Earnings of Note
Company/Estimate
CC/-.07
FDS/.43
LEH/1.91
LEN/1.16
ORCL/.18
PIR/.13
Splits
None of note.
Economic Data
Consumer Price Index for May estimated +.5% versus +.2% in April.
CPI Ex Food & Energy for May estimated +.2% versus +.3% in April.
Business Inventories for April estimated +.4% versus +.7% in March.
Empire Manufacturing for June estimated at 30.50 versus 30.21 in May.
Preliminary Univ. of Mich. Consumer Confidence for June estimated at 90.8 versus 90.2 in May.
NAHB Housing Market Index for June estimated at 68 versus 69 in May.
Recommendations
Goldman Sachs reiterated Outperform on MSFT, ADP, CEN and PAYX.
Late-Night News
Asian indices are quietly mixed ahead of a number of important U.S. economic reports. Steel price rises in the last two years may soon come to an end, the Financial Times said, citing an interview with Arcelor SA CEO Guy Dolle. Saddam Hussein and other detained leaders of his ousted regime will be handed to Iraqi authorities by the U.S. in the next two weeks, the BBC said. China plans to tighten controls on new shopping malls as part of the effort to cool investment and growth in rapidly expanding industries, the Financial Times reported. Manpower's recently released employment survey shows a "much improved" jobs market for the upcoming quarter, the Financial Times said. A letter purportedly written by Abu Musab al-Zarqawi, a terrorist linked to al-Qaeda, says his struggle in Iraq is getting harder because the U.S.-led coalition is tightening its grip, the AP said. A medical journal group that includes the New England Journal of Medicine may require drugmakers to reveal all product trials in order for a drug to be considered for publication, the NY Times said. AT&T will stop offering local service in some states as a court ruling that denies it discounted access to local networks becomes effective, the Wall Street Journal reported. Afghanistan has registered more than 3.5 million voters to take part in the presidential and general elections planned for September, the UN said. Lucent said demand for its products is on the rise in Asia after a three-year slump, Bloomberg reported. Japanese troops will join a UN multinational force planned for Iraq, Bloomberg said.
Late-Night Trading
Asian Indices -.50% to +.75% on average.
S&P 500 indicated -.20%.
NASDAQ 100 indicated -.14%.
BOTTOM LINE: I expect U.S. stocks to open weaker in the morning as higher-than-expected consumer confidence and inflation readings send interest rates higher. However, falling energy prices and relatively high Put/Call and ARMS readings from today should help to cushion any fall. A significantly higher-than-expected CPI reading could result in an inter-meeting rate hike within the next few days. I continue to expect a 50 basis point increase in the Fed Funds Rate by June 30th. I will likely cover a few shorts into any extreme weakness in the morning. The Portfolio is 25% net short heading into tomorrow.
Tuesday, June 15, 2004
Monday, June 14, 2004
Monday Close
S&P 500 1,125.29 -.98%
NASDAQ 1,969.99 -1.49%
Leading Sectors
Biotech -.27%
Hospitals -.46%
Airlines -.49%
Lagging Sectors
Semiconductors -2.27%
Homebuilders -2.34%
Disk Drives -3.04%
Other
Crude Oil 37.76 -2.30%
Natural Gas 6.25 +1.17%
Gold 383.70 -.75%
Base Metals 103.74 +.16%
U.S. Dollar 89.94 -.08%
10-Yr. T-note Yield 4.87% +1.47%
VIX 16.07 +6.85%
Put/Call 1.43 +22.22%
NYSE Arms 1.24 +56.96%
After-hours Movers
RHAT -10.58% after saying its CFO resigned.
YELL +4.91% after raising 2Q forecast on broad-based economic growth.
Recommendations
Goldman Sachs reiterated Outperform on IGT, DIS, FS, AET, AGN and HD. TheStreet.com has a positive column on ELN.
