S&P 500 1,121.16 +.14%
NASDAQ 1,958.89 +.43%
Leading Sectors
Airlines +1.72%
Wireless +1.53%
HMO's +1.49%
Lagging Sectors
I-Banks -.34%
Papers -1.05%
Oil Service -2.94%
Other
Crude Oil 39.50 +1.21%
Natural Gas 6.24 -.46%
Gold 392.50 +.18%
Base Metals 105.20 +.18%
U.S. Dollar 89.30 -.57%
10-Yr. Long-Bond Yield 4.55% -.22%
VIX 16.16 -2.36%
Put/Call .94 +42.42%
NYSE Arms .74 -6.33%
Market Movers
WWCA +15.0% after substantially beating 1Q estimates.
LGND -17.2% after missing 1Q estimate and lowering 04 forecast.
CF +22.0% after acquisition by Royal Bank of Scotland for $10.5B.
IPXL +19.33% after substantially beating 1Q estimates.
GIVN + 9.93% on rebound from yesterday's decline after reporting 1Q results.
DIGE +8.2% after saying United Healthcare will reimburse doctors or patients for its DNAwithPap test to detect cervical cancer.
ZIXI -15.5% after missing 1Q estimates and lowering 2Q guidance.
OTEX -9.44% after beating 3Q estimate, widening 4Q guidance and reaffirming 04 forecast.
Oil Service stocks down across the board on Bank of America downgrade.
Economic Data
ISM Non-Manufacturing for April 68.4 versus expectations of 65.0 and 65.8 in March.
Recommendations
Goldman Sachs reiterated Outperform on BBY, TYC and DDR. Citi SmithBarney said to Buy Metal stocks on weakness, favorites are AA, FCX and NEM. Citi also says to Buy selected auto parts and equipment stocks on weakness, BWA, AXL and MGA. Citi reiterated Buy on TYC, target $35. Citi reiterated Buy on AMGN, target $90. Deutsche Bank raised FON to Buy. GLG raised to Buy at UBS, target $20.25. ICOS rated Underperform at Thomas Weisel. BK raised to Overweight at Morgan Stanley. KEY cut to Underweight at Morgan Stanley. BWS raised to Buy at Merrill, target $44. DELL raised to Buy at Bank of America, target $40. MWD raised to Overweight at Prudential, target $63. HNT cut to Underweight at Prudential. CA rated Buy at Bank of America, target $36.
Mid-day News
U.S. stocks are mostly higher mid-day on an all-time record high reading from the ISM Non-manufacturing index and stable interest rates. The average 2003 U.S. vehicle weighs 4,021 pounds, the heaviest since the mid-70's, the New York Times said, citing an Environmental Protection Agency report. An East Texas man was sentenced to 11 years in federal prison for possessing a sodium cyanide bomb capable of killing everyone inside a basketball arena, the LA Times reported. Royal Bank of Scotland CEO Fred Goodwin said he plans more U.S. takeovers as opportunities for growth in the UK diminish. Ford boosted incentives on three sport-utility vehicles and a minivan after sales for the models declined last month. The Institute for Supply Management's index of financial services, construction, retail and other non-manufacturing enterprises that make up the largest share of the economy climbed to 68.4 in April, an all-time record high. The employment component of the index reached its highest reading since the stock market bubble burst in 2000.
BOTTOM LINE: The Portfolio is up today as my healthcare longs are rising and my tech and retail shorts are falling. I added a new biotech long and a new tech short this morning, leaving the Portfolio with market neutral exposure. With investor complacency readings relatively high, a continuing rise in crude oil prices and poor volume/breadth readings, I will likely keep the Portfolio close to market neutral heading into Friday's important employment report.
Wednesday, May 05, 2004
Wednesday Watch
Earnings of Note
Company/Estimate
CVS/.56
CCI/-.19
THQI/.11
OATS/.07
Splits
None of note.
Economic Data
ISM Non-Manufacturing for April estimated at 65.0 versus 65.8 in March.
Recommendations
Goldman Sachs reiterated Underperform on QGENF. GS reiterated Outperform on NFP, CCU, NOC, DTV, CLX and GTM.
Late-Night News
Asian indices are mostly lower on weakness in Taiwanese semiconductor shares. Microsoft is developing a new tool to filter mass e-mails, known as "spam," that will force companies to pay for the right to send messages to Microsoft clients, the Wall Street Journal reported. Three bombs exploded outside a police station in Athens, Greece before dawn today, damaging the building and its garage and slightly injuring one officer, Reuters reported.
