BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Retail longs, Biotech longs and Commodity shorts. I covered my (QQQQ)/(IWM) hedges and added (BRCM) long today, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is modestly higher, most sectors are rising and volume is light. The airline index has declined 16% over the last two months on high oil prices, terrorism worries and economic growth concerns. As these worries subside over the coming months, I suspect these shares will see a nice bounce from current levels. AMR Corp. (AMR) is my favorite. I am not currently long the stock. I expect US stocks to trade mixed-to-higher into the close from current levels on bargain hunting, short covering and declining energy prices.
Friday, September 08, 2006
Stocks Modestly Higher into Final Hour on Another Fall in Energy Prices
Today's Headlines
Bloomberg:
- Crude oil is falling to a five-month low on speculation that US fuel supplies will be sufficient to meet demand as global growth slows.
- Treasury Secretary Henry Paulson’s support for a strong US dollar is causing anxiety among former colleagues at Goldman Sachs(GS), who have been telling clients to sell the dollar.
- Lennar Corp.(LEN) said profit fell in the fiscal third quarter, the first decline in six years, on increased incentives.
- Hilton Hotels(HLT), the second-biggest US lodging company, may regain investment-grade ratings as an increase in travel enables the company to reduce debt, according to traders betting on the creditworthiness of companies in the credit-default swap market.
- China, responding to criticism from the US and Europe that the yuan is artificially weak, said it will be “more proactive and progressive” in letting the market set the currency’s value.
Wall Street Journal:
- Yahoo! and the US National Football League are to provide all regular-season games to viewers outside North America by making them available over the Internet.
- The US government is trying to isolate a network of banks and companies that it believes Iran controls and uses to acquire weapons technology.
NY Times:
- Former Democratic Treasury Secretary Robert Rubin is training hedge fund managers who once worked for him at Goldman Sachs(GS) in the ways of Washington politics. The Hamilton Project aims to provide policy suggestions to the Democratic Party.
- A federal judge in Oregon denied the US government’s request to dismiss an Islamic charity’s lawsuit challenging surveillance of some of its international communications without warrants.
Business Week:
- Burger King Holdings’(BKC) management and staff have skills that will help boost sales and earnings, said Linda Killian, an adviser for the IPO Fund.
NY Post:
- New York Board of Trade membership prices rose $100,000 to $850,000 earlier this week after four seats were sold Wednesday.
Xinhua:
- China’s economy has “prominent problems” and the government must step up macro-economic controls to resolve them later this year, citing Qiu Xiaohua, director of the National Bureau of Statistics.
AFP:
- European Union foreign policy chief Javier Solana said there will be no UN sanctions against Iran as long as talks over the country’s nuclear program continue.
- Crude oil is falling to a five-month low on speculation that US fuel supplies will be sufficient to meet demand as global growth slows.
- Treasury Secretary Henry Paulson’s support for a strong US dollar is causing anxiety among former colleagues at Goldman Sachs(GS), who have been telling clients to sell the dollar.
- Lennar Corp.(LEN) said profit fell in the fiscal third quarter, the first decline in six years, on increased incentives.
- Hilton Hotels(HLT), the second-biggest US lodging company, may regain investment-grade ratings as an increase in travel enables the company to reduce debt, according to traders betting on the creditworthiness of companies in the credit-default swap market.
- China, responding to criticism from the US and Europe that the yuan is artificially weak, said it will be “more proactive and progressive” in letting the market set the currency’s value.
Wall Street Journal:
- Yahoo! and the US National Football League are to provide all regular-season games to viewers outside North America by making them available over the Internet.
- The US government is trying to isolate a network of banks and companies that it believes Iran controls and uses to acquire weapons technology.
NY Times:
- Former Democratic Treasury Secretary Robert Rubin is training hedge fund managers who once worked for him at Goldman Sachs(GS) in the ways of Washington politics. The Hamilton Project aims to provide policy suggestions to the Democratic Party.
- A federal judge in Oregon denied the US government’s request to dismiss an Islamic charity’s lawsuit challenging surveillance of some of its international communications without warrants.
Business Week:
- Burger King Holdings’(BKC) management and staff have skills that will help boost sales and earnings, said Linda Killian, an adviser for the IPO Fund.
NY Post:
- New York Board of Trade membership prices rose $100,000 to $850,000 earlier this week after four seats were sold Wednesday.
Xinhua:
- China’s economy has “prominent problems” and the government must step up macro-economic controls to resolve them later this year, citing Qiu Xiaohua, director of the National Bureau of Statistics.
AFP:
- European Union foreign policy chief Javier Solana said there will be no UN sanctions against Iran as long as talks over the country’s nuclear program continue.
Thursday, September 07, 2006
Friday Watch
Late-Night Headlines
Bloomberg:
- Crude oil traded near a five-month low in NY after a government report showed supplies of gasoline in the US unexpectedly rose in the last week of the country’s peak summer demand.
- The US Senate unanimously approved an extra $200 million to intensify the hunt for Osama bin Laden, as al-Qaeda released a video tape showing the group’s leader meeting some of the Sept. 11, 2001, hijackers.
