S&P 500 1,104.24 +.46%
NASDAQ 1,838.10 +.09%
Leading Sectors
Oil Service +2.00%
Energy +1.75%
Iron/Steel +1.63%
Lagging Sectors
Retail -.57%
Semis -.70%
Fashion -1.02%
Other
Crude Oil 42.22 +.24%
Natural Gas 5.07 -.08%
Gold 412.00 -.10%
Base Metals 108.43 +.21%
U.S. Dollar 88.94 -.84%
10-Yr. T-note Yield 4.12% -1.29%
VIX 15.29 -.97%
Put/Call .70 -16.67%
NYSE Arms 1.10 -57.53%
After-hours Movers
FRX -5.98% after saying that a clinical study of the experimental drug Neramexane showed the compound may be ineffective at treating Alzheimer's disease.
OTEX -18.17% after missing 4Q estimates and lowering 1Q guidance.
Recommendations
Goldman Sachs reiterated Outperform on MDT, target $57. Goldman reiterated Outperform on BNS and CAT.
After-hours News
U.S. stocks finished modestly higher today as a late session rally in the S&P futures boosted shares. After the close, the U.S. Federal Trade Commission said it is seeking the first fines for breaches of a rule barring calls to people whose numbers are on a "do-not-call" registry, saying a Las Vegas telemarketer made more than 300,000 unwelcome pitches, Bloomberg reported. Boston Scientific may forecast a drop in third-quarter sales of its Taxus heart stent after three recalls cut demand for the device, the company's top-selling product, Bloomberg said. Microsoft co-founder Bill Gates' personal investment fund, which is the second-largest Six Flags shareholder, has become "increasingly dissatisfied" with the amusement park operator's financial performance and may seek a spot on the company's board, Bloomberg reported. Astronomers have found a new class of planets beyond our solar system that appear more similar to Earth than other comparable objects that have been discovered, NASA and university scientists said.
BOTTOM LINE: The Portfolio finished lower today, notwithstanding the late-afternoon rebound. I added a few new longs on the close, bringing the Portfolio's market exposure to 100% net long. One of my new longs is MICC and I am using a stop-loss of $15 on this position. The market's tone improved substantially in the afternoon as many stocks rose on good volume. I expect U.S. equities to continue to rally short-term as optimism over falling energy prices, declining interest rates, pro-business political rhetoric, improvements in Iraq and subsiding terrorism fears more than offsets worries over a slowing economy.
Tuesday, August 31, 2004
Mid-day Update
S&P 500 1,097.01 -.19%
NASDAQ 1,823.33 -.72%
Leading Sectors
Oil Service +1.40%
Iron/Steel +1.03%
Homebuilders +.85%
Lagging Sectors
Software -1.02%
Internet -1.21%
Semis -1.95%
Other
Crude Oil 41.95 -.78%
Natural Gas 5.10 -2.56%
Gold 412.00 +.49%
Base Metals 108.65 +.42%
U.S. Dollar 88.92 -.87%
10-Yr. T-note Yield 4.10% -1.70%
VIX 15.75 +2.01%
Put/Call .77 -8.33%
NYSE Arms 1.71 -33.98%
Market Movers
IPIX +13.8% after saying it signed an agreement with Soling Company to supply, install, and support Ipix systems in Russia.
UNFI +6.6% after beating 4Q estimates and raising 05 outlook.
POS +7.9% after saying it reached agreement on a five-year, $125 million revolving credit line.
SWIR -10.5% on worries over competition.
Economic Data
Chicago Purchasing Manager for August was 57.3 versus estimates of 60.0 and a reading of 64.7 in July.
Consumer Confidence for August was 98.2 versus estimates of 103.5 and a reading of 105.7 in July.
Recommendations
BLKB rated Overweight at JP Morgan. UPL raised to Overweight at JP Morgan, target $47. KSS raised to Buy at Merrill, target $58. DEX rated Buy at Deutsche Bank, target $24. DEX rated Buy at Merrill, target $25. RIG raised to Buy at Merrill, target $36. NE raised to BUY at Merrill and named Focus 1 stock of the week, target $47. GSF raised to Buy at Merrill, target $33. BLKB rated Outperform at Thomas Weisel. Goldman Sachs rated IDIX Outperform, target $23. Goldman reiterated Outperform on ROH, target $50. Goldman reiterated Outperform on PFE and Underperform on SGP, PNY. Citi SmithBarney rated TXU Buy, target $49.