After-hours News
U.S. stocks finished lower today on rising interest rates, weekend violence in the Middle East and profit-taking. After the close, Credit Suisse First Boston, which lost nine members of its technology banking team in February, promised to pay an average of almost $1 million each to about 50 bankers in its California offices, Bloomberg reported. Rick Sherlund, software analyst at Goldman Sachs, said he thinks Microsoft will soon announce a $40 billion share buyback, CNBC reported. Cholesterol-lowering drugs such as Pfizer's Lipitor and Merck's Zocor may reduce glaucoma rates 40% in those with heart disease, according to a study in the June issue of Archives of Ophthalmology, Bloomberg said. Boeing beat Lockheed Martin for a contract worth as much as $3.8 billion to replace the U.S. Navy's fleet of Lockheed-built submarine-hunting planes, Bloomberg reported. Halliburton was "properly awarded" its open-ended contract to repair the Iraqi oil infrastructure, the General Accounting Office concluded in a report issued today. Computer Associates International said it restated revenue for the first three quarters of its 04 fiscal year, Bloomberg said. Munich may become the biggest Microsoft customer to switch to Linux personal-computer software this week, as the city decides whether to remove the Windows operating system from 14,000 municipal computers.
BOTTOM LINE: The Portfolio was modestly higher today as my homebuilding and technology shorts fell more than my industrial and basic material longs. In the afternoon, I took profits in one of my tech shorts and added YZC short. I am using a stop-loss of $52.75 on this position. The Portfolio is still 25% net short. The bond market's reaction to tomorrow's economic reports will likely dictate the direction of U.S. equity indices in the short-run. I expect tomorrow's consumer confidence and inflation readings to exceed expectations, resulting in a further rise in interest rates and pressuring U.S. stocks in the morning.
NASDAQ 1,969.99 -1.49%
Leading Sectors
Biotech -.27%
Hospitals -.46%
Airlines -.49%
Lagging Sectors
Semiconductors -2.27%
Homebuilders -2.34%
Disk Drives -3.04%
Other
Crude Oil 37.76 -2.30%
Natural Gas 6.25 +1.17%
Gold 383.70 -.75%
Base Metals 103.74 +.16%
U.S. Dollar 89.94 -.08%
10-Yr. T-note Yield 4.87% +1.47%
VIX 16.07 +6.85%
Put/Call 1.43 +22.22%
NYSE Arms 1.24 +56.96%
After-hours Movers
RHAT -10.58% after saying its CFO resigned.
YELL +4.91% after raising 2Q forecast on broad-based economic growth.
Recommendations
Goldman Sachs reiterated Outperform on IGT, DIS, FS, AET, AGN and HD. TheStreet.com has a positive column on ELN.
After-hours News
U.S. stocks finished lower today on rising interest rates, weekend violence in the Middle East and profit-taking. After the close, Credit Suisse First Boston, which lost nine members of its technology banking team in February, promised to pay an average of almost $1 million each to about 50 bankers in its California offices, Bloomberg reported. Rick Sherlund, software analyst at Goldman Sachs, said he thinks Microsoft will soon announce a $40 billion share buyback, CNBC reported. Cholesterol-lowering drugs such as Pfizer's Lipitor and Merck's Zocor may reduce glaucoma rates 40% in those with heart disease, according to a study in the June issue of Archives of Ophthalmology, Bloomberg said. Boeing beat Lockheed Martin for a contract worth as much as $3.8 billion to replace the U.S. Navy's fleet of Lockheed-built submarine-hunting planes, Bloomberg reported. Halliburton was "properly awarded" its open-ended contract to repair the Iraqi oil infrastructure, the General Accounting Office concluded in a report issued today. Computer Associates International said it restated revenue for the first three quarters of its 04 fiscal year, Bloomberg said. Munich may become the biggest Microsoft customer to switch to Linux personal-computer software this week, as the city decides whether to remove the Windows operating system from 14,000 municipal computers.
BOTTOM LINE: The Portfolio was modestly higher today as my homebuilding and technology shorts fell more than my industrial and basic material longs. In the afternoon, I took profits in one of my tech shorts and added YZC short. I am using a stop-loss of $52.75 on this position. The Portfolio is still 25% net short. The bond market's reaction to tomorrow's economic reports will likely dictate the direction of U.S. equity indices in the short-run. I expect tomorrow's consumer confidence and inflation readings to exceed expectations, resulting in a further rise in interest rates and pressuring U.S. stocks in the morning.
