Indices
S&P 500 1,227.92 +1.32%
DJIA 10,640.83 +1.83%
NASDAQ 2,156.78 +2.08%
Russell 2000 663.74 +.24%
DJ Wilshire 5000 12,230.85 +1.15%
S&P Equity Long/Short Index 1,041.60 +1.0%
S&P Barra Growth 587.36 +1.51%
S&P Barra Value 636.26 +1.15%
Morgan Stanley Consumer 585.71 +2.01%
Morgan Stanley Cyclical 741.49 +1.55%
Morgan Stanley Technology 500.30 +3.23%
Transports 3,646.03 +1.56%
Utilities 392.73 +.59%
S&P 500 Cum A/D Line 8,295.00 +10.38%
Bloomberg Crude Oil % Bulls 31.0 -46.45%
Put/Call .68 -13.92%
NYSE Arms 1.07 +37.18%
Volatility(VIX) 10.33 -9.78%
ISE Sentiment 169.00 -12.44%
AAII % Bulls 57.89 +34.60%
US Dollar 89.72 -.51%
CRB 309.57 -.11%
Futures Spot Prices
Crude Oil 58.09 -2.70%
Unleaded Gasoline 168.83 -4.54%
Natural Gas 7.85 +5.05%
Heating Oil 166.21 -3.39%
Gold 421.30 -1.20%
Base Metals 123.65 +.16%
Copper 156.20 +.06%
10-year US Treasury Yield 4.17% +1.76%
Average 30-year Mortgage Rate 5.66% +.71%
Leading Sectors
Airlines +5.95%
Semis +4.72%
Restaurants +3.53%
Lagging Sectors
Gold & Silver -2.26%
HMOs -2.38%
Hospitals -3.26%
*5-Day % Change
Friday, July 15, 2005
Stocks Modestly Lower Mid-day, Consolidating Recent Gains
Indices
S&P 500 1,225.42 -.09%
DJIA 10,617.66 -.11%
NASDAQ 2,150.30 -.12%
Russell 2000 661.27 -.26%
DJ Wilshire 5000 12,204.00 -.08%
S&P Barra Growth 586.36 -.11%
S&P Barra Value 634.75 -.07%
Morgan Stanley Consumer 584.56 +.36%
Morgan Stanley Cyclical 740.22 -.15%
Morgan Stanley Technology 498.73 -.35%
Transports 3,631.56 -.83%
Utilities 391.62 -.27%
Put/Call .68 -2.86%
NYSE Arms 1.13 +59.92%
Volatility(VIX) 10.26 -5.09%
ISE Sentiment 167.00 +20.14%
US Dollar 89.64 +.18%
CRB 310.10 +.32%
Futures Spot Prices
Crude Oil 58.30 +.87%
Unleaded Gasoline 168.70 +.12%
Natural Gas 7.98 +1.73%
Heating Oil 166.50 +.49%
Gold 421.50 +.31%
Base Metals 123.65 +.08%
Copper 156.20 +.97%
10-year US Treasury Yield 4.17% +.05%
Leading Sectors
Restaurants +2.34%
Homebuilders +.99%
Biotech +.91%
Lagging Sectors
Papers -1.22%
Gold & Silver -1.31%
Airlines -1.82%
S&P 500 1,225.42 -.09%
DJIA 10,617.66 -.11%
NASDAQ 2,150.30 -.12%
Russell 2000 661.27 -.26%
DJ Wilshire 5000 12,204.00 -.08%
S&P Barra Growth 586.36 -.11%
S&P Barra Value 634.75 -.07%
Morgan Stanley Consumer 584.56 +.36%
Morgan Stanley Cyclical 740.22 -.15%
Morgan Stanley Technology 498.73 -.35%
Transports 3,631.56 -.83%
Utilities 391.62 -.27%
Put/Call .68 -2.86%
NYSE Arms 1.13 +59.92%
Volatility(VIX) 10.26 -5.09%
ISE Sentiment 167.00 +20.14%
US Dollar 89.64 +.18%
CRB 310.10 +.32%
Futures Spot Prices
Crude Oil 58.30 +.87%
Unleaded Gasoline 168.70 +.12%
Natural Gas 7.98 +1.73%
Heating Oil 166.50 +.49%
Gold 421.50 +.31%
Base Metals 123.65 +.08%
Copper 156.20 +.97%
10-year US Treasury Yield 4.17% +.05%
Leading Sectors
Restaurants +2.34%
Homebuilders +.99%
Biotech +.91%
Lagging Sectors
Papers -1.22%
Gold & Silver -1.31%
Airlines -1.82%
BOTTOM LINE: The Portfolio is unchanged mid-day as gains in my Tech and Retail longs are offsetting losses in my Medical longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, sector performance is mixed and volume is below average. Measures of investor anxiety are mostly lower. Today’s overall market action is neutral considering recent gains and positive economic reports. According to a report I received today from Citigroup, the spread between the 55-week and 200-week moving averages for crude is the widest ever. They are calling for a decline to at least $47 a barrel and possibly $35 a barrel. I expect US stocks to trade mixed-to-higher into the close on short-covering and more optimism.
