Friday, August 19, 2005
***Alert***
I will be unable to blog much this weekend due to a scheduling conflict. Have a great weekend and thanks for reading!
Stocks Modestly Higher Mid-day Even as Oil and Rates Rise
Indices
S&P 500 1,221.79 +.23%
DJIA 10,589.48 +.33%
NASDAQ 2,138.94 +.13%
Russell 2000 652.82 +.25%
DJ Wilshire 5000 12,165.93 +.23%
S&P Barra Growth 585.35 +.22%
S&P Barra Value 632.03 +.23%
Morgan Stanley Consumer 587.15 -.04%
Morgan Stanley Cyclical 739.91 +.24%
Morgan Stanley Technology 497.90 +.27%
Transports 3,711.68 +.02%
Utilities 393.94 +.64%
Put/Call 1.14 +14.0%
NYSE Arms .97 -14.21%
Volatility(VIX) 13.11 -2.31%
ISE Sentiment 147.00 -6.96%
US Dollar 88.56 unch.
CRB 314.27 +.81%
Futures Spot Prices
Crude Oil 64.70 +2.34%
Unleaded Gasoline 189.00 +1.45%
Natural Gas 9.10 +1.98%
Heating Oil 183.50 +2.49%
Gold 442.10 -.58%
Base Metals 129.03 +.23%
Copper 161.05 +.50%
10-year US Treasury Yield 4.20% +.27%
Leading Sectors
Oil Service +1.78%
Energy +1.61%
Networking +1.07%
Lagging Sectors
Computer Hardware -.23%
Tobacco -.41%
Airlines -.46%
S&P 500 1,221.79 +.23%
DJIA 10,589.48 +.33%
NASDAQ 2,138.94 +.13%
Russell 2000 652.82 +.25%
DJ Wilshire 5000 12,165.93 +.23%
S&P Barra Growth 585.35 +.22%
S&P Barra Value 632.03 +.23%
Morgan Stanley Consumer 587.15 -.04%
Morgan Stanley Cyclical 739.91 +.24%
Morgan Stanley Technology 497.90 +.27%
Transports 3,711.68 +.02%
Utilities 393.94 +.64%
Put/Call 1.14 +14.0%
NYSE Arms .97 -14.21%
Volatility(VIX) 13.11 -2.31%
ISE Sentiment 147.00 -6.96%
US Dollar 88.56 unch.
CRB 314.27 +.81%
Futures Spot Prices
Crude Oil 64.70 +2.34%
Unleaded Gasoline 189.00 +1.45%
Natural Gas 9.10 +1.98%
Heating Oil 183.50 +2.49%
Gold 442.10 -.58%
Base Metals 129.03 +.23%
Copper 161.05 +.50%
10-year US Treasury Yield 4.20% +.27%
Leading Sectors
Oil Service +1.78%
Energy +1.61%
Networking +1.07%
Lagging Sectors
Computer Hardware -.23%
Tobacco -.41%
Airlines -.46%
BOTTOM LINE: The Portfolio is slightly higher mid-day on gains in my Medical and Semiconductor longs. I exited my IWM and QQQQ trading shorts this morning, thus leaving the Portfolio 100% net long. The tone of the market is modestly positive as the advance/decline line is higher, most sectors are rising and volume is very light. Measures of investor anxiety are mixed. Today’s overall market action is positive, considering the rise in energy prices and long-term rates. Earlier today on CNBC, T. Boone Pickens said he is keeping a very close eye on fourth-quarter oil demand. This is what I hear almost every energy trader say. I continue to believe 4Q U.S. and Chinese oil demand growth estimates are substantially too high. As terrorism and hurricane fears peak in September and it becomes glaringly obvious that oil supplies are overwhelming demand, an accelerated downward move in energy prices should occur as traders "sell the news." I expect US stocks to trade mixed-to-higher from current levels into the close on short covering.
Today's Headlines
Bloomberg:
- French consumers pared spending in the second quarter by the most in more than eight years as high unemployment and rising gas prices further damped economic growth in Europe’s third-largest economy.
- Airbus SAS has struggled for 20 months to design an intercontinental plane to compete with Boeing’s fuel-saving 787.
- US Treasuries are falling on speculation yields at about the lowest since July offered little value after reports this week showed bigger-than-expected gains in manufacturing and wholesale prices.
- Crude oil is rising more than $1/bbl. in New York as production disruptions in Ecuador and a failed rocket attack on two US Navy vessels in Jordan heightened supply concerns.
- The US dollar is headed for its biggest weekly gain against the euro in more than two months as signs that the gap between US growth and European growth is widening.
Wall Street Journal:
- Baidu.com has protected itself from a takeover with a dual-class share structure that gives original shareholders 10 times the voting rights of those who bought shares in the US IPO.
- Talented US high school students are using the Internet to take more advanced college classes at Stanford University, Johns Hopkins University and the University of Missouri and other schools.
- Hollywood marketing executives are realizing that network-tv advertising isn’t the powerful tool it once was as the summer movie season draws to a close.
- Investors, keen to take advantage of growth in Chinese stocks, should avoid putting too much money into the nation’s $400 billion stock market.
- US ranchers are turning to lawsuits and seeking damages to fight environmentalists for what they say are unwarranted accusations of ecological damage caused by cattle.
- Danskin, a maker of women’s activewear, dancewear and hosiery, and other apparel distributors including AnnTaylor Stores are turning yogawear into streetwear to follow the latest fashion trend.