Late-Night Trading
Asian Indices -4.50% to +.25%.
S&P 500 indicated -.16%.
NASDAQ indicated -.32%.
BOTTOM LINE: I expect U.S. stocks to open lower in the morning on weakness in technology shares and terrorism concerns. The Portfolio is market neutral heading into trading tomorrow. I will likely lay out a few new shorts on any unexpected strength on the open.
Company/Estimate
CVS/.56
CCI/-.19
THQI/.11
OATS/.07
Splits
None of note.
Economic Data
ISM Non-Manufacturing for April estimated at 65.0 versus 65.8 in March.
Recommendations
Goldman Sachs reiterated Underperform on QGENF. GS reiterated Outperform on NFP, CCU, NOC, DTV, CLX and GTM.
Late-Night News
Asian indices are mostly lower on weakness in Taiwanese semiconductor shares. Microsoft is developing a new tool to filter mass e-mails, known as "spam," that will force companies to pay for the right to send messages to Microsoft clients, the Wall Street Journal reported. Three bombs exploded outside a police station in Athens, Greece before dawn today, damaging the building and its garage and slightly injuring one officer, Reuters reported.
Late-Night Trading
Asian Indices -4.50% to +.25%.
S&P 500 indicated -.16%.
NASDAQ indicated -.32%.
BOTTOM LINE: I expect U.S. stocks to open lower in the morning on weakness in technology shares and terrorism concerns. The Portfolio is market neutral heading into trading tomorrow. I will likely lay out a few new shorts on any unexpected strength on the open.
Tuesday, May 04, 2004
Tuesday Close
S&P 500 1,119.51 +.18%
NASDAQ 1,950.48 +.61%
Leading Sectors
Networking +3.0%
Iron/Steel +1.99%
Disk Drives +1.78%
Lagging Sectors
Biotech -.83%
HMO's -1.62%
Gaming -3.25%
Other
Crude Oil 38.87 -.28%
Natural Gas 6.21 -.94%
Gold 393.20 +.36%
Base Metals 105.76 +1.51%
U.S. Dollar 89.73 -1.13%
10-Yr. Long-Bond Yield 4.56% +1.37%
VIX 16.55 -.42%
Put/Call .66 -18.52%
NYSE Arms .79 -2.47%
After-hours Movers
WWCA +15.42% after substantially beating 1Q estimates.
PRVD +6.16% after beating 3Q estimates and boosting 04 forecast.
GIVN +5.99% on rebound from today's decline after reporting 1Q results.
ZIXI -12.86% after missing 1Q estimates and lowering 2Q guidance.
ECLG -10.33% after meeting 1Q estimate and lowering 2Q forecast.
SNIC -4.15% after meeting 4Q estimates.
Recommendations
Goldman Sachs reiterated Outperform on MET, ADP, CEN, PAYX, BSX, PFE and KO. GS reiterated Underperform on BMY, RNR and HRB. Bank of America rated Offshore Drillers Underweight.
After-hours News
U.S. stocks rose modestly Tuesday after the Fed reassured investors that any increase in its benchmark interest rate will be "measured," even as policy makers dropped their pledge to be patient in boosting borrowing costs. After the close, Bloomberg reported that cholesterol-lowering drugs, including best-sellers like Pfizer's Lipitor and Merck's Zocor, may reduce death rates after surgery, according to a study in the May 5 Journal of the American Medical Assoc. U.S. auto sales rose .8% in April as Toyota and Nissan benefited from an expanding economy, new models and as fleet customers bought more GM vehicles, Bloomberg reported. Massachusetts Governor Mitt Romney introduced the first statewide advertising campaign aimed at preventing terrorist attacks against buses or trains, Bloomberg said. Best Buy plans to change its sales strategy to target five groups of customers, ranging from suburban mothers to small business owners, amid stiffer competition from Wal-Mart, Bloomberg reported. Royal Bank of Scotland agreed to buy Charter One Financial for $10.5B, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today as my shorts rose a bit more than my longs. I took profits in a couple of shorts in the afternoon, leaving the Portfolio with market neutral(shorts-longs=0) exposure. Today's modest advance came on light volume with mediocre breadth readings. Investor complacency still remains high with energy and interest rates continuing to climb. I expect another down-leg to commence once the current oversold technical bounce runs its course.
