Tuesday, October 24, 2006
Monday, October 23, 2006
Tuesday Watch
Late-Night Headlines
Bloomberg:
- US gasoline at the pump fell 1.8 cents to a nationwide average of $2.20 a gallon, the lowest price in over 11 months, a government report showed.
- Crude oil is falling for a third day on speculation mild fall temperatures in the US may trim heating demand, boosting stockpiles.
- US temperatures will average higher than normal across all regions this winter except in the Northeast, where colder-than-average conditions will dominate, meteorologists said in a November-through-January outlook.
- Douglas Emmett, a US real estate investment trust that owns offices and luxury apartments in the LA area and Hawaii, raised $1.39 billion in the largest IPO for a domestic property trust.
- The Panama Canal will double its capacity, making the 92-year-old waterway more competitive to lure the world’s largest tankers and container ships, after voters yesterday approved a $5.3 billion expansion plan.
- Baosteel Group, China’s biggest steelmaker and the world’s sixth-largest, plans to more than double crude steel output to 50 million metric tons by 2012.
- Oxiana Ltd., the fastest growing of Australia’s 10 largest mining company, had a 27% gain in third-quarter copper production and zinc output jumped 22% after it boosted output and bought a mine.
- Investors spend a record $837 million on renewable energy technologies such as solar power, ethanol and bio-diesel during the third quarter as rising fuel costs and improved technology make the industry more likely to become profitable, according to a report from Cleantech Venture Network.
- David Berkowitz, whose Gotham Partners LP closed three years ago after investors withdrawals and a government prove, raised about $155 million for a hedge fund to invest in stocks.
Financial Times:
- GE Money, the consumer finance arm of General Electric(GE), and Wal-Mart Stores(WMT) are close to starting a credit card in China.
- Marsh & McLennan(MMC), the world’s largest insurance broker is “absolutely not” for sale, citing Brian Storms, head of Marsh’s insurance operations.
Union Radio:
- OPEC may cut production by an additional 500,000 barrels a day when the group meets Dec. 14 in Abuja, Nigeria, Venezuelan Energy and Oil Minister Rafael Ramirez said.
Shanghai Daily:
- Papa John’s Intl.(PZZA) plans to have 500 stores in China in the next ten years, citing the company’s CEO.
Economic Daily News:
- Corning Inc.(GLW) has frozen expansion in central Taiwan after local display panel makers delayed construction of new-generation plants.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (LLL), target $91.
- Reiterated Buy on (CVH), target $68.
- Reiterated Buy on (NFLX), target $33.50.
- Reiterated Buy on (SLAB), target $43.
- Reiterated Buy on (PBI), target $51.
Night Trading
Asian Indices are +.25% to +.75% on average.
S&P 500 indicated -.08%.
NASDAQ 100 indicated -.03%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (ADVS)/.11
- (AFL)/.72
- (AKS)/.34
- (ALK)/2.10
- (AMZN)/.03
- (AV)/.13
- (BLS)/.59
- (EAT)/.46
- (BNI)/1.30
- (CTX)/.68
- (CKFR)/.39
- (CME)/2.87
- (COH)/.31
- (GLW)/.25
- (CYMI)/.65
- (ESV)/1.30
- (ESRX)/.82
- (FAF)/1.16
- (FLEX)/.20
- (GNSS)/.14
- (IM)/.32
- (JBLU)/.00
- (KLAC)/.69
- (LM)/1.02
- (LVLT)/-.14
- (LMT)/1.24
- (LPX)/.09
- (LU)/.04
- (MUR)/1.02
- (NBR)/.99
- (NOC)/1.07
- (PNRA)/.36
- (PD)/4.80
- (QLGC)/.22
- (STX)/.17
- (AMTD)/.22
- (TLAB)/.13
- (WHR)/1.46
- (XTO)/.87
Upcoming Splits
- (HLSH) 1-for-5
Economic Releases
- None of note
Bloomberg:
- US gasoline at the pump fell 1.8 cents to a nationwide average of $2.20 a gallon, the lowest price in over 11 months, a government report showed.
- Crude oil is falling for a third day on speculation mild fall temperatures in the US may trim heating demand, boosting stockpiles.
- US temperatures will average higher than normal across all regions this winter except in the Northeast, where colder-than-average conditions will dominate, meteorologists said in a November-through-January outlook.
- Douglas Emmett, a US real estate investment trust that owns offices and luxury apartments in the LA area and Hawaii, raised $1.39 billion in the largest IPO for a domestic property trust.
- The Panama Canal will double its capacity, making the 92-year-old waterway more competitive to lure the world’s largest tankers and container ships, after voters yesterday approved a $5.3 billion expansion plan.
