Monday, May 30, 2005
Weekly Outlook
There are some important economic reports and a few significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - US Markets Closed
Tues. - Chicago Purchasing Manager, Consumer Confidence
Wed. - Construction Spending, ISM Manufacturing, ISM Prices Paid, Vehicle Sales
Thur. - Final 1Q Non-farm Productivity, Final 1Q Unit Labor Costs, Initial Jobless Claims, Factory Orders
Fri. - Unemployment Rate, Average Hourly Earnings, Change in Non-farm Payrolls, ISM Non-Manufacturing
Some of the more noteworthy companies that release quarterly earnings this week are:
Mon. - US Market Closed
Tues. - Hovnanian Enterprises(HOV), Sear Holdings(SHLD)
Wed. - ADC Telecommunications(ADCTD), Comverse Technology(CMVT), Copart Inc.(CPRT), Neiman-Marcus Group(NMG/A)
Thur. - Take-Two Interactive(TTWO)
Fri. - None of note
Other events that have market-moving potential this week include:
Mon. - US Markets Closed
Tue. - ALTR Business Update, NVLS Mid-Quarter Update
Wed. - Friedman Billings Growth Conference, CSFB Supply Chain Conference, Smith Barney Semi Conference, Sanford C. Bernstein Strategic Decisions Conference, Goldman Sachs Power and Utility Conference, SG Cowen Tech Conference, Lehman Brothers Wireless/Wireline Conference
Thur. - Lehman Brothers Wireless/Wireline Conference, Sanford C. Bernstein Strategic Decisions Conference, Goldman Sachs Power and Utility Conference, SG Cowen Tech Conference, Smith Barney Semi Conference, Friedman Billings Growth Conference, Fed's Stern speaks
Fri. - Lehman Brothers Wireless/Wireline Conference, Goldman Sachs Power and Utility Conference, Sanford C. Bernstein Strategic Decisions Conference, Friedman Billings Growth Conference
Economic reports for the week include:
Mon. - US Markets Closed
Tues. - Chicago Purchasing Manager, Consumer Confidence
Wed. - Construction Spending, ISM Manufacturing, ISM Prices Paid, Vehicle Sales
Thur. - Final 1Q Non-farm Productivity, Final 1Q Unit Labor Costs, Initial Jobless Claims, Factory Orders
Fri. - Unemployment Rate, Average Hourly Earnings, Change in Non-farm Payrolls, ISM Non-Manufacturing
Some of the more noteworthy companies that release quarterly earnings this week are:
Mon. - US Market Closed
Tues. - Hovnanian Enterprises(HOV), Sear Holdings(SHLD)
Wed. - ADC Telecommunications(ADCTD), Comverse Technology(CMVT), Copart Inc.(CPRT), Neiman-Marcus Group(NMG/A)
Thur. - Take-Two Interactive(TTWO)
Fri. - None of note
Other events that have market-moving potential this week include:
Mon. - US Markets Closed
Tue. - ALTR Business Update, NVLS Mid-Quarter Update
Wed. - Friedman Billings Growth Conference, CSFB Supply Chain Conference, Smith Barney Semi Conference, Sanford C. Bernstein Strategic Decisions Conference, Goldman Sachs Power and Utility Conference, SG Cowen Tech Conference, Lehman Brothers Wireless/Wireline Conference
Thur. - Lehman Brothers Wireless/Wireline Conference, Sanford C. Bernstein Strategic Decisions Conference, Goldman Sachs Power and Utility Conference, SG Cowen Tech Conference, Smith Barney Semi Conference, Friedman Billings Growth Conference, Fed's Stern speaks
Fri. - Lehman Brothers Wireless/Wireline Conference, Goldman Sachs Power and Utility Conference, Sanford C. Bernstein Strategic Decisions Conference, Friedman Billings Growth Conference
BOTTOM LINE: I expect US stocks to finish the week mixed as profit-taking, global growth concerns and mixed economic data offset more optimism for a Fed "pause," a rising US dollar and lower inflation readings. As I expected, the French voted "no" to the EU Constitution. The ramifications of this are vastly underestimated in my opinion. This will likely spur further gains in the US dollar, boost demand for US Assets, dampen European growth and pressure commodity prices over the coming months. My trading indicators are still giving bullish signals and the Portfolio is 50% net long heading into the week.
