Bloomberg:
- Bird flue is spreading more slowly as warmer weather in the Northern Hemisphere reduces the virus’s ability to survive in the environment.
- Crude oil may fall further as US refiners increase gasoline production in preparation for the summer driving season, raising stockpiles of the motor fuel, a Bloomberg survey shows.
- European Union finance ministers rejected a proposal to impose a windfall profit tax on oil companies.
- General Motors’ debt may be downgraded deeper into junk status by Moody’s after the automaker said it may have to use collateral when it renegotiates terms of a $5.6 billion line of credit.
- US Treasuries rose after lower-than-forecast job gains last month fueled speculation the Fed will “pause.”
- Crude oil production from OPEC increased 290,000 barrels a day in April from March. Production in Iraq rose 13% from the prior month.
Wall Street Journal:
- US mutual funds focused on growth, which used to be regarded as technology funds by another name, are returning to industries they haven’t looked at for decades.
NY Times:
- The Bush administration’s No Child Left Behind law, which requires testing of public school students, has created a demand for experts in developing, administering and scoring exams.
- Time Warner’s(TWX) AOL unit plans to offer the 41 million users of its instant messaging system a free phone number so that people can stay in touch with subscribers while they’re surfing the Internet.
- Johnson & Johnson(JNJ) told workers yesterday that it’s splitting its pharmaceuticals business into three major groups to boost profits by a tighter focus on drug development.
Chicago Sun-Times:
- Wm. Wrigley Jr. Co.(WWY) is testing a new gum flavored with coffee powder at convenience stores nationwide.
Ritzau:
- Denmark plans to extend its troop presence in Iraq by another year.
Ath-Thawra:
- Syria plans to build a $472 million farm to generate electricity from wind-powered turbines, with private investors from Germany.
Friday, May 05, 2006
Job Market Slows, But Remains Healthy
- The Change in Non-farm Payrolls for April was 138K versus estimates of 200K and 200K in March.
- The Unemployment Rate for April was 4.7% versus estimates of 4.7% and 4.7% in March.
- The Change in Manufacturing Payrolls for April was 19K versus estimates of 0K and 1K in March.
- Average Hourly Earnings for April rose .5% versus estimates of a .3% increase and a .3% gain in March.
- The Unemployment Rate for April was 4.7% versus estimates of 4.7% and 4.7% in March.
- The Change in Manufacturing Payrolls for April was 19K versus estimates of 0K and 1K in March.
- Average Hourly Earnings for April rose .5% versus estimates of a .3% increase and a .3% gain in March.
BOTTOM LINE: Employers in the US added fewer jobs than expected last month, while wages jumped because factories filled more high-paying positions as the unemployment rate held steady, Bloomberg said. Averages wages rose 3.8% year-over-year, the largest gain since August 2001. In my opinion, this is just the type of report we needed, not too hot or cold. I continue to believe the labor market is in the process of slowing, but will remain healthy without creating substantial unit labor cost increases, which account for two-thirds of inflation.
Thursday, May 04, 2006
Friday Watch
Late-Night Headlines
Bloomberg:
- Former NYSE members sold $1.54 billion NYSE Group(NYX) shares that they received when the exchange merged with Archipelago Holdings.
Wall Street Journal:
- Seizures of farmland by the Chinese government are increasing, driven by demand for profit amid the nation’s economic boom.
Financial Times:
- Empty retail floor space in the UK is at “recession” levels, citing the Royal Institution of Chartered Surveyors.
The Guardian:
- Time Warner’s(TWX) AOL has hired Citigroup Inc. to advise on the sale of its Internet access units in France and Germany.
Business Week:
- Phelps Dodge(PD), a copper producer, could rise on growing demand for the metal in industrializing regions like Brazil, India, Eastern Europe and China, citing Arnold Schmeidler of AR Schmeidler.
- Some small US colleges such as Yeshiva Univ. in NYC are taking a cue from Harvard and Yale universities and investing their endowments in hedge funds.
- The shares of Morton’s Restaurant Group(MRT), a steakhouse chain, are cheap, citing Aimee Marcel of Jeffries Group.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are -.25% to +.75% 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
- (ATK)/.71
- (BKD)/-.13
- (XEC)/1.22
- (EP)/.27
- (KCS)/.66
- (MHS)/.55
- (MLS)/1.34
- (NBR)/.74
- (PIXR)/.11
- (CKH)/1.56
- (SINA)/.15
- (THQI)/-.09
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for April is estimated at 200K versus 211K in March.
