Earnings Announcements
Company/Estimate
BSC/2.05
BMET/.33
BKST/2.32
FDX/.66
GME/.67
JBL/.22
TSA/1.06
Splits
CLZR 2-for-1
DCOM 3-for-2
Economic Data
Consumer Price Index estimated up .3% in Feb. vs. a .5% rise in Jan.
CPI Ex Food & Energy estimated up .1% in Feb. vs. a .2% rise in Jan.
Recommendations
Goldman Sachs reiterated Outperform on AMGN, BIIB and DNA. GS reiterated Outperform on NKE ahead of earnings on Thur. GS reiterating Outperform on RCL and CCL after attending State of the Industry panel at Seatrade.
Late-Night News
Asian stocks are mostly higher as a strengthening Japanese economy propelled the Nikkei, led by homebuilders, to a 2% gain. Yum! Brands, the operator of KFC and Pizza Hut, increased China sales by 31% to $1.1B last year, the Xinhua news agency said. The most comprehensive poll taken inside of Iraq has some very interesting and positive findings. A Chinese government official says the U.S. complaint over tax breaks for chipmakers is groundless.
Late-Night Trading
Asian market gains range from +.5% to +2.0%.
S&P 500 indicated +.14%.
NASDAQ indicated +.32%.
BOTTOM LINE: The late-day rally in the U.S. today may continue in the morning on strength in Asia. I will closely monitor the volume and breadth readings on any morning strength to decide whether or not to increase market exposure. The Portfolio is currently 25% net long. It will be interesting to see if the mainstream press burries the positive findings from the Iraqi poll on the back pages, tries to spin it in a negative way or actually makes an effort to report something very positive.
Wednesday, March 17, 2004
Tuesday, March 16, 2004
Tuesday Close
S&P 500 1,110.70 +.56%
NASDAQ 1,943.09 +.20%
Leading Sectors
Gaming +1.47%
Banks +1.24%
Insurance +1.15%
Lagging Sectors
Networking -.79%
Biotech -.85%
Oil Service -.87%
Other
Crude Oil 37.35 -.24%
Natural Gas 5.66 -1.01%
Gold 402.50 +.73%
Base Metals 111.47 +2.08%
U.S. Dollar 88.59 -.25%
10-Yr. Long-Bond Yield 3.68% -2.19%
VIX 20.34 -3.74%
Put/Call 1.04 +1.96%
NYSE Arms .74 -73.38%
After-hours Movers
MAMA +4.19% continuing to rise after Mark Cuban reported 6.3% stake.
ANPI -6.01% on disappointing 4Q earnings report.
BAMM +23% after significantly beating 4Q estimates.
Recommendations
INFY rated new Buy at Janney Montgomery Scott with a $98.00 target. Goldman Sachs initiating coverage of HS with Outperform and $21 target. GS reiterating Outperform on AET. GS reiterates Outperform on SVU. TheStreet.com has a positive article on homebuilding stocks, making the case for continued gains. TheStreet.com thinks the selling in Airlines is overdone.
After-hours News
U.S. stocks gained, led by financials, after the Fed reiterated it will be "patient" about raising interest rates. However, breadth wasn't good as a number of stocks declined in the oil service, technology and biotechnology sectors. After the close, Manpower said its recently released jobs survey says, "Based on the hiring intentions that were reported across a majority of the companies surveyed, it is clear that demand for their products and services has finally surpassed the capacity and productivity of the current workforce." Jim Cramer, of TheStreet.com, thinks there is much less corporate corruption and fraud now than in the 90's, as the feds shutting down Arthur Andersen was a watershed event. The Italian government plans to keep its troops in Iraq, the Financial Times reported. The U.S. government may lodge a complaint to the WTO, saying China is breaking trading rules by giving tax breaks to local chipmakers, the FT said. The Univ. of Mich. said the FBI is investigating "the unauthorized access and public release" of February's report. General Motors said its profit from ventures in China more than tripled to $437M last year as the company's market share in that nation increases, reported Bloomberg.
BOTTOM LINE: The Portfolio had a good day today, notwithstanding its relatively low market exposure of 25%. I did not trade, as I do not see substantial signs of a short-term bottom. "Triple Witching" option expiration on Friday may provide the catalyst for a decent bounce. However, I will not trade too aggressively on the long-side as it seems this correction has a bit further to go.
