S&P 500 1,104.69 -.36%
NASDAQ 1,893.06 -1.25%
Leading Sectors
Oil Service +1.26%
Fashion +.96%
I-Banks +.81%
Lagging Sectors
Airlines -1.65%
Iron/Steel -1.75%
Disk Drives -3.12%
Other
Crude Oil 40.84 +.99%
Natural Gas 5.91 +1.34%
Gold 497.10 -1.24%
Base Metals 110.85 -.77%
U.S. Dollar 88.55 +.82%
10-Yr. T-note Yield 4.49% +1.14%
VIX 14.31 +.92%
Put/Call .62 -6.06%
NYSE Arms .74 +12.12%
Market Movers
MERQ -13.0% after missing 2Q estimates, lowering 3Q and 04 forecast.
IMCL -17.5% after beating 2Q estimates, but saying it would wait until next near to seek U.S. approval for a new use of Erbitux in head and neck cancer.
ERICY +5.5% after better-than-expected 2Q results.
IVGN -18.5% after meeting 2Q estimates, but lowering 3Q/4Q sales forecast.
PLT +8.77% after beating 1Q estimates, raising 2Q guidance and initiating cash dividend.
WEBX +10.05% after beating 2Q estimates, raising 3Q and 04 guidance.
INTL +10.7% after slightly missing 2Q forecast, but raising dividend.
WNC +11.3% after substantially beating 2Q estimates.
TSS +7.4% after meeting 2Q estimates and reaffirming 04 forecast.
WIRE +9.8% after declaring 3-for-2 split.
SGTL -31.0% after beating 2Q estimates and lowering 3Q forecast.
HIBB -17.4% after lowering 2Q guidance.
BLUD -13.4% after meeting 4Q estimates, but lowering 04 guidance.
Economic Data
None of note.
Recommendations
POS raised to Buy at JP Morgan. SANM raised to Sector Outperform at CIBC, target $17. RFMD cut to Sell at Bank of America, target $5. Goldman reiterated Underperform on INFA, AMCC, F, SLG, RSH, HMT, CL and SGP. Goldman reiterated Outperform on MSFT, JCI, LIZ, NFX, HD, FDC, ABK, GE, MERQ, INTC and N. Citi SmithBarney reiterated Buy on MSFT, target $33. Citi reiterated Buy on AFCI, target $24. Citi reiterated Buy on LLTC, target $45. Citi reiterated Buy on AINV, target $18. Citi reiterated Buy on CMCSK, target $34. Citi reiterated Sell on TER, target $20. Citi reiterated Buy on FCX, target $50. Citi reiterated Buy on INFA, target $10.50. Citi reiterated Buy on SPRT, target $11.50.
Mid-day News
U.S. stocks are mostly lower mid-day on rising interest rates, increasing oil prices and some earnings disappointments. Google's IPO conditions are frustrating some investment banks involved in the transaction and may cause some to drop out, as Merrill Lynch did last month, the Wall Street Journal reported. The U.S. government will announce a plan to get the computer systems of doctors, hospitals, laboratories, pharmacists and insurers communicating and sharing information, the NY Times reported. Saudi Arabian authorities have found the head of Paul Johnson, a Lockheed Martin engineer who was abducted and beheaded by militants last month, the AP said. Harrah's CEO Loveman told CNBC that Atlantic City, NJ, was the company's weakest market in the second quarter, Bloomberg reported. California Governor Schwarzenegger vetoed a Democratic bill that would have let people grow at least 6 marijuana plants and possess at least eight ounces without being arrested, the San Jose Mercury News reported. General Motors said second-quarter profit rose 49%, boosted by rising sales in China and income from its finance unit, Bloomberg said. Delta Air's pilots union proposed a 23% wage cut and other measures to help the carrier avoid a bankruptcy filing, Bloomberg reported. DreamWorks plans to raise as much as $650 million through an IPO to finance at least two productions a year and repay debt, Bloomberg said. The dollar had its biggest gain in more than two months against the yen on speculation the Fed will boost its interest-rate target four more times this year as economic growth accelerates, Bloomberg said.
BOTTOM LINE: The Portfolio is lower today on weakness in my biotech, airline and internet longs. A number of my longs hit stop-losses and I added a few new shorts this morning, leaving the Portfolio 50% net long. One of my new shorts is SSNC and I am using a $22 stop-loss on this position. The tone of the market is pretty bad. The advance/decline line is very poor and investor complacency is high. It is also disappointing there is no follow-through to yesterday's fall in oil. Finally, rising interest rates and more disappointing earnings reports will likely prevent any meaningful rally today. I expect U.S. stocks to weaken into the close.
