Indices
S&P 500 1,287.24 +1.60%
DJIA 11,115.32 +1.80%
NASDAQ 2,282.36 +.91%
Russell 2000 730.94 +1.93%
S&P Equity Long/Short Index 1,148.37 -.56%
S&P Barra Growth 609.52 +1.30%
S&P Barra Value 674.10 +1.91%
Morgan Stanley Consumer 604.33 +1.82%
Morgan Stanley Cyclical 802.25 +2.52%
Morgan Stanley Technology 535.82 +.76%
Transports 4,404.34 +1.91%
Utilities 409.66 +1.13%
S&P 500 Cum A/D Line 8,460 +7.0%
Bloomberg Crude Oil % Bulls 29.0 -14.53%
Put/Call .81 +19.12%
NYSE Arms 1.21 +7.08%
Volatility(VIX) 12.01 -6.68%
ISE Sentiment 173.00 -7.98%
AAII % Bulls 40.18 -.02%
AAII % Bears 35.71 +3.27%
US Dollar 90.64 +.05%
CRB 326.15 -1.64%
ECRI Weekly Leading Index 136.90 -.94%
Futures Spot Prices
Crude Oil 59.88 -3.18%
Unleaded Gasoline 150.26 +2.22%
Natural Gas 7.18 -1.75%
Heating Oil 165.74 +.33%
Gold 555.20 +.18%
Base Metals 161.18 -3.69%
Copper 219.20 -1.70%
10-year US Treasury Yield 4.53% -1.31%
Average 30-year Mortgage Rate 6.28% +.64%
Leading Sectors
Telecom +4.43%
Biotech +3.85%
Hospitals +3.83%
I-Banks 3.64%
Disk Drives +3.39%
Lagging Sectors
Tobacco -.40%
Restaurants -.40%
Software -.80%
Semis -.92%
Oil Service -3.65%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day % Change
Saturday, February 18, 2006
Friday, February 17, 2006
Stocks Modestly Lower into Final Hour on Profit-taking
BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Biotech longs, Internet longs and Networking longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, sector performance is mixed and volume is above average. The ECRI Weekly Leading Index fell to 136.90 this week from 138.20 the prior week. This is off of cycle highs of 138.50 set the third week of January, but is still solidly higher from a reading of 132.00 during the last week of May 2005. This gauge of future economic activity is forecasting healthy, but decelerating, U.S. growth. I expect US stocks to trade modestly higher into the close from current levels on short-covering and lower long-term rates.
Today's Headlines
Bloomberg:
- US Steel Corp.(X) CEO Surma said rival Arcelor, which is fighting a $22.4 billion hostile takeover from Mittal Steel, is unlikely to seek to acquire US Steel.
- London’s most expensive homes posted their biggest monthly increase in value in at least 20 years in January as bankers and traders started spending record bonuses, according to UK real-estate agent Knight Frank LLC.
- Sirius Satellite Radio(SIRI) posted a wider fourth-quarter loss after spending more on promotions during the holiday season.
- A campaign button depicting the embrace of President Bush and Democratic Senator Joe Lieberman is circulating among a group of Democrats attempting to organize a primary challenge to the 63-year-old Lieberman.
- Delphi Corp. set a new deadline of March 31 for asking a bankruptcy judge to void its labor contracts, union officials said.
- City officials in Volgograd, Russia, closed their own newspaper for printing a cartoon portraying Muhammad and other prophets amid violent protests in some Islamic countries over Muhammad cartoons in European publications.
- Penthouse Media Group plans to start its own television porn channel this year and may go public to help finance an expansion beyond magazines.
- Crude oil is rising after a report that Nigerian militants would declare war on oil companies.
Wall Street Journal:
- Merger and acquisitions funds, despite an increase in transactions, are showing “uninspiring” returns, citing S&P.
- Wilmer Cutler Pickering Hale & Dorr and other US law firms are gaining business defending companies from China in trade disputes.
- The FDA is seeking user fees from generic-drug markers to help fund reviews, in the same way major branded-pharmaceuticals and device makers do.
- If Mexico’s Grupo Televisa SA is to acquire Univision Communications(UVN) it must overcome some legal and social difficulties.
NY Times:
- KeySpan Corp.(KSE), the fifth-largest US natural gas distributor, is trying to sell itself and has attracted bids of more than $6.5 billion.
- Quadrangle Group LLC, a media and communications investment firm, will announce today that it is starting a head fund for which it eventually expects to raise $1 billion.
- New Orleans, much of which was destroyed by Hurricane Katrina last year, will hold its first Mardi Gras carnival since the destruction later this month.