NASDAQ 1,943.09 +.20%
Leading Sectors
Gaming +1.47%
Banks +1.24%
Insurance +1.15%
Lagging Sectors
Networking -.79%
Biotech -.85%
Oil Service -.87%
Other
Crude Oil 37.35 -.24%
Natural Gas 5.66 -1.01%
Gold 402.50 +.73%
Base Metals 111.47 +2.08%
U.S. Dollar 88.59 -.25%
10-Yr. Long-Bond Yield 3.68% -2.19%
VIX 20.34 -3.74%
Put/Call 1.04 +1.96%
NYSE Arms .74 -73.38%
After-hours Movers
MAMA +4.19% continuing to rise after Mark Cuban reported 6.3% stake.
ANPI -6.01% on disappointing 4Q earnings report.
BAMM +23% after significantly beating 4Q estimates.
Recommendations
INFY rated new Buy at Janney Montgomery Scott with a $98.00 target. Goldman Sachs initiating coverage of HS with Outperform and $21 target. GS reiterating Outperform on AET. GS reiterates Outperform on SVU. TheStreet.com has a positive article on homebuilding stocks, making the case for continued gains. TheStreet.com thinks the selling in Airlines is overdone.
After-hours News
U.S. stocks gained, led by financials, after the Fed reiterated it will be "patient" about raising interest rates. However, breadth wasn't good as a number of stocks declined in the oil service, technology and biotechnology sectors. After the close, Manpower said its recently released jobs survey says, "Based on the hiring intentions that were reported across a majority of the companies surveyed, it is clear that demand for their products and services has finally surpassed the capacity and productivity of the current workforce." Jim Cramer, of TheStreet.com, thinks there is much less corporate corruption and fraud now than in the 90's, as the feds shutting down Arthur Andersen was a watershed event. The Italian government plans to keep its troops in Iraq, the Financial Times reported. The U.S. government may lodge a complaint to the WTO, saying China is breaking trading rules by giving tax breaks to local chipmakers, the FT said. The Univ. of Mich. said the FBI is investigating "the unauthorized access and public release" of February's report. General Motors said its profit from ventures in China more than tripled to $437M last year as the company's market share in that nation increases, reported Bloomberg.
BOTTOM LINE: The Portfolio had a good day today, notwithstanding its relatively low market exposure of 25%. I did not trade, as I do not see substantial signs of a short-term bottom. "Triple Witching" option expiration on Friday may provide the catalyst for a decent bounce. However, I will not trade too aggressively on the long-side as it seems this correction has a bit further to go.
Tuesday Watch
Earnings Announcements
Company/Estimate
FDS/.41
GIS/.66
KBH/1.59
LEH/1.67
LEN/.83
Splits
ATVI 3-for2
BRL 3-for-2
CEC 3-for-2
GWR 3-for-2
Economic Data
Housing Starts for February estimated at 1930K vs. 1903K in January.
Building Permits for February estimated at 1900K vs. 1899K in January.
FOMC expected to leave rates unchanged.
Recommendations
Goldman Sachs says ITW seeing broad-based improvement, raises estimates. GS raised estimates on MMM. Goldman reiterates Outperform on BAX and $40 target.
Late-Night News
Ericsson says Nokia's new walkie-talkie handset won't work with other suppliers' network software and it may take years to fix, the Wall Street Journal reported. Merrill Lynch was hired to manage China Power's IPO.
Late-Night Trading
Asian markets are mostly lower, ranging from -1.0% to +.20%.
S&P 500 indicated +.11%.
NASDAQ indicated -.04%.
BOTTOM LINE: Not much in the way of late-night news. I will look for more concrete signs of a short-term bottom as we are approaching very oversold levels. The Portfolio is currently 25% net long.
Company/Estimate
FDS/.41
GIS/.66
KBH/1.59
LEH/1.67
LEN/.83
Splits
ATVI 3-for2
BRL 3-for-2
CEC 3-for-2
GWR 3-for-2
Economic Data
Housing Starts for February estimated at 1930K vs. 1903K in January.
Building Permits for February estimated at 1900K vs. 1899K in January.
FOMC expected to leave rates unchanged.
Recommendations
Goldman Sachs says ITW seeing broad-based improvement, raises estimates. GS raised estimates on MMM. Goldman reiterates Outperform on BAX and $40 target.
Late-Night News
Ericsson says Nokia's new walkie-talkie handset won't work with other suppliers' network software and it may take years to fix, the Wall Street Journal reported. Merrill Lynch was hired to manage China Power's IPO.
