BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Retail longs, Computer longs, Semi longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, most sectors are higher and volume is about average. OPEC is saying there is a "clear imbalance" between supply and demand and that they will consider an output cut at the December 14 meeting. As well, OPEC's Daukoru said 872,000 bpd are shut-in in Nigeria and that output should come back in 3-6 months. I suspect an OPEC output cut and a substantial increase in oil tanker supply over the intermediate-term will send oil tanker shares substantially lower from current levels. My favorite short in the group remains OMI Corp. (OMM). I expect US stocks to trade modestly higher into the close from current levels on bargain hunting, short covering and declining energy prices.
Monday, September 11, 2006
Stocks Mixed into Final Hour as Falling Commodity Shares Offset Gains Elsewhere
Today's Headlines
Bloomberg:
- President Bush prepared to address the nation tonight as Americans marked the fifth anniversary of the Sept. 11 attacks with somber memorial ceremonies and moments of silence.
- Louisiana, the second-largest oil refining state in the US, is proposing to crude-producing nations to turn farms into an oil refinery, said Dane Revette, the state’s director of energy development. The last refinery built in the US was Marathon Oil’s Garyville, Louisiana, plant, which opened 30 years ago.
- US Treasury Secretary Henry Paulson, attending Group of Seven meetings in Singapore this week, will “steer G-7 thinking away from the notion of dollar devaluation as the solution to anything,” according to economists at High Frequency Economics.
- OPEC agreed to keep production levels unchanged, the group said after its meeting today in Vienna, setting aside concern that prices have tumbled 16% in two months.
- The European Union said it opposes the Chinese government’s decision giving the Xinhua News Agency sole power to regulate the operations of foreign news services, calling it a “very negative development.”
- Gold fell below $600 an ounce for the first time in 10 weeks on speculation demand from investors and jewelers won’t rebound in the fourth quarter.
Wall Street Journal:
- US-based Alcoa Inc.(AA) and Canada’s Alcan(AL), long among the world’s biggest aluminum makers, are being challenged by manufacturers in countries such as Russia and those in the Mid-east who have access to cheap power.
- The Canadian steelmaker, Ipsco Inc., is planning to buy Newport, Kentucky-based steel-tube maker NS Group(NSS) for about $1.46 billion to attract more oil and natural-gas company business.
- Unofficial volunteer “ambassadors” who tend to the Shanksville, Pennsylvania site where United Airlines Flight 93 crashed on Sept. 11, 2001, say their lives have been changed by the episode.
- Expeditors Intl.(EXPE) of Washington could be a good investment because it remains a fast-growing business even though “quick-trigger momentum investors” have been scared off by a 30% stock drop.
- Iraq is the “linchpin” of terrorists’ efforts in the Middle East, a location that they believe, if won, could serve “as a base from which to destabilize the surrounding nations,” Secretary of Defense Rumsfeld wrote.
- General Electric(GE) Chairman and CEO Immelt is reshaping the company by using new technology to increase sales, tapping global markets and relying more on the talents of his managers.
NY Times:
- The goal of US Democrats to capture as many as five House of Representatives seats in NY as they seek to win control of the House is “increasingly remote.”
- Freescale Semi(FSL) may be sold for more than $16 billion, in what would be the largest buyout in the technology industry’s history.
- Wealthier Medicare recipients, who have traditionally paid the same premiums as lower-income beneficiaries, will have increased costs next year.
Washington Post:
- Counterterrorism officers of the CIA have signed up in growing numbers for a government-reimbursed private insurance plan that would cover their civil judgments and legal expenses if they are charged with criminal wrongdoing.
USA Today:
- Sept. 11, 2001, marks two events in American history: the anniversary of the most deadly terrorist attacks on US soil and the day government officials “broke the pattern of inconsistent response” to Islamic fundamentalists, wrote Rudy Giuliani, former mayor of NYC.
Financial Times:
- The value of alternative investments such as hedge funds or commodities has topped $3 trillion worldwide on increasing demand from Pension funds, citing a JPMorgan Chase study.
- Microsoft Corp.(MSFT) may have a lot more research and development money available soon, yet that may not give it an advantage over its Internet search engine rival, Google Inc.(GOOG).
International Herald Tribune:
- Vivendi SA and Electronic Arts(ERTS) are among video-game makers exploring the market for casual games that can be completed in a shorter length of time.
Les Echos:
- France’s national welfare system will post a deficit of 16 billion euros($20.3 billion) in 2006 and a shortfall of 37 billion euros for the 2006-2009 period, citing a government report. The deficits will require higher taxes and new savings, the report said.
- President Bush prepared to address the nation tonight as Americans marked the fifth anniversary of the Sept. 11 attacks with somber memorial ceremonies and moments of silence.
