BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Telecom longs, Medical longs and Energy-related shorts. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is about even, most sectors are gaining and volume is above average. The Fed's Fisher spoke in Austin, Texas today. Here is a summary of his comments:
1. The damage from the subprime market is mostly contained.
2. The U.S. economy is strong enough to weather this storm.
3. Consumption continues to pump the economic engine.
4. Alt-A mortgages may also have imprudent loans.
5. Subprime problems may be a blessing in disguise.
6. Mortgage market discipline will reassert itself.
7. Pending home sales data may be a sign that lower prices are spurring purchases.
8. The Fed is treading very carefully in response to housing.
9. Regulatory agencies are working hard to avoid overreaction with credit standards.
10. Problems are mainly in the ARM segment of the subprime market, which is only 8.5% of total mortgages outstanding.
Overall, these comments are constructive. I seriously doubt the Fed is even contemplating raising rates at this time. The 10-year yield, the best predictor of longer-term inflation, is still low and nowhere near problematic levels, notwithstanding the recent tick higher in inflation readings. As well, the Fed seems very aware of all the housing issues. I continue to believe that the Fed will stand pat this year but that a cut is way more likely than a hike. I expect US stocks to trade mixed-to-higher into the close on short-covering, buyout speculation, lessoned geopolitical tensions and bargain-hunting.
Wednesday, April 04, 2007
Stocks Slightly Higher, Led by Tech, Healthcare and Commodities
Today's Headlines
Bloomberg:
- Iran’s president said 15 British sailors and marines in captivity in Iran will be released. Oil is falling .60/bbl. on the report.
- Best Buy(BBY), the largest US consumer electronics retailer, said fourth-quarter profit rose 18% on gift-card redemptions and strong sales of flat-panel televisions. Best Buy’s 21% jump in revenue was the most in three years.
- Illinois Senator Barack Obama raised at least $25 billion in the first quarter of his presidential campaign, just below the total of Democratic rival and top fundraiser Hillary Clinton.
- House Speaker Nancy Pelosi met with Syrian President Bashar al-Assad in Damascus in defiance of President Bush, who called the visit “counterproductive.”
- Microsoft Corp.(MSFT) had its third-quarter profit and revenue estimates raised by Citigroup Inc. on the outlook for the Windows Vista operating system.
- WJ Bradley Company Merchant Partners LLC, a Denver-based firm that’s bought almost a dozen home lenders and brokers, agreed to purchase MortgageTree Lending of Modesto, California.
- Brazil’s soybean and corn harvests will be even bigger than the records previously forecast after abundant rainfall over the past three months boosted yields.
Wall Street Journal:
- The US Air Force says it can save $1.7 billion over six years if it is allowed to be the central purchaser of flying combat drones, citing Bruce Nelson, the service’s technical adviser for intelligence, surveillance and reconnaissance.
- Many illegal immigrants in the US are paying income taxes in a bid to adhere to US laws. Immigrants, even if they are in the US illegally, are still required to pay taxes, citing IRS Commissioner Mark Everson.
- General Mills(GIS) has hired celebrity chef Mario Batali to produce a new line of frozen Italian pasta meals.
- SEC officials are taking a closer look at regular sales of company stock by top executives as part of insider-trading scrutiny.
NY Times:
- New Jersey redirected billions of dollars from its workers’ pension fund for other purposes in the past 15 years and overstated what it actually contributed by hundreds of millions. State officials say the $79 billion public fund, the nation’s ninth-largest, faces a serious deficit and could collapse without large contributions.
- The Robert Wood Johnson Foundation, established in 1968 in the US by one of the founders of Johnson & Johnson(JNJ), will spend at least $500 million to fight childhood obesity over the next five years.
- US authorities are planning to spend about $2.5 billion on water projects in four states with areas scorched by prolonged drought, the biggest expansion in the West’s water infrastructure in decades.
- Vermont’s lucrative tax breaks have made the state a viable alternative to the Cayman Islands and Bermuda as the “offshore” insurance destination of choice for US companies.
Detroit News:
- Blackstone Group LP, Cerberus Capital Management LP, and Magna International have made formal bids to DaimlerChryler AG(DCX) to buy its Chrysler Group unit.