Mid-day News
U.S. stocks are quietly lower mid-day on declines in technology shares after weaker-than-expected economic data. U.S. Senate and Defense Department computers were invaded by hackers who used them to send spam e-mail, USA Today reported. Senator John McCain speaking at the Republican Convention, described Michael Moore as "a disingenuous filmmaker" and Moore, who was in the convention hall with a press pass, responded with a wave an formed an "L," for loser, with his thumb and forefinger, the New York Times reported. Wal-Mart didn't renew a contract to build a second store in Chicago because of concerns over minimum wage and other standards the city is considering, the Chicago Sun-Times reported. Russian President Putin today said the explosions that brought down two airliners in Russia a week ago were the work of terrorists linked to the al-Qaeda terrorist network, Bloomberg said. Apple Computer will start shipping a new version of the iMac personal computer in the middle of September, missing the back-to-school shopping season, Bloomberg reported. U.S. Treasury notes rose, heading for their biggest monthly gain since September 2003, after indices measuring consumer confidence and Chicago-area manufacturing fell more than forecast this month, Bloomberg reported. Crude oil futures fell for the seventh session in eight as Iraqi exports rose to near-normal rates and Russia said it would increase production this year, Bloomberg reported.
BOTTOM LINE: The Portfolio is lower mid-day on declines in my technology longs and rising steel shorts. I exited a few technology longs as they hit my stop-losses, thus leaving the Portfolio 75% net long. Another disappointing day for the Bulls as technology shares continue to deteriorate on light volume. While today's economic releases were disappointing, they are not near worrisome levels. It is my belief the Bears are looking in the rear-view mirror as the economy should accelerate meaningfully in the fourth quarter. Energy prices are down 15-25% in a very short period of time, inflation fears are subsiding, long-term interest rates have fallen over 80 basis points just since June, the big picture in Iraq is improving, terrorism worries are diminishing the closer we get to the U.S. election, the uncertainty and negative political rhetoric associated with the election will end in the next couple of months and most stocks are at attractive valuations relative to interest rates and growth. I expect stocks to trade mixed into the afternoon as worries over slowing economic growth are offset by falling energy prices and plunging interest rates.
NASDAQ 1,823.33 -.72%
Leading Sectors
Oil Service +1.40%
Iron/Steel +1.03%
Homebuilders +.85%
Lagging Sectors
Software -1.02%
Internet -1.21%
Semis -1.95%
Other
Crude Oil 41.95 -.78%
Natural Gas 5.10 -2.56%
Gold 412.00 +.49%
Base Metals 108.65 +.42%
U.S. Dollar 88.92 -.87%
10-Yr. T-note Yield 4.10% -1.70%
VIX 15.75 +2.01%
Put/Call .77 -8.33%
NYSE Arms 1.71 -33.98%
Market Movers
IPIX +13.8% after saying it signed an agreement with Soling Company to supply, install, and support Ipix systems in Russia.
UNFI +6.6% after beating 4Q estimates and raising 05 outlook.
POS +7.9% after saying it reached agreement on a five-year, $125 million revolving credit line.
SWIR -10.5% on worries over competition.
Economic Data
Chicago Purchasing Manager for August was 57.3 versus estimates of 60.0 and a reading of 64.7 in July.
Consumer Confidence for August was 98.2 versus estimates of 103.5 and a reading of 105.7 in July.
Recommendations
BLKB rated Overweight at JP Morgan. UPL raised to Overweight at JP Morgan, target $47. KSS raised to Buy at Merrill, target $58. DEX rated Buy at Deutsche Bank, target $24. DEX rated Buy at Merrill, target $25. RIG raised to Buy at Merrill, target $36. NE raised to BUY at Merrill and named Focus 1 stock of the week, target $47. GSF raised to Buy at Merrill, target $33. BLKB rated Outperform at Thomas Weisel. Goldman Sachs rated IDIX Outperform, target $23. Goldman reiterated Outperform on ROH, target $50. Goldman reiterated Outperform on PFE and Underperform on SGP, PNY. Citi SmithBarney rated TXU Buy, target $49.
