Thursday, December 23, 2004

Mid-day Report

S&P 500 1,211.20 +.14%
NASDAQ 2,162.00 +.23%

Leading Sectors
Oil Service +.87%
Drugs +.66%
Computer Service +.55%

Lagging Sectors
Homebuilders -.49%
Restaurants -.52%
Airlines -.65%

Crude Oil 44.05 -.43%
Natural Gas 6.66 -2.35%
Gold 442.90 +.34%
Base Metals 121.73 -.36%
U.S. Dollar 81.48 -.55%
10-Yr. T-note Yield 4.21% +.46%
VIX 11.28 -1.48%
Put/Call .72 -27.27%
NYSE Arms .86 +2.38%

Market Movers

Economic Data
Personal Income for November rose .3% versus estimates of a .2% increase and a .6% rise in October.
Personal Spending for November rose .2% versus estimates of a .3% increase and a .8% rise in October.
PCE Deflator for November rose 2.6% versus estimates of a 2.5% increase and a 2.5% gain in October.
PCE Core for November rose 1.5% versus estimates of a 1.5% increase and a rise of 1.5% in October.
Durable Goods Orders for November rose 1.6% versus estimates of a .6% increase and a .9% decline in October.
Durable Goods Orders Less Transportation for November fell .8% versus estimates of a .8% increase and a 1.3% decline in October.
Initial Jobless Claims for last week were 333K versus estimates of 335K and 316K the prior week.
Continuing Claims were 2721K versus estimates of 2736K and 2730K prior.
Final Univ. of Mich. Consumer Confidence for December rose to 97.1 versus estimates of 95.7 and a prior estimate of 95.7.
New Home Sales for November were 1125K versus estimates of 1200K and 1278K in October.

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Mid-day News

Bottom Line: The Portfolio is substantially higher mid-day on gains in my software, semi and internet longs. I exited a Chinese ADR long this morning and bought ERES, thus leaving the Portfolio 125% net long. I am keeping a $14.75 stop-loss on this new position. The decline in New Home Sales is a bit worrisome, however I am not ready to conclude this is a trend, considering their recently elevated levels. The New Home Sales uptrend remains firmly in tact at this point. As well, I continue to expect Consumer Confidence will reach new cycle highs during 05. The overall tone of the market today is mildly positive. Measures of investor anxiety are reaching levels normally associated with a period of consolidation. However, year-end positioning, short-covering, falling energy prices, low interest rates, good corporate profitability, more optimism and reasonable valuations will likely result in strength through year-end. I expect US stocks to rise modestly into the close.

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