Mid-day Update
S&P 500 1,125.12 -1.0%
NASDAQ 1,969.24 -1.53%
Leading Sectors
Airlines -.08%
Biotech -.12%
HMO's -.24%
Lagging Sectors
Networking -2.48%
Semis -2.82%
Disk Drives -3.18%
Other
Crude Oil 38.17 -1.29%
Natural Gas 6.25 +1.28%
Gold 384.00 -.62%
Base Metals 103.74 +.16%
U.S. Dollar 89.96 -.06%
10-Yr. T-note Yield 4.85% +1.05%
VIX 16.10 +7.05%
Put/Call 1.21 +3.42%
NYSE Arms 1.46 +84.81%
Market Movers
IPIX +9.15% after saying it had been asked to meet with Olympic organizers regarding the Summer Games in Athens.
QLTI -15.6% after saying it agreed to buy ATRX for $855 million in stock and cash to add medications for prostate cancer and acne, ATRX +13.2%.
NDN -27.8% after lowering 2Q estimates substantially and Merrill Lynch downgrade to Sell.
CTRP +20.1% after saying Rakuten, Japan's only publicly traded online shopping mall, will acquire a 21.61% stake for $109 million in cash.
CDWC -6.65% after announcing disappointing May sales and Raymond James downgrade to Outperform.
Economic Data
Trade Balance for April came in at -$48.3B versus expectations of -$45.0B and -$46.6B in March.
Advance Retail Sales for May +1.2% versus expectations of +1.2% and -.6% in April.
Retail Sales Less Autos for May +.7% versus expectations of +.6% and -.1% in April.
Recommendations
XL, MAR, HMT raised to Overweight at JP Morgan. RARE rated Overweight at Prudential, target $32. FON raised to Overweight at CSFB, target $21. Merrill Lynch cut ratings on 25 REITs. MGG raised to Buy at UBS. Goldman Sachs estimates crude oil will average above $30/bbl. through 2010, benefiting XOM, AHC, VLO, SUN, BHI and SLB. Goldman reiterated Attractive view on Drug Wholesaling segment, favorite MCK. Goldman reiterated Outperform on KO, PEP, DNA, EMC, SLR, INTC, ATYT, NT, AMGN and AET. Goldman reiterated Underperform on BVF, HRB and NSM. Citi SmithBarney said June CIO vendor preference survey showed tech spending should accelerate slightly from recent levels. Citi said strongest areas of spending appear to be software(apps, security, storage, database) and network equipment/apps(Gigabit Ethernet, WLAN, VPNs). Citi also said 35-45% of CIOs are starting to use VoIP vs. 26% in 03, as well 40-50% of companies deploying VoIP expect to upgrade their network infrastructure to accommodate it, benefiting CSCO. Citi thinks airline sell-off overdone, favorites are AMR and AAI. Citi said early market-oriented leading inflation measures are already flattening or declining on Fed tightening expectations.
Mid-day News
U.S. stocks are falling mid-day as interest rates rise, prompting investors to lock in recent gains. Taiwan Semiconductor said it raised production at two plants because of increased demand, the Wall Street Journal reported. ABC television's advertisers are balking at the network's rate increases after its ratings dropped in the latest season, the LA Times reported. France and Israel may sign their biggest arms deal since the French declared an embargo on weapons sales to Israel before the 1967 Middle East war, Haaretz reported. Large phone companies such as AT&T, cable companies such as Cablevision and possibly local phone carriers are likely to dominate the growing Internet phone-service market, the NY Times reported. Some Democratic senators and Senate candidates are pressuring John Kerry to choose John Edwards as his running mate, the NY Times reported. U.S. states are benefiting from strong economic growth as 32 expect to post budget surpluses, the LA Times said. Pitney Bowes CEO told CNBC he hasn't seen any weakness in demand as a result of higher rates, Bloomberg reported. Scientists are developing a bomb detector that uses subatomic particles called neutrons to detect highly enriched uranium or plutonium, which may help expose a nuclear device hidden in ship cargo, the San Francisco Chronicle reported. MGM Mirage raised its offer for Mandalay Resort to $4.8 billion after Mandalay rejected a bid last week, Bloomberg said. Ford said prices for its new gasoline-electric Escape, the first sport-utility vehicle to use the fuel-saving technology, will start at $26,380 and get 40 miles per gallon in city driving when the model goes on sale during the second half of the year, Bloomberg reported. Gary Stern, president of the Federal Reserve Bank of Minneapolis, said he sees no threat of rising inflation and the central bank is ready to adjust the pace at which it raises rates should that expectation prove wrong, Bloomberg reported. A Somali national living in the U.S. is charged with plotting with al-Qaeda to blow up a shopping mall in the Columbus, Ohio area, the Justice Department announced.
