Goldman Small-cap Growth Conference
Fri. - None of note
There are some economic reports of note and a few significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - Construction Spending, Pending Home Sales, ISM Manufacturing, ISM Prices Paid, Vehicle Sales
Tues. - None of note
Wed. - ISM Non-Manufacturing
Thur. - Initial Jobless Claims
Fri. - Change in Non-farm Payrolls, Change in Manufacturing Payrolls, Unemployment Rate, Average Hourly Earnings, Wholesale Inventories, Consumer Credit
Some of the more noteworthy companies that release quarterly earnings this week are:
Mon. - Intermagnetics General(IMGC), Jos. A. Bank(JOSB), Micron Technology(MU)
Tues. - Delta & Pine Land(DLP), Dresser-Rand(DRC), Telephone & Data(TDS)
Wed. - Acuity Brands(AYI), Bed, Bath & Beyond(BBBY), Monsanto(MON)
Thur. - American Greetings(AM), Constellation Brands(STZ), Immucor(BLUD), Pier 1 Imports(PIR), Rite Aid(RAD), Stolt Offshore(SOSA), Terex Corp.(TEX), Triarc Companies(TRY)
Fri. - Longview Fiber(LFB), Mills Corp.(MLS), Shaw Group(SGR), Verint Systems(VRNT)
Other events that have market-moving potential this week include:
Mon. - Platts Global Power Markets Conference
Tue. - CIBC Biotech & Specialty Pharma Conference, CSFB Real Estate Conference
Wed. - CIBC Biotech & Specialty Pharma Conference, CSFB Real Estate Conference
Thur. - CSFB Real Estate Conference, Goldman Small-cap Growth Conference
Fri. - None of note
BOTTOM LINE: I expect US stocks to finish the week mixed as mostly positive economic data, stable energy prices and short-covering offsets higher long-term rates and profit-taking. My trading indicators are now giving bullish signals and the Portfolio is 75% net long heading into the week.
Friday, March 31, 2006
First Quarter Scoreboard
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
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
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.
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