Sunday, May 29, 2005
Economic Week in Review
ECRI Weekly Leading Index 132.90 -.15%
Existing Home Sales for April rose 4.5% to 7.18M, an all-time record, versus estimates of 6.9M and 6.87M in March. The median price of a previously owned US home topped $200,000 for the first time ever in April, capping the biggest increase in a quarter century, Bloomberg reported. A healthy job market and 30-year mortgage rates of less than 6% are fueling demand. During the last five years, the median sales price of an existing single family home has risen at an 8.1% annual rate. Federal Reserve Chairman Greenspan said the housing market has "a lot of local bubbles" and "a little froth." Investors' increased confidence that the Fed is keeping inflation at bay is holding down long-term rates, Bloomberg said. "Consumers are still apparently confident enough about their personal financial situations to undertake the housing investment despite the recent softness of confidence surveys," said Lynn Reaser, chief economist at Banc of America Capital.
"Most Fed members regarded the recent slower growth of economic activity as likely to be transitory," according to the Fed Minutes from the May 3rd meeting. "All members regarded the stance of policy as accommodative and judged that the current level of short-term rates remained too low to be consistent with sustainable growth and stable prices in the long run." "Members agreed that they should continue along the course of removing policy accommodation at a measured pace conditional on the outlook for inflation and economic growth," the minutes said. Fed members suggested that "greater uncertainty called for eliminating or paring back forward-looking language from the statement – if not at this meeting then fairly soon," the statement said. Other members countered that the language did not preclude the Fed from raising rates or taking a pause, and that view prevailed at the meeting. Eventually, all members decided to keep the "measured pace" language.
Durable Goods Orders for April rose 1.9% versus estimates of a 1.3% gain and an upwardly revised 1.6% decline in March. Durables Ex Transportation for April fell .2% versus estimates of a 1.0% gain and an upwardly revised .2% rise in March. The rise in bookings for items made to last at least three years was the biggest since November and was spurred by demand for machinery, computers and aircraft. With consumers still spending and interest rates low, businesses are likely to keep replacing trucks, machinery and computers to meet demand. Orders for transportation equipment rose 8.2% after declining 6.5% in March. Bookings for vehicles increased 3.4% and aircraft orders surged 28% after slumping 22% the previous month. Machinery orders increased 2.2% last month after declining 4.9% in March. Orders for computers rose 16% last month after falling 5.3%. Orders for defense hardware fell 15% last month, following an 8.3% increase. Excluding defense, orders ex transportation in April rose 2.3%, the most since November 2004. Finally, bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, gained 1.6% last month, the most since January. "We still have good support from consumers and I think businesses will be investing actively," said Michael Moran, chief economist at Daiwa Securities America.
New Home Sales for April rose to 1316K versus estimates of 1325K and a downwardly revised 1313K in March. US new home sales increased in April to a record pace as historically low interest rates and job gains spurred sales. New home sales so far this year have averaged a 1.27M rate versus last year’s record 1.2M. Sales rose in two of the four regions in April. Sales surged 37.2% in the Northeast and rose 2.8% in the West. Sales fell 5.3% in the South and declined .5% in the Midwest. The median price rose to $230,800, a 3.8% rise from the same month last year. "Housing is not quite tapped out as a source of incremental growth, though we don't expect sales to rise much further through the second half," said Ian Shepherdson, chief US economist at High Frequency Economics.
Preliminary 1Q GDP rose 3.5% versus estimates of a 3.6% gain and a 3.1% prior estimate. Preliminary 1Q Personal Consumption rose 3.6% versus estimates of a 3.5% increase and a prior estimate of 3.5%. The US economy expanded at a greater rate in the first quarter than the government originally expected. "Energy prices may have contributed to caution in business spending, but consumer spending is still quite strong and real estate is through the roof," said Mike Englund, chief economist at Action Economics. Investment in housing accelerated. Residential housing construction rose at an 8.8% annual rate in the quarter, the best since mid-2004. The prior estimate was 5.7%, and it compares with 3.4% for the fourth quarter. The personal consumption expenditures prices index rose 2.1%, slower than the 2.7% in the fourth quarter. Corporate earnings adjusted for the value of inventories and depreciation of capital expenditures rose 4.5%, compared with a 13.5% rise in the fourth quarter of 2004.
