Earnings Announcements
Company/Estimate
BHI/.28
COX/.06
CVS/.58
Dell/.28
MTLG/.19
NVDA/.11
UNA/.01
XMSR/-1.15
ADI/.28
AH/.29
LH/.53
Splits
None of note
Economic Data
Advance Retail Sales for Jan. are expected to come in unch. vs. an increase of .5% last month.
Initial jobless claims are expected at 345K vs. 356k last week.
Continuing claims are expected at 3,100K vs. 3,123K last week.
Business inventories are expected to increase .3% vs. a .3% increase last month.
Late-night News
CEO's say they are more confident and are prepared to boost both capital expenditures and mergers/acquisitions activity, the Financial Times reported, citing a survey by Goldman Sachs. The general global business outlook index, the index of how many domestic deals CEO's are planning and the index of U.S. executives who plan to spend on fixed investment all increased significantly in the survey. CIA Director George Tenet has ordered an end to a practice whereby intelligence analysts aren't provided with details about the individuals who provided the information they are evaluating. Chinese industrial production rose 19% last month, its fastest pace on record, as factories made more cars, computers and clothes to meet rising demand at home and abroad. Japanese machinery orders rose 8.1% in December versus an expectation of 2.6% by 40 economists, bolstering economists' predictions that growing business investment is fueling growth in the world's second-largest economy.
Late-Night Trading
Asian markets are mixed, ranging from -.25% to +.75%.
S&P 500 indicated unch.
NASDAQ indicated +.10%.
BOTTOM LINE: The Goldman Sachs survey mentioned above confirms what I have been thinking. It is very likely 1st Q GDP growth will exceed the current 4.6% estimates. A number north of 5% growth is likely. I am a little troubled by the recent divergence between the performance of the Dow and the Nasdaq, but will attribute it to the recent vicious rotation out of and then into cyclicals in a very short period. Moreover, volume and bredth have not been exceptional on this last move up. The portfolio is having another very good year and I don't want to give back these significant gains, thus I will be very quick to shift to a more conservative stance if market weakness dictates such. The next couple of days I plan to rotate out of some recent winners and into some stocks I like fundamentally that have lagged and are just now breaking out technically. I will try and maintain 80-100% market exposure while making these changes.
Thursday, February 12, 2004
Wednesday, February 11, 2004
Wednesday Close
S&P 500 1,157.76+1.07%
NASDAQ 2,089.66+.69%
Leading Sectors
I-Banks+3.88%
Iron/Steel+3.41%
Homebuilders+2.94%
Lagging Sectors
Fashion+.32%
Defense+.08%
HMO's-2.01%
Other
Crude Oil 33.9-.24%
Lumber 377.50+2.72%
VIX 15.39-3.45%
U.S. Dollar Index 85.08-.89%
10-Yr. Long-Bond Yield 4.03%-2.08%
After-hours Movers
INVN+3.41% up after meeting 4th quarter earnings estimates and affirming forecasts.
BRCD+2.96% up after beating 4th quarter earnings expectations and raising 1st Q guidance.
SONS-21.0% down after disclosing that it may restate results for 03 and before because some sales might not have been recorded at the right time.
CSC-5.21% down on disappointing 4th quarter earnings guidance.
After-hours News
U.S. stocks surged Wednesday, pushing the DJIA to its highest level since June 2001, after Federal Reserve Chairman Alan Greenspan said the central bank can remain patient before raising rates even as the economy expands at a faster-than-expected pace. The U.S dollar and interest rates declined on this news. Financials faired especially well today. Declining rates and Comcast's bid for Disney led investors to conclude that more takeovers will follow, generating large i-banking fees. As well, there was a continuation of the rotation back into tech and deep cyclicals, especially basic materials. Vodafone's CEO will recommend a bid of more than $30 billion for AT&T Wireless Services to his board this week, the Financial Times reported. Goodyear Tire said the SEC is investigating the company's restatement of financial results. GE was rated a new "Buy 2" at UBS.
BOTTOM LINE: Many different sectors participated in the rally today, however the advance/decline line wasn't as strong as I would have liked. Volume wasn't exceptional either. However, the portfolio had an excellent day and is now 100% net long. The few positions I added were in the tech and basic materials areas. OHB, the small-cap homebuilder that I bought 2 days ago, had a great day(+5%). I am holding onto this position, as I expect it to rally further over the course of the next few weeks on great fundamentals, improving technicals and a low valuation. The economy is in a sweet spot right now with great growth, low inflation, improving labor conditions, excellent profits and interest rates at 40-yr. lows. I am looking for the trends over the last few days to continue for awhile. The market will trend higher and select stocks could see extraordinary gains.