Wednesday, July 21, 2004
Wednesday Watch
Earnings of Note
Company/Estimate
ALTR/.17
AGR/A/.00
ATVI/.05
BJS/.41
CDN/.15
CHIR/.24
CERN/.37
EBAY/.27
DHI/.88
DRIV/.22
ERES/.14
FFIV/.17
GD/1.40
HET/.79
GM/2.24
IMCL/.25
JPM/.83
LRCX/.26
LIN/.01
LU/.02
NXTL/.51
PFCB/.32
PFE/.46
QCOM/.53
SEBL/.02
SBUX/.22
SYMC/.34
Splits
KNGT 3-for-2
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on CAL, FORM, TRMS, N, JCI and HD. Goldman reiterated Underperform on AVB, F and SLG.
Late-Night News
Asian indices are mostly higher on optimism over Alan Greenspan's comments and Japanese economic growth. New York Senator Hillary Rodham Clinton is favored by delegates to the Democratic National Convention to seek the presidency in 2008 if John Kerry fails to win the Nov. 2 election, the AP reported. Dinakar Singh, head of Goldman Sachs Group's Principal Strategies Department, is leaving the firm to start his own hedge fund, the Wall Street Journal reported. The U.S. may "significantly" reduce its military presence in Japan within the next several years, Nikkei English news reported. OPEC may raise output by as much as 500,000 barrels a day in September, Kuwait's Minister of Energy said.
Late-Night Trading
Asian Indices are +.25% to +1.75% on average.
S&P 500 indicated +.10%.
NASDAQ 100 indicated +.32%.
BOTTOM LINE: I expect U.S. stocks to open higher in the morning on strength in technology shares, short covering and better overall earnings reports. A fall in oil below $40/bbl. and a stabilization of interest rates would also boost shares. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
ALTR/.17
AGR/A/.00
ATVI/.05
BJS/.41
CDN/.15
CHIR/.24
CERN/.37
EBAY/.27
DHI/.88
DRIV/.22
ERES/.14
FFIV/.17
GD/1.40
HET/.79
GM/2.24
IMCL/.25
JPM/.83
LRCX/.26
LIN/.01
LU/.02
NXTL/.51
PFCB/.32
PFE/.46
QCOM/.53
SEBL/.02
SBUX/.22
SYMC/.34
Splits
KNGT 3-for-2
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on CAL, FORM, TRMS, N, JCI and HD. Goldman reiterated Underperform on AVB, F and SLG.
Late-Night News
Asian indices are mostly higher on optimism over Alan Greenspan's comments and Japanese economic growth. New York Senator Hillary Rodham Clinton is favored by delegates to the Democratic National Convention to seek the presidency in 2008 if John Kerry fails to win the Nov. 2 election, the AP reported. Dinakar Singh, head of Goldman Sachs Group's Principal Strategies Department, is leaving the firm to start his own hedge fund, the Wall Street Journal reported. The U.S. may "significantly" reduce its military presence in Japan within the next several years, Nikkei English news reported. OPEC may raise output by as much as 500,000 barrels a day in September, Kuwait's Minister of Energy said.
Late-Night Trading
Asian Indices are +.25% to +1.75% on average.
S&P 500 indicated +.10%.
NASDAQ 100 indicated +.32%.
BOTTOM LINE: I expect U.S. stocks to open higher in the morning on strength in technology shares, short covering and better overall earnings reports. A fall in oil below $40/bbl. and a stabilization of interest rates would also boost shares. The Portfolio is 125% net long heading into tomorrow.
Tuesday, July 20, 2004
Tuesday Close
S&P 500 1,108.67 +.71%
NASDAQ 1,917.07 +1.76%
Leading Sectors
I-Banks +4.39%
Airlines +3.91%
Disk Drives +3.22%
Lagging Sectors
Insurance -.55%
Homebuilders -.67%
Papers -.71%
Other
Crude Oil 40.35 -.22%
Natural Gas 5.87 +.65%
Gold 401.60 -.12%
Base Metals 111.71 -.80%
U.S. Dollar 87.89 +.07%
10-Yr. T-note Yield 4.45% +.31%
VIX 14.17 -6.59%
Put/Call .66 -2.94%
NYSE Arms .66 -54.17%
After-hours Movers
SANM +14.99% after meeting 3Q guidance and raising 04 forecast.
WEBX +14.67% after beating 2Q estimates, raising 3Q and 04 guidance.
INTL +12.04% after slightly missing 2Q forecast, but raising dividend.
LLTC +5.59% after beating 4Q forecast, raising 1Q guidance and announcing 10M share buyback.
ET +5.73% after beating 2Q forecast and raising 04 guidance.
MSFT +5.26% after saying it will return $75 billion to shareholders over the next four years through a special payout, stock buybacks and a higher dividend.
MOT +4.97% after beating 2Q estimates and saying Nextel location service is hampered by glitch.
SGTL -21.12% after beating 2Q estimates and lowering 3Q forecast.
HIBB -19.1% after lowering 2Q guidance.
NVEC -15.03% after meeting 1Q estimate, but saying net income will be lower due to higher R&D expenses.