Today's Headlines
Bloomberg:
- Copper prices will probably fall 35% to about $1 a pound in two years as miners produce more of the metal to meet Chinese demand, said Juan Villarzu, Executive President of Codelco, the world’s biggest copper miner.
- Shares of Tyson Foods, the world’s largest beef producer, rose as much as 7.5% to a one-year high after a court ruling cleared the way for Canadian cattle shipments to resume to the US, ending a two-year ban.
- The dollar is rising against the euro as gains in manufacturing boosted speculation the Fed will keep lifting interest rates.
- Hurricane Emily’s winds weakened to 125 mph as the storm moved across the Caribbean Sea on a path toward Jamaica.
Wall Street Journal:
- The US Social Security system can be made solvent far into the future without large tax increases by supplementing traditional benefits with special personal retirement accounts, Harvard economist Martin Feldstein wrote.
- Kroger, Albertson’s and Walgreen are among US supermarket and drug-store chains suing Visa USA claiming that it fixes prices.
- GM saw sales rise again in early July, as its offer of employee discounts to all US customers extended into this month, with some car dealers seeing sales up by 55% from a year earlier.
NY Times:
- A Vermont federal jury for the first time in almost 50 years recommended the death penalty in a case involving a man convicted of kidnapping a woman in the state and killing her in NY.
Xinhua:
- China’s government said a Japanese company’s plan to test drill for natural gas and crude oil in an area claimed by China is a “serious provocation,” citing a foreign ministry official.
- Copper prices will probably fall 35% to about $1 a pound in two years as miners produce more of the metal to meet Chinese demand, said Juan Villarzu, Executive President of Codelco, the world’s biggest copper miner.
- Shares of Tyson Foods, the world’s largest beef producer, rose as much as 7.5% to a one-year high after a court ruling cleared the way for Canadian cattle shipments to resume to the US, ending a two-year ban.
- The dollar is rising against the euro as gains in manufacturing boosted speculation the Fed will keep lifting interest rates.
- Hurricane Emily’s winds weakened to 125 mph as the storm moved across the Caribbean Sea on a path toward Jamaica.
Wall Street Journal:
- The US Social Security system can be made solvent far into the future without large tax increases by supplementing traditional benefits with special personal retirement accounts, Harvard economist Martin Feldstein wrote.
- Kroger, Albertson’s and Walgreen are among US supermarket and drug-store chains suing Visa USA claiming that it fixes prices.
- GM saw sales rise again in early July, as its offer of employee discounts to all US customers extended into this month, with some car dealers seeing sales up by 55% from a year earlier.
NY Times:
- A Vermont federal jury for the first time in almost 50 years recommended the death penalty in a case involving a man convicted of kidnapping a woman in the state and killing her in NY.