Mid-day News
U.S. stocks are quietly lower mid-day on declines in technology shares after weaker-than-expected economic data. U.S. Senate and Defense Department computers were invaded by hackers who used them to send spam e-mail, USA Today reported. Senator John McCain speaking at the Republican Convention, described Michael Moore as "a disingenuous filmmaker" and Moore, who was in the convention hall with a press pass, responded with a wave an formed an "L," for loser, with his thumb and forefinger, the New York Times reported. Wal-Mart didn't renew a contract to build a second store in Chicago because of concerns over minimum wage and other standards the city is considering, the Chicago Sun-Times reported. Russian President Putin today said the explosions that brought down two airliners in Russia a week ago were the work of terrorists linked to the al-Qaeda terrorist network, Bloomberg said. Apple Computer will start shipping a new version of the iMac personal computer in the middle of September, missing the back-to-school shopping season, Bloomberg reported. U.S. Treasury notes rose, heading for their biggest monthly gain since September 2003, after indices measuring consumer confidence and Chicago-area manufacturing fell more than forecast this month, Bloomberg reported. Crude oil futures fell for the seventh session in eight as Iraqi exports rose to near-normal rates and Russia said it would increase production this year, Bloomberg reported.
BOTTOM LINE: The Portfolio is lower mid-day on declines in my technology longs and rising steel shorts. I exited a few technology longs as they hit my stop-losses, thus leaving the Portfolio 75% net long. Another disappointing day for the Bulls as technology shares continue to deteriorate on light volume. While today's economic releases were disappointing, they are not near worrisome levels. It is my belief the Bears are looking in the rear-view mirror as the economy should accelerate meaningfully in the fourth quarter. Energy prices are down 15-25% in a very short period of time, inflation fears are subsiding, long-term interest rates have fallen over 80 basis points just since June, the big picture in Iraq is improving, terrorism worries are diminishing the closer we get to the U.S. election, the uncertainty and negative political rhetoric associated with the election will end in the next couple of months and most stocks are at attractive valuations relative to interest rates and growth. I expect stocks to trade mixed into the afternoon as worries over slowing economic growth are offset by falling energy prices and plunging interest rates.
Tuesday Watch
Earnings of Note
Company/Estimate
ABS/.33
COO/.67
DCI/.33
EASI/.75
FCEL/-.40
ZLC/.13
Splits
CFC 2-for-1
HOC 2-for-1
Economic Data
Chicago Purchasing Manager for August estimated at 60.0 versus 64.7 in July.
Consumer Confidence for August estimated at 103.5 versus 106.1 in July.
Recommendations
None of note.
Late-Night News
Asian indices are mixed as weakness in Japan is being offset by strength in China. AOL is testing an Internet telephone service to let customers place calls over the Web, Cnet News reported on its Web site, Bloomberg said. Cautious U.S. companies are holding $1.17 trillion of cash, much of it accumulated from improved profits they are choosing not to spend, the Financial Times reported. A group led by Colony Capital LLC is close to an agreement to buy four properties from Harrah's Entertainment and Caesars Entertainment for about $1.26 billion, Dow Jones Newswires reported. Apple Computer may unveil a new version of its iMax personal computer at the Apple Expo 2004 that starts tomorrow in Paris, the AP reported. A fund that has collected more than $540 million for victims of the Sept. 11, 2001, terrorist attacks will close in December, the AP reported. Senator John McCain told delegates at the Republican Convention that the U.S. mission in Iraq was "necessary, achievable and noble," saying the U.S. "couldn't afford the risk posed by an unconstrained Saddam in these dangerous times," Bloomberg reported.
Late-Night Trading
Asian Indices are -.75% to +.25% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated +.07%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning on a better-than-expected Consumer Confidence reading and no acts of terror on opening night at the Republican Convention. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
ABS/.33
COO/.67
DCI/.33
EASI/.75
FCEL/-.40
ZLC/.13
Splits
CFC 2-for-1
HOC 2-for-1
Economic Data
Chicago Purchasing Manager for August estimated at 60.0 versus 64.7 in July.
Consumer Confidence for August estimated at 103.5 versus 106.1 in July.