PXLW -5.9% after meeting 2Q forecast and lowering 3Q guidance.
MDCO -6.86% after missing 2Q estimate.
AFCI -4.64% after missing 2Q forecast.
Recommendations
Goldman Sachs reiterated Outperform on BSX, USB and MSFT.
After-hours News
U.S. stocks finished higher today on stronger earnings reports, comments by Alan Greenspan and falling oil prices. After the close, shares of Pilgrim's Pride had their biggest drop in seven weeks after the KFC unit of YUM! Brands threatened to suspend some meat purchases following reported abuses at a plant, Bloomberg reported. AU Optronics and rival flat-panel display makers in Taiwan will meet their profit forecasts this year even as prices for screens fall, the Commercial Times reported. China's Internet users increased about 28% in the first half of this year to 87 million, slowing from 48.5% growth in the same period last year, the South China Morning Most reported. Microsoft said it will buy back as much as $30 billion in shares over 4 years and set a one-time dividend of $3 a share. Sandy Berger, former U.S. National Security Adviser under Bill Clinton, quit as an adviser to Senator Kerry amid an investigation into Berger's possible theft of classified materials, Bloomberg reported. Federal Reserve Chairman Greenspan said a recent slowdown in consumer spending because of inflation "should prove short-lived" and that the central bank can continue to raise interest rates at a "measured" pace, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly higher today on strength in my technology longs. I added a few new airline and gaming longs in the afternoon, leaving the Portfolio with 125% net long market exposure. One of my new longs is JBLU and I am using a $24.25 stop-loss on this position. Today was a good day for the bulls as good news was rewarded, oil fell and many sectors saw substantial gains. Based on after-hours action, tomorrow should be a positive day as well. I continue to believe this is a tradable rally, but high levels of investor complacency will likely result in a resumption of the selling in the new few weeks.
NASDAQ 1,917.07 +1.76%
Leading Sectors
I-Banks +4.39%
Airlines +3.91%
Disk Drives +3.22%
Lagging Sectors
Insurance -.55%
Homebuilders -.67%
Papers -.71%
Other
Crude Oil 40.35 -.22%
Natural Gas 5.87 +.65%
Gold 401.60 -.12%
Base Metals 111.71 -.80%
U.S. Dollar 87.89 +.07%
10-Yr. T-note Yield 4.45% +.31%
VIX 14.17 -6.59%
Put/Call .66 -2.94%
NYSE Arms .66 -54.17%
After-hours Movers
SANM +14.99% after meeting 3Q guidance and raising 04 forecast.
WEBX +14.67% after beating 2Q estimates, raising 3Q and 04 guidance.
INTL +12.04% after slightly missing 2Q forecast, but raising dividend.
LLTC +5.59% after beating 4Q forecast, raising 1Q guidance and announcing 10M share buyback.
ET +5.73% after beating 2Q forecast and raising 04 guidance.
MSFT +5.26% after saying it will return $75 billion to shareholders over the next four years through a special payout, stock buybacks and a higher dividend.
MOT +4.97% after beating 2Q estimates and saying Nextel location service is hampered by glitch.
SGTL -21.12% after beating 2Q estimates and lowering 3Q forecast.
HIBB -19.1% after lowering 2Q guidance.
NVEC -15.03% after meeting 1Q estimate, but saying net income will be lower due to higher R&D expenses.
PXLW -5.9% after meeting 2Q forecast and lowering 3Q guidance.
MDCO -6.86% after missing 2Q estimate.
AFCI -4.64% after missing 2Q forecast.
Recommendations
Goldman Sachs reiterated Outperform on BSX, USB and MSFT.
After-hours News
U.S. stocks finished higher today on stronger earnings reports, comments by Alan Greenspan and falling oil prices. After the close, shares of Pilgrim's Pride had their biggest drop in seven weeks after the KFC unit of YUM! Brands threatened to suspend some meat purchases following reported abuses at a plant, Bloomberg reported. AU Optronics and rival flat-panel display makers in Taiwan will meet their profit forecasts this year even as prices for screens fall, the Commercial Times reported. China's Internet users increased about 28% in the first half of this year to 87 million, slowing from 48.5% growth in the same period last year, the South China Morning Most reported. Microsoft said it will buy back as much as $30 billion in shares over 4 years and set a one-time dividend of $3 a share. Sandy Berger, former U.S. National Security Adviser under Bill Clinton, quit as an adviser to Senator Kerry amid an investigation into Berger's possible theft of classified materials, Bloomberg reported. Federal Reserve Chairman Greenspan said a recent slowdown in consumer spending because of inflation "should prove short-lived" and that the central bank can continue to raise interest rates at a "measured" pace, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly higher today on strength in my technology longs. I added a few new airline and gaming longs in the afternoon, leaving the Portfolio with 125% net long market exposure. One of my new longs is JBLU and I am using a $24.25 stop-loss on this position. Today was a good day for the bulls as good news was rewarded, oil fell and many sectors saw substantial gains. Based on after-hours action, tomorrow should be a positive day as well. I continue to believe this is a tradable rally, but high levels of investor complacency will likely result in a resumption of the selling in the new few weeks.