Chicago Tribune:
- Chicago will seek proposals from technology companies this spring on how to build and offer wireless Internet access throughout the city.
Sky News:
- Eva Green, a French actress best known for her role in Ridley Scott’s drama Kingdom of Heaven, has been cast as the female lead in the new James Bond movie.
China Daily:
- China’s sales of personal computers will rise 50% to 30 million by 2008 from 20 million last year.
Al-Hayat:
- Yemen’s auction of oil-exploration rights has attracted 63 companies from 25 nations, citing Oil Minister Khaled Mahfodh Ba-Haj.
- US Steel Corp.(X) CEO Surma said rival Arcelor, which is fighting a $22.4 billion hostile takeover from Mittal Steel, is unlikely to seek to acquire US Steel.
- London’s most expensive homes posted their biggest monthly increase in value in at least 20 years in January as bankers and traders started spending record bonuses, according to UK real-estate agent Knight Frank LLC.
- Sirius Satellite Radio(SIRI) posted a wider fourth-quarter loss after spending more on promotions during the holiday season.
- A campaign button depicting the embrace of President Bush and Democratic Senator Joe Lieberman is circulating among a group of Democrats attempting to organize a primary challenge to the 63-year-old Lieberman.
- Delphi Corp. set a new deadline of March 31 for asking a bankruptcy judge to void its labor contracts, union officials said.
- City officials in Volgograd, Russia, closed their own newspaper for printing a cartoon portraying Muhammad and other prophets amid violent protests in some Islamic countries over Muhammad cartoons in European publications.
- Penthouse Media Group plans to start its own television porn channel this year and may go public to help finance an expansion beyond magazines.
- Crude oil is rising after a report that Nigerian militants would declare war on oil companies.
Wall Street Journal:
- Merger and acquisitions funds, despite an increase in transactions, are showing “uninspiring” returns, citing S&P.
- Wilmer Cutler Pickering Hale & Dorr and other US law firms are gaining business defending companies from China in trade disputes.
- The FDA is seeking user fees from generic-drug markers to help fund reviews, in the same way major branded-pharmaceuticals and device makers do.
- If Mexico’s Grupo Televisa SA is to acquire Univision Communications(UVN) it must overcome some legal and social difficulties.
NY Times:
- KeySpan Corp.(KSE), the fifth-largest US natural gas distributor, is trying to sell itself and has attracted bids of more than $6.5 billion.
- Quadrangle Group LLC, a media and communications investment firm, will announce today that it is starting a head fund for which it eventually expects to raise $1 billion.
- New Orleans, much of which was destroyed by Hurricane Katrina last year, will hold its first Mardi Gras carnival since the destruction later this month.
Chicago Tribune:
- Chicago will seek proposals from technology companies this spring on how to build and offer wireless Internet access throughout the city.
Sky News:
- Eva Green, a French actress best known for her role in Ridley Scott’s drama Kingdom of Heaven, has been cast as the female lead in the new James Bond movie.
China Daily:
- China’s sales of personal computers will rise 50% to 30 million by 2008 from 20 million last year.
Al-Hayat:
- Yemen’s auction of oil-exploration rights has attracted 63 companies from 25 nations, citing Oil Minister Khaled Mahfodh Ba-Haj.
PPI Rises, Consumer Confidence Moderates
- The PPI for January rose .3% versus estimates of a .2% gain and a downwardly revised .6% increase in December.
- The PPI Ex Food & Energy for January rose .4% versus estimates of a .2% gain and a .1% rise in December.
- Preliminary Univ. of Mich. Consumer Confidence for February fell to 87.4 versus estimates of 91.0 and a reading of 91.2 in January.
- The PPI Ex Food & Energy for January rose .4% versus estimates of a .2% gain and a .1% rise in December.
- Preliminary Univ. of Mich. Consumer Confidence for February fell to 87.4 versus estimates of 91.0 and a reading of 91.2 in January.
BOTTOM LINE: US wholesale prices rose .3% in January, led by higher costs for vehicles and machinery, Bloomberg said. Prices of raw materials actually fell .5%. I continue to believe measures of inflation will decelerate throughout most of the year as commodity prices fall, unit labor costs remain subdued and economic growth slows to average rates.
Confidence among US consumers slipped for a second month in February, Bloomberg reported. The expectations component of the index fell to 74.4 from 78.9 in January. The current conditions component of the index fell to 107.7 from 110.3 the prior month. I continue to believe consumer confidence makes new cycle highs later this year as the job market remains healthy, gas prices fall, inflation decelerates, stock prices rise, long-term interest rates remain low and housing stabilizes at relatively high levels.