Xinhua:
- China’s government said a Japanese company’s plan to test drill for natural gas and crude oil in an area claimed by China is a “serious provocation,” citing a foreign ministry official.
Manufacturing Improving, Inflation Decelerating, Sentiment Rising
- Empire Manufacturing for July rose to 23.9 versus estimates of 10.0 and a reading of 10.5 in June.
- The Producer Price Index for June was unchanged versus estimates of a .4% increase and a .6% fall in May.
- The PPI Ex Food & Energy for June fell .1% versus estimates of a .1% rise and a .1% gain in May.
- Industrial Production for June rose .9% versus estimates of a .4% increase and a .3% gain in May.
- Capacity Utilization for June rose to 80.0% versus estimates of 79.6% increase and 79.4% in May.
- Preliminary Univ. of Mich. Consumer Confidence for July rose to 96.5 versus estimates of 95.0 and a reading of 96.0 in June.
- The Producer Price Index for June was unchanged versus estimates of a .4% increase and a .6% fall in May.
- The PPI Ex Food & Energy for June fell .1% versus estimates of a .1% rise and a .1% gain in May.
- Industrial Production for June rose .9% versus estimates of a .4% increase and a .3% gain in May.
- Capacity Utilization for June rose to 80.0% versus estimates of 79.6% increase and 79.4% in May.
- Preliminary Univ. of Mich. Consumer Confidence for July rose to 96.5 versus estimates of 95.0 and a reading of 96.0 in June.
BOTTOM LINE: Empire Manufacturing unexpectedly rose in July to its highest level this year as orders picked up and inventories shrank. The optimism component of the index for the next 6 months rose to 47 from 34 in June. The current orders index rose to 19.2, the highest since January. The measure of current shipments increased to 20.9 from 1 in June. The gauge of prices paid for materials fell to 21.6 in July, the lowest since December 2003. The index of expected prices paid six months from now fell to 28.4 from 44.4. Finally, the index of hiring expectations over the next six months rose to 23.9 this month from 14.7 in June.
US producer prices were unchanged in June, pulled lower by discounts at GM, as well as cheaper food and computers. Excluding food & energy, core raw materials prices fell 4.3% from last year, the most since May 2004. Food prices fell 1.1%, the largest drop since July 2004. Computer prices fell .8% after declining 4.8% last month.
US industrial production rose twice as much as expected last month, the most since Feb. 2004. Capacity Utilization rose to the best level since December 2000. Automakers resumed production after scaling back earlier this year to trim their inventories.
US consumer sentiment unexpectedly rose in July to the highest level this year led by stable employment prospects and rising home values. Consumers have become accustomed to rising gasoline prices, which reached a record last week. The expectations index, based on optimism about the next one to five years, increased to 86.6, the highest since December. The fact that consumer sentiment rose even with the London bombings, record gas prices and hurricanes in Florida bodes well for future readings.
Friday Watch
Late-Night Headlines
Bloomberg:
- Crude oil is rising for the first day in three in NY on concern Hurricane Emily will disrupt oil production in the US Gulf of Mexico.
- Cnooc failed to persuade Unocal directors to accept a revised takeover bid because the Chinese company didn't raise the amount of cash shareholders would get from the $18.5 billion offer.
- Samsung posted a third straight quarterly profit drop as semiconductor and flat-panel display prices fell. The company expects an LCD industry glut to end this quarter and shipments of mobile phones to rise.
Wall Street Journal:
- Hewlett-Packard Co. may announce plans to restructure the printer and computer maker next week.
Financial Times:
- The US expects China to revalue its currency in August, ahead of a visit to Washington by Chinese President Hu Jintao.
Commercial Times:
- Taiwan Semiconductor Manufacturing expects third-quarter chip shipments to grow about 29% from the second quarter.
Economic Times:
- Indian car manufacturers may cut production because of sluggish sales since May.
