BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Medical longs, Internet longs and Computer longs. I added to my (ISRG) long and took profits in a trading long today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is above average. Google (GOOG) is trading up 10, back above $400. Google is one of the greatest growth stocks in the world trading at a very reasonable valuation, in my opinion. I suspect it is in the early stages of another stunning move higher. I remain long the stock. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering.
Wednesday, September 13, 2006
Stocks Modstly Higher into Final Hour, Led by I-Banking Shares
Today's Headlines
Bloomberg:
- Lehman Brothers(LEH), buoyed by stock and bond trading in the third quarter, extending the longest streak of earnings gains on Wall Street.
- US homebuilders’ shares gained this week, led by KB Home(KBH), Hovnanian(HOV) and Pulte Homes(PHM), as investors bought on expectations of a rebound.
- Global investment in real estate may increase 26% to $600 billion this year, according to Jones Lang LaSalle.
- Peruvian stocks became the world’s best performers this year as metals prices soared. A slump in silver, gold, copper and zinc, whose producers account for half the trading on the Lima exchange, may end the five-year rally.
- Mortgage applications in the US rose last week to the highest level in more than three months after a recent decline in borrowing costs spurred home buying.
- France, whose lenders account for 24% of bank loans to Iran, may reject a US campaign to sever financial ties with the Middle Eastern nation.
Wall Street Journal:
- ESPN drew a network record 12.6 million viewers for the first game of its opening National Football League doubleheader two nights ago, citing Nielsen Media Research.
- Goldman Sachs Group’s(GS) Global Alpha fund, a hedge fund offered to the investment bank’s wealthiest clients, lost nearly 10% of its value in August.
- Some celestial beings in the hedge-fund firmament are being made to seem all-too-human this year.
- Bristol-Myers Squibb’s(BMY) appointment of James Cornelius as interim CEO has spurred conjecture that the company is seeking to be acquired.
- Hitachi Ltd. developed the ability to store 345 gigabits, or billions of bits, of data per square inch on a disk drive, 212 gigabits more than the current maximum.
NY Times:
- The American Medical Assoc., which has never before demanded regulation of a food ingredient, in June called on the FDA to regulate salt.
NY Post:
- The New York Board of Trade’s board of governors is expected to agree today to be bought by Intercontinental Exchange(ICE) for about $1 billion.
LA Times:
- Nine major US ports received a record amount of cargo in July, citing Global Insight.
Star-Ledger:
- Red Bull GmbH and Anschutz Entertainment Group are building a $220 million stadium for the NY Red Bulls, a soccer team named for the energy-drink maker.
Financial Times:
- The US auto-parts industry is showing some signs of life.
La Tribune:
- The French government is considering a “social tax” on stock options to “raise funds” for its 2007 budget.
Milliyet:
- The IMF said Turkey and other emerging markets could face a second capital flight of the kind that caused the lira to slump in May and June.
China Land and Resources News:
- China discovered one super-size and three smaller lead and zinc mines in the central Henan province. The discovery is the biggest by reserves in decades.
- Lehman Brothers(LEH), buoyed by stock and bond trading in the third quarter, extending the longest streak of earnings gains on Wall Street.
- US homebuilders’ shares gained this week, led by KB Home(KBH), Hovnanian(HOV) and Pulte Homes(PHM), as investors bought on expectations of a rebound.
- Global investment in real estate may increase 26% to $600 billion this year, according to Jones Lang LaSalle.
- Peruvian stocks became the world’s best performers this year as metals prices soared. A slump in silver, gold, copper and zinc, whose producers account for half the trading on the Lima exchange, may end the five-year rally.
- Mortgage applications in the US rose last week to the highest level in more than three months after a recent decline in borrowing costs spurred home buying.
- France, whose lenders account for 24% of bank loans to Iran, may reject a US campaign to sever financial ties with the Middle Eastern nation.
Wall Street Journal:
- ESPN drew a network record 12.6 million viewers for the first game of its opening National Football League doubleheader two nights ago, citing Nielsen Media Research.
- Goldman Sachs Group’s(GS) Global Alpha fund, a hedge fund offered to the investment bank’s wealthiest clients, lost nearly 10% of its value in August.
- Some celestial beings in the hedge-fund firmament are being made to seem all-too-human this year.