NASDAQ 2,089.66+.69%
Leading Sectors
I-Banks+3.88%
Iron/Steel+3.41%
Homebuilders+2.94%
Lagging Sectors
Fashion+.32%
Defense+.08%
HMO's-2.01%
Other
Crude Oil 33.9-.24%
Lumber 377.50+2.72%
VIX 15.39-3.45%
U.S. Dollar Index 85.08-.89%
10-Yr. Long-Bond Yield 4.03%-2.08%
After-hours Movers
INVN+3.41% up after meeting 4th quarter earnings estimates and affirming forecasts.
BRCD+2.96% up after beating 4th quarter earnings expectations and raising 1st Q guidance.
SONS-21.0% down after disclosing that it may restate results for 03 and before because some sales might not have been recorded at the right time.
CSC-5.21% down on disappointing 4th quarter earnings guidance.
After-hours News
U.S. stocks surged Wednesday, pushing the DJIA to its highest level since June 2001, after Federal Reserve Chairman Alan Greenspan said the central bank can remain patient before raising rates even as the economy expands at a faster-than-expected pace. The U.S dollar and interest rates declined on this news. Financials faired especially well today. Declining rates and Comcast's bid for Disney led investors to conclude that more takeovers will follow, generating large i-banking fees. As well, there was a continuation of the rotation back into tech and deep cyclicals, especially basic materials. Vodafone's CEO will recommend a bid of more than $30 billion for AT&T Wireless Services to his board this week, the Financial Times reported. Goodyear Tire said the SEC is investigating the company's restatement of financial results. GE was rated a new "Buy 2" at UBS.
BOTTOM LINE: Many different sectors participated in the rally today, however the advance/decline line wasn't as strong as I would have liked. Volume wasn't exceptional either. However, the portfolio had an excellent day and is now 100% net long. The few positions I added were in the tech and basic materials areas. OHB, the small-cap homebuilder that I bought 2 days ago, had a great day(+5%). I am holding onto this position, as I expect it to rally further over the course of the next few weeks on great fundamentals, improving technicals and a low valuation. The economy is in a sweet spot right now with great growth, low inflation, improving labor conditions, excellent profits and interest rates at 40-yr. lows. I am looking for the trends over the last few days to continue for awhile. The market will trend higher and select stocks could see extraordinary gains.
Wednesday Mid-day Update
S&P 500 1,151.70+.54%
NASDAQ 2,081.39+.29%
Leading Sectors
I-Banks+2.44%
Iron/Steel+2.16%
Homebuilders+1.46%
Lagging Sectors
Defense-.12%
Drugs-.07%
HMO's-2.49%
Other
Crude Oil 34.17+92%
Natural Gas 5.22-3.03%
Gold 411.10+1.01%
10-Yr. Long-bond yield 4.02%-2.12%
U.S. Dollar Index 85.24-.7%
Market Movers
CMCSA down on $54.1B DIS acquisition as analysts cut ratings.
DISH up on buy-out speculation.
PCLN up on stronger than expected earnings announcement.
DKS up on raised guidance and 2-for-1 split announcement.
TASR up on short-covering after 3-for-1 split.
ZBRA up on better than expected 4th quarter earnings.
BGP up on better than expected 4th quarter earnings.
MUSE up on better than expected 4th quarter earnings.
MANH up on strong earnings report and raised guidance.
Mid-day News
U.S. stocks are rallying mid-day after Greenspan said the Fed can remain patient about raising rates even as the economy expands at a faster-than-expected rate. Greenspan said the U.S. economy may expand as much as 5% this year, the strongest growth in 20 years, and push the unemployment rate lower. This is 25 basis points higher than the Fed's last forecast. Comcast's plans to acquire Disney also dominated mid-day news as analyst's speculate on the deal's ramifications. Auto sales off to slow start in Feb. according to Goldman Sachs. PC Motherboard shipments in Jan. much higher than expected says Smith Barney. The latest available data show foreigners' appetite for stocks and bonds remains voracious. In November, purchases of US stocks and bonds jumped 217% to 87.6 billion, after a 560% jump in October according to The Street.com.
