Portfolio Manager's Commentary on Investing and Trading in the U.S. Financial Markets
Thursday, May 03, 2007
Stocks Higher into Final Hour Ahead of Tomorrow's Jobs Report
Today's Headlines
Bloomberg:
- Crude oil is falling another $.50/bbl. to $63.17/bbl. as investment fund speculation that gasoline inventories are too low to meet summer demand subsides.
- Former NY Mayor Rudolph Giuliani, who is favored among Republican presidential candidates, also leads the top Democratic contenders in head-to-head match-ups, a
- About 50 countries adopted a UN-sponsored plan to boost
- Intel Corp.(INTC) CEO Otellini said profit will increase at a faster rate than sales this year as the chipmaker pushes ahead with its plan to lower costs by $2 billion.
- Prime Minister Nuri al-Maliki told a major conference on
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- UBS AG, the world’s biggest money manager, reported a third straight decline in quarterly profit and said it plans to scrap the hedge fund run by John Costas after losses in the
- Democratic Senator Charles Schumer introduced legislation that would hold lenders liable for brokers and appraisers who make bad mortgage loans and called on banks to match $300 million in federal funds to prevent foreclosures.
Wall Street Journal:
- T-Mobile USA Inc. will introduce a line of cell phones this summer that can roam on so-called Wi-Fi hotspots, carrying calls on the Internet to reduce the cost of mobile phone use.
- Michael Elefante, a Boston-based trust and estates attorney, is at the center of the decision over News Corp.’s(NWS/A) $5 billion offer for Dow Jones(DJ).
- JPMorgan Chase(JPM) is developing a pilot project to sell mortgages to illegal immigrants in Maricopa Country,
- The US government need to do more to stop terrorists from using the Internet and video games to recruit young people.
- The Democrat-led US Congress is considering legislation to protect reporters from being forced to disclose the identities of their sources.
Market News Intl.:
- The European Central Bank may have less of a reason to raise interest rates further after Juen if the euro continues to appreciate, citing “well-informed central bank sources.”
Dagens Nyheter:
- Czech lawmakers approved a bill that would mandate the addition of biofuels to gasoline and diesel.
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Productivity Accelerates, Labor Costs Decelerate Substantially, Jobless Claims Fall, Service Sector Healthy
- Preliminary 1Q Non-farm Productivity rose 1.7% versus estimates of a .7% gain and an upwardly revised 2.1% increase in 4Q.
- Preliminary 1Q Unit Labor Costs rose .6% versus estimates of a 3.8% gain and a downwardly revised 6.2% increase in 4Q.
- Initial Jobless Claims fell to 305K versus estimates of 325K and 326K the prior week.
- Continuing Claims fell to 2495K versus estimates of 2550K and 2588K prior.
- ISM Non-Manufacturing for April rose to 56.0 versus estimates of 53.0 and a reading of 52.4 in March.
BOTTOM LINE:
The number of US workers filing first-time claims for unemployment benefits fell to a three-month low last week, signaling the jobless rate may not rise in coming months, Bloomberg said. The four-week moving-average of jobless claims fell to 328,750 from 333,250 the prior week. The unemployment rate among those eligible for benefits, which tracks the
Wednesday, May 02, 2007
Thursday Watch
Late-Night Headlines
Bloomberg:
- Morgan Stanley(MS) said investors should bet the US dollar will rise against the Australian dollar and overcome its recent economic-related weakness. Dollar “valuations already reflect a lot of bad news,” wrote Morgan Stanley currency strategists Sophia Drossos and Yilin Nie in New York in a note to clients today. “While the possibility for further weakness remains, the bulk of depreciation is behind us.”
- The yen declined to a record low against the euro as traders took advantage of the lowest borrowing costs among major economies to buy higher-yielding currencies.
- In the end, it was Segolene Royal who lost her cool. The French Socialist presidential candidate raised her voice and accused her opponent Nicolas Sarkozy of “immorality” for presenting himself as a defender of handicapped children.
- Gold traded near a three-week low in Asia amid speculation physical demand from
- Israeli Prime Minister Ehud Olmert’s prospects of staying in office are fading after Foreign Minister Tzipi Livni offered herself as a candidate to lead their Kadima Party, allowing the ruling coalition to retain power.
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- Chris de Lavigne, global vice president of consulting at Frost & Sullivan, says the ability to make ethanol from waster “is here” now.
Wall Street Journal:
- The United Auto Workers union is preparing a final counteroffer to wage and benefit cuts proposed by bankrupt auto supplier Delphi Corp.
- PepsiCo Inc.(PEP) is starting a new advertising campaign to boost sales of Diet Pepsi as it competes with Coca-Cola’s(KO) Diet Coke.