- Amazon.com(AMZN) introduced a digital-video download service, offering thousands of television shows, movies and other content from more than 30 studio and network partners.
- Three naturalized US citizens were indicted by a federal grand jury in California for allegedly acquiring secret US defense information and stolen military equipment and conspiring to send them to Yemen.
- Former Iranian President Mohammad Khatami said the US and Europe should offer to negotiate with Iran about its nuclear program without any conditions. On Sunday, Sept. 10, the eve of the fifth anniversary of the Sept. 11 terrorist attacks, Khatami will make an address at Harvard University.
- China’s producer-price inflation unexpectedly slowed for the first time in four months in August as gains in gasoline and raw material prices eased.
- Crude oil prices may continue to fall on speculation that US fuel inventories are sufficient to meet demand in coming months, a Bloomberg survey showed.
Wall Street Journal:
- Last year, more than 3,000 terrorist suspects wanted internationally were arrested, more than triple the number in 2001, wrote Intepol Secretary-General Ronald Noble.
Fortune:
- Frank Quattrone, the former Credit Suisse Group investment banker who struck a deal last month that would clear him of charges he obstructed justice, may reunite with former colleagues.
Apple Daily:
- Motorola(MOT) is evaluating possible acquisitions of handset, network and home-entertainment companies in Taiwan.
Xinhua:
- China’s economy is not overheating in general and the government’s macroeconomic control will show more results in the second half of the year, citing vice premier Wu Yi.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (URBN), target $24.
Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.13%.
NASDAQ 100 indicated +.08%.
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
- (VOL)/.61
Upcoming Splits
- None of note
Economic Releases
3:00 pm EST
- Consumer Credit for July is estimated to fall to $6.8B versus $10.2B in June.
Bloomberg:
- Crude oil traded near a five-month low in NY after a government report showed supplies of gasoline in the US unexpectedly rose in the last week of the country’s peak summer demand.
- The US Senate unanimously approved an extra $200 million to intensify the hunt for Osama bin Laden, as al-Qaeda released a video tape showing the group’s leader meeting some of the Sept. 11, 2001, hijackers.
- Amazon.com(AMZN) introduced a digital-video download service, offering thousands of television shows, movies and other content from more than 30 studio and network partners.
- Three naturalized US citizens were indicted by a federal grand jury in California for allegedly acquiring secret US defense information and stolen military equipment and conspiring to send them to Yemen.
- Former Iranian President Mohammad Khatami said the US and Europe should offer to negotiate with Iran about its nuclear program without any conditions. On Sunday, Sept. 10, the eve of the fifth anniversary of the Sept. 11 terrorist attacks, Khatami will make an address at Harvard University.
- China’s producer-price inflation unexpectedly slowed for the first time in four months in August as gains in gasoline and raw material prices eased.
- Crude oil prices may continue to fall on speculation that US fuel inventories are sufficient to meet demand in coming months, a Bloomberg survey showed.
Wall Street Journal:
- Last year, more than 3,000 terrorist suspects wanted internationally were arrested, more than triple the number in 2001, wrote Intepol Secretary-General Ronald Noble.
Fortune:
- Frank Quattrone, the former Credit Suisse Group investment banker who struck a deal last month that would clear him of charges he obstructed justice, may reunite with former colleagues.
Apple Daily:
- Motorola(MOT) is evaluating possible acquisitions of handset, network and home-entertainment companies in Taiwan.
Xinhua:
- China’s economy is not overheating in general and the government’s macroeconomic control will show more results in the second half of the year, citing vice premier Wu Yi.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (URBN), target $24.
Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.13%.
NASDAQ 100 indicated +.08%.
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
- (VOL)/.61
Upcoming Splits
- None of note
Economic Releases
3:00 pm EST
- Consumer Credit for July is estimated to fall to $6.8B versus $10.2B in June.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.
Stocks Finish Lower on Growth Worries and Profit Taking
Indices
S&P 1,300.1294.02 -.48%
DJIA 11,331.44 -.66%
NASDAQ 2,155.29 -.58%
Russell 2000 706.47 -.78%
Wilshire 5000 12,935.19 -.50%
S&P Barra Growth 600.53 -.45%
S&P Barra Value 691.48 -.51%
Morgan Stanley Consumer 640.13 -.44%
Morgan Stanley Cyclical 802.11 -.61%
Morgan Stanley Technology 498.29 -.69%
Transports 4,223.94 -.14%
Utilities 434.64 -.02%
Put/Call .90 -28.57%
NYSE Arms .95 -24.28%
Volatility(VIX) 13.88 +1.02%
ISE Sentiment 68.0 -33.98%
US Dollar 85.56 +.54%
CRB 323.61 -.56%
Futures Spot Prices
Crude Oil 67.18 -.47%
Unleaded Gasoline 164.50 +.30%
Natural Gas 5.70 -4.82%
Heating Oil 188.77 -1.22%
Gold 623.70 -.19%
Base Metals 239.84 +1.45%
Copper 365.20 +.11%
10-year US Treasury Yield 4.78% -.21%
Leading Sectors
Homebuilders +.06%
Gaming -.09%
Retail -.10%
Lagging Sectors
Steel -1.35%
Coal -1.97%
Gold & Silver -3.48%
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
Oppenheimer:
- Rated (ADSK) Outperform.