NY Post:
- Billionaires Ron Burkle and Eli Broad may increase their bid for Tribune(TRB) to top the $8.2 billion agreement reached by Sam Zell and the newspaper.
Financial Times:
- Accredited Home Lenders Holding(LEND), a San Diego-based subprime mortgage company, may have bought itself some breathing room as it secured a loan from a hedge fund. The company can now make new loans, and it can keep them, instead of selling them into a slumping secondary market.
Lloyd’s List:
- Shipping markets are unsustainable and the value of vessels will fall because too many carriers are being built, citing DVB Bank and Nordea Bank. There will be a “pretty heavy” oversupply of oil tankers in one or two years’ time, quoting the CEO of DVB Bank.
Military.com:
- The US Army plans to equip soldiers in Iraq and Afghanistan with better body-armor vests. The Army said the Improved Outer Tactical Vest is lighter, more comfortable and offers more protection.
- Iran’s president said 15 British sailors and marines in captivity in Iran will be released. Oil is falling .60/bbl. on the report.
- Best Buy(BBY), the largest US consumer electronics retailer, said fourth-quarter profit rose 18% on gift-card redemptions and strong sales of flat-panel televisions. Best Buy’s 21% jump in revenue was the most in three years.
- Illinois Senator Barack Obama raised at least $25 billion in the first quarter of his presidential campaign, just below the total of Democratic rival and top fundraiser Hillary Clinton.
- House Speaker Nancy Pelosi met with Syrian President Bashar al-Assad in Damascus in defiance of President Bush, who called the visit “counterproductive.”
- Microsoft Corp.(MSFT) had its third-quarter profit and revenue estimates raised by Citigroup Inc. on the outlook for the Windows Vista operating system.
- WJ Bradley Company Merchant Partners LLC, a Denver-based firm that’s bought almost a dozen home lenders and brokers, agreed to purchase MortgageTree Lending of Modesto, California.
- Brazil’s soybean and corn harvests will be even bigger than the records previously forecast after abundant rainfall over the past three months boosted yields.
Wall Street Journal:
- The US Air Force says it can save $1.7 billion over six years if it is allowed to be the central purchaser of flying combat drones, citing Bruce Nelson, the service’s technical adviser for intelligence, surveillance and reconnaissance.
- Many illegal immigrants in the US are paying income taxes in a bid to adhere to US laws. Immigrants, even if they are in the US illegally, are still required to pay taxes, citing IRS Commissioner Mark Everson.
- General Mills(GIS) has hired celebrity chef Mario Batali to produce a new line of frozen Italian pasta meals.
- SEC officials are taking a closer look at regular sales of company stock by top executives as part of insider-trading scrutiny.
NY Times:
- New Jersey redirected billions of dollars from its workers’ pension fund for other purposes in the past 15 years and overstated what it actually contributed by hundreds of millions. State officials say the $79 billion public fund, the nation’s ninth-largest, faces a serious deficit and could collapse without large contributions.
- The Robert Wood Johnson Foundation, established in 1968 in the US by one of the founders of Johnson & Johnson(JNJ), will spend at least $500 million to fight childhood obesity over the next five years.
- US authorities are planning to spend about $2.5 billion on water projects in four states with areas scorched by prolonged drought, the biggest expansion in the West’s water infrastructure in decades.
- Vermont’s lucrative tax breaks have made the state a viable alternative to the Cayman Islands and Bermuda as the “offshore” insurance destination of choice for US companies.
Detroit News:
- Blackstone Group LP, Cerberus Capital Management LP, and Magna International have made formal bids to DaimlerChryler AG(DCX) to buy its Chrysler Group unit.
NY Post:
- Billionaires Ron Burkle and Eli Broad may increase their bid for Tribune(TRB) to top the $8.2 billion agreement reached by Sam Zell and the newspaper.
Financial Times:
- Accredited Home Lenders Holding(LEND), a San Diego-based subprime mortgage company, may have bought itself some breathing room as it secured a loan from a hedge fund. The company can now make new loans, and it can keep them, instead of selling them into a slumping secondary market.
Lloyd’s List:
- Shipping markets are unsustainable and the value of vessels will fall because too many carriers are being built, citing DVB Bank and Nordea Bank. There will be a “pretty heavy” oversupply of oil tankers in one or two years’ time, quoting the CEO of DVB Bank.
