BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Semi longs, Networking longs and Energy-related shorts. I added to my (QQQQ) and (IWM) shorts today, thus leaving the Portfolio 50% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are falling and volume is about average. The Saudi Tadawul Index is plunging over 8% today, its biggest one day drop ever. Saudi shares are still trading at around 40x estimated earnings. I continue to believe the mania for emerging market stocks, which is mainly the result of record commodity speculation, will end badly. I expect US stocks to trade mixed into the close from current levels as rising energy prices offsets short-covering.
Monday, April 10, 2006
Stocks Mostly Lower into Final Hour on Profit-taking as Oil Rises
Today's Headlines
Bloomberg:
- Saudi Arabia’s main stock index had its biggest drop ever, falling almost 9%, on concern that share prices have outpaced prospects for earnings growth.
- US Federal Reserve Bank of Dallas President Richard Fisher said in a NY Times column that more globalized nations tend to achieve faster economic growth, lower inflation and higher incomes than those which are less so.
- Boeing(BA) will get a $5 billion order from Hainan Airlines and seven Chinese carriers tomorrow for as many as 80 planes, airline executives said.
- President Bush said he wants a diplomatic solution to Iran’s nuclear power ambitions and called published reports that the US many be contemplating military strikes “wild speculation.”
- The first exchange-traded fund that tracks US oil prices debuted today on the American Stock Exchange, providing another way to invest in a market that has drawn increasing interest from speculators.
- Crude oil is rising on speculation of potential supply disruptions and debut of the oil ETF.
Wall Street Journal:
- Novartis AG, Switzerland’s largest drugmaker, said it asked for regulatory approval to sell its Gleevec treatment for four types of cancer.
- Webaroo Inc., a closely held US Internet company, plans to release a service that allows customers to search and browse Web sites while not connected to the Internet.
- Alcoa Inc.(AA) will say today it plans to expand into China with a $95 million joint venture near Shanghai.
- Sprint Nextel(S) will ally with Time Warner(TWX), Comcast(CMCSA) and other US cable operators for a test program of a new wireless service for television and Internet.
- Walt Disney(DIS) plans to make much of its programming on ABC and other channels available for free on the Internet.
- The US Citizenship and Immigration Services received a record 6.6 million hits on its Web site in March as legal immigrants seek citizenship amid the debate over new residency laws.
- Wal-Mart Stores(WMT) plans to match employees’ work shifts with customer traffic patterns and boost part-time workers’ schedules as the CEO of the company’s US stores tries to improve shoppers’ experience.
Lloyd’s List:
- Shell Gas & Power International expects global supplies of liquefied natural gas to rise almost 282% through 2020.
NY Times:
- Orkut, Google’s(GOOG) on-line friends network, is more popular in Brazil than any other country.
Financial Times:
- DirectTV Group, EchoStar Communications(DISH) and other satellite-tv providers are being squeezed between cable operators and telecom companies, both seeking to offer telephone, broadband Internet and video services.
- US forests are becoming an increasingly popular investment, yet most of the price gains may already be history.
Les Echos:
- French Prime Minister Dominique de Villepin will propose scrapping the much-disputed new labor young worker contract which has brought violent demonstrations to the streets of France.
Nihon Keizai:
- Samsung Electronics of South Korea and Japan’s Sony Corp.(SNE) have agreed to build a second liquid-crystal display factory.
Oman Daily:
- The Oman government will invest $10 billion over the next five years to boost domestic oil production, citing Oil Ministeer Mohammed al-Rumhy.
- Saudi Arabia’s main stock index had its biggest drop ever, falling almost 9%, on concern that share prices have outpaced prospects for earnings growth.
- US Federal Reserve Bank of Dallas President Richard Fisher said in a NY Times column that more globalized nations tend to achieve faster economic growth, lower inflation and higher incomes than those which are less so.
- Boeing(BA) will get a $5 billion order from Hainan Airlines and seven Chinese carriers tomorrow for as many as 80 planes, airline executives said.
- President Bush said he wants a diplomatic solution to Iran’s nuclear power ambitions and called published reports that the US many be contemplating military strikes “wild speculation.”