Late-Night Trading
Asian markets are mostly lower, ranging from -1.0% to +.20%.
S&P 500 indicated +.11%.
NASDAQ indicated -.04%.
BOTTOM LINE: Not much in the way of late-night news. I will look for more concrete signs of a short-term bottom as we are approaching very oversold levels. The Portfolio is currently 25% net long.
Monday, March 15, 2004
Monday Close
S&P 500 1,104.49 -1.43%
NASDAQ 1,939.20 -2.29%
Leading Sectors
Oil Service +.82%
HMO's +.35%
Homebuilders -.05%
Lagging Sectors
Iron/Steel -3.22%
Networking -3.41%
Airlines -7.05%
Other
Crude Oil 37.46 +.05%
Natural Gas 5.72 +.09%
Gold 400.50 +.23%
Base Metals 109.20 +.56%
U.S. Dollar 88.77 -.39%
10-Yr. Long-Bond Yield 3.76% -.40%
VIX 21.13 +15.46%
Put/Call 1.02 -.97%
NYSE Arms 2.78 +595.0%
After-hours Movers
JILL +8.8% after boosting 1Q guidance significantly.
MXT +8.9% after reporting better-than-expected 4Q.
PFCB -8.2% after announcing that it was restating 01,02 and 03 earnings.
SAFC Halted after announcing that its Talbot Financial life insurance division would be acquired for $1.35B.
MGM +12.79% on announcing that it is considering a one-time dividend of as much as $9 a share.
Recommendations
Friedman Billings analyst said he likes BR, KMG on CNBC. CNBC had analysts on that were positive on security stocks, favorites are DRXR, VRNT, MAGS, IDNX and OSIS.
After-hours News
U.S. stocks closed at their lows for the day as major indices broke through their recent lows set last week. Rising energy prices and terrorism fears provided the catalyst for the sell-off. The S&P 500 is now down 4.6% from its recent high. The index has not declined more than 5% in over a year, the longest such stretch in 8 years. Crude oil jumped to a one-year high as oil ministers from Venezuela and Qatar said OPEC will proceed with a production cut in April. Bank of America and FleetBoston reached a record $675M settlement with the SEC and Eliot Spitzer over illegal mutual fund trading. The U.S. Dept. of Agriculture will increase the number of cattle it tests for mad cow disease by up to 12-fold to help restore confidence in the safety of the beef supply, Bloomberg reported. 3M(MMM) raised 1Q guidance after the close citing strength in its core industrial businesses.
BOTTOM LINE: The Portfolio was down today as my market exposure was too high. I incorrectly anticipated a follow-through to the rally on Fri. Instead, the major indices made new short-term lows, thus forcing me to exit some recent longs and bring the Portfolio's market exposure back down to 25% net long. Volume was light again today, with indicators of fear continuing to rise. Signs of a bottom are starting to surface, however I am not ready to get aggressive. A short-term bounce is likely at any time, but a few more weeks of corrective action will likely follow.
NASDAQ 1,939.20 -2.29%
Leading Sectors
Oil Service +.82%
HMO's +.35%
Homebuilders -.05%
Lagging Sectors
Iron/Steel -3.22%
Networking -3.41%
Airlines -7.05%
Other
Crude Oil 37.46 +.05%
Natural Gas 5.72 +.09%
Gold 400.50 +.23%
Base Metals 109.20 +.56%
U.S. Dollar 88.77 -.39%
10-Yr. Long-Bond Yield 3.76% -.40%
VIX 21.13 +15.46%
Put/Call 1.02 -.97%
NYSE Arms 2.78 +595.0%
After-hours Movers
JILL +8.8% after boosting 1Q guidance significantly.
MXT +8.9% after reporting better-than-expected 4Q.
PFCB -8.2% after announcing that it was restating 01,02 and 03 earnings.
SAFC Halted after announcing that its Talbot Financial life insurance division would be acquired for $1.35B.
MGM +12.79% on announcing that it is considering a one-time dividend of as much as $9 a share.
Recommendations
Friedman Billings analyst said he likes BR, KMG on CNBC. CNBC had analysts on that were positive on security stocks, favorites are DRXR, VRNT, MAGS, IDNX and OSIS.