Thursday, February 16, 2006
Friday Watch
Late-Night Headlines
Bloomberg:
- Almost one in six children worldwide smoke or use tobacco in another form such as snuff, a study by the World Health Organization and US Centers for Disease Control Prevention found.
- Japanese bonds rose, pushing benchmark 10-year yields to a three-week low, after a government report on gross domestic product showed the country is struggling to end a more than seven-year bout of deflation.
- Nike Inc.(NKE) sued rival Adidas-Salomon AG, claiming a patent violation.
- Japan’s economy expanded at an annual 5.5% pace in the fourth quarter of last year, the Cabinet Office said.
- Dell Inc.(DELL) expects to overtake Hewlett-Packard(HPQ) and Lenovo Group Ltd., its two closet rivals in Asia, in the next few years, helped by demand for notebook computers.
- Oil prices may fall for a fifth week as gains in inventories indicate supplies are ample to meet demand, according to a Bloomberg survey of analysts.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on (STZ), (NFP), (SYMC), (CG) and (DNA).
- Reiterated Underperform on (AEIS) and (PFG).
Business Week:
- Pozen Inc.(POZN) shares may gain as earnings rise on the company’s Trexima treatment for severe headaches, which is set for US regulatory approval by June, citing SG Cowen’s Joshua Schimmer.
- Shares of United Parcel Service(UPS) may increase more than 33% in the next two years because of growth in Asia, citing Stephen Leeb, head of Leeb Capital Management.
- The shares of PNC Financial Services Group(PNC) may rise after the company reduced its stake in BlackRock(BLK).
Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated -.06%.
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
(BEC)/.73
(CPB)/.59
(SJM)/.73
(PCG)/.43
(RSH)/.67
(SIRI)/-.22
(TEX)/.96
(ZLC)/1.91
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- The Producer Price Index for January is estimated to rise .2% versus a .6% gain in December.
- The PPI Ex Food & Energy for January is estimated to rise .2% versus a .1% increase in December.
9:45 am EST
- The Preliminary Univ. of Mich. Consumer Confidence reading for February is estimated to fall to 91.0 versus a reading of 91.2 in January.
Bloomberg:
- Almost one in six children worldwide smoke or use tobacco in another form such as snuff, a study by the World Health Organization and US Centers for Disease Control Prevention found.
- Japanese bonds rose, pushing benchmark 10-year yields to a three-week low, after a government report on gross domestic product showed the country is struggling to end a more than seven-year bout of deflation.
- Nike Inc.(NKE) sued rival Adidas-Salomon AG, claiming a patent violation.
- Japan’s economy expanded at an annual 5.5% pace in the fourth quarter of last year, the Cabinet Office said.
- Dell Inc.(DELL) expects to overtake Hewlett-Packard(HPQ) and Lenovo Group Ltd., its two closet rivals in Asia, in the next few years, helped by demand for notebook computers.
- Oil prices may fall for a fifth week as gains in inventories indicate supplies are ample to meet demand, according to a Bloomberg survey of analysts.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on (STZ), (NFP), (SYMC), (CG) and (DNA).
- Reiterated Underperform on (AEIS) and (PFG).
Business Week:
- Pozen Inc.(POZN) shares may gain as earnings rise on the company’s Trexima treatment for severe headaches, which is set for US regulatory approval by June, citing SG Cowen’s Joshua Schimmer.
- Shares of United Parcel Service(UPS) may increase more than 33% in the next two years because of growth in Asia, citing Stephen Leeb, head of Leeb Capital Management.
- The shares of PNC Financial Services Group(PNC) may rise after the company reduced its stake in BlackRock(BLK).
Night Trading
Asian Indices are -.50% to +.50% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated -.06%.
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
(BEC)/.73
(CPB)/.59
(SJM)/.73
(PCG)/.43
(RSH)/.67
(SIRI)/-.22
(TEX)/.96
(ZLC)/1.91
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- The Producer Price Index for January is estimated to rise .2% versus a .6% gain in December.
- The PPI Ex Food & Energy for January is estimated to rise .2% versus a .1% increase in December.
9:45 am EST
- The Preliminary Univ. of Mich. Consumer Confidence reading for February is estimated to fall to 91.0 versus a reading of 91.2 in January.
BOTTOM LINE: Asian indices are mostly lower, weighed down by real estate firms in the region on speculation Japan would raise interest rates. I expect US equities to open mixed and to trade higher into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.
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