NASDAQ 1,950.48 +.61%
Leading Sectors
Networking +3.0%
Iron/Steel +1.99%
Disk Drives +1.78%
Lagging Sectors
Biotech -.83%
HMO's -1.62%
Gaming -3.25%
Other
Crude Oil 38.87 -.28%
Natural Gas 6.21 -.94%
Gold 393.20 +.36%
Base Metals 105.76 +1.51%
U.S. Dollar 89.73 -1.13%
10-Yr. Long-Bond Yield 4.56% +1.37%
VIX 16.55 -.42%
Put/Call .66 -18.52%
NYSE Arms .79 -2.47%
After-hours Movers
WWCA +15.42% after substantially beating 1Q estimates.
PRVD +6.16% after beating 3Q estimates and boosting 04 forecast.
GIVN +5.99% on rebound from today's decline after reporting 1Q results.
ZIXI -12.86% after missing 1Q estimates and lowering 2Q guidance.
ECLG -10.33% after meeting 1Q estimate and lowering 2Q forecast.
SNIC -4.15% after meeting 4Q estimates.
Recommendations
Goldman Sachs reiterated Outperform on MET, ADP, CEN, PAYX, BSX, PFE and KO. GS reiterated Underperform on BMY, RNR and HRB. Bank of America rated Offshore Drillers Underweight.
After-hours News
U.S. stocks rose modestly Tuesday after the Fed reassured investors that any increase in its benchmark interest rate will be "measured," even as policy makers dropped their pledge to be patient in boosting borrowing costs. After the close, Bloomberg reported that cholesterol-lowering drugs, including best-sellers like Pfizer's Lipitor and Merck's Zocor, may reduce death rates after surgery, according to a study in the May 5 Journal of the American Medical Assoc. U.S. auto sales rose .8% in April as Toyota and Nissan benefited from an expanding economy, new models and as fleet customers bought more GM vehicles, Bloomberg reported. Massachusetts Governor Mitt Romney introduced the first statewide advertising campaign aimed at preventing terrorist attacks against buses or trains, Bloomberg said. Best Buy plans to change its sales strategy to target five groups of customers, ranging from suburban mothers to small business owners, amid stiffer competition from Wal-Mart, Bloomberg reported. Royal Bank of Scotland agreed to buy Charter One Financial for $10.5B, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today as my shorts rose a bit more than my longs. I took profits in a couple of shorts in the afternoon, leaving the Portfolio with market neutral(shorts-longs=0) exposure. Today's modest advance came on light volume with mediocre breadth readings. Investor complacency still remains high with energy and interest rates continuing to climb. I expect another down-leg to commence once the current oversold technical bounce runs its course.
Mid-day Update
S&P 500 1,116.14 -.12%
NASDAQ 1,939.78 +.05%
Leading Sectors
Networking +1.78%
Iron/Steel +1.70%
Semis +1.30%
Lagging Sectors
Biotech -1.23%
HMO's -1.60%
Gaming -3.30%
Other
Crude Oil 38.88 +1.75%
Natural Gas 6.28 +.79%
Gold 392.80 +1.37%
Base Metals 105.76 +1.51%
U.S. Dollar 89.96 -.88%
10-Yr. Long-Bond Yield 4.50% +.09%
VIX 17.02 +2.29%
Put/Call .58 -28.40%
NYSE Arms .85 +4.94%
Market Movers
TYC +3.6% after beating 2Q estimate and raising 3Q/04 forecast.
MVSN +25.91% after substantially beating 1Q estimate and raising 2Q/04 guidance.
PSS +19.37% after boosting 1Q estimates significantly.
VISG +20.98% after missing 1Q estimate, but boosting 04 forecast.
KTR +14.15% after announcing it will be acquired by ProLogis for $1.6B.
GPRO +11.12% after significantly beating 1Q estimate and raising 04 forecast.
HNT -8.7% after missing 1Q estimate and lowering 2Q guidance.
Economic Data
Factory Orders for March +4.3% versus expectations of +2.4% and 1.1% in February.
Recommendations
Goldman Sachs reiterated Outperform on IACI, MET, KR, PFGC and BBY. Citi SmithBarney said to Buy IGT on weakness, target $50. Citi also said to Buy CSCO ahead of quarter, target $34. Citi reiterated Buy on RDWR, target $25. Citi reiterated Buy on LPX, target $32. Citi reiterated Buy on SEBL, target $19. EOG raised to Overweight at JP Morgan. EMN raised to Buy at UBS. ISLE raised to Sector Outperform at CIBC. MGG, IGT and AGY cut to Sector Underperform at CIBC. CDN added to Focus List at JP Morgan, target $18.
