BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Medical longs, Internet longs and Biotech longs. I covered my (IWM) and (QQQQ) shorts this morning, thus leaving the Portfolio 100% net long. The tone of the market is neutral as the advance/decline line is about even, sector performance is mixed and volume is below average. The growth rate of the weekly ECRI Future Inflation Gauge rose 1.5% as of June 9. This is down from a peak of 8.6% growth during October of last year and 6.4% during February of this year. This gauge of future inflation continues to trend lower. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and bargain hunting.
Friday, June 23, 2006
Stocks Mixed into Final Hour on Light Volume
Today's Headlines
Bloomberg:
- General Motors(GM), losing sales to fuel-efficient cars from Toyota Motor(TM), is developing a hybrid-electric vehicle with a battery that recharges at any outlet, said GM officials.
- Crude oil may fall in NY as stockpiles approach nine-year highs, easing concern that supply may be inadequate to meet peak summer demand, according to a Bloomberg survey of energy analysts.
- Pequot Capital Management, a $7 billion hedge fund run by Arthur Samberg, said it never made trades based on non-public information. The NY Times had reported that the SEC is investigating whether Pequot used insider tips to profit on trades.
- Energy Partners Ltd.(EPL), a US oil and natural-gas producer, agreed to buy Stone Energy(SGY) for $1.4 billion after Stone dropped its sale to Plains E&P.
- The US charged seven people in Miami with participating in a terrorist conspiracy to blow up the Sears Tower in Chicago.
- Anadarko Petroleum Corp.(APC) agreed to pay $21 billion in cash for Kerr-McGee(KMG) and Western Gas Resources(WGR) to more than double its sales and create the largest independent oil and gas producer in the US.
- Emerging-market bonds tumbled after Turkey’s central bank stepped in to shore up its currency and indicated it may raise interest rates, prompting investors to move out of riskier developing nation assets.
- US Transportation Secretary Norman Mineta has resigned.
- A federal appeals court struck down a controversial SEC rule that subjected the $1.1 trillion hedge-fund industry to stricter regulation and random inspections for the first time.
- The US dollar climbed to an eight-week high against the euro on increasing speculation the Fed will raise interest rates at least twice more this year.
- UGS Corp., a maker of software used by GM to design cars, may go public early next year in an offering that CEO Affuso said would raise as much as $4.6 billion.
Wall Street Journal:
- Mittal Steel(MT) is in advanced talks with rival Arcelor SA about possibly raising its $30.1 billion hostile offer for the business.
- Google Inc.(GOOG) started giving away commercial videos for free on its Web site, supporting the offering with advertising.
- Jones Apparel Group(JNY), VF Corp.(VFC), Kellwood Co.(KWD) and other apparel makers goods are opening stores in China in a bid to develop sales to that country’s growing middle class.
- Qualcomm(QCOM) has accused Intel(INTC) of stalling efforts to develop an industry standard for the next generation of wireless technology.
NY Post:
- Best Buy(BBY) and Blender magazine joined to create special music aisles at Best Buy’s(BBY) 658 stores to get shoppers to buy more than the “Top 10” songs that account for most purchases.
Detroit Free Press:
- General Motors(GM) plans to offer no-interest, six-year loans on most 2006 models.
Die Welt:
- McDonald’s(MCD) plans to increase the number of cafes it operates in Germany as much as fivefold to boost revenue from drinks such as cappuccinos.
Der Tagesspiegel:
- Nanosolar Inc., a US-based maker of solar cells, plans to build the world’s largest factory for solar modules in Berlin.
Le Monde:
- French President Chirac is ending his 12 years in power with little apparent legacy and leaving voters with the perception that he has failed to be involved in recent crises, citing an opinion poll.
- General Motors(GM), losing sales to fuel-efficient cars from Toyota Motor(TM), is developing a hybrid-electric vehicle with a battery that recharges at any outlet, said GM officials.
- Crude oil may fall in NY as stockpiles approach nine-year highs, easing concern that supply may be inadequate to meet peak summer demand, according to a Bloomberg survey of energy analysts.
- Pequot Capital Management, a $7 billion hedge fund run by Arthur Samberg, said it never made trades based on non-public information. The NY Times had reported that the SEC is investigating whether Pequot used insider tips to profit on trades.