Mid-day Update
S&P 500 1,104.48 +.33%
NASDAQ 1,903.29 +1.03%
Leading Sectors
I-Banks +3.59%
Internet +2.27%
Airlines +2.21%
Lagging Sectors
Insurance -.98%
Papers -1.02%
Homebuilders -1.83%
Other
Crude Oil 41.15 -.70%
Natural Gas 5.86 +.81%
Gold 400.80 -1.23%
Base Metals 111.71 -.80%
U.S. Dollar 87.53 +.40%
10-Yr. T-note Yield 4.37% +.58%
VIX 14.68 -3.36%
Put/Call .68 unch.
NYSE Arms .79 -45.14%
Market Movers
SINA +10.7% on CSFB upgrade to Outperform.
RHAT +9.5% after its restated 1Q results were consistent with its previous comments.
BSX -4.0% after saying it had completed its stent recall.
GLW +10.2% after beating 2Q forecast, raising 3Q guidance and saying it is encouraged by Fiber-to-the-premises sales.
TASR -11.6% after beating 2Q estimates and saying it found a minor accounting error in 1Q that did not materially affect results.
NTMD +15.8% on continued optimism over recent cardiovascular study in African-Americans.
AEN +22.0% on speculation JP Morgan Partners is close to an agreement to purchase the company for about $1.4 billion.
ALDN +15.4% after beating 2Q forecast and raising 3Q guidance.
TEN +14.3% after substantially beating 2Q estimates.
BRLI +15.75% after Jefferies upgrade from Hold to Buy, target $16.50.
SSNC +14.2% after beating 2Q estimates and boosting 3Q and 04 guidance. RSH +8.3% after beating 2Q forecast, raising 3Q and 04 guidance.
DNB +8.1% after beating 2Q estimates and raising 04 forecast.
CGNX -10.1% on profit-taking after meeting 2Q estimates and boosting 3Q guidance.
ITRI -11.2% after missing 2Q estimate, lowering 04 guidance and RBC Capital downgrade to Sector Perform.
DSPG -10.9% after missing 2Q sales forecast and lowering 04 guidance on product delays and reduced demand.
Economic Data
Housing Starts for June were 1802K versus an estimate of 1990K and an upwardly revised 1970K in May.
Building Permits for June were 1924K versus an estimate of 2000K and an upwardly revised 2097K in May.
Recommendations
LOW raised to Buy at UBS, target $61. CFC raised to Outperform at CSFB, target $85. OSIP rated Underperform at CSFB, target $50. IMCL rated Outperform at CSFB, target $105. CNP rated Overweight at Prudential, target $14. Goldman Sachs said to Buy FLEX on weakness. Goldman reiterated Outperform on RE, DOW and ALL. Goldman reiterated Underperform on F, FRX and ATI. Citi SmithBarney upgraded PEG to Buy, target $46. Citi reiterated Sell on RKY, target $52. Citi reiterated Sell on BA, target $36. Citi reiterated Buy on ALL, target $55. Citi reiterated Buy on MXRE, target $24. Citi reiterated Buy on PRE, target $69. Citi reiterated Sell on RNR, target $51. Citi reiterated Buy on ACGL, target $48. Citi reiterated Buy on LNCR, target $42. Citi reiterated Buy on MSFT, target $33. Citi reiterated Buy on SONSE, target $5.5. Citi reiterated Buy on PNR, target $40. Citi reiterated Sell on FLSH, target $15. Citi reiterated Buy on ASD, target $46.
Mid-day News
U.S. stocks are higher mid-day, led by rebounding technology shares after several strong earnings reports prompted bargain-hunting. The demand-supply imbalance in the U.S. coal market, which has almost doubled prices to about $60 a ton, won't last long, the Wall Street Journal reported. President Bush is pushing Congress to extend a series of tax cuts before it leaves for the August recess at the end of this week, the Washington Post reported. China Petrochemical estimates it has found more than 500 million metric tons of crude oil reserves in western China, China Central tv said. Richard Grasso has filed suit against the NYSE for at least $50 million, alleging breach of contract, CNBC reported. Mickey Levy, chief economist at Bank of America, told CNBC the weakness in housing starts is temporary and he is already seeing a bounce back in other indicators for the month of July. Japan's Cabinet Office plans to increase its official forecast for the current fiscal year's economic growth to 3.5% from 1.8%, Kyodo News said. George Soros of the Quantum fund made $750 million last year, regaining the top spot for highly paid hedge fund managers, according to Institutional Investor's Alpha magazine. OAO Yukos Oil's largest oil unit, which accounts for two-thirds of Yukos's output, will be seized and sold as Russia tries to recover $3.4 billion in back taxes, the Russian Justice Ministry said.