- The Change in Manufacturing Payrolls for April is estimated at 0K versus -5K in March.
- The Unemployment Rate for April is estimated at 4.7% versus 4.7% in March.
- Average Hourly Earnings for April are estimated to rise .3% versus a .2% gain in March.
3:00 pm EST
- Consumer Credit for March is estimated to rise to $4.1B versus $3.3B in February.
Bloomberg:
- Former NYSE members sold $1.54 billion NYSE Group(NYX) shares that they received when the exchange merged with Archipelago Holdings.
Wall Street Journal:
- Seizures of farmland by the Chinese government are increasing, driven by demand for profit amid the nation’s economic boom.
Financial Times:
- Empty retail floor space in the UK is at “recession” levels, citing the Royal Institution of Chartered Surveyors.
The Guardian:
- Time Warner’s(TWX) AOL has hired Citigroup Inc. to advise on the sale of its Internet access units in France and Germany.
Business Week:
- Phelps Dodge(PD), a copper producer, could rise on growing demand for the metal in industrializing regions like Brazil, India, Eastern Europe and China, citing Arnold Schmeidler of AR Schmeidler.
- Some small US colleges such as Yeshiva Univ. in NYC are taking a cue from Harvard and Yale universities and investing their endowments in hedge funds.
- The shares of Morton’s Restaurant Group(MRT), a steakhouse chain, are cheap, citing Aimee Marcel of Jeffries Group.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are -.25% to +.75% 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
- (ATK)/.71
- (BKD)/-.13
- (XEC)/1.22
- (EP)/.27
- (KCS)/.66
- (MHS)/.55
- (MLS)/1.34
- (NBR)/.74
- (PIXR)/.11
- (CKH)/1.56
- (SINA)/.15
- (THQI)/-.09
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for April is estimated at 200K versus 211K in March.
- The Change in Manufacturing Payrolls for April is estimated at 0K versus -5K in March.
- The Unemployment Rate for April is estimated at 4.7% versus 4.7% in March.
- Average Hourly Earnings for April are estimated to rise .3% versus a .2% gain in March.
3:00 pm EST
- Consumer Credit for March is estimated to rise to $4.1B versus $3.3B in February.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and mining stocks in the region. I expect US equities to open mixed and to trade modestly higher into the afternoon. The Portfolio is 75% net long heading into the day.
Stocks Finish Near Session Highs as Oil Falls Below $70 and Long-term Rates Stabilize
Indices
S&P 500 1,312.25 +.34%
DJIA 11,438.86 +.34%
NASDAQ 2,323.90 +.87%
Russell 2000 774.72 +.91%
Wilshire 5000 13,288.63 +.41%
S&P Barra Growth 607.43 +.27%
S&P Barra Value 703.00 +.40%
Morgan Stanley Consumer 611.13 +.31%
Morgan Stanley Cyclical 875.97 +1.04%
Morgan Stanley Technology 548.09 +.47%
Transports 4,908.24 +3.34%
Utilities 402.12 +.01%
Put/Call .62 -30.34%
NYSE Arms 1.03 -11.40%
Volatility(VIX) 11.86 -1.08%
ISE Sentiment 160.00 -26.61%
US Dollar 85.84 unch.
CRB 349.89 -.66%
Futures Spot Prices
Crude Oil 70.47 +.76%
Unleaded Gasoline 201.10 +.82%
Natural Gas 7.10 +2.77%
Heating Oil 195.00 +.63%
Gold 681.70 +.77%
Base Metals 229.56 +5.98%
Copper 348.50 +.16%
10-year US Treasury Yield 5.15% +.21%
Leading Sectors
Gold & Silver +2.64%
Disk Drives +2.30%
Steel +2.12%
Lagging Sectors
Software -.42%
Oil Service -.36%
Energy -.58%
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
Bear Stearns:
- Rated GSL Outperform, target $55.
Afternoon/Evening Headlines
Bloomberg:
- The House of Representatives passed legislation today that would tighten security at US seaports, requiring more “dirty” and nuclear bomb detectors and background checks on dockside workers.