Military.com:
- The US Army plans to equip soldiers in Iraq and Afghanistan with better body-armor vests. The Army said the Improved Outer Tactical Vest is lighter, more comfortable and offers more protection.
Factory Orders Rise, ISM Non-Manufacturing Expands at Slower Pace
- Factory Orders for February rose 1.0% versus estimates of a 1.8% gain and a -5.7% decline in January.
- ISM Non-Manufacturing for March fell to 52.4 versus estimates of 55.0 and a reading of 54.3 in February.
- ISM Non-Manufacturing for March fell to 52.4 versus estimates of 55.0 and a reading of 54.3 in February.
BOTTOM LINE: Orders placed with US factories rose in February, paced by a jump in aircraft, Bloomberg reported. Excluding transportation equipment, bookings fell .4%. Civilian aircraft orders soared 88.0%. Metals orders dropped 3.8%, the most since October 2004. Orders for computers and electronic products rose 4.5%. Auto bookings rose 1.1%. Orders for capital goods excluding aircraft and military equipment, a gauge of future business investment, declined 2.4%. I expect Durable Goods Orders to rise again next month as companies gain more confidence in the sustainability of the current expansion.
Service industries expanded at a slower pace last month, Bloomberg reported. The Prices Paid component of the index rose to 63.3 from 53.8 the prior month. The New Orders component fell to 53.8 from 54.8 the prior month. The employment component of the index fell to 50.8 versus 52.2 the prior month. However, the Backlogs component of the index surged to 52.5 from 47 the prior month. I expect Service activity to strengthen as spring progresses and the ISM Non-manufacturing index to bounce back to more average levels.
Tuesday, April 03, 2007
Wednesday Watch
Late-Night Headlines
Bloomberg:
- US ethanol output could rise as much as 60% by year-end as more plants start operating, hurting prices and profits, according to analysts from UBS AG and Friedman, Billings, Ramsey.
- Google Inc.(GOOG) shares may rise at least another 30% by the end of the year as the most popular Internet search engine company reports a jump in first-quarter revenue and earnings, according to Goldman Sachs(GS).
- India’s economic growth will slow “significantly” this year and higher interest rates will reduce inflation, according to the Asian Development Bank’s top economist.
- Motorola(MOT) CEO Zander is “well-supported” by directors as sales slump and billionaire shareholder Carl Icahn battles for a board seat, said Miles White, a company board member.
- Nasdaq Stock Market(NDAQ) will introduce an index tracking Chinese companies traded in the US as part of an effort to lure more international listings.
- Toyota Motor Corp.(TM) and Honda Motor(HMC) posted US sales gains of more than 10% and Mazda Motor Corp. had its biggest increase in 26 years to lead Asian carmakers to another month of rising market share in the US. Higher gas prices last month aided demand for fuel-efficient vehicles such as Toyota’s Prius gasoline-electric car and Yaris subcompact, Honda’s Fit and Mazda’s Mazda3.
- Indian car sales may slow to below 10% in the year that began April 1, from 24% last year, because of higher interest rates, citing analysts, dealers and bankers.
- The yen will slump 5% this quarter, the worst start to a fiscal year since 1989, as Japanese free up more capital for investment overseas, said Toru Umemoto, chief foreign-exchange strategist at Barclays Capital.
- New Century Financial(NEWC) can borrow up to $150 million to fund operations while it auctions off its assets, a judge ruled.
- OPEC’s daily production is running about 465,000 barrels above the group’s informal target of 25.8 million barrels a day, a Bloomberg news survey showed.
- Japan’s electricity prices may surge 58% because safety cover-ups could prompt the government to order the closure of more nuclear reactors, cutting power supply, Mizuho Investors Securities says.
CNBC:
- Goldman Sachs(GS) is advising private equity firm Apollo Management on an IPO.
Financial Times:
- Global solar equipment sector revenue will increase 400% within 3 years to $90 billion, from $20 billion last year, citing a report by German research group Photon Consulting. The report forecasts profit will increase even more quickly, with control of costs raising margins to almost 60%. Demand for the silicon, used to make solar cells, will increase to 400,000 tons in 2015, compared with 41,000 metric tons in 2006. By 2015, 7.6% of all electricity used in homes throughout the world’s 30 richest nations could be generated by solar power.