- Bristol-Myers Squibb’s(BMY) appointment of James Cornelius as interim CEO has spurred conjecture that the company is seeking to be acquired.
- Hitachi Ltd. developed the ability to store 345 gigabits, or billions of bits, of data per square inch on a disk drive, 212 gigabits more than the current maximum.
NY Times:
- The American Medical Assoc., which has never before demanded regulation of a food ingredient, in June called on the FDA to regulate salt.
NY Post:
- The New York Board of Trade’s board of governors is expected to agree today to be bought by Intercontinental Exchange(ICE) for about $1 billion.
LA Times:
- Nine major US ports received a record amount of cargo in July, citing Global Insight.
Star-Ledger:
- Red Bull GmbH and Anschutz Entertainment Group are building a $220 million stadium for the NY Red Bulls, a soccer team named for the energy-drink maker.
Financial Times:
- The US auto-parts industry is showing some signs of life.
La Tribune:
- The French government is considering a “social tax” on stock options to “raise funds” for its 2007 budget.
Milliyet:
- The IMF said Turkey and other emerging markets could face a second capital flight of the kind that caused the lira to slump in May and June.
China Land and Resources News:
- China discovered one super-size and three smaller lead and zinc mines in the central Henan province. The discovery is the biggest by reserves in decades.
Wednesday Watch
Late-Night Headlines
Bloomberg:
- Crude oil traded near its lowest in more than five months after falling for a seventh day as the IEA lowered consumption forecasts. “We’re in the midst of a tectonic change,” said Peter Beutel, president of Cameron Hanover, an energy consultant. “The rally in oil that has lasted five years may be over. We keep seeing lower demand estimates which show the impact of very high prices.”
- China’s industrial production grew last month at the slowest pace in 17 months as government lending curbs began to cool the world’s fastest-growing major economy.
- China, the world’s biggest maker of steel, made 17% more of the metal last month from a year earlier, the National Bureau of Statistics said.
- Gold in Asia fell for the sixth day, the longest losing streak in three months, after declining crude oil prices reduced the metal’s appeal as an inflation hedge. Movements in oil and gold prices are 81% correlated, Merrill Lynch said in a recent report.
Wall Street Journal:
- Institutional investment in Asian real estate has climbed so high it has reached what one property executive calls “nosebleed levels.”
AP:
- US Senator Hillary Clinton, seeking re-election, turned back a Democratic primary challenge in NY from an anti-war candidate today, and Eliot Spitzer bested his opponent to win the party’s gubernatorial nomination.
Financial Times:
- Hedge funds have increased their purchase of high-risk corporate instruments in Europe amid forecasts that a corporate restructuring will take place soon.
- French Interior Minister Nicolas Sarkozy said he is “proud” of his “friendship” with the US. Though Israel’s response in Lebanon was “clumsy and disproportionate,” Israel has the right to defend itself against Hezbollah, which was the “aggressor,” Sarkozy said.
China Securities Journal:
- China’s government should use its $1 trillion of foreign currency reserves to buy overseas companies and assets, citing a central government economist.
- China should raise medium- and long-term deposit rates to curb increasing liquidity in the market.
Commercial Times:
- S&P may downgrade Taiwan’s credit ratings because of slowing economic growth, a government budget deficit and political instability.
China Daily:
- Walt Disney(DIS), Sony’s Columbia Pictures Entertainment and News Corp.’s Twentieth Century Fox Film Corp. are among five movie studios suing a Beijing-based company on piracy claims.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (MRVL), target $29.
- Reiterated Buy on (SNDK), target $69.
- Reiterated Buy on (EBAY), target $38.
- Reiterated Buy on (BBY), target $65.
Morgan Stanley:
- Cut (PCL) to Underweight, target $32.
Night Trading
Asian Indices are +.50% to +.75% on average.
S&P 500 indicated -.08.
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
- (FOE)/.28
- (LEH)/1.49
Upcoming Splits
- (CXW) 3-for-2
Economic Releases
2:00 pm EST
- The monthly budget deficit for August is estimated to widen to -$65.5 billion versus -$51.3 billion in July.
Bloomberg:
- Crude oil traded near its lowest in more than five months after falling for a seventh day as the IEA lowered consumption forecasts. “We’re in the midst of a tectonic change,” said Peter Beutel, president of Cameron Hanover, an energy consultant. “The rally in oil that has lasted five years may be over. We keep seeing lower demand estimates which show the impact of very high prices.”