Mid-day News
U.S. stocks are mixed mid-day on rising energy prices, rebounding technology shares and nervousness ahead of the Fed's rate announcement. Citi SmithBarney now believes this year's budget deficit will total $370B or 3.1% of GDP, much better-than-expected, as vigorous U.S. economic growth is generating higher tax revenues. Guidant, Boston Scientific and Johnson & Johnson generated about $6B in sales of angioplasty products last year as the procedure displaces bypass surgery in repairing blood vessels, the Wall Street Journal reported. The U.S. Transportation Security Administration has designated United Airlines Flight 200 from LA to DC as a "flight of interest", an indication it is a possible terrorist target, the Washington Times reported. Crude oil rose to its highest since the 1990 Gulf War after foreign workers were killed at a chemical plant in Saudi Arabia Saturday, raising concern supplies from the world's biggest oil exported would be disrupted, Bloomberg reported. California regulators may declare the first motor-fuels emergency in 15 years amid concern the rupture of a Kinder Morgan pipeline may cause shortages of gasoline and diesel, Bloomberg reported. Pioneer Natural Resources agreed to buy Evergreen Resources for about $1.7B to tap increasing natural-gas output in the Rockies, Bloomberg reported. Orders placed with U.S. factories rose 10.8% year-over-year, the strongest showing since the stock market bubble burst in 2000, Bloomberg reported. "With inventories low and firms finding it hard to gain traction to both meet demand and bring stocks to a more comfortable level, we can expect increased hiring and accelerated production," said Drew Matus, an economist at Lehman Brothers.
BOTTOM LINE: The Portfolio is unchanged today as my shorts and longs are mixed. I have not traded and the Portfolio is still 25% net short. I am waiting to see the bond market's reaction to the Fed's statement before trading.
NASDAQ 1,939.78 +.05%
Leading Sectors
Networking +1.78%
Iron/Steel +1.70%
Semis +1.30%
Lagging Sectors
Biotech -1.23%
HMO's -1.60%
Gaming -3.30%
Other
Crude Oil 38.88 +1.75%
Natural Gas 6.28 +.79%
Gold 392.80 +1.37%
Base Metals 105.76 +1.51%
U.S. Dollar 89.96 -.88%
10-Yr. Long-Bond Yield 4.50% +.09%
VIX 17.02 +2.29%
Put/Call .58 -28.40%
NYSE Arms .85 +4.94%
Market Movers
TYC +3.6% after beating 2Q estimate and raising 3Q/04 forecast.
MVSN +25.91% after substantially beating 1Q estimate and raising 2Q/04 guidance.
PSS +19.37% after boosting 1Q estimates significantly.
VISG +20.98% after missing 1Q estimate, but boosting 04 forecast.
KTR +14.15% after announcing it will be acquired by ProLogis for $1.6B.
GPRO +11.12% after significantly beating 1Q estimate and raising 04 forecast.
HNT -8.7% after missing 1Q estimate and lowering 2Q guidance.
Economic Data
Factory Orders for March +4.3% versus expectations of +2.4% and 1.1% in February.
Recommendations
Goldman Sachs reiterated Outperform on IACI, MET, KR, PFGC and BBY. Citi SmithBarney said to Buy IGT on weakness, target $50. Citi also said to Buy CSCO ahead of quarter, target $34. Citi reiterated Buy on RDWR, target $25. Citi reiterated Buy on LPX, target $32. Citi reiterated Buy on SEBL, target $19. EOG raised to Overweight at JP Morgan. EMN raised to Buy at UBS. ISLE raised to Sector Outperform at CIBC. MGG, IGT and AGY cut to Sector Underperform at CIBC. CDN added to Focus List at JP Morgan, target $18.