- Louisiana, the second-largest oil refining state in the US, is proposing to crude-producing nations to turn farms into an oil refinery, said Dane Revette, the state’s director of energy development. The last refinery built in the US was Marathon Oil’s Garyville, Louisiana, plant, which opened 30 years ago.
- US Treasury Secretary Henry Paulson, attending Group of Seven meetings in Singapore this week, will “steer G-7 thinking away from the notion of dollar devaluation as the solution to anything,” according to economists at High Frequency Economics.
- OPEC agreed to keep production levels unchanged, the group said after its meeting today in Vienna, setting aside concern that prices have tumbled 16% in two months.
- The European Union said it opposes the Chinese government’s decision giving the Xinhua News Agency sole power to regulate the operations of foreign news services, calling it a “very negative development.”
- Gold fell below $600 an ounce for the first time in 10 weeks on speculation demand from investors and jewelers won’t rebound in the fourth quarter.
Wall Street Journal:
- US-based Alcoa Inc.(AA) and Canada’s Alcan(AL), long among the world’s biggest aluminum makers, are being challenged by manufacturers in countries such as Russia and those in the Mid-east who have access to cheap power.
- The Canadian steelmaker, Ipsco Inc., is planning to buy Newport, Kentucky-based steel-tube maker NS Group(NSS) for about $1.46 billion to attract more oil and natural-gas company business.
- Unofficial volunteer “ambassadors” who tend to the Shanksville, Pennsylvania site where United Airlines Flight 93 crashed on Sept. 11, 2001, say their lives have been changed by the episode.
- Expeditors Intl.(EXPE) of Washington could be a good investment because it remains a fast-growing business even though “quick-trigger momentum investors” have been scared off by a 30% stock drop.
- Iraq is the “linchpin” of terrorists’ efforts in the Middle East, a location that they believe, if won, could serve “as a base from which to destabilize the surrounding nations,” Secretary of Defense Rumsfeld wrote.
- General Electric(GE) Chairman and CEO Immelt is reshaping the company by using new technology to increase sales, tapping global markets and relying more on the talents of his managers.
NY Times:
- The goal of US Democrats to capture as many as five House of Representatives seats in NY as they seek to win control of the House is “increasingly remote.”
- Freescale Semi(FSL) may be sold for more than $16 billion, in what would be the largest buyout in the technology industry’s history.
- Wealthier Medicare recipients, who have traditionally paid the same premiums as lower-income beneficiaries, will have increased costs next year.
Washington Post:
- Counterterrorism officers of the CIA have signed up in growing numbers for a government-reimbursed private insurance plan that would cover their civil judgments and legal expenses if they are charged with criminal wrongdoing.
USA Today:
- Sept. 11, 2001, marks two events in American history: the anniversary of the most deadly terrorist attacks on US soil and the day government officials “broke the pattern of inconsistent response” to Islamic fundamentalists, wrote Rudy Giuliani, former mayor of NYC.
Financial Times:
- The value of alternative investments such as hedge funds or commodities has topped $3 trillion worldwide on increasing demand from Pension funds, citing a JPMorgan Chase study.
- Microsoft Corp.(MSFT) may have a lot more research and development money available soon, yet that may not give it an advantage over its Internet search engine rival, Google Inc.(GOOG).
International Herald Tribune:
- Vivendi SA and Electronic Arts(ERTS) are among video-game makers exploring the market for casual games that can be completed in a shorter length of time.
Les Echos:
- France’s national welfare system will post a deficit of 16 billion euros($20.3 billion) in 2006 and a shortfall of 37 billion euros for the 2006-2009 period, citing a government report. The deficits will require higher taxes and new savings, the report said.
Sunday, September 10, 2006
Monday Watch
Weekend Headlines
Bloomberg:
- President Bush said Americans are safer now than before the Sept. 11 terrorist attacks five years ago because of steps taken by his administration.
- The US gasoline pump price fell 21 cents in the past two weeks to $2.66 a gallon as supplies kept ahead of demand, Trilby Lundberg said, citing her survey of about 7,000 filling stations nationwide.
- OPEC President Edmund Daukoru said he’s “very concerned” about the drop in oil prices, down 16% from July highs.
- OPEC is likely to keep production unchanged when it meets next week, OPEC ministers from Saudi Arabia and the UAE said.
- European Central Bank President Jean-Claude Trichet and fellow policy makers signaled interest rates will be raised again in October to temper inflation.
- China’s government will increasingly turn to monetary policy to slow excessive investment, Vice Premier Zeng Peiyan said, signaling that the central bank my raise the cost of borrowing and curb loans in the fourth quarter.