BOTTOM LINE: The Portfolio is modestly higher today as my homebuilding and tech shorts are falling more than my industrial and basic material longs. I added a few Chinese ADR and retail shorts on the open, thus leaving the Portfolio with 25% net short market exposure. One of my new shorts is URBN and I am using a $58.75 stop-loss on this new position. Tradesports.com is showing the chances of the Fed raising rates by 50 basis points on June 30 doubled over the weekend to 27%. I expect U.S. stocks to weaken modestly into the close on rising interest rates and profit-taking.
NASDAQ 1,969.24 -1.53%
Leading Sectors
Airlines -.08%
Biotech -.12%
HMO's -.24%
Lagging Sectors
Networking -2.48%
Semis -2.82%
Disk Drives -3.18%
Other
Crude Oil 38.17 -1.29%
Natural Gas 6.25 +1.28%
Gold 384.00 -.62%
Base Metals 103.74 +.16%
U.S. Dollar 89.96 -.06%
10-Yr. T-note Yield 4.85% +1.05%
VIX 16.10 +7.05%
Put/Call 1.21 +3.42%
NYSE Arms 1.46 +84.81%
Market Movers
IPIX +9.15% after saying it had been asked to meet with Olympic organizers regarding the Summer Games in Athens.
QLTI -15.6% after saying it agreed to buy ATRX for $855 million in stock and cash to add medications for prostate cancer and acne, ATRX +13.2%.
NDN -27.8% after lowering 2Q estimates substantially and Merrill Lynch downgrade to Sell.
CTRP +20.1% after saying Rakuten, Japan's only publicly traded online shopping mall, will acquire a 21.61% stake for $109 million in cash.
CDWC -6.65% after announcing disappointing May sales and Raymond James downgrade to Outperform.
Economic Data
Trade Balance for April came in at -$48.3B versus expectations of -$45.0B and -$46.6B in March.
Advance Retail Sales for May +1.2% versus expectations of +1.2% and -.6% in April.
Retail Sales Less Autos for May +.7% versus expectations of +.6% and -.1% in April.
Recommendations
XL, MAR, HMT raised to Overweight at JP Morgan. RARE rated Overweight at Prudential, target $32. FON raised to Overweight at CSFB, target $21. Merrill Lynch cut ratings on 25 REITs. MGG raised to Buy at UBS. Goldman Sachs estimates crude oil will average above $30/bbl. through 2010, benefiting XOM, AHC, VLO, SUN, BHI and SLB. Goldman reiterated Attractive view on Drug Wholesaling segment, favorite MCK. Goldman reiterated Outperform on KO, PEP, DNA, EMC, SLR, INTC, ATYT, NT, AMGN and AET. Goldman reiterated Underperform on BVF, HRB and NSM. Citi SmithBarney said June CIO vendor preference survey showed tech spending should accelerate slightly from recent levels. Citi said strongest areas of spending appear to be software(apps, security, storage, database) and network equipment/apps(Gigabit Ethernet, WLAN, VPNs). Citi also said 35-45% of CIOs are starting to use VoIP vs. 26% in 03, as well 40-50% of companies deploying VoIP expect to upgrade their network infrastructure to accommodate it, benefiting CSCO. Citi thinks airline sell-off overdone, favorites are AMR and AAI. Citi said early market-oriented leading inflation measures are already flattening or declining on Fed tightening expectations.