After-hours News
U.S. stocks closed at their lows for the day as major indices broke through their recent lows set last week. Rising energy prices and terrorism fears provided the catalyst for the sell-off. The S&P 500 is now down 4.6% from its recent high. The index has not declined more than 5% in over a year, the longest such stretch in 8 years. Crude oil jumped to a one-year high as oil ministers from Venezuela and Qatar said OPEC will proceed with a production cut in April. Bank of America and FleetBoston reached a record $675M settlement with the SEC and Eliot Spitzer over illegal mutual fund trading. The U.S. Dept. of Agriculture will increase the number of cattle it tests for mad cow disease by up to 12-fold to help restore confidence in the safety of the beef supply, Bloomberg reported. 3M(MMM) raised 1Q guidance after the close citing strength in its core industrial businesses.
BOTTOM LINE: The Portfolio was down today as my market exposure was too high. I incorrectly anticipated a follow-through to the rally on Fri. Instead, the major indices made new short-term lows, thus forcing me to exit some recent longs and bring the Portfolio's market exposure back down to 25% net long. Volume was light again today, with indicators of fear continuing to rise. Signs of a bottom are starting to surface, however I am not ready to get aggressive. A short-term bounce is likely at any time, but a few more weeks of corrective action will likely follow.
Mid-day Update
S&P 500 1,106.67 -1.24%
NASDAQ 1,949.22 -1.79%
Leading Sectors
Oil Service +1.05%
HMO's +.49%
Energy +.25%
Lagging Sectors
Biotech -2.56%
Networking -2.60%
Airlines -6.43%
Other
Crude Oil 36.94 +2.07%
Natural Gas 5.68 +1.50%
Gold 399.00 +.86%
Base Metals 109.55 +.88%
U.S. Dollar 88.96 -.19%
10-Yr. Long-Bond Yield 3.75% -.70%
VIX 20.44 +11.69%
Put/Call .94 -8.74%
NYSE Arms 2.23 +457.50%
Market Movers
INVN +19.7% after takeover by GE.
PDLI +8.08% after saying its phase II trial for its daclizumab treatment for asthma was effective in tests on humans.
DAL -14.8% after it warned 1Q losses will be larger-than-expected on high fuel costs and terrorism concerns.
KDE -11.26% after disappointing 4Q results.
NTES -8.7% after saying it received SEC "Wells Notice" for restatement that occurred 2 1/2 years ago under previous management.
NT -14.0% after putting CFO and controller on paid leave.
Economic Data
Empire Manufacturing came in at 25.33 in March vs. expectations of 38.0.
Industrial Production for Feb. rose .7% vs. expectations of a .4% rise.
Capacity Utilization for Feb. was 76.6% vs. expectations of 76.4%.
Recommendations
Goldman Sachs is reiterating its Outperform on PAYX ahead of Thur. report. GS raising ALK to Outperform. GS says concern over an inventory build in notebooks and seasonally mixed PC data points from Taiwan are fully priced into semi stocks. They reiterate Outperform rating on ATYT and INTC. GS remains bullish on tower stocks, favorites are AMT and CCI. GS reiterating Underperform on EDS. GS reiterating Outperform on KMT. GS says HRB continues to lose market share. GS reiterating Underperform on BMY. GS reiterating Outperform on KRB. Goldman says to Overweight select Financial sub-sectors, focus on IT for alpha, consider indexing consumer staples, healthcare offers the best combination of growth and value and energy is their highest ranked sector for EPS revisions. Bank of America upgrading MNST to Buy. Citi Smith Barney is reiterating Buy on GE. GR and UTX raised to Buy at Deutsche Bank. APOL raised to Sector Outperform at CIBC. MRK raised to Outperform at Thomas Weisel. ATYT raised to Buy at Bear Stearns.
Mid-day News
U.S. stocks are down mid-day on terrorism concerns and rising energy prices. GE agreed to buy bomb-detection company InVision Technologies for $900M in cash. Hotel chains are investing more money in their own web sites and guaranteeing that clients will find the same room prices on their sites as elsewhere, the NY Times reported. GlaxoSmithKline will run commercials on U.S. primetime t.v. that promote the difficult work of its scientists to seek to ease public anger at drugmakers, the Philadelphia Inquirer reported. Nortel(NT) put its CFO and controller on paid leave, pending completion of an accounting review. Crude Oil rose after oil ministers from Venezuela and Qatar said that OPEC will proceed with a production cut in April, Bloomberg reported. Martha Stewart resigned from Martha Stewart Living Omnimedia's board and from her role as Chief Creative Officer, Bloomberg reported. U.S. industrial production rose a larger-than-forecast .7% in February as companies made more cars, electronics and business equipment. This strong showing followed a .8% rise in January, resulting in the strongest 2 month performance since 1999.