- NYSE Euronext Inc., the newly merged exchange group, may consider a deal with a US derivatives exchange, citing CEO Thain.
London-based Times:
- The SEC is looking at trading activity which took place before the April 2 announcement that KKR was buying First Data Corp.(FDC).
Guardian:
- NYSE Group(NYX) CEO Thain said he is concerned about “the quality” of corporate governance, transparency and adequate protection of minority shareholders at Russian companies.
Late Buy/Sell Recommendations
Citigroup:
- Upgraded (COCO) to Buy, target $19.
Night Trading
Asian Indices are +.50% to +1.25% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.10%.
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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (AYI)/.50
- (AES)/.11
- (BBY)/1.52
- (CC)/.63
- (GBX)/.54
- (BLUD)/.19
- (MU)/.02
- (MON)/.93
- (MSM)/.61
- (RVI)/.24
Upcoming Splits
- None of note
Economic Releases
10:00 am EST
- Factory Orders for February are estimated to rise 1.8% versus a -5.6% decline in January.
- ISM Non-Manufacturing for March is estimated to rise to 55.0 versus 54.3 in February.
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 500,000 barrels versus a -846,000 barrel drawdown the prior week. Gasoline supplies are estimated to fall by -150,000 barrels versus a -258,000 barrel decline the prior week. Distillate supplies are expected to fall by -1,000,000 barrels versus a -700,000 barrel decline the prior week. Refinery Utilization is expected to rise .6% versus a .7% increase the prior week.
Bloomberg:
- US ethanol output could rise as much as 60% by year-end as more plants start operating, hurting prices and profits, according to analysts from UBS AG and Friedman, Billings, Ramsey.
- Google Inc.(GOOG) shares may rise at least another 30% by the end of the year as the most popular Internet search engine company reports a jump in first-quarter revenue and earnings, according to Goldman Sachs(GS).
- India’s economic growth will slow “significantly” this year and higher interest rates will reduce inflation, according to the Asian Development Bank’s top economist.
- Motorola(MOT) CEO Zander is “well-supported” by directors as sales slump and billionaire shareholder Carl Icahn battles for a board seat, said Miles White, a company board member.
- Nasdaq Stock Market(NDAQ) will introduce an index tracking Chinese companies traded in the US as part of an effort to lure more international listings.
- Toyota Motor Corp.(TM) and Honda Motor(HMC) posted US sales gains of more than 10% and Mazda Motor Corp. had its biggest increase in 26 years to lead Asian carmakers to another month of rising market share in the US. Higher gas prices last month aided demand for fuel-efficient vehicles such as Toyota’s Prius gasoline-electric car and Yaris subcompact, Honda’s Fit and Mazda’s Mazda3.
- Indian car sales may slow to below 10% in the year that began April 1, from 24% last year, because of higher interest rates, citing analysts, dealers and bankers.
- The yen will slump 5% this quarter, the worst start to a fiscal year since 1989, as Japanese free up more capital for investment overseas, said Toru Umemoto, chief foreign-exchange strategist at Barclays Capital.
- New Century Financial(NEWC) can borrow up to $150 million to fund operations while it auctions off its assets, a judge ruled.
- OPEC’s daily production is running about 465,000 barrels above the group’s informal target of 25.8 million barrels a day, a Bloomberg news survey showed.
- Japan’s electricity prices may surge 58% because safety cover-ups could prompt the government to order the closure of more nuclear reactors, cutting power supply, Mizuho Investors Securities says.
CNBC:
- Goldman Sachs(GS) is advising private equity firm Apollo Management on an IPO.
Financial Times:
- Global solar equipment sector revenue will increase 400% within 3 years to $90 billion, from $20 billion last year, citing a report by German research group Photon Consulting. The report forecasts profit will increase even more quickly, with control of costs raising margins to almost 60%. Demand for the silicon, used to make solar cells, will increase to 400,000 tons in 2015, compared with 41,000 metric tons in 2006. By 2015, 7.6% of all electricity used in homes throughout the world’s 30 richest nations could be generated by solar power.