Afternoon/Evening Headlines
Bloomberg:
- Al-Qaeda has released a videotape purporting to show Osama bin Laden and other leaders plotting the hijackings of Sept. 11, 2001.
- San Francisco Fed Bank President Janet Yellen defended the central bank’s pause from two years of interest-rate increases and said inflation may recede “faster than many forecasters expect.”
- Alcatel SA(ALA) and Lucent Technologies(LU) shareholders approved the French company’s $10.5 billion purchase of its US competitor to create the world’s largest supplier of telephone networks.
- Former WorldCom Inc. CEO Ebbers, convicted of leading an $11 billion fraud, must start serving a 25-year term Sept. 26 after losing an appeal of his conviction.
- Gold and silver in NY tumbled the most in seven weeks as the dollar strengthened against the euro, eroding the appeal of precious metals as an alternative investment.
- Oil fell to a five-month low after an EIA report showed that supplies are higher than a year ago.
- Automakers must display crash-test scores on the window stickers of most new vehicles within a year as part of a US push to showcase safety data for consumers.
- The Bush administration outlined a program today that seeks to reduce US reliance on foreign oil by boosting the use of alternative fuels such as ethanol and biodiesel.
- Natural gas dropped to the lowest in more than seven weeks in NY as mild weather cut demand, allowing utilities to build inventories for winter.
S&P 1,300.1294.02 -.48%
DJIA 11,331.44 -.66%
NASDAQ 2,155.29 -.58%
Russell 2000 706.47 -.78%
Wilshire 5000 12,935.19 -.50%
S&P Barra Growth 600.53 -.45%
S&P Barra Value 691.48 -.51%
Morgan Stanley Consumer 640.13 -.44%
Morgan Stanley Cyclical 802.11 -.61%
Morgan Stanley Technology 498.29 -.69%
Transports 4,223.94 -.14%
Utilities 434.64 -.02%
Put/Call .90 -28.57%
NYSE Arms .95 -24.28%
Volatility(VIX) 13.88 +1.02%
ISE Sentiment 68.0 -33.98%
US Dollar 85.56 +.54%
CRB 323.61 -.56%
Futures Spot Prices
Crude Oil 67.18 -.47%
Unleaded Gasoline 164.50 +.30%
Natural Gas 5.70 -4.82%
Heating Oil 188.77 -1.22%
Gold 623.70 -.19%
Base Metals 239.84 +1.45%
Copper 365.20 +.11%
10-year US Treasury Yield 4.78% -.21%
Leading Sectors
Homebuilders +.06%
Gaming -.09%
Retail -.10%
Lagging Sectors
Steel -1.35%
Coal -1.97%
Gold & Silver -3.48%
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
Oppenheimer:
- Rated (ADSK) Outperform.
Afternoon/Evening Headlines
Bloomberg:
- Al-Qaeda has released a videotape purporting to show Osama bin Laden and other leaders plotting the hijackings of Sept. 11, 2001.
- San Francisco Fed Bank President Janet Yellen defended the central bank’s pause from two years of interest-rate increases and said inflation may recede “faster than many forecasters expect.”
- Alcatel SA(ALA) and Lucent Technologies(LU) shareholders approved the French company’s $10.5 billion purchase of its US competitor to create the world’s largest supplier of telephone networks.
- Former WorldCom Inc. CEO Ebbers, convicted of leading an $11 billion fraud, must start serving a 25-year term Sept. 26 after losing an appeal of his conviction.
- Gold and silver in NY tumbled the most in seven weeks as the dollar strengthened against the euro, eroding the appeal of precious metals as an alternative investment.
- Oil fell to a five-month low after an EIA report showed that supplies are higher than a year ago.
- Automakers must display crash-test scores on the window stickers of most new vehicles within a year as part of a US push to showcase safety data for consumers.
- The Bush administration outlined a program today that seeks to reduce US reliance on foreign oil by boosting the use of alternative fuels such as ethanol and biodiesel.
- Natural gas dropped to the lowest in more than seven weeks in NY as mild weather cut demand, allowing utilities to build inventories for winter.
BOTTOM LINE: The Portfolio finished higher today on gains in my Semi longs, Computer longs and Commodity shorts. I added back (IWM)/(QQQQ) hedges in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was negative today as the advance/decline line finished lower, most sectors declined and volume was slightly above average. Measures of investor anxiety were mixed into the close. Overall, today's market performance was modestly bearish. Trading was sloppy throughout the day. The homebuilders finished with a slight gain despite more negative news. Gold appears to have begun another leg lower as inflation worries continue to diminish and extreme speculation in all commodities subsides. The fact that the major averages can still fall on little new negative news likely means more sideways action in the near-term. Bloomberg reported that BP (BP) said that Prudhoe Bay could reach full capacity by the end of October. This is another headwind for oil. Oil finished floor trading near session lows and is nearing its long-term uptrend at around $66.33.
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