Mid-day News
U.S. stocks are falling mid-day as interest rates rise, prompting investors to lock in recent gains. Taiwan Semiconductor said it raised production at two plants because of increased demand, the Wall Street Journal reported. ABC television's advertisers are balking at the network's rate increases after its ratings dropped in the latest season, the LA Times reported. France and Israel may sign their biggest arms deal since the French declared an embargo on weapons sales to Israel before the 1967 Middle East war, Haaretz reported. Large phone companies such as AT&T, cable companies such as Cablevision and possibly local phone carriers are likely to dominate the growing Internet phone-service market, the NY Times reported. Some Democratic senators and Senate candidates are pressuring John Kerry to choose John Edwards as his running mate, the NY Times reported. U.S. states are benefiting from strong economic growth as 32 expect to post budget surpluses, the LA Times said. Pitney Bowes CEO told CNBC he hasn't seen any weakness in demand as a result of higher rates, Bloomberg reported. Scientists are developing a bomb detector that uses subatomic particles called neutrons to detect highly enriched uranium or plutonium, which may help expose a nuclear device hidden in ship cargo, the San Francisco Chronicle reported. MGM Mirage raised its offer for Mandalay Resort to $4.8 billion after Mandalay rejected a bid last week, Bloomberg said. Ford said prices for its new gasoline-electric Escape, the first sport-utility vehicle to use the fuel-saving technology, will start at $26,380 and get 40 miles per gallon in city driving when the model goes on sale during the second half of the year, Bloomberg reported. Gary Stern, president of the Federal Reserve Bank of Minneapolis, said he sees no threat of rising inflation and the central bank is ready to adjust the pace at which it raises rates should that expectation prove wrong, Bloomberg reported. A Somali national living in the U.S. is charged with plotting with al-Qaeda to blow up a shopping mall in the Columbus, Ohio area, the Justice Department announced.
BOTTOM LINE: The Portfolio is modestly higher today as my homebuilding and tech shorts are falling more than my industrial and basic material longs. I added a few Chinese ADR and retail shorts on the open, thus leaving the Portfolio with 25% net short market exposure. One of my new shorts is URBN and I am using a $58.75 stop-loss on this new position. Tradesports.com is showing the chances of the Fed raising rates by 50 basis points on June 30 doubled over the weekend to 27%. I expect U.S. stocks to weaken modestly into the close on rising interest rates and profit-taking.
Monday Watch
Earnings of Note
Company/Estimate
URS/.50
SMSC/.13
ZQK/.46
Splits
None of note.
Economic Data
Trade Balance for April estimated at -$45.0 billion versus -$46.0 billion in March.
Advance Retail Sales for May estimated +1.2% versus -.5% in April.
Retail Sales Less Autos for May estimated +.6% versus -.1% in April.
Weekend Recommendations
Forbes on Fox had guests that were positive on AMD, AGIX, BSX, JNJ and mixed on AZN, AAPL. Bulls and Bears had guests that were positive on NVS, ABT, SHPGY, LLY, SVM, VZ and mixed on PIR, FCS, BRL, CMCSA. Cashin' In had guests that were positive on PKZ, VIP, NVO, TKC, SIRI and mixed on SEPR, AMZN, RYAAY. Louis Rukeyser's Wall Street had guests that were positive on ACDO, CVD, MNT, CHN, JNJ, ABT, TGT and AGN. Wall St. Week w/Fortune had guests that were positive on FON, LU, NT, TXN, AFL, LNC, MET, PRU, TMK, UL, NEM and negative on CXW. Barron's had a positive column on banking stocks. Goldman Sachs reiterated Outperform on MDT, PFGC and EMC. Goldman expects JBL and SLR reports this week to support view that enterprise hardware and communications are improving. Goldman thinks VRTSE can trade higher in near-term on a number of catalysts.
Weekend News
Moqtada al-Sadr called on his supporters to end aggression against opponents and the U.S.-led coalition in Iraq, NY Times said. Disney President Rober Iger said he would like to succeed Chief Executive Michael Eisner, who has held the role for 19 years, the London-based Times reported. ChevronTexaco's annual oil and gas production fell by about 15% during the past six years while its reported reserves rose 14%, contributing to concerns that the oil industry can't keep pace with demand, the NY Times said. A non-partisan congressional office has concluded that Social Security's shortfall during the next 75 years will be 33% less than originally thought, Bloomberg reported. Fifty of the U.S.'s largest employers have formed a purchasing group to win greater discounts from drugmakers, rather than acquiring medications through pharmacy benefit managers, the NY Times reported. China's central bank is poised to raise interest rates and is waiting for the appropriate time, the Economic Observer reported. Police in the UAE arrested an Indian citizen who offered to sell nuclear secrets to Arab embassies, al-Hayat reported. More companies are granting their executives restricted stock grants, that aren't tied to performance, instead of stock options, the NY Times reported. Government agencies have stepped up efforts to detect radioactive materials in the New York and New Jersey area, the Star-Ledger reported. The number of U.S. companies filing for bankruptcy may fall to a six-year low this year, boosted by increased pricing power and profitability, the Financial Times said. The terror group Hamas said it will continue attacks against Israel even after the nation withdraws from settlements in the Gaza Strip, Haaretz reported. 12 people were killed and thirteen others wounded in an attack on an Iraqi police patrol in the capital, Agence France-Presse reported. Copper prices may rise this week as inventories fall and global demand is forecast to exceed production, Bloomberg reported. Nokia may have to lower its sales forecast for this quarter after price reductions and new models failed to stem a drop in market share, Bloomberg reported. Crude oil futures are falling in New York after a general strike ended in Nigeria without disrupting oil exports, Bloomberg said.