- China’s industrial production grew last month at the slowest pace in 17 months as government lending curbs began to cool the world’s fastest-growing major economy.
- China, the world’s biggest maker of steel, made 17% more of the metal last month from a year earlier, the National Bureau of Statistics said.
- Gold in Asia fell for the sixth day, the longest losing streak in three months, after declining crude oil prices reduced the metal’s appeal as an inflation hedge. Movements in oil and gold prices are 81% correlated, Merrill Lynch said in a recent report.
Wall Street Journal:
- Institutional investment in Asian real estate has climbed so high it has reached what one property executive calls “nosebleed levels.”
AP:
- US Senator Hillary Clinton, seeking re-election, turned back a Democratic primary challenge in NY from an anti-war candidate today, and Eliot Spitzer bested his opponent to win the party’s gubernatorial nomination.
Financial Times:
- Hedge funds have increased their purchase of high-risk corporate instruments in Europe amid forecasts that a corporate restructuring will take place soon.
- French Interior Minister Nicolas Sarkozy said he is “proud” of his “friendship” with the US. Though Israel’s response in Lebanon was “clumsy and disproportionate,” Israel has the right to defend itself against Hezbollah, which was the “aggressor,” Sarkozy said.
China Securities Journal:
- China’s government should use its $1 trillion of foreign currency reserves to buy overseas companies and assets, citing a central government economist.
- China should raise medium- and long-term deposit rates to curb increasing liquidity in the market.
Commercial Times:
- S&P may downgrade Taiwan’s credit ratings because of slowing economic growth, a government budget deficit and political instability.
China Daily:
- Walt Disney(DIS), Sony’s Columbia Pictures Entertainment and News Corp.’s Twentieth Century Fox Film Corp. are among five movie studios suing a Beijing-based company on piracy claims.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (MRVL), target $29.
- Reiterated Buy on (SNDK), target $69.
- Reiterated Buy on (EBAY), target $38.
- Reiterated Buy on (BBY), target $65.
Morgan Stanley:
- Cut (PCL) to Underweight, target $32.
Night Trading
Asian Indices are +.50% to +.75% on average.
S&P 500 indicated -.08.
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
- (FOE)/.28
- (LEH)/1.49
Upcoming Splits
- (CXW) 3-for-2
Economic Releases
2:00 pm EST
- The monthly budget deficit for August is estimated to widen to -$65.5 billion versus -$51.3 billion in July.
BOTTOM LINE: Asian indices are modestly higher, boosted by automaker and technology shares in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.
Tuesday, September 12, 2006
Stocks Soar on Plunging Gas Prices, Lower Interest Rates and Less Irrational Pessimism
Indices
S&P 1,313.11 +1.04%
DJIA 11,498.09 +.89%
NASDAQ 2,215.82 +1.96%
Russell 2000 724.48 +2.39%
Wilshire 5000 13,125.83 +1.18%
S&P Barra Growth 611.25 +1.13%
S&P Barra Value 699.58 +.96%
Morgan Stanley Consumer 651.52 +.63%
Morgan Stanley Cyclical 814.15 +1.95%
Morgan Stanley Technology 519.32 +2.41%
Transports 4,369.85 +3.33%
Utilities 428.06 -.85%
Put/Call .94 -6.93%
NYSE Arms .89 -14.72%
Volatility(VIX) 11.92 -8.24%
ISE Sentiment 117.0 +23.16%
US Dollar 85.91 -.01%
CRB 310.71 -.96%
Futures Spot Prices
Crude Oil 63.77 -2.82%
Unleaded Gasoline 156.50 -1.94%
Natural Gas 5.56 -1.85%
Heating Oil 176.65 -2.15%
Gold 594.60 +.05%
Base Metals 227.99 -.52%
Copper 335.50 -.53%
10-year US Treasury Yield 4.76% -.70%
Leading Sectors
Airlines +4.88%
Homebuilders +3.84%
Networking +3.77%
Lagging Sectors
Energy -.71%
Gold & Silver -.83%
Oil Service -.99%
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
- None of note
Afternoon/Evening Headlines
Bloomberg:
- US stocks had their biggest advance in a month, pushing the Dow Jones Industrial Average within 225 points of its all-time high, as revenue at Goldman Sachs(GS) set a Wall Street record and retailers rallied on a plunge in oil prices.