- The first exchange-traded fund that tracks US oil prices debuted today on the American Stock Exchange, providing another way to invest in a market that has drawn increasing interest from speculators.
- Crude oil is rising on speculation of potential supply disruptions and debut of the oil ETF.
Wall Street Journal:
- Novartis AG, Switzerland’s largest drugmaker, said it asked for regulatory approval to sell its Gleevec treatment for four types of cancer.
- Webaroo Inc., a closely held US Internet company, plans to release a service that allows customers to search and browse Web sites while not connected to the Internet.
- Alcoa Inc.(AA) will say today it plans to expand into China with a $95 million joint venture near Shanghai.
- Sprint Nextel(S) will ally with Time Warner(TWX), Comcast(CMCSA) and other US cable operators for a test program of a new wireless service for television and Internet.
- Walt Disney(DIS) plans to make much of its programming on ABC and other channels available for free on the Internet.
- The US Citizenship and Immigration Services received a record 6.6 million hits on its Web site in March as legal immigrants seek citizenship amid the debate over new residency laws.
- Wal-Mart Stores(WMT) plans to match employees’ work shifts with customer traffic patterns and boost part-time workers’ schedules as the CEO of the company’s US stores tries to improve shoppers’ experience.
Lloyd’s List:
- Shell Gas & Power International expects global supplies of liquefied natural gas to rise almost 282% through 2020.
NY Times:
- Orkut, Google’s(GOOG) on-line friends network, is more popular in Brazil than any other country.
Financial Times:
- DirectTV Group, EchoStar Communications(DISH) and other satellite-tv providers are being squeezed between cable operators and telecom companies, both seeking to offer telephone, broadband Internet and video services.
- US forests are becoming an increasingly popular investment, yet most of the price gains may already be history.
Les Echos:
- French Prime Minister Dominique de Villepin will propose scrapping the much-disputed new labor young worker contract which has brought violent demonstrations to the streets of France.
Nihon Keizai:
- Samsung Electronics of South Korea and Japan’s Sony Corp.(SNE) have agreed to build a second liquid-crystal display factory.
Oman Daily:
- The Oman government will invest $10 billion over the next five years to boost domestic oil production, citing Oil Ministeer Mohammed al-Rumhy.
Sunday, April 09, 2006
Monday Watch
Weekend Headlines
Bloomberg:
- The US economy has plenty of room to add jobs without stretching the workforce and fueling inflation, St. Louis Fed Bank President Poole said.
- The US may use “bunker-buster” tactical nuclear bombs to put an end to Iran’s nuclear weapons program, citing the New Yorker magazine.
- British Foreign Secretary Jack Straw said he is “certain” that neither the US nor Britain would preemptively attack Iran.
- The US dollar rose for a third straight week against the yen and gained versus the euro as a strengthening US job market added to speculation the Fed will raise rates twice more this year.
- President Bush said Democratic Senate Minority Leader Harry Reid is responsible for the collapse of an immigration overhaul compromise this week, and asked him to “end his blocking tactics” and allow the bill to move forward.
- Comcast Corp.(CMCSA), Time Warner(TWX) and two other US cable-tv providers will begin selling mobile-phone services in the second half, heating up competition with phone companies including Verizon Communications(VZ).
- China’s yuan may fall 2.3% by the year-end because economic growth will slow, said chief economist Jim Walker at CLSA Ltd., the Asian investment banking arm of France’s biggest lender by assets, Credit Agricole SA.
Wall Street Journal:
- Dunkin’ Brands Inc., which franchises Dunkin’ Donuts outlets, is attempting to attract customers from Starbucks Corp.(SBUX) without alienating lower-income, working-class clients.
Investment Dealers' Digest:
- Ethanol companies are lining up for IPOs.
Financial Times:
- Venture capital trusts raised a record $1.27 billion from investors in the financial year ended April 5.
- A larger than forecast increase in Internet advertising and the forthcoming World Cup finals in Germany have helped boost global spending on advertising.
- International Business Machines(IBM) will reveal technology that improves security for handheld devices including mobile phones, citing the head of security and privacy at IBM Research.