BOTTOM LINE: The Portfolio, with 75% net long exposure, is down as the markets hover near their lows for the day. I am selectively adding a few long positions here as I think the selling is overdone short-term, however if today's lows do not hold I will sell longs and lower market exposure to 25%. The markets are testing the levels hit a couple of days ago. If they can hold these levels, a short-term rally will likely ensue. However, if the markets break through those lows convincingly, further weakness is likely in the short-term.
NASDAQ 1,949.22 -1.79%
Leading Sectors
Oil Service +1.05%
HMO's +.49%
Energy +.25%
Lagging Sectors
Biotech -2.56%
Networking -2.60%
Airlines -6.43%
Other
Crude Oil 36.94 +2.07%
Natural Gas 5.68 +1.50%
Gold 399.00 +.86%
Base Metals 109.55 +.88%
U.S. Dollar 88.96 -.19%
10-Yr. Long-Bond Yield 3.75% -.70%
VIX 20.44 +11.69%
Put/Call .94 -8.74%
NYSE Arms 2.23 +457.50%
Market Movers
INVN +19.7% after takeover by GE.
PDLI +8.08% after saying its phase II trial for its daclizumab treatment for asthma was effective in tests on humans.
DAL -14.8% after it warned 1Q losses will be larger-than-expected on high fuel costs and terrorism concerns.
KDE -11.26% after disappointing 4Q results.
NTES -8.7% after saying it received SEC "Wells Notice" for restatement that occurred 2 1/2 years ago under previous management.
NT -14.0% after putting CFO and controller on paid leave.
Economic Data
Empire Manufacturing came in at 25.33 in March vs. expectations of 38.0.
Industrial Production for Feb. rose .7% vs. expectations of a .4% rise.
Capacity Utilization for Feb. was 76.6% vs. expectations of 76.4%.
Recommendations
Goldman Sachs is reiterating its Outperform on PAYX ahead of Thur. report. GS raising ALK to Outperform. GS says concern over an inventory build in notebooks and seasonally mixed PC data points from Taiwan are fully priced into semi stocks. They reiterate Outperform rating on ATYT and INTC. GS remains bullish on tower stocks, favorites are AMT and CCI. GS reiterating Underperform on EDS. GS reiterating Outperform on KMT. GS says HRB continues to lose market share. GS reiterating Underperform on BMY. GS reiterating Outperform on KRB. Goldman says to Overweight select Financial sub-sectors, focus on IT for alpha, consider indexing consumer staples, healthcare offers the best combination of growth and value and energy is their highest ranked sector for EPS revisions. Bank of America upgrading MNST to Buy. Citi Smith Barney is reiterating Buy on GE. GR and UTX raised to Buy at Deutsche Bank. APOL raised to Sector Outperform at CIBC. MRK raised to Outperform at Thomas Weisel. ATYT raised to Buy at Bear Stearns.
Mid-day News
U.S. stocks are down mid-day on terrorism concerns and rising energy prices. GE agreed to buy bomb-detection company InVision Technologies for $900M in cash. Hotel chains are investing more money in their own web sites and guaranteeing that clients will find the same room prices on their sites as elsewhere, the NY Times reported. GlaxoSmithKline will run commercials on U.S. primetime t.v. that promote the difficult work of its scientists to seek to ease public anger at drugmakers, the Philadelphia Inquirer reported. Nortel(NT) put its CFO and controller on paid leave, pending completion of an accounting review. Crude Oil rose after oil ministers from Venezuela and Qatar said that OPEC will proceed with a production cut in April, Bloomberg reported. Martha Stewart resigned from Martha Stewart Living Omnimedia's board and from her role as Chief Creative Officer, Bloomberg reported. U.S. industrial production rose a larger-than-forecast .7% in February as companies made more cars, electronics and business equipment. This strong showing followed a .8% rise in January, resulting in the strongest 2 month performance since 1999.
BOTTOM LINE: The Portfolio, with 75% net long exposure, is down as the markets hover near their lows for the day. I am selectively adding a few long positions here as I think the selling is overdone short-term, however if today's lows do not hold I will sell longs and lower market exposure to 25%. The markets are testing the levels hit a couple of days ago. If they can hold these levels, a short-term rally will likely ensue. However, if the markets break through those lows convincingly, further weakness is likely in the short-term.
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