- NYSE Euronext Inc., the newly merged exchange group, may consider a deal with a US derivatives exchange, citing CEO Thain.
London-based Times:
- The SEC is looking at trading activity which took place before the April 2 announcement that KKR was buying First Data Corp.(FDC).
Guardian:
- NYSE Group(NYX) CEO Thain said he is concerned about “the quality” of corporate governance, transparency and adequate protection of minority shareholders at Russian companies.
Late Buy/Sell Recommendations
Citigroup:
- Upgraded (COCO) to Buy, target $19.
Night Trading
Asian Indices are +.50% to +1.25% on average.
S&P 500 indicated +.09%.
NASDAQ 100 indicated +.10%.
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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (AYI)/.50
- (AES)/.11
- (BBY)/1.52
- (CC)/.63
- (GBX)/.54
- (BLUD)/.19
- (MU)/.02
- (MON)/.93
- (MSM)/.61
- (RVI)/.24
Upcoming Splits
- None of note
Economic Releases
10:00 am EST
- Factory Orders for February are estimated to rise 1.8% versus a -5.6% decline in January.
- ISM Non-Manufacturing for March is estimated to rise to 55.0 versus 54.3 in February.
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 500,000 barrels versus a -846,000 barrel drawdown the prior week. Gasoline supplies are estimated to fall by -150,000 barrels versus a -258,000 barrel decline the prior week. Distillate supplies are expected to fall by -1,000,000 barrels versus a -700,000 barrel decline the prior week. Refinery Utilization is expected to rise .6% versus a .7% increase the prior week.
BOTTOM LINE: Asian indices are 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.
Stocks Finish Sharply Higher on Decline in Energy Prices and Greater Economic Optimism
Indices
S&P 500 1,437.77 +.93%
DJIA 12,510.30 +1.03%
NASDAQ 2,450.33 +1.16%
Russell 2000 811.76 +1.06%
Wilshire 5000 14,525.03 +.91%
Russell 1000 Growth 566.19 +1.02%
Russell 1000 Value 831.43 +.83%
Morgan Stanley Consumer 710.01 +.76%
Morgan Stanley Cyclical 966.71 +1.03%
Morgan Stanley Technology 567.54 +1.05%
Transports 4,901.78 +1.76%
Utilities 510.10 -.02%
MSCI Emerging Markets 118.44 +1.15%
Sentiment/Internals
Total Put/Call 1.07 +28.92%
NYSE Arms .77 -17.87%
Volatility(VIX) 13.51 -7.02%
ISE Sentiment 106.0 -19.08%
Futures Spot Prices
Crude Oil 64.60 -2.03%
Reformulated Gasoline 201.55 -1.34%
Natural Gas 7.45 -2.88%
Heating Oil 183.82 -1.30%
Gold 670.10 -.21%
Base Metals 258.79 +3.67%
Copper 330.80 +4.06%
Economy
10-year US Treasury Yield 4.66% +2 basis points
US Dollar 83.18 +.39%
CRB Index 313.78 -.41%
Leading Sectors
Airlines +3.39%
Internet +1.95%
Homebuilders +1.74%
Lagging Sectors
Oil Service +.20%
Utilities -.02%
Coal -.42%
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
Merrill Lynch:
- Reiterated Buy on Google(GOOG).
Afternoon/Evening Headlines
Bloomberg:
- Falling oil prices and an unexpected rise in pending home sales ignited a stock-market rally that carried the DJIA to a five-week high.
- Crude oil(-$1.30/bbl.) fell the most in more than three weeks after Prime Minister Tony Blair said the UK will try to negotiate with Iran over the release of 15 hostage British naval personnel.
- Boeing Co.(BA) won an order for five of its 787 Dreamliner jets from Japan Airlines Corp., bringing the total to 514 and extending its lead over Airbus SAS.
- The shutdown of a Valero Energy Corp.(VLO) refinery in Texas has caused some Colorado filling stations to run out of gasoline over the past two weeks, a spokesman for AAA Colorado said.
- US buyers may have imported as much as 2.8 billion cubic feet a day of liquefied natural gas, a record, as sellers sought to capitalize on high prices.