Canadian Broadcasting Corp.:
- It’s impossible for Canada to meet anti-pollution targets set by the Kyoto accord and the nation must set more realistic goals to cut the emission of greenhouse gases, citing Environment Minister Rona Ambrose.
El Mundo:
- Novartis AG Chairman Daniel Vaseslla said the company invests in research centers in the US and Asia because Europe lacks business drive.
Weekend Recommendations
Barron's:
- Had positive comments on (JBX), (HET) and (GS).
- Had negative comments on (DRI).
Night Trading
Asian indices are -.50% to unch. on average.
S&P 500 indicated -.05%.
NASDAQ 100 indicated -.07%.
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
- (AA)/.51
- (GY)/-.15
- (JBHT)/.31
- (MU)/.06
- (SCHN)/.71
- (SGR)/.37
Upcoming Splits
- (ATW) 2-for-1
- (SLB) 2-for-1
- (CTRP) 2-for-1
- (MTW) 2-for-1
Economic Releases
- None of note
Bloomberg:
- The US economy has plenty of room to add jobs without stretching the workforce and fueling inflation, St. Louis Fed Bank President Poole said.
- The US may use “bunker-buster” tactical nuclear bombs to put an end to Iran’s nuclear weapons program, citing the New Yorker magazine.
- British Foreign Secretary Jack Straw said he is “certain” that neither the US nor Britain would preemptively attack Iran.
- The US dollar rose for a third straight week against the yen and gained versus the euro as a strengthening US job market added to speculation the Fed will raise rates twice more this year.
- President Bush said Democratic Senate Minority Leader Harry Reid is responsible for the collapse of an immigration overhaul compromise this week, and asked him to “end his blocking tactics” and allow the bill to move forward.
- Comcast Corp.(CMCSA), Time Warner(TWX) and two other US cable-tv providers will begin selling mobile-phone services in the second half, heating up competition with phone companies including Verizon Communications(VZ).
- China’s yuan may fall 2.3% by the year-end because economic growth will slow, said chief economist Jim Walker at CLSA Ltd., the Asian investment banking arm of France’s biggest lender by assets, Credit Agricole SA.
Wall Street Journal:
- Dunkin’ Brands Inc., which franchises Dunkin’ Donuts outlets, is attempting to attract customers from Starbucks Corp.(SBUX) without alienating lower-income, working-class clients.
Investment Dealers' Digest:
- Ethanol companies are lining up for IPOs.
Financial Times:
- Venture capital trusts raised a record $1.27 billion from investors in the financial year ended April 5.
- A larger than forecast increase in Internet advertising and the forthcoming World Cup finals in Germany have helped boost global spending on advertising.
- International Business Machines(IBM) will reveal technology that improves security for handheld devices including mobile phones, citing the head of security and privacy at IBM Research.
Canadian Broadcasting Corp.:
- It’s impossible for Canada to meet anti-pollution targets set by the Kyoto accord and the nation must set more realistic goals to cut the emission of greenhouse gases, citing Environment Minister Rona Ambrose.
El Mundo:
- Novartis AG Chairman Daniel Vaseslla said the company invests in research centers in the US and Asia because Europe lacks business drive.
Weekend Recommendations
Barron's:
- Had positive comments on (JBX), (HET) and (GS).
- Had negative comments on (DRI).
Night Trading
Asian indices are -.50% to unch. on average.
S&P 500 indicated -.05%.
NASDAQ 100 indicated -.07%.
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
- (AA)/.51
- (GY)/-.15
- (JBHT)/.31
- (MU)/.06
- (SCHN)/.71
- (SGR)/.37
Upcoming Splits
- (ATW) 2-for-1
- (SLB) 2-for-1
- (CTRP) 2-for-1
- (MTW) 2-for-1
Economic Releases
- None of note
BOTTOM LINE: Asian Indices are mostly lower, weighed down by technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. My trading indicators are giving mostly bullish signals. The Portfolio is 75% net long heading into the week.
Thursday, April 06, 2006
***Alert***
I will be unable to post through the weekend due to a scheduling conflict. Sorry for the inconvenience. I will post the Monday Watch late Sunday evening.
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