Initial Jobless Claims for last week rose to 323K versus estimates of 325K and 322K the prior week. Continuing Claims fell to 2574K versus estimates of 2582K and 2596K prior. The Help Wanted Index for April stayed at 39 versus estimates of 40 and a reading of 39 in March. The four-week moving average of jobless claims rose to 330,500 from 330,000. The four-week moving-average of continuing claims rose to 2.587M, from 2.582M, which was a four-year low. The insured unemployment rate, which tends to move with the US unemployment rate, held at 2%. "These figures imply that this year is likely to continue with a pace of healthy job gains," said Richard DeKaser, chief economist at National City Corp.
Personal Income for April rose .7% versus estimates of a .7% increase and a .5% gain in March. Personal Spending for April rose .6% versus estimates of a .8% gain and an upwardly revised .9% increase in March. The PCE Deflator(YoY) for April rose 2.7% versus a 2.4% gain in March. The PCE Core(YoY) for April rose 1.6% versus a 1.7% gain in March. US personal spending rose for a third consecutive month, spurred by rising incomes as hiring accelerated. "The increase in incomes is completely under-appreciated as a driver of the expansion," said Steven Wieting, an economist at Citigroup Capital Markets
The Final Univ. of Mich. Consumer Confidence reading for May rose to 86.9 versus estimates of 86.0 and a prior estimate of 85.3. The current conditions index, which reflects whether it’s a good time to buy big-ticket items, actually rose to 104.9 in May from 104.4 in April. The improvement in the overall sentiment score from the mid-May preliminary estimate "is an encouraging sign," said Stephen Stanley, chief economist at RBS Greenwich Capital. "While consumers have been saying that they are worried, their spending patterns suggest otherwise. Look for further improvement in attitudes in June," he said.
Existing Home Sales for April rose 4.5% to 7.18M, an all-time record, versus estimates of 6.9M and 6.87M in March. The median price of a previously owned US home topped $200,000 for the first time ever in April, capping the biggest increase in a quarter century, Bloomberg reported. A healthy job market and 30-year mortgage rates of less than 6% are fueling demand. During the last five years, the median sales price of an existing single family home has risen at an 8.1% annual rate. Federal Reserve Chairman Greenspan said the housing market has "a lot of local bubbles" and "a little froth." Investors' increased confidence that the Fed is keeping inflation at bay is holding down long-term rates, Bloomberg said. "Consumers are still apparently confident enough about their personal financial situations to undertake the housing investment despite the recent softness of confidence surveys," said Lynn Reaser, chief economist at Banc of America Capital.
"Most Fed members regarded the recent slower growth of economic activity as likely to be transitory," according to the Fed Minutes from the May 3rd meeting. "All members regarded the stance of policy as accommodative and judged that the current level of short-term rates remained too low to be consistent with sustainable growth and stable prices in the long run." "Members agreed that they should continue along the course of removing policy accommodation at a measured pace conditional on the outlook for inflation and economic growth," the minutes said. Fed members suggested that "greater uncertainty called for eliminating or paring back forward-looking language from the statement – if not at this meeting then fairly soon," the statement said. Other members countered that the language did not preclude the Fed from raising rates or taking a pause, and that view prevailed at the meeting. Eventually, all members decided to keep the "measured pace" language.
Durable Goods Orders for April rose 1.9% versus estimates of a 1.3% gain and an upwardly revised 1.6% decline in March. Durables Ex Transportation for April fell .2% versus estimates of a 1.0% gain and an upwardly revised .2% rise in March. The rise in bookings for items made to last at least three years was the biggest since November and was spurred by demand for machinery, computers and aircraft. With consumers still spending and interest rates low, businesses are likely to keep replacing trucks, machinery and computers to meet demand. Orders for transportation equipment rose 8.2% after declining 6.5% in March. Bookings for vehicles increased 3.4% and aircraft orders surged 28% after slumping 22% the previous month. Machinery orders increased 2.2% last month after declining 4.9% in March. Orders for computers rose 16% last month after falling 5.3%. Orders for defense hardware fell 15% last month, following an 8.3% increase. Excluding defense, orders ex transportation in April rose 2.3%, the most since November 2004. Finally, bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, gained 1.6% last month, the most since January. "We still have good support from consumers and I think businesses will be investing actively," said Michael Moran, chief economist at Daiwa Securities America.
New Home Sales for April rose to 1316K versus estimates of 1325K and a downwardly revised 1313K in March. US new home sales increased in April to a record pace as historically low interest rates and job gains spurred sales. New home sales so far this year have averaged a 1.27M rate versus last year’s record 1.2M. Sales rose in two of the four regions in April. Sales surged 37.2% in the Northeast and rose 2.8% in the West. Sales fell 5.3% in the South and declined .5% in the Midwest. The median price rose to $230,800, a 3.8% rise from the same month last year. "Housing is not quite tapped out as a source of incremental growth, though we don't expect sales to rise much further through the second half," said Ian Shepherdson, chief US economist at High Frequency Economics.