BOTTOM LINE: The Portfolio is unchanged today as my biotech longs are falling and a few of my shorts hit stop-losses, offsetting gains in other positions. I also added a few more technology longs this morning, leaving the Portfolio 100% net long. One of my new longs is YHOO and I am using a $28.25 stop-loss on the position. Crude oil may have made an intermediate-term top today as the news from Russia could not send prices higher. The tone of the market is much improved relative to the past few weeks. I expect U.S. stocks to strengthen into the close on comments from Greenspan, short-covering and bargain-hunting in technology and financial shares.
NASDAQ 1,903.29 +1.03%
Leading Sectors
I-Banks +3.59%
Internet +2.27%
Airlines +2.21%
Lagging Sectors
Insurance -.98%
Papers -1.02%
Homebuilders -1.83%
Other
Crude Oil 41.15 -.70%
Natural Gas 5.86 +.81%
Gold 400.80 -1.23%
Base Metals 111.71 -.80%
U.S. Dollar 87.53 +.40%
10-Yr. T-note Yield 4.37% +.58%
VIX 14.68 -3.36%
Put/Call .68 unch.
NYSE Arms .79 -45.14%
Market Movers
SINA +10.7% on CSFB upgrade to Outperform.
RHAT +9.5% after its restated 1Q results were consistent with its previous comments.
BSX -4.0% after saying it had completed its stent recall.
GLW +10.2% after beating 2Q forecast, raising 3Q guidance and saying it is encouraged by Fiber-to-the-premises sales.
TASR -11.6% after beating 2Q estimates and saying it found a minor accounting error in 1Q that did not materially affect results.
NTMD +15.8% on continued optimism over recent cardiovascular study in African-Americans.
AEN +22.0% on speculation JP Morgan Partners is close to an agreement to purchase the company for about $1.4 billion.
ALDN +15.4% after beating 2Q forecast and raising 3Q guidance.
TEN +14.3% after substantially beating 2Q estimates.
BRLI +15.75% after Jefferies upgrade from Hold to Buy, target $16.50.
SSNC +14.2% after beating 2Q estimates and boosting 3Q and 04 guidance. RSH +8.3% after beating 2Q forecast, raising 3Q and 04 guidance.
DNB +8.1% after beating 2Q estimates and raising 04 forecast.
CGNX -10.1% on profit-taking after meeting 2Q estimates and boosting 3Q guidance.
ITRI -11.2% after missing 2Q estimate, lowering 04 guidance and RBC Capital downgrade to Sector Perform.
DSPG -10.9% after missing 2Q sales forecast and lowering 04 guidance on product delays and reduced demand.
Economic Data
Housing Starts for June were 1802K versus an estimate of 1990K and an upwardly revised 1970K in May.
Building Permits for June were 1924K versus an estimate of 2000K and an upwardly revised 2097K in May.
Recommendations
LOW raised to Buy at UBS, target $61. CFC raised to Outperform at CSFB, target $85. OSIP rated Underperform at CSFB, target $50. IMCL rated Outperform at CSFB, target $105. CNP rated Overweight at Prudential, target $14. Goldman Sachs said to Buy FLEX on weakness. Goldman reiterated Outperform on RE, DOW and ALL. Goldman reiterated Underperform on F, FRX and ATI. Citi SmithBarney upgraded PEG to Buy, target $46. Citi reiterated Sell on RKY, target $52. Citi reiterated Sell on BA, target $36. Citi reiterated Buy on ALL, target $55. Citi reiterated Buy on MXRE, target $24. Citi reiterated Buy on PRE, target $69. Citi reiterated Sell on RNR, target $51. Citi reiterated Buy on ACGL, target $48. Citi reiterated Buy on LNCR, target $42. Citi reiterated Buy on MSFT, target $33. Citi reiterated Buy on SONSE, target $5.5. Citi reiterated Buy on PNR, target $40. Citi reiterated Sell on FLSH, target $15. Citi reiterated Buy on ASD, target $46.
Mid-day News
U.S. stocks are higher mid-day, led by rebounding technology shares after several strong earnings reports prompted bargain-hunting. The demand-supply imbalance in the U.S. coal market, which has almost doubled prices to about $60 a ton, won't last long, the Wall Street Journal reported. President Bush is pushing Congress to extend a series of tax cuts before it leaves for the August recess at the end of this week, the Washington Post reported. China Petrochemical estimates it has found more than 500 million metric tons of crude oil reserves in western China, China Central tv said. Richard Grasso has filed suit against the NYSE for at least $50 million, alleging breach of contract, CNBC reported. Mickey Levy, chief economist at Bank of America, told CNBC the weakness in housing starts is temporary and he is already seeing a bounce back in other indicators for the month of July. Japan's Cabinet Office plans to increase its official forecast for the current fiscal year's economic growth to 3.5% from 1.8%, Kyodo News said. George Soros of the Quantum fund made $750 million last year, regaining the top spot for highly paid hedge fund managers, according to Institutional Investor's Alpha magazine. OAO Yukos Oil's largest oil unit, which accounts for two-thirds of Yukos's output, will be seized and sold as Russia tries to recover $3.4 billion in back taxes, the Russian Justice Ministry said.