Late Buy/Sell Recommendations
Goldman Sachs:
- None of note
Business Week:
- Shares of Merck(MRK) are an attractive buy, citing analysts.
- Spectrum Pharmaceuticals'(SSPI) shares will likely rise because the unprofitable biotech company is expected to sign a deal with a large drugmaker to market Satraplatin.
Night Trading
Asian Indices are unch. to +.25% on average.
S&P 500 indicated -.14%.
NASDAQ 100 indicated -.09%.
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
ASPT/.10
FDC/.57
GE/.44
NCC/.75
RF/.59
Upcoming Splits
HCC 3-for-2
SNHY 3-for-2
USPI 3-for-2
Economic Releases
8:30 am EST
- Empire Manufacturing for July is estimated to fall to 10.0 versus a reading of 11.7 in June.
- The Producer Price Index for June is estimated to rise .4% versus a .6% decline in May.
- The PPI Ex Food & Energy for June is estimated to rise .1% versus a .1% increase in May.
- Business Inventories for May are estimated to rise .2% versus a .3% increase in April.
9:15 am EST
- Industrial Production for June is estimated to rise .4% versus a .4% gain in May.
- Capacity Utilization for June is estimated to rise to 79.6% versus 79.4% in May.
9:45 am EST
- Preliminary Univ. of Mich. Consumer Confidence for July is estimated to fall to 95.0 from 96.0 in June.
Bloomberg:
- Crude oil is rising for the first day in three in NY on concern Hurricane Emily will disrupt oil production in the US Gulf of Mexico.
- Cnooc failed to persuade Unocal directors to accept a revised takeover bid because the Chinese company didn't raise the amount of cash shareholders would get from the $18.5 billion offer.
- Samsung posted a third straight quarterly profit drop as semiconductor and flat-panel display prices fell. The company expects an LCD industry glut to end this quarter and shipments of mobile phones to rise.
Wall Street Journal:
- Hewlett-Packard Co. may announce plans to restructure the printer and computer maker next week.
Financial Times:
- The US expects China to revalue its currency in August, ahead of a visit to Washington by Chinese President Hu Jintao.
Commercial Times:
- Taiwan Semiconductor Manufacturing expects third-quarter chip shipments to grow about 29% from the second quarter.
Economic Times:
- Indian car manufacturers may cut production because of sluggish sales since May.
Late Buy/Sell Recommendations
Goldman Sachs:
- None of note
Business Week:
- Shares of Merck(MRK) are an attractive buy, citing analysts.
- Spectrum Pharmaceuticals'(SSPI) shares will likely rise because the unprofitable biotech company is expected to sign a deal with a large drugmaker to market Satraplatin.
Night Trading
Asian Indices are unch. to +.25% on average.
S&P 500 indicated -.14%.
NASDAQ 100 indicated -.09%.
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
ASPT/.10
FDC/.57
GE/.44
NCC/.75
RF/.59
Upcoming Splits
HCC 3-for-2
SNHY 3-for-2
USPI 3-for-2
Economic Releases
8:30 am EST
- Empire Manufacturing for July is estimated to fall to 10.0 versus a reading of 11.7 in June.
- The Producer Price Index for June is estimated to rise .4% versus a .6% decline in May.
- The PPI Ex Food & Energy for June is estimated to rise .1% versus a .1% increase in May.
- Business Inventories for May are estimated to rise .2% versus a .3% increase in April.
9:15 am EST
- Industrial Production for June is estimated to rise .4% versus a .4% gain in May.
- Capacity Utilization for June is estimated to rise to 79.6% versus 79.4% in May.
9:45 am EST
- Preliminary Univ. of Mich. Consumer Confidence for July is estimated to fall to 95.0 from 96.0 in June.
BOTTOM LINE: Asian indices are mostly higher, led by exporters in the region. I expect US equities to open modestly lower and rise later in the day. The Portfolio is 100% net long heading into the day.
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