BOTTOM LINE: The advance/decline line is weaker than I would have hoped for on this Greenspan inspired rally, however the Portfolio is having a very good day. I made a few purchases in the morning bringing my net long exposure to 100%. The dollar is weak, interest rates are falling and cyclicals are strong on Greenspan's testimony. The recipe seems right for continued gains on the long-side. I will monitor the market's price action in the final hour before making any further changes.
NASDAQ 2,081.39+.29%
Leading Sectors
I-Banks+2.44%
Iron/Steel+2.16%
Homebuilders+1.46%
Lagging Sectors
Defense-.12%
Drugs-.07%
HMO's-2.49%
Other
Crude Oil 34.17+92%
Natural Gas 5.22-3.03%
Gold 411.10+1.01%
10-Yr. Long-bond yield 4.02%-2.12%
U.S. Dollar Index 85.24-.7%
Market Movers
CMCSA down on $54.1B DIS acquisition as analysts cut ratings.
DISH up on buy-out speculation.
PCLN up on stronger than expected earnings announcement.
DKS up on raised guidance and 2-for-1 split announcement.
TASR up on short-covering after 3-for-1 split.
ZBRA up on better than expected 4th quarter earnings.
BGP up on better than expected 4th quarter earnings.
MUSE up on better than expected 4th quarter earnings.
MANH up on strong earnings report and raised guidance.
Mid-day News
U.S. stocks are rallying mid-day after Greenspan said the Fed can remain patient about raising rates even as the economy expands at a faster-than-expected rate. Greenspan said the U.S. economy may expand as much as 5% this year, the strongest growth in 20 years, and push the unemployment rate lower. This is 25 basis points higher than the Fed's last forecast. Comcast's plans to acquire Disney also dominated mid-day news as analyst's speculate on the deal's ramifications. Auto sales off to slow start in Feb. according to Goldman Sachs. PC Motherboard shipments in Jan. much higher than expected says Smith Barney. The latest available data show foreigners' appetite for stocks and bonds remains voracious. In November, purchases of US stocks and bonds jumped 217% to 87.6 billion, after a 560% jump in October according to The Street.com.
BOTTOM LINE: The advance/decline line is weaker than I would have hoped for on this Greenspan inspired rally, however the Portfolio is having a very good day. I made a few purchases in the morning bringing my net long exposure to 100%. The dollar is weak, interest rates are falling and cyclicals are strong on Greenspan's testimony. The recipe seems right for continued gains on the long-side. I will monitor the market's price action in the final hour before making any further changes.
Wednesday Watch
Earnings Announcements
Company/Estimate
BRCD/.02
CMCSA/.02
DCN/.39
DCTM/.13
FOX/.34
INVN/.29
MDT/.40
MHS/.46
ODP/.21
OSI/.58
PFCB/.28
WFMI/.57
ZBRA/.49
Splits
TASR 3-for-1
Economic Data
Greenspan report on economy and Fed policy to Congress at 10am est.
Late-night News
Kerry wins Virginia and Tennessee primaries. Aides say Clark is dropping out of presidential race. Treasury Secretary John Snow denounced OPEC's decision to cut oil quotas for the second time in less than 5 months. Cambodia may have first human bird flu case. China is preparing to open its newspapers, broadcasters and other media to private investment, the Financial Times reported. 1,341 Roman Catholic clergy members have been accused in the U.S. of molesting minors since 1950, according to the AP.
Late-Night Trading
Asian markets are mixed, ranging from -.5% to +.5%.
S&P 500 indicated -.03%.
NASDAQ indicated -.03%.
BOTTOM LINE: There isn't much in the way of late-night market moving news. All eyes on Greenspan tomorrow. I think he will say that he sees continued economic strength and an improving labor market. He will likely make it clear that the Fed will stay on hold until better job growth materializes. The market should like these comments and rally further. It is possible, but unlikely, that he will say a dramatic pick-up in job growth is imminent and prepare the markets for the ensuing rate hike. Bonds and stocks would likely fall under this scenario. Either way, the markets reaction to the news is more important than the actual news in determining which way we are headed over the next few weeks. I am 80% net long and will be looking to trade once the markets reaction to Greenspan's testimony becomes apparent.
Company/Estimate
BRCD/.02
CMCSA/.02
DCN/.39
DCTM/.13
FOX/.34
INVN/.29
MDT/.40
MHS/.46
ODP/.21
OSI/.58
PFCB/.28
WFMI/.57
ZBRA/.49
Splits
TASR 3-for-1
Economic Data
Greenspan report on economy and Fed policy to Congress at 10am est.