- Energy Partners Ltd.(EPL), a US oil and natural-gas producer, agreed to buy Stone Energy(SGY) for $1.4 billion after Stone dropped its sale to Plains E&P.
- The US charged seven people in Miami with participating in a terrorist conspiracy to blow up the Sears Tower in Chicago.
- Anadarko Petroleum Corp.(APC) agreed to pay $21 billion in cash for Kerr-McGee(KMG) and Western Gas Resources(WGR) to more than double its sales and create the largest independent oil and gas producer in the US.
- Emerging-market bonds tumbled after Turkey’s central bank stepped in to shore up its currency and indicated it may raise interest rates, prompting investors to move out of riskier developing nation assets.
- US Transportation Secretary Norman Mineta has resigned.
- A federal appeals court struck down a controversial SEC rule that subjected the $1.1 trillion hedge-fund industry to stricter regulation and random inspections for the first time.
- The US dollar climbed to an eight-week high against the euro on increasing speculation the Fed will raise interest rates at least twice more this year.
- UGS Corp., a maker of software used by GM to design cars, may go public early next year in an offering that CEO Affuso said would raise as much as $4.6 billion.
Wall Street Journal:
- Mittal Steel(MT) is in advanced talks with rival Arcelor SA about possibly raising its $30.1 billion hostile offer for the business.
- Google Inc.(GOOG) started giving away commercial videos for free on its Web site, supporting the offering with advertising.
- Jones Apparel Group(JNY), VF Corp.(VFC), Kellwood Co.(KWD) and other apparel makers goods are opening stores in China in a bid to develop sales to that country’s growing middle class.
- Qualcomm(QCOM) has accused Intel(INTC) of stalling efforts to develop an industry standard for the next generation of wireless technology.
NY Post:
- Best Buy(BBY) and Blender magazine joined to create special music aisles at Best Buy’s(BBY) 658 stores to get shoppers to buy more than the “Top 10” songs that account for most purchases.
Detroit Free Press:
- General Motors(GM) plans to offer no-interest, six-year loans on most 2006 models.
Die Welt:
- McDonald’s(MCD) plans to increase the number of cafes it operates in Germany as much as fivefold to boost revenue from drinks such as cappuccinos.
Der Tagesspiegel:
- Nanosolar Inc., a US-based maker of solar cells, plans to build the world’s largest factory for solar modules in Berlin.
Le Monde:
- French President Chirac is ending his 12 years in power with little apparent legacy and leaving voters with the perception that he has failed to be involved in recent crises, citing an opinion poll.
Durable Goods Orders Still Healthy
- Durable Goods Orders for May fell .3% versus estimates of a .4% increase and a 4.7% decline in April.
- Durables Ex Transportation for May rose .7% versus estimates of a .6% increase and a 1.0% decline in April.
- Durables Ex Transportation for May rose .7% versus estimates of a .6% increase and a 1.0% decline in April.
BOTTOM LINE: Orders for US-made durable goods excluding transportation equipment rose .7% in May, easing concern that the economy is cooling too quickly after two years of interest rate increases, Bloomberg said. Record corporate profits are continuing to fuel the purchasing of new equipment to improve efficiency. Orders for computers rose 1.9% and communications equipment orders gained 5.9% last month. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, rose 1.0% last month versus a 1.9% decline the prior month. Inventories of durable goods rose .4% versus a 1.1% gain in April, paced by metals stockpiles which rose to an all-time record. I continue to believe US growth is just slowing to more average levels, not plunging, and this report just adds to evidence that supports that belief.
Thursday, June 22, 2006
Friday Watch
Late-Night Headlines
Bloomberg:
- The US will pursue diplomacy to ease tensions with North Korea over a possible North Korean long-range missile test, the US State Dept. said.
- Emerging-market stock funds suffered withdrawals for a fifth straight week after investors pulled out a further $2 billion in the period ended June 21, according to Emerging Portfolio Fund Research.
AP:
- US authorities arrested seven people today in connection with a plot to attack Chicago’s Sears Tower and other buildings in the country.
Wall Street Journal Asia:
- Merrill Lynch(MER) has expanded its debt team by more than 40% since January to prepare for the Bank of Japan’s move to increase interest rates.