- Crude oil fell below $64/bbl., clearly breaking its long-term uptrend at $66.33, after the IEA cut its global consumption estimates.
- The company that produces “Girls Gone Wild” videos pleaded guilty to violating a law, aimed at protecting minors, that requires makers of sexually explicit films to document the ages of their performers.
- The US will raise the monthly bill for most people who get basic health care through Medicare by 5.6% next year, and by as much as 83% for rich Americans.
- New York chose Northrop Grumman(NOC) to build a $500 million wireless network which will enable public-safety workers and first-responders to get information more quickly.
- Apple Computer(AAPL) said it will start selling 75 full-length Walt Disney(DIS) films including the first “Pirates of the Caribbean” over the Internet today, and introduced iPod players with a brighter screen and more storage.
- Treasury 10-year notes posted their biggest gains in about two weeks after the government sold $8 billion of the benchmark securities at a yield lower than forecast by bond-trading firms.
S&P 1,313.11 +1.04%
DJIA 11,498.09 +.89%
NASDAQ 2,215.82 +1.96%
Russell 2000 724.48 +2.39%
Wilshire 5000 13,125.83 +1.18%
S&P Barra Growth 611.25 +1.13%
S&P Barra Value 699.58 +.96%
Morgan Stanley Consumer 651.52 +.63%
Morgan Stanley Cyclical 814.15 +1.95%
Morgan Stanley Technology 519.32 +2.41%
Transports 4,369.85 +3.33%
Utilities 428.06 -.85%
Put/Call .94 -6.93%
NYSE Arms .89 -14.72%
Volatility(VIX) 11.92 -8.24%
ISE Sentiment 117.0 +23.16%
US Dollar 85.91 -.01%
CRB 310.71 -.96%
Futures Spot Prices
Crude Oil 63.77 -2.82%
Unleaded Gasoline 156.50 -1.94%
Natural Gas 5.56 -1.85%
Heating Oil 176.65 -2.15%
Gold 594.60 +.05%
Base Metals 227.99 -.52%
Copper 335.50 -.53%
10-year US Treasury Yield 4.76% -.70%
Leading Sectors
Airlines +4.88%
Homebuilders +3.84%
Networking +3.77%
Lagging Sectors
Energy -.71%
Gold & Silver -.83%
Oil Service -.99%
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
- None of note
Afternoon/Evening Headlines
Bloomberg:
- US stocks had their biggest advance in a month, pushing the Dow Jones Industrial Average within 225 points of its all-time high, as revenue at Goldman Sachs(GS) set a Wall Street record and retailers rallied on a plunge in oil prices.
- Crude oil fell below $64/bbl., clearly breaking its long-term uptrend at $66.33, after the IEA cut its global consumption estimates.
- The company that produces “Girls Gone Wild” videos pleaded guilty to violating a law, aimed at protecting minors, that requires makers of sexually explicit films to document the ages of their performers.
- The US will raise the monthly bill for most people who get basic health care through Medicare by 5.6% next year, and by as much as 83% for rich Americans.
- New York chose Northrop Grumman(NOC) to build a $500 million wireless network which will enable public-safety workers and first-responders to get information more quickly.
- Apple Computer(AAPL) said it will start selling 75 full-length Walt Disney(DIS) films including the first “Pirates of the Caribbean” over the Internet today, and introduced iPod players with a brighter screen and more storage.
- Treasury 10-year notes posted their biggest gains in about two weeks after the government sold $8 billion of the benchmark securities at a yield lower than forecast by bond-trading firms.
BOTTOM LINE: The Portfolio finished higher today on gains in my Semi longs, Retail longs, Internet longs, Medical longs and Commodity shorts. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was very positive today as the advance/decline line finished substantially 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 very bullish. The 10-year yield is finished near session lows, down 3 basis points, despite today's sharp stock gains. With a number of sectors posting 3%+ gains today and the over-owned commodity stocks falling again, I suspect portfolio manager performance anxiety is rising at a rapid rate. Moreover, many of the best growth stocks, which are the cheapest relative to value in at least 30 years, rose 5%-7% today. Oil has now broken clearly below its long-term uptrend line at $66.33 during its seasonally strongest period. My intraday gauges of investor angst were slightly above-average levels throughout the day, which also bodes well for further gains in the near-term.
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