Recommendations
None of note.
Late-Night News
Asian indices are mixed as weakness in Japan is being offset by strength in China. AOL is testing an Internet telephone service to let customers place calls over the Web, Cnet News reported on its Web site, Bloomberg said. Cautious U.S. companies are holding $1.17 trillion of cash, much of it accumulated from improved profits they are choosing not to spend, the Financial Times reported. A group led by Colony Capital LLC is close to an agreement to buy four properties from Harrah's Entertainment and Caesars Entertainment for about $1.26 billion, Dow Jones Newswires reported. Apple Computer may unveil a new version of its iMax personal computer at the Apple Expo 2004 that starts tomorrow in Paris, the AP reported. A fund that has collected more than $540 million for victims of the Sept. 11, 2001, terrorist attacks will close in December, the AP reported. Senator John McCain told delegates at the Republican Convention that the U.S. mission in Iraq was "necessary, achievable and noble," saying the U.S. "couldn't afford the risk posed by an unconstrained Saddam in these dangerous times," Bloomberg reported.
Late-Night Trading
Asian Indices are -.75% to +.25% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated +.07%
BOTTOM LINE: I expect U.S. equities to open modestly higher in the morning on a better-than-expected Consumer Confidence reading and no acts of terror on opening night at the Republican Convention. The Portfolio is 100% net long heading into tomorrow.
Monday, August 30, 2004
Monday Close
S&P 500 1,099.15 -.78%
NASDAQ 1,836.49 -1.37%
Leading Sectors
Airlines +.38%
Utilities +.17%
Telecom -.11%
Lagging Sectors
Internet -2.05%
Semis -2.28%
Biotech -2.59%
Other
Crude Oil 42.35 +.17%
Natural Gas 5.23 +.02%
Gold 409.40 -.15%
Base Metals 108.20 -.21%
U.S. Dollar 89.69 -.09%
10-Yr. T-note Yield 4.18% -1.10%
VIX 15.44 +4.96%
Put/Call .84 +12.0%
NYSE Arms 2.59 +153.92%
After-hours Movers
None of note.
Recommendations
Goldman reiterated Outperform on SYMC, NEM and PDG.
After-hours News
U.S. stocks finished lower today on the lowest volume of the year as buyers failed to materialize on worries over terrorism at the Republican Convention. After the close, Samsung Electronics, the world's largest memory-chip maker, may increase production of dynamic random-access memory chips because prices haven't fallen as much as for flash-memory chips, the Wall Street Journal reported. The benchmark 10-yr U.S. Treasury note rose for the fourth day in five after a measure of inflation was unchanged in July, Bloomberg reported. Surgery and other procedures to clear heart arteries are just as effective as drug treatment in the elderly and cause no more complications after a year, according to research in the new issue of Circulation. Merck's Zocor failed to reduce complications in the first four months after a heart attack, according to a study that may give an edge to Pfizer's Lipitor medicine, Bloomberg said. Crude oil futures in New York fell for the sixth session in seven, to $42.28 a barrel, as a decline in political unrest in Iraq reduced concern that supplies from the fifth-largest Middle East producer will be disrupted, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today as weakness in my biotechnology and technology longs more than offset my declining steel shorts. I exited a few of my biotech and tech positions in the afternoon after their stop-losses were triggered. Thus, the Portfolio is now 100% net long. While today was unexpectedly weak and disappointing for the Bulls, I am not reading too much into it at this point. Trading activity was exceptionally light and measures of investor anxiety rose. Moreover, interest rates and energy prices continue to fall. I still expect stocks to rally as the week progresses. However, if the major U.S. indices fail to rise later in the week I will assume that the weakness I anticipated later in September has begun.
NASDAQ 1,836.49 -1.37%
Leading Sectors
Airlines +.38%
Utilities +.17%
Telecom -.11%
Lagging Sectors
Internet -2.05%
Semis -2.28%
Biotech -2.59%
Other
Crude Oil 42.35 +.17%
Natural Gas 5.23 +.02%
Gold 409.40 -.15%
Base Metals 108.20 -.21%
U.S. Dollar 89.69 -.09%
10-Yr. T-note Yield 4.18% -1.10%
VIX 15.44 +4.96%
Put/Call .84 +12.0%
NYSE Arms 2.59 +153.92%
After-hours Movers
None of note.