NY Times:
- US home prices since 1980 have risen more slowly than the stock market. Home in San Francisco, two of the hottest markets, have risen 7% a year, compared with a 10% annual rise in the S&P 500.
- GM doesn’t face the immediate threat of bankruptcy, though that outlook isn’t as certain beyond two or three years.
Interfax:
- Russia’s Federal Security Service has information that terrorists are trying to obtain weapons of mass destruction, citing the service’s chief Nikolai Patrushev.
- French consumers pared spending in the second quarter by the most in more than eight years as high unemployment and rising gas prices further damped economic growth in Europe’s third-largest economy.
- Airbus SAS has struggled for 20 months to design an intercontinental plane to compete with Boeing’s fuel-saving 787.
- US Treasuries are falling on speculation yields at about the lowest since July offered little value after reports this week showed bigger-than-expected gains in manufacturing and wholesale prices.
- Crude oil is rising more than $1/bbl. in New York as production disruptions in Ecuador and a failed rocket attack on two US Navy vessels in Jordan heightened supply concerns.
- The US dollar is headed for its biggest weekly gain against the euro in more than two months as signs that the gap between US growth and European growth is widening.
Wall Street Journal:
- Baidu.com has protected itself from a takeover with a dual-class share structure that gives original shareholders 10 times the voting rights of those who bought shares in the US IPO.
- Talented US high school students are using the Internet to take more advanced college classes at Stanford University, Johns Hopkins University and the University of Missouri and other schools.
- Hollywood marketing executives are realizing that network-tv advertising isn’t the powerful tool it once was as the summer movie season draws to a close.
- Investors, keen to take advantage of growth in Chinese stocks, should avoid putting too much money into the nation’s $400 billion stock market.
- US ranchers are turning to lawsuits and seeking damages to fight environmentalists for what they say are unwarranted accusations of ecological damage caused by cattle.
- Danskin, a maker of women’s activewear, dancewear and hosiery, and other apparel distributors including AnnTaylor Stores are turning yogawear into streetwear to follow the latest fashion trend.
NY Times:
- US home prices since 1980 have risen more slowly than the stock market. Home in San Francisco, two of the hottest markets, have risen 7% a year, compared with a 10% annual rise in the S&P 500.
- GM doesn’t face the immediate threat of bankruptcy, though that outlook isn’t as certain beyond two or three years.
Interfax:
- Russia’s Federal Security Service has information that terrorists are trying to obtain weapons of mass destruction, citing the service’s chief Nikolai Patrushev.
Friday Watch
Late-Night Headlines
Bloomberg:
- Australia has increased its troop commitment to Afghanistan ahead of elections in September, Defense Minister Robert Hill said.
- The US dollar is poised for its biggest weekly advance against the euro in more than two months on speculation international investors are increasing purchases of US debt to boost returns.
- Economic growth among members of the Association of Southeast Asian Nations may slow by as much as 1.5 percentage points this year if the price of oil remains above $60/bbl., said Secretary-General Ong Keng Yong.
- Crude oil may fall for a second week as record gas prices deter consumers, reducing demand, and global production increases, a Bloomberg survey showed.
Financial Times:
- China has set up an armed and helicopter-equipped police force in major cities to fight terrorism and an increasing number of riots.
Commercial Times:
- AU Optronics cut its target for 2005 shipments of small-and medium-sized flat-panel displays by 20% to 55 million units because mobile-phone makers postponed orders.
Japan Metal Daily:
- Chinese export-coke prices fell below $200 a ton for the first time in two years on a free-on-broad basis because of oversupply and as steelmakers cut production.
China Business News:
- A Home Depot unit, which focuses on wholesale and retail of home-improvement products, won approval to set up a store in Shanghai.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on MRVL.
- Reiterated Underperform on HC and BKS.
Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.05%.
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
ANN/.17
Upcoming Splits
CRR 3-for-2
STGS 3-for-2
Economic Releases
None of note
Bloomberg:
- Australia has increased its troop commitment to Afghanistan ahead of elections in September, Defense Minister Robert Hill said.
- The US dollar is poised for its biggest weekly advance against the euro in more than two months on speculation international investors are increasing purchases of US debt to boost returns.
- Economic growth among members of the Association of Southeast Asian Nations may slow by as much as 1.5 percentage points this year if the price of oil remains above $60/bbl., said Secretary-General Ong Keng Yong.
- Crude oil may fall for a second week as record gas prices deter consumers, reducing demand, and global production increases, a Bloomberg survey showed.
Financial Times:
- China has set up an armed and helicopter-equipped police force in major cities to fight terrorism and an increasing number of riots.
Commercial Times:
- AU Optronics cut its target for 2005 shipments of small-and medium-sized flat-panel displays by 20% to 55 million units because mobile-phone makers postponed orders.
Japan Metal Daily:
- Chinese export-coke prices fell below $200 a ton for the first time in two years on a free-on-broad basis because of oversupply and as steelmakers cut production.
China Business News:
- A Home Depot unit, which focuses on wholesale and retail of home-improvement products, won approval to set up a store in Shanghai.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on MRVL.
- Reiterated Underperform on HC and BKS.
Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated +.05%.
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
ANN/.17
Upcoming Splits
CRR 3-for-2
STGS 3-for-2
Economic Releases
None of note
BOTTOM LINE: Asian indices are mostly lower, led down by exporting shares in the region. I expect US equities to open modestly lower and to move higher later in the afternoon. The Portfolio is 75% net long heading into the day.
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