- Baosteel Group, China’s biggest steelmaker and the world’s sixth-largest, plans to more than double crude steel output to 50 million metric tons by 2012.
- Oxiana Ltd., the fastest growing of Australia’s 10 largest mining company, had a 27% gain in third-quarter copper production and zinc output jumped 22% after it boosted output and bought a mine.
- Investors spend a record $837 million on renewable energy technologies such as solar power, ethanol and bio-diesel during the third quarter as rising fuel costs and improved technology make the industry more likely to become profitable, according to a report from Cleantech Venture Network.
- David Berkowitz, whose Gotham Partners LP closed three years ago after investors withdrawals and a government prove, raised about $155 million for a hedge fund to invest in stocks.
Financial Times:
- GE Money, the consumer finance arm of General Electric(GE), and Wal-Mart Stores(WMT) are close to starting a credit card in China.
- Marsh & McLennan(MMC), the world’s largest insurance broker is “absolutely not” for sale, citing Brian Storms, head of Marsh’s insurance operations.
Union Radio:
- OPEC may cut production by an additional 500,000 barrels a day when the group meets Dec. 14 in Abuja, Nigeria, Venezuelan Energy and Oil Minister Rafael Ramirez said.
Shanghai Daily:
- Papa John’s Intl.(PZZA) plans to have 500 stores in China in the next ten years, citing the company’s CEO.
Economic Daily News:
- Corning Inc.(GLW) has frozen expansion in central Taiwan after local display panel makers delayed construction of new-generation plants.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (LLL), target $91.
- Reiterated Buy on (CVH), target $68.
- Reiterated Buy on (NFLX), target $33.50.
- Reiterated Buy on (SLAB), target $43.
- Reiterated Buy on (PBI), target $51.
Night Trading
Asian Indices are +.25% to +.75% on average.
S&P 500 indicated -.08%.
NASDAQ 100 indicated -.03%.
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (ADVS)/.11
- (AFL)/.72
- (AKS)/.34
- (ALK)/2.10
- (AMZN)/.03
- (AV)/.13
- (BLS)/.59
- (EAT)/.46
- (BNI)/1.30
- (CTX)/.68
- (CKFR)/.39
- (CME)/2.87
- (COH)/.31
- (GLW)/.25
- (CYMI)/.65
- (ESV)/1.30
- (ESRX)/.82
- (FAF)/1.16
- (FLEX)/.20
- (GNSS)/.14
- (IM)/.32
- (JBLU)/.00
- (KLAC)/.69
- (LM)/1.02
- (LVLT)/-.14
- (LMT)/1.24
- (LPX)/.09
- (LU)/.04
- (MUR)/1.02
- (NBR)/.99
- (NOC)/1.07
- (PNRA)/.36
- (PD)/4.80
- (QLGC)/.22
- (STX)/.17
- (AMTD)/.22
- (TLAB)/.13
- (WHR)/1.46
- (XTO)/.87
Upcoming Splits
- (HLSH) 1-for-5
Economic Releases
- None of note
BOTTOM LINE: Asian indices are higher, boosted by automaker shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.
S&P 500 Hits Highest Level Since 2000, DJIA Makes Another All-Time High on Falling Oil and Strong Profits
Indices
S&P 500 1,377.02 +.62%
DJIA 12,116.91 +.95%
NASDAQ 2,355.56 +.57%
Russell 2000 763.52 +.18%
Wilshire 5000 13,760.20 +.51%
S&P Barra Growth 639.26 +.62%
S&P Barra Value 735.61 +.62%
Morgan Stanley Consumer 668.52 +.75%
Morgan Stanley Cyclical 853.81 +.67%
Morgan Stanley Technology 546.73 +.37%
Transports 4,681.98 -.52%
Utilities 449.16 +.38%
Put/Call .75 +13.64%
NYSE Arms .70 -36.62%
Volatility(VIX) 11.07 +4.14%
ISE Sentiment 123.0 -15.75%
US Dollar 86.73 +.53%
CRB 306.10 +.12%
Futures Spot Prices
Crude Oil 58.81 -.88%
Unleaded Gasoline 147.20 +.33%
Natural Gas 6.87 -5.05%
Heating Oil 167.25 -.45%
Gold 584.20 +.22%
Base Metals 245.33 -.68%
Copper 345.55 +.13%
10-year US Treasury Yield 4.82% +.76%
Leading Sectors
Retail +2.11%
Restaurants +1.83%
Computer Services +1.26%
Lagging Sectors
Oil Service -.33%
Oil Tankers -.71%
Homebuilders -.84%
Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play
Afternoon Recommendations
- None of note
Afternoon/Evening Headlines
Bloomberg:
- The October rally in US stocks pushed the S&P 500 Index to the highest close since 2000 and the Dow Jones Industrial Average to another all-time high as falling oil prices buoyed shares of companies most dependent on consumer spending.