Recommendations
Goldman reiterated Outperform on SYMC, NEM and PDG.
After-hours News
U.S. stocks finished lower today on the lowest volume of the year as buyers failed to materialize on worries over terrorism at the Republican Convention. After the close, Samsung Electronics, the world's largest memory-chip maker, may increase production of dynamic random-access memory chips because prices haven't fallen as much as for flash-memory chips, the Wall Street Journal reported. The benchmark 10-yr U.S. Treasury note rose for the fourth day in five after a measure of inflation was unchanged in July, Bloomberg reported. Surgery and other procedures to clear heart arteries are just as effective as drug treatment in the elderly and cause no more complications after a year, according to research in the new issue of Circulation. Merck's Zocor failed to reduce complications in the first four months after a heart attack, according to a study that may give an edge to Pfizer's Lipitor medicine, Bloomberg said. Crude oil futures in New York fell for the sixth session in seven, to $42.28 a barrel, as a decline in political unrest in Iraq reduced concern that supplies from the fifth-largest Middle East producer will be disrupted, Bloomberg reported.
BOTTOM LINE: The Portfolio finished lower today as weakness in my biotechnology and technology longs more than offset my declining steel shorts. I exited a few of my biotech and tech positions in the afternoon after their stop-losses were triggered. Thus, the Portfolio is now 100% net long. While today was unexpectedly weak and disappointing for the Bulls, I am not reading too much into it at this point. Trading activity was exceptionally light and measures of investor anxiety rose. Moreover, interest rates and energy prices continue to fall. I still expect stocks to rally as the week progresses. However, if the major U.S. indices fail to rise later in the week I will assume that the weakness I anticipated later in September has begun.
Mid-day Update
S&P 500 1,103.63 -.37%
NASDAQ 1,844.36 -.95%
Leading Sectors
Airlines +1.62%
Utilities +.37%
Insurance +.13%
Lagging Sectors
Internet -1.40%
I-Banks -1.54%
Biotech -2.08%
Other
Crude Oil 41.90 -2.96%
Natural Gas 5.19 +.02%
Gold 409.50 +.99%
Base Metals 108.20 -.21%
U.S. Dollar 89.69 -.09%
10-Yr. T-note Yield 4.19% -.78%
VIX 15.33 +4.28%
Put/Call .87 +16.0%
NYSE Arms 1.78 +74.51%
Market Movers
ACDO -23.2% after missing 4Q estimates and lowering 05 guidance.
TSN -7.7% after lowering 4Q estimates.
URI -16.7% after saying it received a subpoena from the U.S. SEC for some of its accounting records.
SWIR -7.9% after GMP cut to Reduce, target $19.
Economic Data
Personal Income for July rose .1% versus expectations of a .5% increase and a .2% rise in June.
Personal Spending for July rose .8% versus estimates of a .7% increase and an upwardly revised .2% decline in June.
PCE Deflator(YoY) for July rose 2.4% versus estimates of a 2.4% increase and a 2.5% rise in June.
PCE Core(YoY) for July rose 1.5% versus estimates of a 1.5% increase and a 1.5% rise in June.
Recommendations
Goldman Sachs reiterated Outperform on COH, MSFT, INTC, WMT, FD, FS and IGT. Citi SmithBarney reiterated Buy on LLY, target $82. Citi reiterated Buy on INTC, target $30. Citi reiterated Buy on PRU, target $55. PFGC downgraded to Sell at Deutsche Bank, target $19.50. NXTL raised to Sector Outperform at CIBC.