Preliminary 1Q GDP rose 3.5% versus estimates of a 3.6% gain and a 3.1% prior estimate. Preliminary 1Q Personal Consumption rose 3.6% versus estimates of a 3.5% increase and a prior estimate of 3.5%. The US economy expanded at a greater rate in the first quarter than the government originally expected. "Energy prices may have contributed to caution in business spending, but consumer spending is still quite strong and real estate is through the roof," said Mike Englund, chief economist at Action Economics. Investment in housing accelerated. Residential housing construction rose at an 8.8% annual rate in the quarter, the best since mid-2004. The prior estimate was 5.7%, and it compares with 3.4% for the fourth quarter. The personal consumption expenditures prices index rose 2.1%, slower than the 2.7% in the fourth quarter. Corporate earnings adjusted for the value of inventories and depreciation of capital expenditures rose 4.5%, compared with a 13.5% rise in the fourth quarter of 2004.
Initial Jobless Claims for last week rose to 323K versus estimates of 325K and 322K the prior week. Continuing Claims fell to 2574K versus estimates of 2582K and 2596K prior. The Help Wanted Index for April stayed at 39 versus estimates of 40 and a reading of 39 in March. The four-week moving average of jobless claims rose to 330,500 from 330,000. The four-week moving-average of continuing claims rose to 2.587M, from 2.582M, which was a four-year low. The insured unemployment rate, which tends to move with the US unemployment rate, held at 2%. "These figures imply that this year is likely to continue with a pace of healthy job gains," said Richard DeKaser, chief economist at National City Corp.
Personal Income for April rose .7% versus estimates of a .7% increase and a .5% gain in March. Personal Spending for April rose .6% versus estimates of a .8% gain and an upwardly revised .9% increase in March. The PCE Deflator(YoY) for April rose 2.7% versus a 2.4% gain in March. The PCE Core(YoY) for April rose 1.6% versus a 1.7% gain in March. US personal spending rose for a third consecutive month, spurred by rising incomes as hiring accelerated. "The increase in incomes is completely under-appreciated as a driver of the expansion," said Steven Wieting, an economist at Citigroup Capital Markets
The Final Univ. of Mich. Consumer Confidence reading for May rose to 86.9 versus estimates of 86.0 and a prior estimate of 85.3. The current conditions index, which reflects whether it’s a good time to buy big-ticket items, actually rose to 104.9 in May from 104.4 in April. The improvement in the overall sentiment score from the mid-May preliminary estimate "is an encouraging sign," said Stephen Stanley, chief economist at RBS Greenwich Capital. "While consumers have been saying that they are worried, their spending patterns suggest otherwise. Look for further improvement in attitudes in June," he said.
BOTTOM LINE: Overall, last week's economic data were positive. Job growth, rising incomes and mortgage rates near a four-decade low will continue fueling home sales and spurring construction, which adds to economic growth. I continue to believe there is not a nation-wide bubble in housing, notwithstanding the attempts by many to suggest otherwise. I expect homebuilding stocks to outperform through at least year-end. I still expect the Fed to raise rates 25 basis points at the June meeting and remove the word "measured" from their policy statement, thus paving the way for a holding period with respect to rate hikes. The underlying strength in the Durable Goods report bodes well for a rebound in manufacturing activity at some point over the coming months. An improving trade deficit and strong consumer spending helped spur the 3.5% increase in 1Q GDP. This compares favorably to the 10-year average rate of US growth of 3.3%. GDP growth is likely slowing to around 2.5% this quarter, spurred by weakness in the manufacturing sector. Low interest rates, an end to the inventory correction, falling commodity prices, a booming housing market, improving consumer sentiment, rising stock prices, improving trade/budget deficits and a firmer US dollar should propel growth back to around average levels sometime during the third quarter. A recession in Europe or "hard landing" in China could potentially alter my future US growth expectations. The labor market remains healthy. However, a period of moderation is likely during the next few months. The PCE Core, the Fed’s favorite inflation gauge, rose 1.6%. This is well within their stated optimal range of 1.5-1.8%. Incomes were up 7.0% last month from April 2004, well above the inflation rate. This should continue to fuel consumer spending. High gas prices and incessant talk of a “housing bubble” continue to weigh on sentiment. However, the consumer continues to exhibit high levels of confidence by their actions. Record high home sales and better-than-expected retail sales illustrate this. The average price of self-serve gas is falling. Unleaded Gasoline futures have now declined 17.0% since the first week of April. Rising stock values, low long-term interest rates and a booming housing market should also help boost the next sentiment report. Finally, the ECRI Weekly Leading Index fell .15% to 132.90 and is still forecasting slowing, but healthy levels of economic activity.