- Goldman Sachs Group’s(GS) Global Alpha hedge fund lost 5.7% in February, hurt by wrong-way bets on stocks, global bonds and currencies including the Japanese yen. The decline left the $10 billion fund down 2% for the year.
S&P 500 1,437.77 +.93%
DJIA 12,510.30 +1.03%
NASDAQ 2,450.33 +1.16%
Russell 2000 811.76 +1.06%
Wilshire 5000 14,525.03 +.91%
Russell 1000 Growth 566.19 +1.02%
Russell 1000 Value 831.43 +.83%
Morgan Stanley Consumer 710.01 +.76%
Morgan Stanley Cyclical 966.71 +1.03%
Morgan Stanley Technology 567.54 +1.05%
Transports 4,901.78 +1.76%
Utilities 510.10 -.02%
MSCI Emerging Markets 118.44 +1.15%
Sentiment/Internals
Total Put/Call 1.07 +28.92%
NYSE Arms .77 -17.87%
Volatility(VIX) 13.51 -7.02%
ISE Sentiment 106.0 -19.08%
Futures Spot Prices
Crude Oil 64.60 -2.03%
Reformulated Gasoline 201.55 -1.34%
Natural Gas 7.45 -2.88%
Heating Oil 183.82 -1.30%
Gold 670.10 -.21%
Base Metals 258.79 +3.67%
Copper 330.80 +4.06%
Economy
10-year US Treasury Yield 4.66% +2 basis points
US Dollar 83.18 +.39%
CRB Index 313.78 -.41%
Leading Sectors
Airlines +3.39%
Internet +1.95%
Homebuilders +1.74%
Lagging Sectors
Oil Service +.20%
Utilities -.02%
Coal -.42%
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
Merrill Lynch:
- Reiterated Buy on Google(GOOG).
Afternoon/Evening Headlines
Bloomberg:
- Falling oil prices and an unexpected rise in pending home sales ignited a stock-market rally that carried the DJIA to a five-week high.
- Crude oil(-$1.30/bbl.) fell the most in more than three weeks after Prime Minister Tony Blair said the UK will try to negotiate with Iran over the release of 15 hostage British naval personnel.
- Boeing Co.(BA) won an order for five of its 787 Dreamliner jets from Japan Airlines Corp., bringing the total to 514 and extending its lead over Airbus SAS.
- The shutdown of a Valero Energy Corp.(VLO) refinery in Texas has caused some Colorado filling stations to run out of gasoline over the past two weeks, a spokesman for AAA Colorado said.
- US buyers may have imported as much as 2.8 billion cubic feet a day of liquefied natural gas, a record, as sellers sought to capitalize on high prices.
- Goldman Sachs Group’s(GS) Global Alpha hedge fund lost 5.7% in February, hurt by wrong-way bets on stocks, global bonds and currencies including the Japanese yen. The decline left the $10 billion fund down 2% for the year.
BOTTOM LINE: The Portfolio finished higher today on gains in my Retail longs, Computer longs, Internet longs and Biotech longs. 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 above average into the close. Today's overall market action was very bullish. The I-Banking, Internet, Paper, Airline, Homebuilder and HMO sectors all substantially outperformed the major averages. Corn fell another 2.4% today and is down 21% from its highs as some are now saying it has entered a bear market, which would have positive implications for future inflation readings. So far, the addition of more Google (GOOG) shares last month is paying off as the stock has busted through its 50-day moving-average on volume today. Google remains my largest long position. I sense many traders are in disbelief of recent stock strength. I suspect we will build on today's gains before week's end. Johnson Redbook weekly retail sales surged 4.1% last week vs. a 3.9% gain the prior week and a 1.7% gain during this week last year. This is well above the long-term average and the highest weekly increase since early May of last year. Weekly retail sales have gained 3.4%, 3.7%, 3.9% and 4.1% over the last four weeks vs. weekly gains of around 2.75% the prior 3 months. Retail sales are clearly trending higher even as the record number of U.S. stock market bears say sales should be falling off a cliff right now. I continue to believe retail sales are bouncing back sharply into the spring, notwithstanding the drag from housing and higher gas prices. This is likely the result of the facts that wage growth is almost double the recent CPI reading, interest rates are still very low, unemployment is historically low and Americans' net worth is at record high levels. These large positives continue to be ignored.
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