Late-Night Trading
Asian indices are mostly lower, -2.0% to unch. on average.
S&P 500 indicated -.51%.
NASDAQ 100 indicated -.61%.
BOTTOM LINE: I expect U.S. stocks to open lower tomorrow on Middle East violence, rising interest rates and weakness in Asia. I will likely add a few new shorts on any unexpected strength on the open. The Portfolio is market neutral heading into tomorrow.
Company/Estimate
URS/.50
SMSC/.13
ZQK/.46
Splits
None of note.
Economic Data
Trade Balance for April estimated at -$45.0 billion versus -$46.0 billion in March.
Advance Retail Sales for May estimated +1.2% versus -.5% in April.
Retail Sales Less Autos for May estimated +.6% versus -.1% in April.
Weekend Recommendations
Forbes on Fox had guests that were positive on AMD, AGIX, BSX, JNJ and mixed on AZN, AAPL. Bulls and Bears had guests that were positive on NVS, ABT, SHPGY, LLY, SVM, VZ and mixed on PIR, FCS, BRL, CMCSA. Cashin' In had guests that were positive on PKZ, VIP, NVO, TKC, SIRI and mixed on SEPR, AMZN, RYAAY. Louis Rukeyser's Wall Street had guests that were positive on ACDO, CVD, MNT, CHN, JNJ, ABT, TGT and AGN. Wall St. Week w/Fortune had guests that were positive on FON, LU, NT, TXN, AFL, LNC, MET, PRU, TMK, UL, NEM and negative on CXW. Barron's had a positive column on banking stocks. Goldman Sachs reiterated Outperform on MDT, PFGC and EMC. Goldman expects JBL and SLR reports this week to support view that enterprise hardware and communications are improving. Goldman thinks VRTSE can trade higher in near-term on a number of catalysts.
Weekend News
Moqtada al-Sadr called on his supporters to end aggression against opponents and the U.S.-led coalition in Iraq, NY Times said. Disney President Rober Iger said he would like to succeed Chief Executive Michael Eisner, who has held the role for 19 years, the London-based Times reported. ChevronTexaco's annual oil and gas production fell by about 15% during the past six years while its reported reserves rose 14%, contributing to concerns that the oil industry can't keep pace with demand, the NY Times said. A non-partisan congressional office has concluded that Social Security's shortfall during the next 75 years will be 33% less than originally thought, Bloomberg reported. Fifty of the U.S.'s largest employers have formed a purchasing group to win greater discounts from drugmakers, rather than acquiring medications through pharmacy benefit managers, the NY Times reported. China's central bank is poised to raise interest rates and is waiting for the appropriate time, the Economic Observer reported. Police in the UAE arrested an Indian citizen who offered to sell nuclear secrets to Arab embassies, al-Hayat reported. More companies are granting their executives restricted stock grants, that aren't tied to performance, instead of stock options, the NY Times reported. Government agencies have stepped up efforts to detect radioactive materials in the New York and New Jersey area, the Star-Ledger reported. The number of U.S. companies filing for bankruptcy may fall to a six-year low this year, boosted by increased pricing power and profitability, the Financial Times said. The terror group Hamas said it will continue attacks against Israel even after the nation withdraws from settlements in the Gaza Strip, Haaretz reported. 12 people were killed and thirteen others wounded in an attack on an Iraqi police patrol in the capital, Agence France-Presse reported. Copper prices may rise this week as inventories fall and global demand is forecast to exceed production, Bloomberg reported. Nokia may have to lower its sales forecast for this quarter after price reductions and new models failed to stem a drop in market share, Bloomberg reported. Crude oil futures are falling in New York after a general strike ended in Nigeria without disrupting oil exports, Bloomberg said.