BOTTOM LINE: The Portfolio is unchanged today as my biotech longs are falling and a few of my shorts hit stop-losses, offsetting gains in other positions. I also added a few more technology longs this morning, leaving the Portfolio 100% net long. One of my new longs is YHOO and I am using a $28.25 stop-loss on the position. Crude oil may have made an intermediate-term top today as the news from Russia could not send prices higher. The tone of the market is much improved relative to the past few weeks. I expect U.S. stocks to strengthen into the close on comments from Greenspan, short-covering and bargain-hunting in technology and financial shares.
Tuesday Watch
Earnings of Note
Company/Estimate
MO/1.28
BCC/.29
CDWC/.66
CNF/.58
EMC/.08
ET/.19
CYMI/.29
ESV/.09
F/.50
FRX/.56
GNTX/.38
N/.85
MOT/.17
MCHP/.26
LLTC/.30
SUNW/-.04
TASR/.13
TXN/.25
WFC/1.04
Splits
None of note.
Economic Data
Housing Starts for June estimated at 1990K versus 1967K in May.
Building Permits for June estimated at 2000K versus 2097K in May.
Greenspan begins testimony to Congress.
Recommendations
CHTR cut to Reduce at UBS, target $3. China's telecom industry raised to Overweight at CSFB. AUO cut to Sell from Buy at Merrill Lynch. Goldman Sachs reiterated Outperform on IR, ALL, GLW, TPX, CEN and RE.
Late-Night News
Asian indices are mostly lower on concerns that slowing growth in China and the U.S. will further hurt technology shares in the region. China will tighten control on churches in Shanghai, extending surveillance for the first time to include the activities of foreigners, South China Morning Post reported. Israeli Prime Minister Sharon is unwelcome in France until he explains comments calling on French Jews to leave because of increased anti-Semitism, Agence France-Presse said, citing President Chirac. J.P. Morgan Chase is in final talks to buy Egg Plc, the U.K. internet bank, for $2.61 billion, the Financial Times said. Former U.S. National Security Adviser for the Clinton administration Sandy Berger is being investigated for taking home highly classified terror documents, the AP reported. Martha Stewart wants to write a how-to book about her legal experiences, she said in an interview with CNN. China's curbs on short-term lending are too tight and are causing difficulties to companies, the official Economic Daily reported, citing the deputy director of the National Bureau of Statistics. Juan del Olmo, the Spanish judge investigating the March 11 terrorist attacks in Madrid, said support cells that helped with the attacks may be taking over operations in the country, the AP reported. China plans to let banks convert mortgage loans and non-performing assets into tradable securities as part of plans to develop the country's bond market, the China Securities Journal reported. Oil-tanker rates for shipping crude oil from the Middle East to Asia surged to their highest in almost three years as near-record oil production from OPEC spurred demand for vessels, Bloomberg said. Striking workers shut LG-Caltex Oil's oil refinery, which accounts for 28% of South Korean fuel production, reducing supplies to plastics makers, transport companies and power stations, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.75% to -.75% on average.
S&P 500 indicated -.06%.
NASDAQ 100 indicated -.07%.
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning on weakness in Asia. However, I will likely add to market exposure on any extreme weakness as Greenspan's testimony, better earnings reports and a continuation of today's oversold technical bounce in technology shares boosts the major indices later in the day. The Portfolio is 50% net long heading into tomorrow.
Company/Estimate
MO/1.28
BCC/.29
CDWC/.66
CNF/.58
EMC/.08
ET/.19
CYMI/.29
ESV/.09
F/.50
FRX/.56
GNTX/.38
N/.85
MOT/.17
MCHP/.26
LLTC/.30
SUNW/-.04
TASR/.13
TXN/.25
WFC/1.04
Splits
None of note.
Economic Data
Housing Starts for June estimated at 1990K versus 1967K in May.
Building Permits for June estimated at 2000K versus 2097K in May.
Greenspan begins testimony to Congress.
Recommendations
CHTR cut to Reduce at UBS, target $3. China's telecom industry raised to Overweight at CSFB. AUO cut to Sell from Buy at Merrill Lynch. Goldman Sachs reiterated Outperform on IR, ALL, GLW, TPX, CEN and RE.