Mid-day News
U.S. stocks are quietly lower mid-day on profit-taking and terrorism worries ahead of the Republican Convention. Google stock options started trading Friday and volume was higher than may expected, the Wall Street Journal reported. Production at Ford's Hapeville, Georgia, plant was stopped at least for today because of a parts shortage, the AP reported. Venezuela, the world's fifth-largest oil supplier, expects oil prices to stabilize at $30/bbl. in the near future, El Universal reported, citing the country's oil minister. Washington and 11 other U.S. states have adopted laws barring suits for obesity against restaurants and food companies, the New York Post reported. Most big cell-phone companies intend to compile publicly accessible listings of wireless phone numbers starting in October, the NY Times said. UBS AG wants to make an acquisition such as a trust bank to target wealthy customers in the U.S., the Wall Street Journal reported. The U.S. Patent and Trademark Office turned down Donald Trump's initial attempt to register the expression, "You're Fired," for games and toys, the NY Times said. Radical cleric al-Sadr called on his followers across Iraq to stop fighting U.S.-led coalition troops and Iraqi forces and lay down their arms, the AP reported. France said it will maintain its law banning religious garb in state schools, rejected a demand by the Iraqi kidnappers of two French reporters for its revocation, Bloomberg reported. Crude oil futures in New York fell for the sixth session in seven amid reports that exports from Iraq, the Middle East's fifth-largest oil producer, were unaffected after an explosion damaged a pipeline, Bloomberg reported.
BOTTOM LINE: The Portfolio is lower mid-day on weakness in my biotechnology and technology longs. I have not traded and the Portfolio is still 125% net long. The weakness today is a worse than I expected, however measures of investor anxiety are rising, which is a positive. Moreover, I continue to expect oil prices to head toward the mid-$30's/bbl. within the next couple of months. With energy prices and interest rates dropping, I expect U.S. stocks to rise into the close on short-covering.
NASDAQ 1,844.36 -.95%
Leading Sectors
Airlines +1.62%
Utilities +.37%
Insurance +.13%
Lagging Sectors
Internet -1.40%
I-Banks -1.54%
Biotech -2.08%
Other
Crude Oil 41.90 -2.96%
Natural Gas 5.19 +.02%
Gold 409.50 +.99%
Base Metals 108.20 -.21%
U.S. Dollar 89.69 -.09%
10-Yr. T-note Yield 4.19% -.78%
VIX 15.33 +4.28%
Put/Call .87 +16.0%
NYSE Arms 1.78 +74.51%
Market Movers
ACDO -23.2% after missing 4Q estimates and lowering 05 guidance.
TSN -7.7% after lowering 4Q estimates.
URI -16.7% after saying it received a subpoena from the U.S. SEC for some of its accounting records.
SWIR -7.9% after GMP cut to Reduce, target $19.
Economic Data
Personal Income for July rose .1% versus expectations of a .5% increase and a .2% rise in June.
Personal Spending for July rose .8% versus estimates of a .7% increase and an upwardly revised .2% decline in June.
PCE Deflator(YoY) for July rose 2.4% versus estimates of a 2.4% increase and a 2.5% rise in June.
PCE Core(YoY) for July rose 1.5% versus estimates of a 1.5% increase and a 1.5% rise in June.
Recommendations
Goldman Sachs reiterated Outperform on COH, MSFT, INTC, WMT, FD, FS and IGT. Citi SmithBarney reiterated Buy on LLY, target $82. Citi reiterated Buy on INTC, target $30. Citi reiterated Buy on PRU, target $55. PFGC downgraded to Sell at Deutsche Bank, target $19.50. NXTL raised to Sector Outperform at CIBC.
Mid-day News
U.S. stocks are quietly lower mid-day on profit-taking and terrorism worries ahead of the Republican Convention. Google stock options started trading Friday and volume was higher than may expected, the Wall Street Journal reported. Production at Ford's Hapeville, Georgia, plant was stopped at least for today because of a parts shortage, the AP reported. Venezuela, the world's fifth-largest oil supplier, expects oil prices to stabilize at $30/bbl. in the near future, El Universal reported, citing the country's oil minister. Washington and 11 other U.S. states have adopted laws barring suits for obesity against restaurants and food companies, the New York Post reported. Most big cell-phone companies intend to compile publicly accessible listings of wireless phone numbers starting in October, the NY Times said. UBS AG wants to make an acquisition such as a trust bank to target wealthy customers in the U.S., the Wall Street Journal reported. The U.S. Patent and Trademark Office turned down Donald Trump's initial attempt to register the expression, "You're Fired," for games and toys, the NY Times said. Radical cleric al-Sadr called on his followers across Iraq to stop fighting U.S.-led coalition troops and Iraqi forces and lay down their arms, the AP reported. France said it will maintain its law banning religious garb in state schools, rejected a demand by the Iraqi kidnappers of two French reporters for its revocation, Bloomberg reported. Crude oil futures in New York fell for the sixth session in seven amid reports that exports from Iraq, the Middle East's fifth-largest oil producer, were unaffected after an explosion damaged a pipeline, Bloomberg reported.