Late-Night Trading
Asian indices are mostly lower, -2.0% to unch. on average.
S&P 500 indicated -.51%.
NASDAQ 100 indicated -.61%.
BOTTOM LINE: I expect U.S. stocks to open lower tomorrow on Middle East violence, rising interest rates and weakness in Asia. I will likely add a few new shorts on any unexpected strength on the open. The Portfolio is market neutral heading into tomorrow.
Sunday, June 13, 2004
Weekly Outlook
There are a number of important economic reports and several significant corporate earnings reports scheduled for release this week. Economic reports this week include Trade Balance, Advance Retail Sales, PPI, CPI, Business Inventories, Empire Manufacturing, Preliminary U. of Mich. Consumer Confidence, Housing Market Index, Housing Starts, Industrial Production, Capacity Utilization, Initial Jobless Claims, Leading Indicators, Philadelphia Fed. and Current Account Balance. PPI, CPI, Consumer Confidence, Initial Jobless Claims, Leading Indicators and Philly Fed all have market-moving potential.
Oracle(ORCL), Lehman Brothers(LEH), Circuit City(CC), Bear Stearns(BSC), Best Buy(BBY), KB Home(KBH), Adobe Systems(ADBE), Solectron(SLR), Carnival Corp.(CCL) and Red Hat(RHAT) are some of the more important companies that release quarterly earnings this week. There are also a few other events that have market-moving potential. The Thomas Weisel Growth Forum, Bear Stearns Tech Conference and NYSSA Semi Conference could all impact trading this week.
Bottom Line: I expect U.S. stocks to trade weaker-to-neutral this week on a moderate rise in interest rates and energy prices. Numerous economic reports will likely point to continued strong economic growth and higher-than-expected inflation which will send interest rates higher and pressure stocks in the short-term. The spike in the AAII % Bulls, lower Put/Call and ARMS readings and a falling VIX last week also point to a tougher week for U.S. stocks. Finally, the market's technically overbought short-term condition and psychological factors will also weigh on shares this week. My short-term trading indicators are giving mixed signals and the Portfolio is market neutral(longs-shorts=0) heading into the week.
Oracle(ORCL), Lehman Brothers(LEH), Circuit City(CC), Bear Stearns(BSC), Best Buy(BBY), KB Home(KBH), Adobe Systems(ADBE), Solectron(SLR), Carnival Corp.(CCL) and Red Hat(RHAT) are some of the more important companies that release quarterly earnings this week. There are also a few other events that have market-moving potential. The Thomas Weisel Growth Forum, Bear Stearns Tech Conference and NYSSA Semi Conference could all impact trading this week.
Bottom Line: I expect U.S. stocks to trade weaker-to-neutral this week on a moderate rise in interest rates and energy prices. Numerous economic reports will likely point to continued strong economic growth and higher-than-expected inflation which will send interest rates higher and pressure stocks in the short-term. The spike in the AAII % Bulls, lower Put/Call and ARMS readings and a falling VIX last week also point to a tougher week for U.S. stocks. Finally, the market's technically overbought short-term condition and psychological factors will also weigh on shares this week. My short-term trading indicators are giving mixed signals and the Portfolio is market neutral(longs-shorts=0) heading into the week.
Chart of the Week
CBOE Index Put/Call Ratio (simple 5-day moving-average)
(>1.70 Bullish, <1.00 Bearish)
Close: 1.35
Bottom Line: Put/Call, ARMS, VIX and AAII % Bulls readings are all pointing to a weaker-to-neutral environment for U.S. stocks in the short-term. The market has technical and psychological hurdles in the short-term as well.
(>1.70 Bullish, <1.00 Bearish)
Close: 1.35
Bottom Line: Put/Call, ARMS, VIX and AAII % Bulls readings are all pointing to a weaker-to-neutral environment for U.S. stocks in the short-term. The market has technical and psychological hurdles in the short-term as well.
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