- China’s investment and production grew at a slower pace last month while inflation remained stable, Premier Wen Jiabao said, suggesting government measures are effective in cooling the fastest expansion in more than a decade.
- Former Hewlett-Packard Co.(HPQ) director Tom Perkins, who resigned over an investigation of leaks of company information to the press, today called on Chairwoman Patricia Dunn to step down.
- Coca-Cola(KO) today inaugurated a new $25 million bottling plant in Kabul, marking its re-entry into Afghanistan after a 15-year absence because of violence there.
- The drop in oil, gold and other raw materials since May is signaling an end to the five-year bull market in commodities as global growth slows and demand falls. Frederic Lasserre, director of commodities research at Societe Generale SA in Paris, said a 50% plunge in metals prices is “likely.”
Wall Street Journal:
- Citigroup(C) named Dean Barr as head of its Tribeca Global Management LLC hedge fund unit, replacing Tanya Styblo Beder.
- Asia’s emerging stock markets failed to keep pace with a global rally during the past three months.
- Lenovo Group Ltd., the world’s third-largest pc maker, is prepared to cut prices as competitors such as Dell Inc.(DELL) step up efforts to gain market share in China.
- The Japanese economy grew at a 1.0% annual pace in the three months ended June 30, the Cabinet Office said.
- The Australian dollar may decline a fourth straight day, its longest losing streak in over a month, on concern a slump in the price of metals the nation exports will spur selling.
- President Bush began two days of ceremonies marking the fifth anniversary of the Sept. 11 terrorist attacks, laying wreaths at the site of the World Trade Center in NY.
Barron’s:
- Apple Computer(AAPL) is about to start remodeling some of its stores. The stores’ all-white look will likely be changed and the redesign will focus on new products being added to the company’s lineup.
- Johnson & Johnson(JNJ), General Electric(GE) and Procter & Gamble(PG) were rated the most respected of the world’s 100 largest companies, citing a second annual survey of money managers.
- LaBranche(LAB) is “ripe” for a management-led leveraged buyout as the company may add as much as $400 million in cash during the next few years, citing Louis Capital research head Robert Van Batenburg.
NY Times:
- Medtronic(MDT) and Honeywell Intl.(HON) are betting on remote-monitoring medical technology to lead to more effective use of drugs and fewer and shorter hospital stays for patients.
- The Boston Police Dept. will be testing a system that automatically notifies US immigration officials if state and local police run a federal fingerprint check on a suspect.
Washington Post:
- US intelligence agencies have made “major advance” since the Sept. 11 attacks and are now better prepared to head off terrorist plots, John Negroponte, director of national intelligence, wrote.
LA Times:
- Los Angeles International Airport began a service allowing passengers to check in at locations around the city to avoid the buildup of long lines at the airport.
Financial Times:
- Apple Computer(AAPL) will say it plans to start a service for downloading films.
- General Electric’s(GE) NBC Universal plans a rapid acceleration of its digital activities that could increase online revenue 500% by 2009, citing CEO Wright.
Sunday Times:
- Richard Branson, the UK billionaire who controls Virgin Group, invested $60 million in a stake in Cilion, a company that makes fuel from corn.
AP:
- Former US Vice President Al Gore said he hasn’t ruled out the possibility of making another run for president, but considers it unlikely.
- Iran’s chief nuclear negotiator said the country is willing to consider halting uranium enrichment for as long as two months.
Le Monde:
- French Interior Minister Nicolas Sarkozy, a probable candidate for the nation’s presidency next year, said he feels “close” with the US and expressed admiration for its “energy and fluidity” in an interview.
Daily Mail:
- Scientists may find a cure for hay fever within three years, and asthma “shortly” after that, citing Dr. Ronald van Ree, a researcher at the University of Amsterdam.
al-Ayam:
- Trade between Bahrain and the US increased 58% in the first half after the two countries signed a free-trade agreement.
Weekend Recommendations
Barron's:
- Had positive comments on (SYMC) and (IR).
Night Trading
Asian indices are -.50% to +.50% on average.
S&P 500 indicated -.05%
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/Estimate
- (CPB)/.22
- (PRX)/.15
Upcoming Splits
- None of note
Economic Releases
- None of note
Bloomberg:
- President Bush said Americans are safer now than before the Sept. 11 terrorist attacks five years ago because of steps taken by his administration.
- The US gasoline pump price fell 21 cents in the past two weeks to $2.66 a gallon as supplies kept ahead of demand, Trilby Lundberg said, citing her survey of about 7,000 filling stations nationwide.
- OPEC President Edmund Daukoru said he’s “very concerned” about the drop in oil prices, down 16% from July highs.