Saturday, May 28, 2005
Market Week in Review
S&P 500 1,198.78 +.80%
Click here for the Weekly Wrap by Briefing.com.
*5-day % Change
Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was positive. The advance/decline rose, most sectors gained and volume was light on the week. Commodities, Small-caps and Tech outperformed as economic reports exceeded expectations. Measures of investor anxiety were mostly lower on the week. The AAII % Bulls rose again and is now at average levels. Mortgage rates continued to drop and are now only 44 basis points away from all-time lows set in June 2003. Energy prices rose as crude inventories registered a weekly decline. However, overall oil fundamentals actually deteriorated further. Oil supplies last week were 11% higher than a year ago at this time. Crude inventories were 24 million barrels, or 7.8%, above the five-year average. Stockpiles have now risen in 13 of the last 15 weeks. API implied US crude demand last week was down 3.03% from a year earlier. Finally, the contango spread in the oil futures market is finally beginning to narrow, which is bearish for crude. Fed comments this week were relatively hawkish. This will likely remain the case until closer to the June meeting, thus keeping downward pressure on commodity prices. The fact that long-term rates declined this week even with strong economic reports leads me to believe a breach of the 4.0% level on the 10-year T-note is imminent as global growth continues to slow and inflation fears further diminish.
*5-day % Change
Friday, May 27, 2005
Weekly Scoreboard*
Indices
S&P 500 1,198.78 +.80%
DJIA 10,542.55 +.68%
NASDAQ 2,075.73 +1.43%
Russell 2000 616.90 +1.23%
DJ Wilshire 5000 11,833.81 +.90%
S&P Equity Long/Short Index 1,007.12 +.21%
S&P Barra Growth 579.91 +.79%
S&P Barra Value 614.37 +.80%
Morgan Stanley Consumer 588.64 -.39%
Morgan Stanley Cyclical 725.72 +.80%
Morgan Stanley Technology 481.39 +1.11%
Transports 3,623.13 +.06%
Utilities 365.03 +.04%
S&P 500 Cum A/D Line 7,282 +.46%
Bloomberg Crude Oil % Bulls 57.0 +162.19%
Put/Call .81 -18.18%
NYSE Arms 1.23 +6.96%
Volatility(VIX) 12.15 -7.53%
ISE Sentiment 171.00 +19.58%
AAII % Bulls 44.14 +13.41%
US Dollar 86.42 -.21%
CRB 300.89 +2.59%
Futures Spot Prices
Crude Oil 51.85 +6.47%
Unleaded Gasoline 147.53 +4.19%
Natural Gas 6.37 -.78%
Heating Oil 144.58 +5.61%
Gold 422.70 +.40%
Base Metals 122.04 +2.06%
Copper 144.35 +5.13%
10-year US Treasury Yield 4.07% -1.21%
Average 30-year Mortgage Rate 5.65% -1.05%
Leading Sectors
Gold & Silver +7.10%
Energy +5.78%
Oil Service +5.19%
Lagging Sectors
Banks -.58%
Gaming -.73%
I-Banks -1.50%
*5-Day % Change
S&P 500 1,198.78 +.80%
DJIA 10,542.55 +.68%
NASDAQ 2,075.73 +1.43%
Russell 2000 616.90 +1.23%
DJ Wilshire 5000 11,833.81 +.90%
S&P Equity Long/Short Index 1,007.12 +.21%
S&P Barra Growth 579.91 +.79%
S&P Barra Value 614.37 +.80%
Morgan Stanley Consumer 588.64 -.39%
Morgan Stanley Cyclical 725.72 +.80%
Morgan Stanley Technology 481.39 +1.11%
Transports 3,623.13 +.06%
Utilities 365.03 +.04%
S&P 500 Cum A/D Line 7,282 +.46%
Bloomberg Crude Oil % Bulls 57.0 +162.19%
Put/Call .81 -18.18%
NYSE Arms 1.23 +6.96%
Volatility(VIX) 12.15 -7.53%