Digitimes:
- Advanced Micro Devices(AMD) will cut chip prices as much as 46% on July 24 in a “price war” with larger rival Intel Corp.(INTC).
Late Buy/Sell Recommendations
Business Week:
- Sealed Air(SEE), the maker of Bubble Wrap and Jiffy Mailer packaging products, could see its margins boosted as the company unveils a range of new products, citing Ghansham Panjabi, analyst at Wachovia Securities.
- Shares of Advanced Life Sciences Holdings(ADLS) may more than double in the next year, citing Lazard Capital Markets’ Matthew Osborne.
- Lowe’s(LOW) may rise as much as 64% because of the stock’s recent decline and the company’s increasing earnings, citing Piedmont Select Value Fund’s David Clark.
Night Trading
Asian Indices are -1.5% to -.50% on average.
S&P 500 indicated -.10%.
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
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- None of note
Upcoming Splits
- (EXPD) 2-for-1
- (TROW) 2-for-1
- (FTO) 2-for-1
Economic Releases
8:30 am EST
- Durable Goods Orders for May are estimated to rise .4% versus a 4.4% decline in April.
- Durables Ex Transportation for May are estimated to rise .6% versus a 1.0% decline in April.
Bloomberg:
- The US will pursue diplomacy to ease tensions with North Korea over a possible North Korean long-range missile test, the US State Dept. said.
- Emerging-market stock funds suffered withdrawals for a fifth straight week after investors pulled out a further $2 billion in the period ended June 21, according to Emerging Portfolio Fund Research.
AP:
- US authorities arrested seven people today in connection with a plot to attack Chicago’s Sears Tower and other buildings in the country.
Wall Street Journal Asia:
- Merrill Lynch(MER) has expanded its debt team by more than 40% since January to prepare for the Bank of Japan’s move to increase interest rates.
Digitimes:
- Advanced Micro Devices(AMD) will cut chip prices as much as 46% on July 24 in a “price war” with larger rival Intel Corp.(INTC).
Late Buy/Sell Recommendations
Business Week:
- Sealed Air(SEE), the maker of Bubble Wrap and Jiffy Mailer packaging products, could see its margins boosted as the company unveils a range of new products, citing Ghansham Panjabi, analyst at Wachovia Securities.
- Shares of Advanced Life Sciences Holdings(ADLS) may more than double in the next year, citing Lazard Capital Markets’ Matthew Osborne.
- Lowe’s(LOW) may rise as much as 64% because of the stock’s recent decline and the company’s increasing earnings, citing Piedmont Select Value Fund’s David Clark.
Night Trading
Asian Indices are -1.5% to -.50% on average.
S&P 500 indicated -.10%.
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
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- None of note
Upcoming Splits
- (EXPD) 2-for-1
- (TROW) 2-for-1
- (FTO) 2-for-1
Economic Releases
8:30 am EST
- Durable Goods Orders for May are estimated to rise .4% versus a 4.4% decline in April.
- Durables Ex Transportation for May are estimated to rise .6% versus a 1.0% decline in April.
BOTTOM LINE: Asian indices are lower, weighed down by automaker and financial stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.
Stocks Finish Lower on Light Volume
Indices
S&P 500 1,245.60 -.53%
DJIA 11,019.11 -.54%
NASDAQ 2,122.98 -.85%
Russell 2000 688.04 -.38%
Wilshire 5000 12,504.22 -.50%
S&P Barra Growth 577.23 -.61%
S&P Barra Value 666.55 -.45%
Morgan Stanley Consumer 602.45 -.34%
Morgan Stanley Cyclical 802.54 -.48%
Morgan Stanley Technology 486.51 -1.34%
Transports 4,737.88 -.58%
Utilities 404.33 -.52%
Put/Call 1.10 +23.60%
NYSE Arms 1.05 +64.72%
Volatility(VIX) 15.88 +2.32%
ISE Sentiment 173.00 +54.46%
US Dollar 86.42 +.75%
CRB 336.13 -.18%
Futures Spot Prices
Crude Oil 71.0 +.23%
Unleaded Gasoline 212.50 +.33%
Natural Gas 6.42 -.22%
Heating Oil 197.19 +.01%
Gold 584.00 -.24%
Base Metals 201.75 -.81%
Copper 307.00 +.71%
10-year US Treasury Yield 5.21% +1.07%
Leading Sectors
Airlines +1.37%
Tobacco +.45%
Energy +.44%
Lagging Sectors
Networking -1.42%
Internet -1.60%
Wireless -2.33%
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
Sanford Berstein:
- Upgraded (MCHP) to Outperform, target $40.