- OPEC is likely to keep production unchanged when it meets next week, OPEC ministers from Saudi Arabia and the UAE said.
- European Central Bank President Jean-Claude Trichet and fellow policy makers signaled interest rates will be raised again in October to temper inflation.
- China’s government will increasingly turn to monetary policy to slow excessive investment, Vice Premier Zeng Peiyan said, signaling that the central bank my raise the cost of borrowing and curb loans in the fourth quarter.
- China’s investment and production grew at a slower pace last month while inflation remained stable, Premier Wen Jiabao said, suggesting government measures are effective in cooling the fastest expansion in more than a decade.
- Former Hewlett-Packard Co.(HPQ) director Tom Perkins, who resigned over an investigation of leaks of company information to the press, today called on Chairwoman Patricia Dunn to step down.
- Coca-Cola(KO) today inaugurated a new $25 million bottling plant in Kabul, marking its re-entry into Afghanistan after a 15-year absence because of violence there.
- The drop in oil, gold and other raw materials since May is signaling an end to the five-year bull market in commodities as global growth slows and demand falls. Frederic Lasserre, director of commodities research at Societe Generale SA in Paris, said a 50% plunge in metals prices is “likely.”
Wall Street Journal:
- Citigroup(C) named Dean Barr as head of its Tribeca Global Management LLC hedge fund unit, replacing Tanya Styblo Beder.
- Asia’s emerging stock markets failed to keep pace with a global rally during the past three months.
- Lenovo Group Ltd., the world’s third-largest pc maker, is prepared to cut prices as competitors such as Dell Inc.(DELL) step up efforts to gain market share in China.
- The Japanese economy grew at a 1.0% annual pace in the three months ended June 30, the Cabinet Office said.
- The Australian dollar may decline a fourth straight day, its longest losing streak in over a month, on concern a slump in the price of metals the nation exports will spur selling.
- President Bush began two days of ceremonies marking the fifth anniversary of the Sept. 11 terrorist attacks, laying wreaths at the site of the World Trade Center in NY.
Barron’s:
- Apple Computer(AAPL) is about to start remodeling some of its stores. The stores’ all-white look will likely be changed and the redesign will focus on new products being added to the company’s lineup.
- Johnson & Johnson(JNJ), General Electric(GE) and Procter & Gamble(PG) were rated the most respected of the world’s 100 largest companies, citing a second annual survey of money managers.
- LaBranche(LAB) is “ripe” for a management-led leveraged buyout as the company may add as much as $400 million in cash during the next few years, citing Louis Capital research head Robert Van Batenburg.
NY Times:
- Medtronic(MDT) and Honeywell Intl.(HON) are betting on remote-monitoring medical technology to lead to more effective use of drugs and fewer and shorter hospital stays for patients.
- The Boston Police Dept. will be testing a system that automatically notifies US immigration officials if state and local police run a federal fingerprint check on a suspect.
Washington Post:
- US intelligence agencies have made “major advance” since the Sept. 11 attacks and are now better prepared to head off terrorist plots, John Negroponte, director of national intelligence, wrote.
LA Times:
- Los Angeles International Airport began a service allowing passengers to check in at locations around the city to avoid the buildup of long lines at the airport.
Financial Times:
- Apple Computer(AAPL) will say it plans to start a service for downloading films.
- General Electric’s(GE) NBC Universal plans a rapid acceleration of its digital activities that could increase online revenue 500% by 2009, citing CEO Wright.
Sunday Times:
- Richard Branson, the UK billionaire who controls Virgin Group, invested $60 million in a stake in Cilion, a company that makes fuel from corn.
AP:
- Former US Vice President Al Gore said he hasn’t ruled out the possibility of making another run for president, but considers it unlikely.
- Iran’s chief nuclear negotiator said the country is willing to consider halting uranium enrichment for as long as two months.
Le Monde:
- French Interior Minister Nicolas Sarkozy, a probable candidate for the nation’s presidency next year, said he feels “close” with the US and expressed admiration for its “energy and fluidity” in an interview.
Daily Mail:
- Scientists may find a cure for hay fever within three years, and asthma “shortly” after that, citing Dr. Ronald van Ree, a researcher at the University of Amsterdam.
al-Ayam:
- Trade between Bahrain and the US increased 58% in the first half after the two countries signed a free-trade agreement.
Weekend Recommendations
Barron's:
- Had positive comments on (SYMC) and (IR).
Night Trading
Asian indices are -.50% to +.50% on average.
S&P 500 indicated -.05%
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/Estimate
- (CPB)/.22
- (PRX)/.15
Upcoming Splits
- None of note
Economic Releases
- None of note
BOTTOM LINE: Asian Indices are mostly lower, weighed down by commodity shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the week.
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