Late-Night News
Asian indices are mostly lower on concerns that slowing growth in China and the U.S. will further hurt technology shares in the region. China will tighten control on churches in Shanghai, extending surveillance for the first time to include the activities of foreigners, South China Morning Post reported. Israeli Prime Minister Sharon is unwelcome in France until he explains comments calling on French Jews to leave because of increased anti-Semitism, Agence France-Presse said, citing President Chirac. J.P. Morgan Chase is in final talks to buy Egg Plc, the U.K. internet bank, for $2.61 billion, the Financial Times said. Former U.S. National Security Adviser for the Clinton administration Sandy Berger is being investigated for taking home highly classified terror documents, the AP reported. Martha Stewart wants to write a how-to book about her legal experiences, she said in an interview with CNN. China's curbs on short-term lending are too tight and are causing difficulties to companies, the official Economic Daily reported, citing the deputy director of the National Bureau of Statistics. Juan del Olmo, the Spanish judge investigating the March 11 terrorist attacks in Madrid, said support cells that helped with the attacks may be taking over operations in the country, the AP reported. China plans to let banks convert mortgage loans and non-performing assets into tradable securities as part of plans to develop the country's bond market, the China Securities Journal reported. Oil-tanker rates for shipping crude oil from the Middle East to Asia surged to their highest in almost three years as near-record oil production from OPEC spurred demand for vessels, Bloomberg said. Striking workers shut LG-Caltex Oil's oil refinery, which accounts for 28% of South Korean fuel production, reducing supplies to plastics makers, transport companies and power stations, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.75% to -.75% on average.
S&P 500 indicated -.06%.
NASDAQ 100 indicated -.07%.
BOTTOM LINE: I expect U.S. stocks to open modestly lower in the morning on weakness in Asia. However, I will likely add to market exposure on any extreme weakness as Greenspan's testimony, better earnings reports and a continuation of today's oversold technical bounce in technology shares boosts the major indices later in the day. The Portfolio is 50% net long heading into tomorrow.
Monday, July 19, 2004
Monday Close
S&P 500 1,100.90 -.04%
NASDAQ 1,883.83 +.04%
Leading Sectors
Airlines +1.46%
Computer Services +.80%
Restaurants +.73%
Lagging Sectors
I-Banks -1.57%
Homebuilders -1.57%
Gaming -1.61%
Other
Crude Oil 41.37 -.17%
Natural Gas 5.80 -.22%
Gold 406.40 +.15%
Base Metals 112.61 -.37%
U.S. Dollar 87.16 +.02%
10-Yr. T-note Yield 4.35% +.13%
VIX 15.17 +5.79%
Put/Call .68 -37.61%
NYSE Arms 1.44 -21.74%
After-hours Movers
JCOM +4.92% after beating 2Q estimates and boosting 3Q and 04 guidance.
SSNC +7.42% after beating 2Q estimates and boosting 3Q and 04 guidance.
GLW +6.48% after beating 2Q forecast, raising 3Q guidance and saying it is encouraged by Fiber-to-the-premises sales.
CYTK +4.2% after CSFB initiated with Neutral rating, $16 target.
FLEX -10.03% after missing 2Q estimates and lowering 3Q guidance.
CGNX -6.93% on profit-taking after meeting 2Q estimates and boosting 3Q guidance.
RLRN -4.25% after missing 2Q forecast and making negative comments on future growth.
Recommendations
TheStreet.com has a positive column on SYK. Jim Cramer, of TheStreet.com, thinks the selling is overdone in net stocks, he is nibbling at YHOO. Goldman Sachs reiterated Outperform on KO, STZ and Underperform on RKY, PBG.
After-hours News
U.S. stocks finished mixed today as a late-afternoon surge boosted technology shares. After the close, Sony and Bertelsmann's planned merger of their music businesses was approved by the European Commission a day earlier than expected, Dow Jones Newswires reported. Northwest Airlines may get competition in Detroit, its biggest airport hub, from discount carrier JetBlue, the Detroit News reported. U.S. investors should consider putting money into loan funds instead of bonds as interest rates rise, Christine Benz, associate director of fund analysis at Morningstar told CNN. Corning, the world's largest maker of fiber-optic cable, reported that sales rose 29% to $971 million on increased purchases of glass used in liquid-crystal displays, Bloomberg said. Allstate, the second-largest U.S. auto and home insurer, said second-quarter earnings rose 76% as losses from natural catastrophes fell and it targeted clients that file the fewest claims, Bloomberg reported. Halliburton said the U.S. Attorney for the Southern District of Texas subpoenaed documents related to the company's operations in Iran, Bloomberg said. Documents obtained by Human Rights Watch show that Sudanese government officials helped recruit and arm an Arab militia group responsible for abuses in the country's western Darfur province, Bloomberg reported. Researchers have discovered a genetic defect that may cause sudden infant death syndrome in some children, according to a National Academy of Science study. Molson and No. 3 U.S. brewer Coors confirmed media reports that they are in advanced discussions about a possible merger, Bloomberg reported. Winn-Dixie Stores agreed to include protections for gay and lesbian workers after a request from two of New York City's five public employee pension funds, which hold $1.57 million in the supermarket chain's stock, Bloomberg said.