Late-night News
Kerry wins Virginia and Tennessee primaries. Aides say Clark is dropping out of presidential race. Treasury Secretary John Snow denounced OPEC's decision to cut oil quotas for the second time in less than 5 months. Cambodia may have first human bird flu case. China is preparing to open its newspapers, broadcasters and other media to private investment, the Financial Times reported. 1,341 Roman Catholic clergy members have been accused in the U.S. of molesting minors since 1950, according to the AP.
Late-Night Trading
Asian markets are mixed, ranging from -.5% to +.5%.
S&P 500 indicated -.03%.
NASDAQ indicated -.03%.
BOTTOM LINE: There isn't much in the way of late-night market moving news. All eyes on Greenspan tomorrow. I think he will say that he sees continued economic strength and an improving labor market. He will likely make it clear that the Fed will stay on hold until better job growth materializes. The market should like these comments and rally further. It is possible, but unlikely, that he will say a dramatic pick-up in job growth is imminent and prepare the markets for the ensuing rate hike. Bonds and stocks would likely fall under this scenario. Either way, the markets reaction to the news is more important than the actual news in determining which way we are headed over the next few weeks. I am 80% net long and will be looking to trade once the markets reaction to Greenspan's testimony becomes apparent.
Tuesday, February 10, 2004
Tuesday Close
S&P 500 1,145.54+.5%
NASDAQ 2,075.33+.72%
Leading Sectors
Oil Service+2.25%
Fashion+1.26%
Biotech+1.04%
Lagging Sectors
Disk Drives+.01%
I-Banks-.32%
Homebuilding-.61%
Other
Crude Oil 33.98+3.47%
VIX 15.94-2.75%
After-hours Movers
PCLN+7.5% after posting better than expected earnings.
MANH+7.6% after beating expectations and raising guidance.
SCMR-8.2% after earnings and revenue didn't meet expectations.
After-hours News
U.S. stocks rose modestly for the third day in four on optimism Greenspan will affirm investor's expectations of stronger economic growth with low inflation when he speaks tomorrow. Energy related stocks led the way higher today, as investors bid them up on news that OPEC would cut crude production April 1, thus keeping prices high. California's Democratic Party leaders endorsed the $15B bond sale that voters will cast ballots on in March, bolstering Governor Schwarzenegger's plan to help close deficits with the largest municipal debt sale in history.Accordingng to CNBC, Oracle won't get Justice Dept. approval for Peoplesoft merger. Ford(F) was raised to "overweight" and General Motors(GM) cut to "neutral" by JP Morgan after the close. Lastly, Dick's Sporting Goods(DKS) announced a 2-for-1 split.
BOTTOM LINE: I didn't make any changes to the Portfolio today, leaving it 80% net long. Action was muted ahead of Greenspan's testimony tomorrow. Financials were weaker than I would like to see. Energy prices could become a problem later in the year. Tomorrow's market reaction to Greenspan's speech is the key factor that will determine whether we are done with the recent correction or not. I will most likely shift my market exposure tomorrow.
NASDAQ 2,075.33+.72%
Leading Sectors
Oil Service+2.25%
Fashion+1.26%
Biotech+1.04%
Lagging Sectors
Disk Drives+.01%
I-Banks-.32%
Homebuilding-.61%
Other
Crude Oil 33.98+3.47%
VIX 15.94-2.75%
After-hours Movers
PCLN+7.5% after posting better than expected earnings.
MANH+7.6% after beating expectations and raising guidance.
SCMR-8.2% after earnings and revenue didn't meet expectations.
After-hours News
U.S. stocks rose modestly for the third day in four on optimism Greenspan will affirm investor's expectations of stronger economic growth with low inflation when he speaks tomorrow. Energy related stocks led the way higher today, as investors bid them up on news that OPEC would cut crude production April 1, thus keeping prices high. California's Democratic Party leaders endorsed the $15B bond sale that voters will cast ballots on in March, bolstering Governor Schwarzenegger's plan to help close deficits with the largest municipal debt sale in history.Accordingng to CNBC, Oracle won't get Justice Dept. approval for Peoplesoft merger. Ford(F) was raised to "overweight" and General Motors(GM) cut to "neutral" by JP Morgan after the close. Lastly, Dick's Sporting Goods(DKS) announced a 2-for-1 split.
