BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Semi longs and Commodity shorts. I added (IWM) and (QQQQ) hedges today, thus leaving the Portfolio 75% net long. The tone of the market is negative today as the advance/decline line is lower, most sectors are falling and volume is above-average. I expect we will see a pick-up in economic activity, after recent slowing, during the fourth quarter as the positive effects from the plunge in energy prices and lower long-term rates take hold. I expect US stocks to trade modestly higher into the close from current levels on short-covering, declining interest rates and bargain hunting.
Thursday, September 21, 2006
Stocks Lower into Final Hour on Profit-taking and Economic Slowdown Worries
Wednesday, September 20, 2006
Stocks Finish Near Session Highs on Another Drop in Energy Prices and Dovish Fed Comments
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
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
BOTTOM LINE: The Portfolio finished higher today on gains in my Computer longs, Semi 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 positive today as the advance/decline line finished higher, most sectors gained and volume was heavy. Measures of investor anxiety were mostly lower into the close. Overall, today's market performance was bullish. Oil temporarily fell below $60/bbl. this afternoon to $59.80. I think two stunning things are about to happen during the fourth quarter: Gas prices will fall below $2 a gallon nationwide on average, and the DJIA will bust out to an all-time high. Consumers will be absolutely stunned by both of these events. This will offset, to a large extent, the slowdown in housing. I will not be able to blog as much through tomorrow evening due to a scheduling conflict.
Stocks Sharply Higher into Final Hour as Dow Approaches All-Time High
BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Retail, Computer longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive today as the advance/decline line is higher, most sectors are gaining and volume is heavy. While investors continue to wring their hands over semiconductor inventories, the stocks are moving higher. This has always been and always will be the way this group trades. By the time, their fundamentals are strong, the sector has already had a major run. Yesterday, the president of IC Insights said he expects IC revenue growth to accelerate to 8% next year and 20% in 2008. I believe his assumptions are conservative. The time to buy semis is now. I expect the Philadelphia Stock Exchange Semiconductor Sector Index (SOX) to test five-year highs of around 650 over the next two years, for a gain of around 40% from current levels. I expect US stocks to trade modestly higher into the close from current levels on short-covering, lower energy prices, less pessimism, declining interest rates and bargain hunting.
Today's Headlines
Bloomberg:
- Crude oil is falling again, erasing the year’s gain, after a government reported showed stockpiles of winter fuel are near 7 year highs.
- Boeing Co.(BA) won a multibillion-dollar Homeland Security contract to secure US borders against illegal immigration.
- Morgan Stanley(MS) reported record third-quarter earnings as investment banking, brokerage and credit-card revenue, along with reduced compensation, enabled CEO Mack to give shareholders the biggest profit gain on Wall Street.
- Circuit City(CC) said second-quarter profit increased 700%, beating analysts’ estimates, as the company sold more flat-panel TVs and laptop computers.
- CarMax(KMX), the largest used-car dealer in the US, reported a 44% jump in second-quarter profit and said 2006 earnings will exceed its forecast as rising sales reduced the need for price cuts.
- World steel output climbed 11% in August as Chinese production surged.
Wall Street Journal:
- AstraZeneca Plc(AZN) will still look for acquisitions and licensing deals for some of its new drugs, even as it focuses on its own laboratories.
NY Times:
- Young athletes in extreme sports such as skateboarding, snowboarding and motocross are turning to sports academies and home schooling to both stay competitive and receive an education.
NY Post:
- Amaranth Advisors LLC, the Greenwich, Connecticut-based hedge fund that said it lost about $4.6 billion after wrong bets on natural gas prices, invested in the penny stock market and blind pools, citing SEC filings.
LA Times:
- The Bill & Melinda Gates Foundation donated $1.8 million to a Los Angeles charter school organization that is creating small, community-oriented high schools.
Reporter Herald:
- People are not to blame for global warming, and the notion that they are is perpetuated by the media and by scientists seeking grants, a university professor said Monday. Bill Gray, who works at Colorado State University in Fort Collins, said that global warming is caused by “ocean circulation patterns” and that Earth was actually warmer during some medieval periods. Gray has studied tropical meteorology for more than 40 years.
Interfax:
- Azerbaijan will produce a record 30 million tons of oil in 2006, 35% more than last year. Output in the former Soviet state should rise to 47 million tons next year and 65 million tons a year by 2010, citing Rovnag Abdullaev, the CEO of the state oil producer SOCAR.
AFP:
- The new chief judge in Saddam Hussein’s genocide trial ejected the former Iraqi president from court after he protested the judge’s appointment.
- Crude oil is falling again, erasing the year’s gain, after a government reported showed stockpiles of winter fuel are near 7 year highs.
- Boeing Co.(BA) won a multibillion-dollar Homeland Security contract to secure US borders against illegal immigration.
- Morgan Stanley(MS) reported record third-quarter earnings as investment banking, brokerage and credit-card revenue, along with reduced compensation, enabled CEO Mack to give shareholders the biggest profit gain on Wall Street.
- Circuit City(CC) said second-quarter profit increased 700%, beating analysts’ estimates, as the company sold more flat-panel TVs and laptop computers.
- CarMax(KMX), the largest used-car dealer in the US, reported a 44% jump in second-quarter profit and said 2006 earnings will exceed its forecast as rising sales reduced the need for price cuts.
- World steel output climbed 11% in August as Chinese production surged.
Wall Street Journal:
- AstraZeneca Plc(AZN) will still look for acquisitions and licensing deals for some of its new drugs, even as it focuses on its own laboratories.
NY Times:
- Young athletes in extreme sports such as skateboarding, snowboarding and motocross are turning to sports academies and home schooling to both stay competitive and receive an education.
NY Post:
- Amaranth Advisors LLC, the Greenwich, Connecticut-based hedge fund that said it lost about $4.6 billion after wrong bets on natural gas prices, invested in the penny stock market and blind pools, citing SEC filings.
LA Times:
- The Bill & Melinda Gates Foundation donated $1.8 million to a Los Angeles charter school organization that is creating small, community-oriented high schools.
Reporter Herald:
- People are not to blame for global warming, and the notion that they are is perpetuated by the media and by scientists seeking grants, a university professor said Monday. Bill Gray, who works at Colorado State University in Fort Collins, said that global warming is caused by “ocean circulation patterns” and that Earth was actually warmer during some medieval periods. Gray has studied tropical meteorology for more than 40 years.
Interfax:
- Azerbaijan will produce a record 30 million tons of oil in 2006, 35% more than last year. Output in the former Soviet state should rise to 47 million tons next year and 65 million tons a year by 2010, citing Rovnag Abdullaev, the CEO of the state oil producer SOCAR.
AFP:
- The new chief judge in Saddam Hussein’s genocide trial ejected the former Iraqi president from court after he protested the judge’s appointment.
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