Mid-day News
U.S. stocks are mixed mid-day on rising energy prices, rebounding technology shares and nervousness ahead of the Fed's rate announcement. Citi SmithBarney now believes this year's budget deficit will total $370B or 3.1% of GDP, much better-than-expected, as vigorous U.S. economic growth is generating higher tax revenues. Guidant, Boston Scientific and Johnson & Johnson generated about $6B in sales of angioplasty products last year as the procedure displaces bypass surgery in repairing blood vessels, the Wall Street Journal reported. The U.S. Transportation Security Administration has designated United Airlines Flight 200 from LA to DC as a "flight of interest", an indication it is a possible terrorist target, the Washington Times reported. Crude oil rose to its highest since the 1990 Gulf War after foreign workers were killed at a chemical plant in Saudi Arabia Saturday, raising concern supplies from the world's biggest oil exported would be disrupted, Bloomberg reported. California regulators may declare the first motor-fuels emergency in 15 years amid concern the rupture of a Kinder Morgan pipeline may cause shortages of gasoline and diesel, Bloomberg reported. Pioneer Natural Resources agreed to buy Evergreen Resources for about $1.7B to tap increasing natural-gas output in the Rockies, Bloomberg reported. Orders placed with U.S. factories rose 10.8% year-over-year, the strongest showing since the stock market bubble burst in 2000, Bloomberg reported. "With inventories low and firms finding it hard to gain traction to both meet demand and bring stocks to a more comfortable level, we can expect increased hiring and accelerated production," said Drew Matus, an economist at Lehman Brothers.
BOTTOM LINE: The Portfolio is unchanged today as my shorts and longs are mixed. I have not traded and the Portfolio is still 25% net short. I am waiting to see the bond market's reaction to the Fed's statement before trading.
Monday, May 03, 2004
Tuesday Watch
Earnings of Note
Company/Estimate
CCU/.14
ECLG/.08
EMR/.68
JILL/.04
KOSP/.28
MBI/1.27
NOC/1.21
TYC/.36
THC/.03
Splits
LACO 2-for-1
Economic Data
Factory Orders in March estimated +2.4% versus +.3% in February.
FOMC rate decision.
Recommendations
Goldman Sachs reiterated Outperform on DVN, AMGN and WMT.
Late-Night News
Asian indices are higher on strength in Hong Kong and Taiwanese semiconductor companies. Motorola may scrap plans to sell shares in Freescale Semiconductor, the company's chip-making unit, Silicon Strategies reported. North Korea said it won't sell nuclear materials to terrorist groups and is seeking friendship with the U.S. because it doesn't want to suffer the fate of Iraq, the Financial Times reported. MetLife, the second-biggest U.S. life insurer, said first-quarter profit rose 44% as stock market gains increased annuities fees and its own income from investments, Bloomberg reported.
Late-Night Trading
Asian Indices +.25% to +2.50%.
S&P 500 indicated +.13%.
NASDAQ indicated +.25%.
BOTTOM LINE: I expect U.S. stocks to open mixed in the morning ahead of the Fed's announcement. It is likely the Fed will change several of its policy statements. The bond market's reaction to these changes will probably dictate the direction of equity trading later in the afternoon. The Portfolio is 25% net short heading into tomorrow.
Company/Estimate
CCU/.14
ECLG/.08
EMR/.68
JILL/.04
KOSP/.28
MBI/1.27
NOC/1.21
TYC/.36
THC/.03
Splits
LACO 2-for-1
Economic Data
Factory Orders in March estimated +2.4% versus +.3% in February.
FOMC rate decision.
Recommendations
Goldman Sachs reiterated Outperform on DVN, AMGN and WMT.
Late-Night News
Asian indices are higher on strength in Hong Kong and Taiwanese semiconductor companies. Motorola may scrap plans to sell shares in Freescale Semiconductor, the company's chip-making unit, Silicon Strategies reported. North Korea said it won't sell nuclear materials to terrorist groups and is seeking friendship with the U.S. because it doesn't want to suffer the fate of Iraq, the Financial Times reported. MetLife, the second-biggest U.S. life insurer, said first-quarter profit rose 44% as stock market gains increased annuities fees and its own income from investments, Bloomberg reported.
Late-Night Trading
Asian Indices +.25% to +2.50%.
S&P 500 indicated +.13%.
NASDAQ indicated +.25%.
BOTTOM LINE: I expect U.S. stocks to open mixed in the morning ahead of the Fed's announcement. It is likely the Fed will change several of its policy statements. The bond market's reaction to these changes will probably dictate the direction of equity trading later in the afternoon. The Portfolio is 25% net short heading into tomorrow.