- Taiwanese lenders are funding companies rejected by bond and equity investors as the banks seek corporate clients to offset rising consumer defaults.
- Microsoft(MSFT) agreed to buy Massive, a closely held seller of video-game ads, to gain early entry into a new ad market.
- Seven Senators from both sides of the aisle responded to surging gas prices with a proposal to reduce US oil consumption through conservation.
- Crude oil fell more than $2/bbl. as US oil inventories approach 9-year highs and gasoline demand is waning.
- A further increase in oil prices may hurt global economic growth more than the recent rise to $70 a barrel, NY Fed Reserve Bank President Geithner said in an interview published on Business Week’s Web site.
S&P 500 1,312.25 +.34%
DJIA 11,438.86 +.34%
NASDAQ 2,323.90 +.87%
Russell 2000 774.72 +.91%
Wilshire 5000 13,288.63 +.41%
S&P Barra Growth 607.43 +.27%
S&P Barra Value 703.00 +.40%
Morgan Stanley Consumer 611.13 +.31%
Morgan Stanley Cyclical 875.97 +1.04%
Morgan Stanley Technology 548.09 +.47%
Transports 4,908.24 +3.34%
Utilities 402.12 +.01%
Put/Call .62 -30.34%
NYSE Arms 1.03 -11.40%
Volatility(VIX) 11.86 -1.08%
ISE Sentiment 160.00 -26.61%
US Dollar 85.84 unch.
CRB 349.89 -.66%
Futures Spot Prices
Crude Oil 70.47 +.76%
Unleaded Gasoline 201.10 +.82%
Natural Gas 7.10 +2.77%
Heating Oil 195.00 +.63%
Gold 681.70 +.77%
Base Metals 229.56 +5.98%
Copper 348.50 +.16%
10-year US Treasury Yield 5.15% +.21%
Leading Sectors
Gold & Silver +2.64%
Disk Drives +2.30%
Steel +2.12%
Lagging Sectors
Software -.42%
Oil Service -.36%
Energy -.58%
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
Bear Stearns:
- Rated GSL Outperform, target $55.
Afternoon/Evening Headlines
Bloomberg:
- The House of Representatives passed legislation today that would tighten security at US seaports, requiring more “dirty” and nuclear bomb detectors and background checks on dockside workers.
- Taiwanese lenders are funding companies rejected by bond and equity investors as the banks seek corporate clients to offset rising consumer defaults.
- Microsoft(MSFT) agreed to buy Massive, a closely held seller of video-game ads, to gain early entry into a new ad market.
- Seven Senators from both sides of the aisle responded to surging gas prices with a proposal to reduce US oil consumption through conservation.
- Crude oil fell more than $2/bbl. as US oil inventories approach 9-year highs and gasoline demand is waning.
- A further increase in oil prices may hurt global economic growth more than the recent rise to $70 a barrel, NY Fed Reserve Bank President Geithner said in an interview published on Business Week’s Web site.
BOTTOM LINE: The Portfolio finished higher today on gains in my Retail longs, Semi longs, Medical longs and Energy-related shorts. I added (IWM) and (QQQQ) shorts in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was positive today as the advance/decline line finished higher, almost every sector rose and volume was above average. Measures of investor anxiety were mostly lower into the close. Overall, today's market performance was bullish. I want to see the bond market’s reaction to tomorrow’s likely strong employment data before shifting market exposure further. Muted losses in energy-related stocks, notwithstanding the recent sharp pullback in oil prices, show complacency is high in the sector.
Stocks Higher into Final Hour on Falling Energy Prices and Stabilizing Long-term Rates
BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Semi longs, Medical longs, Retail longs and Energy-related shorts. I covered the remainder of my (IWM) and (QQQQ) shorts today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, sector performance is positive and volume is above average. Quanta Services (PWR) is trading up 7.4% today, to a 4-year high of around $18. Quanta beat first-quarter consensus estimates by 133%. The firm exceeded revenue estimates by 10.4% and raised 2Q guidance. I expect increased spending by utility companies on transmission infrastructure, accelerating spending by telecom companies on FTTP and hurricane rebuilding to continue to propel estimates above expectations this year. I will wait for a pullback in the shares before adding to my current long position. I expect US stocks to trade mixed into the close from current levels as falling energy prices offset profit-taking ahead of tomorrow’s employment report.
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