BOTTOM LINE: The Portfolio is lower mid-day on weakness in my biotechnology and technology longs. I have not traded and the Portfolio is still 125% net long. The weakness today is a worse than I expected, however measures of investor anxiety are rising, which is a positive. Moreover, I continue to expect oil prices to head toward the mid-$30's/bbl. within the next couple of months. With energy prices and interest rates dropping, I expect U.S. stocks to rise into the close on short-covering.
Monday Watch
Earnings of Note
Company/Estimate
ACDO/.39
DY/.35
CEN/.19
Splits
BAC 2-for-1
Economic Data
Personal Income for July estimated up .5% versus an increase of .2% in June.
Personal Spending for July estimated up .7% versus a decline of .7% in June.
PCE Deflator(YoY) for July estimated up 2.4% versus a 2.5% increase in June.
PCE Core(YoY) for July estimated up 1.5% versus a 1.5% increase in June.
Weekend Recommendations
Forbes on Fox had guests that were positive on COF, PVN, TGT and mixed on INTC, FPL. Bulls and Bears had guests that were positive on IDA, SU, HDWR, DPZ, NOK, GE, WTW, AMGN, IVX and negative on LLY, KKD. Cashin' In had guests that were positive on CCMP, CPWM, BAC, CRM and PRX. Wall St. Week w/Fortune had guests that were positive on NYT, YHOO, DCLK, SSP, GCI, INTC, IDTI, TM, GM, F, DD, TRFX, AMSWA and negative on CP, JPM. Barron's had positive columns on OSIS, ASE, VICL, DRXR, LOJN, XRAY and negative columns on CCU and CDL. Goldman Sachs reiterated Attractive view of Lodging and Cruise sectors. Goldman reiterated Outperform on EBAY.
Weekend News
Audi AG, which makes luxury cars for Volkswagen AG, is considering a plan to produce vehicles in the U.S. or Mexico to help reduce the risk of currency fluctuations, Die Welt reported. Russian investigators found traces of explosives in the wreckage of the second plane that crashed this week in Russia, Agence France-Presse reported. Wal-Mart canceled plans to build its first store in Washington, D.C., the Washington Post reported. Two men were arrested yesterday in connection with a plot to detonate a bomb on a New York City subway at the Herald Square station, the New York Post reported. The California state Legislature approved a package of bills allowing the importation of less expensive drugs from Canada, the LA Times reported. French government officials called for the release of two journalists kidnapped in Iraq by a group demanding the France rescind a ban on religious garb in the nation's schools, Agence France-Presse said. Brandsonsale.com, an Internet toy and clothing retailer, said "pimp" suits and "ho" dresses for children are among its best sellers for Halloween this year, the Washington Post reported. Target plans to spend $100 million to build a warehouse in DeKalb, Illinois, by 2006, Crain's Chicago Business said. Young adults are growing "bored" of sexually explicit ads and could be better targeted by more wholesome marketing methods, the Financial Times said, citing a survey by WPP Group. UBS AG, Europe's biggest bank by assets, plans to buy Charles Schwab's institutional research and trading unit for $265 million, the Wall Street Journal reported. Sanofi-Aventis SA, the world's third biggest drugmaker, said its experimental anti-craving pill, rimonabant, helped obese patients lose about 19 pounds and trim 3.5 inches from their waists in a study, Bloomberg reported. U.S. weather forecasters urged those in the northern Lesser Antilles and northeastern Caribbean Sea to "closely monitor" the progress of Hurricane Frances, which may become a Category 5 storm within 24 hours, Bloomberg said. Senator John McCain said Senator Kerry's anti-war activities after he returned from Vietnam are an appropriate subject for political debate, Bloomberg reported. Europe is slipping further behind the U.S. in competitiveness as the leaders of Germany, France and Italy, weakened by election setbacks, fail to take advantage of the economic recovery to reduce taxes and over-regulation, Bloomberg reported.