BOTTOM LINE: The Portfolio finished higher today on strength in my Chinese ADR longs and weakness in my medical shorts. I took profits in a few retail shorts in the afternoon and added a some beaten up technology longs, bringing the Portfolio's market exposure to 50% net long. One of my new longs is DITC and I am using an $18 stop-loss on this position. The Advance/Decline line improved in the afternoon as well as the overall tone of trading. Many technology stocks have reached levels that should prompt more bargain-hunting later this week. I expect positive reports from Motorola, Microsoft, Amazon, Broadcom, SAP and Qualcomm to also provide catalysts for positive performance by tech stocks in the near-term. However, any rally will likely be short-lived as I expect more weakness later in the month on earnings worries, political fears and relatively high investor complacency.
NASDAQ 1,883.83 +.04%
Leading Sectors
Airlines +1.46%
Computer Services +.80%
Restaurants +.73%
Lagging Sectors
I-Banks -1.57%
Homebuilders -1.57%
Gaming -1.61%
Other
Crude Oil 41.37 -.17%
Natural Gas 5.80 -.22%
Gold 406.40 +.15%
Base Metals 112.61 -.37%
U.S. Dollar 87.16 +.02%
10-Yr. T-note Yield 4.35% +.13%
VIX 15.17 +5.79%
Put/Call .68 -37.61%
NYSE Arms 1.44 -21.74%
After-hours Movers
JCOM +4.92% after beating 2Q estimates and boosting 3Q and 04 guidance.
SSNC +7.42% after beating 2Q estimates and boosting 3Q and 04 guidance.
GLW +6.48% after beating 2Q forecast, raising 3Q guidance and saying it is encouraged by Fiber-to-the-premises sales.
CYTK +4.2% after CSFB initiated with Neutral rating, $16 target.
FLEX -10.03% after missing 2Q estimates and lowering 3Q guidance.
CGNX -6.93% on profit-taking after meeting 2Q estimates and boosting 3Q guidance.
RLRN -4.25% after missing 2Q forecast and making negative comments on future growth.
Recommendations
TheStreet.com has a positive column on SYK. Jim Cramer, of TheStreet.com, thinks the selling is overdone in net stocks, he is nibbling at YHOO. Goldman Sachs reiterated Outperform on KO, STZ and Underperform on RKY, PBG.
After-hours News
U.S. stocks finished mixed today as a late-afternoon surge boosted technology shares. After the close, Sony and Bertelsmann's planned merger of their music businesses was approved by the European Commission a day earlier than expected, Dow Jones Newswires reported. Northwest Airlines may get competition in Detroit, its biggest airport hub, from discount carrier JetBlue, the Detroit News reported. U.S. investors should consider putting money into loan funds instead of bonds as interest rates rise, Christine Benz, associate director of fund analysis at Morningstar told CNN. Corning, the world's largest maker of fiber-optic cable, reported that sales rose 29% to $971 million on increased purchases of glass used in liquid-crystal displays, Bloomberg said. Allstate, the second-largest U.S. auto and home insurer, said second-quarter earnings rose 76% as losses from natural catastrophes fell and it targeted clients that file the fewest claims, Bloomberg reported. Halliburton said the U.S. Attorney for the Southern District of Texas subpoenaed documents related to the company's operations in Iran, Bloomberg said. Documents obtained by Human Rights Watch show that Sudanese government officials helped recruit and arm an Arab militia group responsible for abuses in the country's western Darfur province, Bloomberg reported. Researchers have discovered a genetic defect that may cause sudden infant death syndrome in some children, according to a National Academy of Science study. Molson and No. 3 U.S. brewer Coors confirmed media reports that they are in advanced discussions about a possible merger, Bloomberg reported. Winn-Dixie Stores agreed to include protections for gay and lesbian workers after a request from two of New York City's five public employee pension funds, which hold $1.57 million in the supermarket chain's stock, Bloomberg said.
BOTTOM LINE: The Portfolio finished higher today on strength in my Chinese ADR longs and weakness in my medical shorts. I took profits in a few retail shorts in the afternoon and added a some beaten up technology longs, bringing the Portfolio's market exposure to 50% net long. One of my new longs is DITC and I am using an $18 stop-loss on this position. The Advance/Decline line improved in the afternoon as well as the overall tone of trading. Many technology stocks have reached levels that should prompt more bargain-hunting later this week. I expect positive reports from Motorola, Microsoft, Amazon, Broadcom, SAP and Qualcomm to also provide catalysts for positive performance by tech stocks in the near-term. However, any rally will likely be short-lived as I expect more weakness later in the month on earnings worries, political fears and relatively high investor complacency.
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