Indices
S&P 500 1,280.16 +1.04%
DJIA 11,278.61 +1.21%
NASDAQ 2,210.37 +.75%
Russell 2000 729.55 +.97%
Wilshire 5000 12,895.75 +.94%
S&P Equity Long/Short Index 1,153.54 -2.94%
S&P Barra Growth 593.44 +1.06%
S&P Barra Value 684.83 +1.01%
Morgan Stanley Consumer 608.71 +1.03%
Morgan Stanley Cyclical 842.62 +.93%
Morgan Stanley Technology 510.49 +1.02%
Transports 4,675.64 +1.07%
Utilities 404.16 +1.87%
S&P 500 Cum A/D Line 7,172 +3.0%
Bloomberg Crude Oil % Bulls 30.4 unch.
Put/Call .74 -40.16%
NYSE Arms .65 -26.74%
Volatility(VIX) 14.29 -16.70%
ISE Sentiment 160.00 +14.29%
AAII % Bulls 33.04 -16.12%
AAII % Bears 45.54 +4.35%
US Dollar 85.22 +.44%
CRB 347.82 +2.71%
ECRI Weekly Leading Index 136.90 -.51%
Futures Spot Prices
Crude Oil 71.38 +3.11%
Unleaded Gasoline 213.00 +4.67%
Natural Gas 6.05 +1.17%
Heating Oil 198.65 +3.41%
Gold 652.70 -.56%
Base Metals 241.20 +8.39%
Copper 378.20 +9.10%
10-year US Treasury Yield 5.04 -.20%
Average 30-year Mortgage Rate 6.62% +.3%
Leading Sectors
Steel +3.43%
Internet +3.13%
Oil Service +3.12%
Biotech +2.97%
REITs +2.06%
Lagging Sectors
Hospitals -1.40%
Computer Hardware -2.04%
Restaurants -2.20%
Disk Drives -2.48%
Semis -4.67%
One-Week High-Volume Gainers
One-Week High-Volume Losers
*5-Day % Change
Friday, May 26, 2006
Stocks Higher Heading Into Final Hour on Bargain Hunting and Short Covering
BOTTOM LINE: The Portfolio is higher heading into the final hour on gains in my Retail longs, Semi longs and Medical longs. I covered the remainder of my (IWM) and (QQQQ) shorts today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, almost every sector is higher and volume is below average. The U.S. Dollar Index is rising .6% today. The dollar continues to trade as though at the very least a short-term bottom is in place. This is a positive for equities given the bears' arguments revolving around a collapsing dollar. I expect US stocks to trade mixed-to-higher into the close from current levels on lower long-term rates, a rising dollar, short-covering and bargain hunting.
Today's Headlines
Bloomberg:
- Crude oil may fall on signs that higher refinery output and near-record imports will meet gasoline demand during the US summer driving season, a Bloomberg News survey shows.
- Las Vegas Sands(LVS) beat three rival bids to build Singapore’s first casino-resort with an offer valued at more than $3.2 billion.
- US Capitol Police are investigating a report that gunshots were heard in the garage of the Rayburn House Office Building near the Capitol.
- Shares of Navistar Intl.(NAV) rose as much as 17% after MAN AG, Europe’s third-largest truckmaker, said it was interested in acquiring a stake in its US competitor while expanding across the Atlantic.
- The US dollar is rising against the euro and the yen after a government report reinforced expectations the Fed will lift interest rates next month.
- US Treasuries rose on signs the economy may cool and curb demand for risky assets.
Wall Street Journal:
- Keefe, Bruyette & Woods, which is planning an IPO, will sell about 25% of itself to raise as much as $150 million.
- International funds, which spread their investments across a broad geographical spectrum, may have put more of their money in emerging markets than investors might have expected. Last week, investors withdrew a record $1.9 billion from such funds. The poor performance of international funds is aggravating for investors who may have thought their investment risk to emerging markets was less than it actually is.
NY Times:
- Grief still afflicts many people directly affected by the Sept. 11 terrorist attacks more than four years ago, citing a study by the American Red Cross.
NY Post:
- Microsoft’s(MSFT) negotiations to buy Internet auction site EBay Inc.(EBAY) are waning as the two companies are weighing antitrust concerns.
Interfax:
- Russia will deliver anti-aircraft missiles to Iran as agreed, citing Defense Minister Ivanov.
- Crude oil may fall on signs that higher refinery output and near-record imports will meet gasoline demand during the US summer driving season, a Bloomberg News survey shows.
- Las Vegas Sands(LVS) beat three rival bids to build Singapore’s first casino-resort with an offer valued at more than $3.2 billion.
- US Capitol Police are investigating a report that gunshots were heard in the garage of the Rayburn House Office Building near the Capitol.
- Shares of Navistar Intl.(NAV) rose as much as 17% after MAN AG, Europe’s third-largest truckmaker, said it was interested in acquiring a stake in its US competitor while expanding across the Atlantic.
- The US dollar is rising against the euro and the yen after a government report reinforced expectations the Fed will lift interest rates next month.
- US Treasuries rose on signs the economy may cool and curb demand for risky assets.
Wall Street Journal:
- Keefe, Bruyette & Woods, which is planning an IPO, will sell about 25% of itself to raise as much as $150 million.
- International funds, which spread their investments across a broad geographical spectrum, may have put more of their money in emerging markets than investors might have expected. Last week, investors withdrew a record $1.9 billion from such funds. The poor performance of international funds is aggravating for investors who may have thought their investment risk to emerging markets was less than it actually is.
NY Times:
- Grief still afflicts many people directly affected by the Sept. 11 terrorist attacks more than four years ago, citing a study by the American Red Cross.
NY Post:
- Microsoft’s(MSFT) negotiations to buy Internet auction site EBay Inc.(EBAY) are waning as the two companies are weighing antitrust concerns.