Late-Night Trading
Asian indices are mixed, -.50% to +.25% on average.
S&P 500 indicated -.23%.
NASDAQ indicated -.14%.
BOTTOM LINE: I expect U.S. stock to open modestly lower in the morning on fears over terrorism during the Republican Convention. However, equities should rise later in the day on short-covering and optimism over the recent fall in energy prices. The Portfolio is 125% net long heading into tomorrow.
Company/Estimate
ACDO/.39
DY/.35
CEN/.19
Splits
BAC 2-for-1
Economic Data
Personal Income for July estimated up .5% versus an increase of .2% in June.
Personal Spending for July estimated up .7% versus a decline of .7% in June.
PCE Deflator(YoY) for July estimated up 2.4% versus a 2.5% increase in June.
PCE Core(YoY) for July estimated up 1.5% versus a 1.5% increase in June.
Weekend Recommendations
Forbes on Fox had guests that were positive on COF, PVN, TGT and mixed on INTC, FPL. Bulls and Bears had guests that were positive on IDA, SU, HDWR, DPZ, NOK, GE, WTW, AMGN, IVX and negative on LLY, KKD. Cashin' In had guests that were positive on CCMP, CPWM, BAC, CRM and PRX. Wall St. Week w/Fortune had guests that were positive on NYT, YHOO, DCLK, SSP, GCI, INTC, IDTI, TM, GM, F, DD, TRFX, AMSWA and negative on CP, JPM. Barron's had positive columns on OSIS, ASE, VICL, DRXR, LOJN, XRAY and negative columns on CCU and CDL. Goldman Sachs reiterated Attractive view of Lodging and Cruise sectors. Goldman reiterated Outperform on EBAY.
Weekend News
Audi AG, which makes luxury cars for Volkswagen AG, is considering a plan to produce vehicles in the U.S. or Mexico to help reduce the risk of currency fluctuations, Die Welt reported. Russian investigators found traces of explosives in the wreckage of the second plane that crashed this week in Russia, Agence France-Presse reported. Wal-Mart canceled plans to build its first store in Washington, D.C., the Washington Post reported. Two men were arrested yesterday in connection with a plot to detonate a bomb on a New York City subway at the Herald Square station, the New York Post reported. The California state Legislature approved a package of bills allowing the importation of less expensive drugs from Canada, the LA Times reported. French government officials called for the release of two journalists kidnapped in Iraq by a group demanding the France rescind a ban on religious garb in the nation's schools, Agence France-Presse said. Brandsonsale.com, an Internet toy and clothing retailer, said "pimp" suits and "ho" dresses for children are among its best sellers for Halloween this year, the Washington Post reported. Target plans to spend $100 million to build a warehouse in DeKalb, Illinois, by 2006, Crain's Chicago Business said. Young adults are growing "bored" of sexually explicit ads and could be better targeted by more wholesome marketing methods, the Financial Times said, citing a survey by WPP Group. UBS AG, Europe's biggest bank by assets, plans to buy Charles Schwab's institutional research and trading unit for $265 million, the Wall Street Journal reported. Sanofi-Aventis SA, the world's third biggest drugmaker, said its experimental anti-craving pill, rimonabant, helped obese patients lose about 19 pounds and trim 3.5 inches from their waists in a study, Bloomberg reported. U.S. weather forecasters urged those in the northern Lesser Antilles and northeastern Caribbean Sea to "closely monitor" the progress of Hurricane Frances, which may become a Category 5 storm within 24 hours, Bloomberg said. Senator John McCain said Senator Kerry's anti-war activities after he returned from Vietnam are an appropriate subject for political debate, Bloomberg reported. Europe is slipping further behind the U.S. in competitiveness as the leaders of Germany, France and Italy, weakened by election setbacks, fail to take advantage of the economic recovery to reduce taxes and over-regulation, Bloomberg reported.
Late-Night Trading
Asian indices are mixed, -.50% to +.25% on average.
S&P 500 indicated -.23%.
NASDAQ indicated -.14%.
BOTTOM LINE: I expect U.S. stock to open modestly lower in the morning on fears over terrorism during the Republican Convention. However, equities should rise later in the day on short-covering and optimism over the recent fall in energy prices. The Portfolio is 125% net long heading into tomorrow.
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