Dow Jones:
- Dow Jones’(DJ) board won’t act on News Corp.’s $5 billion takeover bid. 52% of shareholders with voting power in the company oppose the takeover, citing a survey of the company’s controlling family, the Bancrofts.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (SYMC), target $22.
- Reiterated Buy on (WXS), target $38.
- Reiterated Buy on (S), target $25.
Night Trading
Asian Indices are +.25% to +.75% on average.
S&P 500 indicated +.01%.
NASDAQ 100 indicated +.08%.
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Earnings of Note
Company/EPS Estimate
- (ANDW)/.08
- (BEBE)/.13
- (CVC)/-.11
- (ELY)/.46
- (CECO)/.35
- (CBS)/.32
- (CELG)/.20
- (CKP)/.08
- (CHK)/.78
- (CXW)/.47
- (CROX)/.48
- (DF)/.45
- (DNB)/.96
- (EDS)/.21
- (EL)/.46
- (FAF)/.78
- (FSLR)/.00
- (GMST)/.05
- (GM)/.83
- (IACI)/.32
- (IP)/.40
- (IFF)/.66
- (ITG)/.54
- (JSDA)/.03
- (LF)/-.40
- (CLI)/.25
- (MSO)/-.17
- (MDR)/.75
- (MGM)/.63
- (MORN)/.36
- (NBR)/.85
- (NBL)/.99
- (OMX)/.91
- (PTEN)/.71
- (PPL)/.70
- (PSA)/1.12
- (QLGC)/.23
- (SBUX)/.19
- (STRA)/1.29
- (TK)/1.07
- (TKLC)/-.04
- (TSO)/1.88
- (TIE)/.37
- (WTW)/.63
- (WMB)/.33
- (WMS)/.34
Upcoming Splits
- (AZZ) 2-for-1
Economic Releases
8:30 am EST
- Preliminary 1Q Non-farm Productivity is estimated to rise .7% versus a 1.6% gain in 4Q.
- Preliminary 1Q Unit Labor Costs are estimated to rise 3.8% versus a 6.6% gain in 4Q.
- Initial Jobless Claims are estimated to rise to 325K versus 321K the prior week.
- Continuing Claims are estimated to fall to 2550K versus 2594K prior.
10:00 am EST
- ISM Non-Manufacturing for April is estimated to rise to 53.0 versus a reading of 52.4 in March.
DJIA Hits Another All-Time High, S&P 500 at 6-year High on Positive Earnings, Better Economic Data, Buyout Speculation
Indices
S&P 500 1,495.92 +.65%
DJIA 13,211.88 +.58%
NASDAQ 2,557.84 +1.04%
Russell 2000 828.46 +1.50%
Wilshire 5000 15,066.46 +.78%
Russell 1000 Growth 591.28 +.82%
Russell 1000 Value 859.03 +.60%
Morgan Stanley Consumer 738.13 +.43%
Morgan Stanley Cyclical 1,033.17 +1.24%
Morgan Stanley Technology 601.17 +.84%
Transports 5,086.14 +1.03%
Utilities 527.27 +.52%
MSCI Emerging Markets 123.0 +1.03%
Sentiment/Internals
Total Put/Call .79 -29.46%
NYSE Arms .63 -32.66%
Volatility(VIX) 13.08 -3.18%
ISE Sentiment 122.0 +7.02%
Futures Spot Prices
Crude Oil 63.50 -1.40%
Reformulated Gasoline 222.25 -.99%
Natural Gas 7.72 +.06%
Heating Oil 184.85 -1.83%
Gold 675.40 -.28%
Base Metals 274.82 +.92%
Copper 363.25 -.06%
Economy
10-year US Treasury Yield 4.64% unch.
US Dollar 81.76 +.20%
CRB Index 310.52 -.34%
Leading Sectors
Restaurants +1.79%
HMOs +1.76%
Gaming +1.75%
Lagging Sectors
Foods +.37%
Hospitals +.24%
Oil Tankers -.70%
Evening Review
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In Play
Afternoon Recommendations
Bank of America:
- Rated (CNET) Buy, target $11.
Afternoon/Evening Headlines
Bloomberg:
-
- The
- Symantec Corp.(SYMC) said fourth-quarter profit fell 49% as sales growth slackened to its slowest pace since 2000. The shares surged 6% after the earnings topped analysts’ estimates.
- Consuming more than 14 alcoholic drinks a week may be linked to a decrease in brain size, a potential sign of mental decline, according to a study.
- The
- The House of Representatives failed to override President Bush’s veto of a war-funding measure that includes a deadline for withdrawal from
- JDS Uniphase(JDSU) posted a third-quarter loss because of increased stock-option expenses. The shares fell 8% after the company forecast sales that trailed analysts’ estimates.
Star-Ledger:
- James McGreevey, the New Jersey governor who quit after saying he’d had an affair with a male employee, is taking steps to become an Episcopal priest.