ISE Sentiment 171.00 +19.58%
AAII % Bulls 44.14 +13.41%
US Dollar 86.42 -.21%
CRB 300.89 +2.59%
Futures Spot Prices
Crude Oil 51.85 +6.47%
Unleaded Gasoline 147.53 +4.19%
Natural Gas 6.37 -.78%
Heating Oil 144.58 +5.61%
Gold 422.70 +.40%
Base Metals 122.04 +2.06%
Copper 144.35 +5.13%
10-year US Treasury Yield 4.07% -1.21%
Average 30-year Mortgage Rate 5.65% -1.05%
Leading Sectors
Gold & Silver +7.10%
Energy +5.78%
Oil Service +5.19%
Lagging Sectors
Banks -.58%
Gaming -.73%
I-Banks -1.50%
*5-Day % Change
Stocks Quietly Higher Mid-day Ahead of Memorial Weekend
Indices
S&P 500 1,198.16 +.05%
DJIA 10,540.28 +.03%
NASDAQ 2,074.45 +.16%
Russell 2000 616.67 +.32%
DJ Wilshire 5000 11,826.83 +.11%
S&P Barra Growth 579.72 +.03%
S&P Barra Value 613.99 +.07%
Morgan Stanley Consumer 589.08 -.03%
Morgan Stanley Cyclical 725.53 +.09%
Morgan Stanley Technology 481.36 -.21%
Transports 3,629.04 -.20%
Utilities 364.59 +.35%
Put/Call 1.0 +31.58%
NYSE Arms 1.20 +84.57%
Volatility(VIX) 12.27 +.25%
ISE Sentiment 159.00 -4.79%
US Dollar 86.45 -.46%
CRB 300.94 +.28%
Futures Spot Prices
Crude Oil 51.75 +1.45%
Unleaded Gasoline 147.45 +1.84%
Natural Gas 6.38 +2.70%
Heating Oil 145.10 +.19%
Gold 422.50 +.45%
Base Metals 122.04 -.11%
Copper 144.50 -.31%
10-year US Treasury Yield 4.07% -.14%
Leading Sectors
Gold & Silver +3.47%
Steel +1.15%
Energy +1.13%
Lagging Sectors
Homebuilders -.36%
Software -.47%
Semis -.91%
S&P 500 1,198.16 +.05%
DJIA 10,540.28 +.03%
NASDAQ 2,074.45 +.16%
Russell 2000 616.67 +.32%
DJ Wilshire 5000 11,826.83 +.11%
S&P Barra Growth 579.72 +.03%
S&P Barra Value 613.99 +.07%
Morgan Stanley Consumer 589.08 -.03%
Morgan Stanley Cyclical 725.53 +.09%
Morgan Stanley Technology 481.36 -.21%
Transports 3,629.04 -.20%
Utilities 364.59 +.35%
Put/Call 1.0 +31.58%
NYSE Arms 1.20 +84.57%
Volatility(VIX) 12.27 +.25%
ISE Sentiment 159.00 -4.79%
US Dollar 86.45 -.46%
CRB 300.94 +.28%
Futures Spot Prices
Crude Oil 51.75 +1.45%
Unleaded Gasoline 147.45 +1.84%
Natural Gas 6.38 +2.70%
Heating Oil 145.10 +.19%
Gold 422.50 +.45%
Base Metals 122.04 -.11%
Copper 144.50 -.31%
10-year US Treasury Yield 4.07% -.14%
Leading Sectors
Gold & Silver +3.47%
Steel +1.15%
Energy +1.13%
Lagging Sectors
Homebuilders -.36%
Software -.47%
Semis -.91%
BOTTOM LINE: The Portfolio is higher mid-day on gains in my Internet, Wireless and Networking longs. I added to a few longs this morning and added PD short, thus leaving the Portfolio 100% net long. I am using a $92.50 stop-loss on this position. The tone of the market is modestly positive as the advance/decline line is slightly higher, most sectors are rising and volume is very light. Measures of investor anxiety are lower. Today’s overall market action is positive, given last week’s gains, rising energy prices and more positive economic data. The major indices and breadth are rising after the report of King Fahd's hospitalization. As well, the put/call and arms reading are modestly elevated. This leads me to believe the path of least resistance is higher today. I expect US stocks to rise modestly into the close on short-covering and more optimism.
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