Banc of America:
- Rated (TSCO) Buy, target $66.
Deutsche Bank:
- Rated (HGSI) Buy, target $19.
Afternoon/Evening Headlines
Bloomberg:
- Google(GOOG) sold its 2.6% stake in China’s Baidu.com(BIDU) and said it will focus on developing its own business in the country.
- Iran is providing weapons and training to Shiite extremist groups in Iraq who are attacking US troops and Iraqi security forces, said General George Casey, the top American military commander in Iraq.
- Oracle Corp.(ORCL) said fourth-quarter profit gained 27% and forecast earnings and sales will rise again this period.
- The House of Representatives voted to give President Bush a form of the line-item veto in what supporters said was a bid to help reduce wasteful spending.
London-based Times:
- The Iraqi government will announce a 28-point peace agreement as early as June 25 that would include an amnesty for prisoners who renounce violence to bring an end to the country’s Sunni insurgency.
S&P 500 1,245.60 -.53%
DJIA 11,019.11 -.54%
NASDAQ 2,122.98 -.85%
Russell 2000 688.04 -.38%
Wilshire 5000 12,504.22 -.50%
S&P Barra Growth 577.23 -.61%
S&P Barra Value 666.55 -.45%
Morgan Stanley Consumer 602.45 -.34%
Morgan Stanley Cyclical 802.54 -.48%
Morgan Stanley Technology 486.51 -1.34%
Transports 4,737.88 -.58%
Utilities 404.33 -.52%
Put/Call 1.10 +23.60%
NYSE Arms 1.05 +64.72%
Volatility(VIX) 15.88 +2.32%
ISE Sentiment 173.00 +54.46%
US Dollar 86.42 +.75%
CRB 336.13 -.18%
Futures Spot Prices
Crude Oil 71.0 +.23%
Unleaded Gasoline 212.50 +.33%
Natural Gas 6.42 -.22%
Heating Oil 197.19 +.01%
Gold 584.00 -.24%
Base Metals 201.75 -.81%
Copper 307.00 +.71%
10-year US Treasury Yield 5.21% +1.07%
Leading Sectors
Airlines +1.37%
Tobacco +.45%
Energy +.44%
Lagging Sectors
Networking -1.42%
Internet -1.60%
Wireless -2.33%
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
Sanford Berstein:
- Upgraded (MCHP) to Outperform, target $40.
Banc of America:
- Rated (TSCO) Buy, target $66.
Deutsche Bank:
- Rated (HGSI) Buy, target $19.
Afternoon/Evening Headlines
Bloomberg:
- Google(GOOG) sold its 2.6% stake in China’s Baidu.com(BIDU) and said it will focus on developing its own business in the country.
- Iran is providing weapons and training to Shiite extremist groups in Iraq who are attacking US troops and Iraqi security forces, said General George Casey, the top American military commander in Iraq.
- Oracle Corp.(ORCL) said fourth-quarter profit gained 27% and forecast earnings and sales will rise again this period.
- The House of Representatives voted to give President Bush a form of the line-item veto in what supporters said was a bid to help reduce wasteful spending.
London-based Times:
- The Iraqi government will announce a 28-point peace agreement as early as June 25 that would include an amnesty for prisoners who renounce violence to bring an end to the country’s Sunni insurgency.
BOTTOM LINE: The Portfolio finished slightly higher today on gains in my Medical longs, Computer longs and Semi longs. I did not trade in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was negative today as the advance/decline line finished lower, most sectors fell and volume was below average. Measures of investor anxiety were mostly higher into the close. Overall, today's market performance was mildly bearish. Weakness in tech and bonds was disappointing for the bulls. There were some bright spots, however. There are some very encouraging signs in the growth stock arena. Volume was light on today’s decline and breadth closed well off session lows. The dollar index maintained gains throughout the day, finishing 0.73% higher. I expect US stocks to turn in a better performance tomorrow.
Subscribe to:
Posts (Atom)