- Keefe Bruyette & Woods, an investment bank that specializes in mergers and stock sales for financial-services companies, said it plans to raise as much as $157.5 million in an IPO of its own.
- Texas Instruments(TXN) said third quarter profit rose 11% on higher sales of chips for the newest handsets and televisions.
- Amgen(AMGN) had a 14% third-quarter profit gain on higher sales of medicines to treat anemia and infections in cancer patients. The company raised its 2006 forecast for the second time this year.
- Henry Louis Gates Jr., director of the African-American research institute at Harvard University, has been named a University Professor, a distinction held by only 20 other current faculty members.
- Jeffrey Skilling, Enron’s former CEO, was sentenced to 24 years and four months in prison for his role in the securities fraud that led to the energy trader’s collapse.
Financial Times Deutschland:
- Germany may force oil companies to add more bio-diesel to its gasoline and diesel products.
S&P 500 1,377.02 +.62%
DJIA 12,116.91 +.95%
NASDAQ 2,355.56 +.57%
Russell 2000 763.52 +.18%
Wilshire 5000 13,760.20 +.51%
S&P Barra Growth 639.26 +.62%
S&P Barra Value 735.61 +.62%
Morgan Stanley Consumer 668.52 +.75%
Morgan Stanley Cyclical 853.81 +.67%
Morgan Stanley Technology 546.73 +.37%
Transports 4,681.98 -.52%
Utilities 449.16 +.38%
Put/Call .75 +13.64%
NYSE Arms .70 -36.62%
Volatility(VIX) 11.07 +4.14%
ISE Sentiment 123.0 -15.75%
US Dollar 86.73 +.53%
CRB 306.10 +.12%
Futures Spot Prices
Crude Oil 58.81 -.88%
Unleaded Gasoline 147.20 +.33%
Natural Gas 6.87 -5.05%
Heating Oil 167.25 -.45%
Gold 584.20 +.22%
Base Metals 245.33 -.68%
Copper 345.55 +.13%
10-year US Treasury Yield 4.82% +.76%
Leading Sectors
Retail +2.11%
Restaurants +1.83%
Computer Services +1.26%
Lagging Sectors
Oil Service -.33%
Oil Tankers -.71%
Homebuilders -.84%
Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play
Afternoon Recommendations
- None of note
Afternoon/Evening Headlines
Bloomberg:
- The October rally in US stocks pushed the S&P 500 Index to the highest close since 2000 and the Dow Jones Industrial Average to another all-time high as falling oil prices buoyed shares of companies most dependent on consumer spending.
- Keefe Bruyette & Woods, an investment bank that specializes in mergers and stock sales for financial-services companies, said it plans to raise as much as $157.5 million in an IPO of its own.
- Texas Instruments(TXN) said third quarter profit rose 11% on higher sales of chips for the newest handsets and televisions.
- Amgen(AMGN) had a 14% third-quarter profit gain on higher sales of medicines to treat anemia and infections in cancer patients. The company raised its 2006 forecast for the second time this year.
- Henry Louis Gates Jr., director of the African-American research institute at Harvard University, has been named a University Professor, a distinction held by only 20 other current faculty members.
- Jeffrey Skilling, Enron’s former CEO, was sentenced to 24 years and four months in prison for his role in the securities fraud that led to the energy trader’s collapse.
Financial Times Deutschland:
- Germany may force oil companies to add more bio-diesel to its gasoline and diesel products.
BOTTOM LINE: The Portfolio finished higher today on gains in my Computer longs, Internet longs, Retail longs and Medical longs. I did not trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was modestly positive today as the advance/decline line finished about even, sector performance was mostly positive and volume was slightly above average. Measures of investor anxiety were mostly higher into the close. Today's overall market action was bullish. The fact that the VIX rose, ISE Sentiment Index fell and the Put/Call rose today despite another DJIA all-time high bodes well for more upside later this week.
DJIA Sharply Higher into Final Hour, Making Another All-Time High
BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Retail longs and Computer longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is about even, sector performance is mostly higher and volume is modestly above average. At this point in time, Google (GOOG) is arguably the greatest large-cap growth stock in the world. Its niche is expanding rapidly and it is the dominant player. Most analysts expect Google's multiple to rise to around 40x forward estimates. Historically, the best growth stocks trading in a favorable environment for the "growth style" eventually trade at much higher valuations than this. Taking into consideration Google's strong fundamentals during a time of moderating global growth, a shift to the growth style and global underexposure to U.S. equities, I suspect Google's P/E multiple will expand much more than most expect. Google remains my largest long position. I expect US stocks to trade modestly higher into the close from current levels on short-covering, lower energy prices and investment manager performance anxiety.
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