BOTTOM LINE: I didn't make any changes to the Portfolio today, leaving it 80% net long. Action was muted ahead of Greenspan's testimony tomorrow. Financials were weaker than I would like to see. Energy prices could become a problem later in the year. Tomorrow's market reaction to Greenspan's speech is the key factor that will determine whether we are done with the recent correction or not. I will most likely shift my market exposure tomorrow.
Mid-day Update
S&P 500 1,145.99+54%
NASDAQ 2072.08+.56%
Leading Sectors
Oil Service+2.57%
Telecom+1.3%
Fashion+1.26%
Lagging Sectors
I-Banks-.44%
Disk Drives-.71%
Homebuilders-.89%
Other
Crude Oil 33.53+2.13%
VIX 16.05-2.07%
Market Movers
JNPR up on volume due to multiple upgrades from Pacific Crest,Raymond James, American Technology and Prudential.
ACDO up on 10-yr agreement with Medco to provide its specialty product lines to Medco members.
CHPC up on acquisition by Singapore-based ST Assembly Test Services. World's second largest provider of chip-testing services said it is betting on a "significant recovery" in demand.
FWHT down on earnings report and lowered guidance.
SHRP down on downgrade by WR Hambrecht.
Oil Service/Energy sectors up on OPEC production cut April 1.
Mid-day News
U.S. stocks are up modestly at mid-day on strength in energy and technology related shares. Volume is light ahead of Greenspan's testimony tomorrow. Iraqi police station blast kills 50, wounds dozens. General Motors, which plans to sell vehicles powered by low-pollution fuel cells in the U.S. by 2010, started up the first of 400 fuel cells planned for a test at Dow Chemical plant in Texas. Merrill Lynch announced a $2B stock buy-back program. OPEC will cut output on April 1. China halts U.S. poultry imports on avian flu concerns. Islamist extremists are being trained in terrorist camps in Pakistan and routed through Europe to Muslim communities in the U.S., the Washington Times reported. 400 terrorists have been or are being trained and dozens have already entered the U.S. according to the report. Dr. Atkins had a history of heart failure, heart attack and hypertension. He weighed 258 lbs at death.
BOTTOM LINE: Overall, a pretty good day. Seems like a pause before another upwards thrust. I haven't traded today. The Portfolio is performing well and is still positioned 80% net long. I will analyze the final hour trading to decide whether or not to make any changes.
NASDAQ 2072.08+.56%
Leading Sectors
Oil Service+2.57%
Telecom+1.3%
Fashion+1.26%
Lagging Sectors
I-Banks-.44%
Disk Drives-.71%
Homebuilders-.89%
Other
Crude Oil 33.53+2.13%
VIX 16.05-2.07%
Market Movers
JNPR up on volume due to multiple upgrades from Pacific Crest,Raymond James, American Technology and Prudential.
ACDO up on 10-yr agreement with Medco to provide its specialty product lines to Medco members.
CHPC up on acquisition by Singapore-based ST Assembly Test Services. World's second largest provider of chip-testing services said it is betting on a "significant recovery" in demand.
FWHT down on earnings report and lowered guidance.
SHRP down on downgrade by WR Hambrecht.
Oil Service/Energy sectors up on OPEC production cut April 1.
Mid-day News
U.S. stocks are up modestly at mid-day on strength in energy and technology related shares. Volume is light ahead of Greenspan's testimony tomorrow. Iraqi police station blast kills 50, wounds dozens. General Motors, which plans to sell vehicles powered by low-pollution fuel cells in the U.S. by 2010, started up the first of 400 fuel cells planned for a test at Dow Chemical plant in Texas. Merrill Lynch announced a $2B stock buy-back program. OPEC will cut output on April 1. China halts U.S. poultry imports on avian flu concerns. Islamist extremists are being trained in terrorist camps in Pakistan and routed through Europe to Muslim communities in the U.S., the Washington Times reported. 400 terrorists have been or are being trained and dozens have already entered the U.S. according to the report. Dr. Atkins had a history of heart failure, heart attack and hypertension. He weighed 258 lbs at death.
BOTTOM LINE: Overall, a pretty good day. Seems like a pause before another upwards thrust. I haven't traded today. The Portfolio is performing well and is still positioned 80% net long. I will analyze the final hour trading to decide whether or not to make any changes.
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