Monday Close
S&P 500 1,117.56 +.93%
NASDAQ 1,938.72 +.97%
Leading Sectors
Energy +2.55%
Gaming +2.55%
Airlines +2.28%
Lagging Sectors
Disk Drives -.26%
Semis -.59%
Iron/Steel -1.43%
Other
Crude Oil 38.18 -.08%
Natural Gas 6.23 -.02%
Gold 387.80 +.08%
Base Metals 104.19 +.72%
U.S. Dollar 90.77 +.32%
10-Yr. Long-Bond Yield 4.50% -.09%
VIX 16.62 -3.32%
Put/Call .81 -14.74%
NYSE Arms .81 -53.45%
After-hours Movers
MVSN +12.19% after substantially beating 1Q estimate and raising 2Q/04 guidance.
PHRM +5.14% after beating 1Q estimate and raising 04 forecast.
GPRO +4.87% after substantially beating 1Q estimate and raising 04 forecast.
CEPH -4.89% after meeting 1Q estimate and lowering 2Q guidance.
PCLN -3.5% after beating 1Q estimate and announcing acquisition.
Recommendations
Jim Cramer, of TheStreet.com, thinks cyclicals will rally on the Fed rate hike. Goldman Sachs reiterated Outperform on KO, PEP and STZ. GS reiterated Underperform on SGP and FHCC.
After-hours News
U.S. stocks finished higher Monday as strength in energy, gaming and airline stocks offset continued weakness in technology shares. After the close, the Semiconductor Industry Association said it will soon hike its forecast for 04 chip growth to over 20%, TheStreet.com reported. Thomas Siebel will step down as chief executive of Siebel Systems, CNBC reported. UK business optimism and output are at their highest in almost 10 years, the London-based Times said. Global air traffic rose 10% in the first-quarter of 2004 compared with year-earlier figures, beating expectations, the BBC reported. The U.S. government cut its planned borrowing to a net $38 billion from April through June, half the amount it initially forecast, as strong economic growth has resulted in rising tax revenues, Bloomberg reported. The IEA said in a study that higher oil prices are reducing U.S. economic growth by about .3%, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today and I added a few health care service longs in the afternoon, bringing market exposure back to 25% net short. Volume and breadth were weak today. As well, investor complacency remains relatively high. Thus, I believe today's rally was likely an oversold technical bounce and that selling will resurface later in the week.
NASDAQ 1,938.72 +.97%
Leading Sectors
Energy +2.55%
Gaming +2.55%
Airlines +2.28%
Lagging Sectors
Disk Drives -.26%
Semis -.59%
Iron/Steel -1.43%
Other
Crude Oil 38.18 -.08%
Natural Gas 6.23 -.02%
Gold 387.80 +.08%
Base Metals 104.19 +.72%
U.S. Dollar 90.77 +.32%
10-Yr. Long-Bond Yield 4.50% -.09%
VIX 16.62 -3.32%
Put/Call .81 -14.74%
NYSE Arms .81 -53.45%
After-hours Movers
MVSN +12.19% after substantially beating 1Q estimate and raising 2Q/04 guidance.
PHRM +5.14% after beating 1Q estimate and raising 04 forecast.
GPRO +4.87% after substantially beating 1Q estimate and raising 04 forecast.
CEPH -4.89% after meeting 1Q estimate and lowering 2Q guidance.
PCLN -3.5% after beating 1Q estimate and announcing acquisition.
Recommendations
Jim Cramer, of TheStreet.com, thinks cyclicals will rally on the Fed rate hike. Goldman Sachs reiterated Outperform on KO, PEP and STZ. GS reiterated Underperform on SGP and FHCC.
After-hours News
U.S. stocks finished higher Monday as strength in energy, gaming and airline stocks offset continued weakness in technology shares. After the close, the Semiconductor Industry Association said it will soon hike its forecast for 04 chip growth to over 20%, TheStreet.com reported. Thomas Siebel will step down as chief executive of Siebel Systems, CNBC reported. UK business optimism and output are at their highest in almost 10 years, the London-based Times said. Global air traffic rose 10% in the first-quarter of 2004 compared with year-earlier figures, beating expectations, the BBC reported. The U.S. government cut its planned borrowing to a net $38 billion from April through June, half the amount it initially forecast, as strong economic growth has resulted in rising tax revenues, Bloomberg reported. The IEA said in a study that higher oil prices are reducing U.S. economic growth by about .3%, Bloomberg reported.
BOTTOM LINE: The Portfolio fell slightly today and I added a few health care service longs in the afternoon, bringing market exposure back to 25% net short. Volume and breadth were weak today. As well, investor complacency remains relatively high. Thus, I believe today's rally was likely an oversold technical bounce and that selling will resurface later in the week.
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