Interfax:
- Russia will deliver anti-aircraft missiles to Iran as agreed, citing Defense Minister Ivanov.
Incomes Rise, Spending Strong, Inflation Muted
- Personal Income for April rose .5% versus estimates of a .7% gain and a .5% increase in March.
- Personal Spending for April rose .6% versus estimates of a .6% increase and a .5% gain in March.
- The PCE Core for April rose .2% versus estimates of a .2% gain and a .3% increase in March.
- Final Univ. of Mich. Consumer Confidence for May rose to 79.1 versus estimates of 79.0 and a prior estimate of 79.0.
- Personal Spending for April rose .6% versus estimates of a .6% increase and a .5% gain in March.
- The PCE Core for April rose .2% versus estimates of a .2% gain and a .3% increase in March.
- Final Univ. of Mich. Consumer Confidence for May rose to 79.1 versus estimates of 79.0 and a prior estimate of 79.0.
BOTTOM LINE: Consumer spending in the US rose .6% in April, mainly reflecting an increase in prices that suggests inflation is taking a toll on Americans’ buying power, Bloomberg said. The Core PCE, the Fed's favorite inflation gauge, rose 2.1% from year-ago levels. Incomes rose 5.4% in April from the same month last year, almost twice the rate of most inflation measures. Economists expect consumer spending to slow to 2.5% this quarter. I continue to believe spending will slow to average rates through year-end, while incomes will remain relatively healthy and inflation measures decelerate from current levels.
Consumer confidence in the US fell to its lowest in seven months in May as near-record gas prices eroded purchasing power, Bloomberg said. The current conditions index fell to 96.1 from 109.2. The expectations index fell to 68.2 from 73.4 in April. The average price of regular gasoline was $2.88/gallon on May 22 versus $2.14/gallon in May 2005. I continue to believe consumer sentiment is irrationally low and will make cycle highs later this year as stocks rise sharply from current levels, interest rates fall modestly, inflation decelerates, gas prices fall, the job market remains relatively healthy and Iraq improves.
Thursday, May 25, 2006
Friday Watch
Late-Night Headlines
Bloomberg:
- An employee of San Jose-based Data Physics was indicted on charges he exported to China equipment used to design and manufacture missiles, federal prosecutors said.
- Nielsen/NetRatings, a global leader in Internet media and market research, today announced that Google(GOOG) accounted for 50% of all searches conducted in April, followed by Yahoo! and MSN, with 22% and 11%, respectively. Year-over-year, Google gained three percentage points in market share, while Yahoo! remained flat and MSN dipped slightly.
- The yen fell, reversing a gain, after Japanese Finance Minister Sadakazu Tanigaki said there still wasn’t enough evidence that seven years of deflation in the world’s second-largest economy has ended.
Financial Times:
- The top two highest paid hedge fund managers in a list of 26 earned around $1.5 billion each last year, citing the Institutional Investor’s Alpha magazine list. Renaissance Technologies Chairman James Simons earned $1.5 billion in 2005, while T. Boone Pickens, chairman of BP Capital LLC, earned $1.4 billion speculating mainly on the rise in energy prices.
Commercial Times:
- AU Optronics(AUO) urged liquid-crystal displays makers to cut production to help clear excess inventory that has caused prices to fall.
Xinhua News Agency:
- China won’t buy crude oil from the international market to fill its strategic reserves because of high prices, citing a senior Chinese government official.
Late Buy/Sell Recommendations
Business Week:
- Anadys Pharmaceuticals(ANDS), a drug developer will see its share price rise later this year as favorable results from early trials of certain drugs come in, citing Eric Schmidt, an analyst with Cowen & Co.
- Sierra Health Services(SIE) may rise as much as 34% because of its earnings and possible acquisition interest from other companies.
- Signature Bank(SBNY), a commercial bank started by 100 former First Republic Bank employees, is growing by targeting the underserved market of smaller private companies, citing David Long of William Blair.
Night Trading
Asian Indices are +.75% to +1.25% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated +.08%.
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
- None of note
Upcoming Splits
- (APC) 2-for-1
- (IMO) 3-for-1
- (NICE) 2-for-1
- (TLM) 3-for-1
- (UMBF) 2-for-1
Economic Releases
8:30 am EST
- Personal Income for April is estimated to rise .7% versus a .5% increase in March.
- Personal Spending for April is estimated to rise .6% versus a .6% gain in March.
- The PCE Core for April is estimated to rise .2% versus a .3% gain in March.
9:45 am EST
- The final Univ. of Mich. Consumer Confidence reading for May is estimated at 79.0 versus a prior estimate of 79.0.
Bloomberg:
- An employee of San Jose-based Data Physics was indicted on charges he exported to China equipment used to design and manufacture missiles, federal prosecutors said.
- Nielsen/NetRatings, a global leader in Internet media and market research, today announced that Google(GOOG) accounted for 50% of all searches conducted in April, followed by Yahoo! and MSN, with 22% and 11%, respectively. Year-over-year, Google gained three percentage points in market share, while Yahoo! remained flat and MSN dipped slightly.
- The yen fell, reversing a gain, after Japanese Finance Minister Sadakazu Tanigaki said there still wasn’t enough evidence that seven years of deflation in the world’s second-largest economy has ended.
Financial Times:
- The top two highest paid hedge fund managers in a list of 26 earned around $1.5 billion each last year, citing the Institutional Investor’s Alpha magazine list. Renaissance Technologies Chairman James Simons earned $1.5 billion in 2005, while T. Boone Pickens, chairman of BP Capital LLC, earned $1.4 billion speculating mainly on the rise in energy prices.
Commercial Times:
- AU Optronics(AUO) urged liquid-crystal displays makers to cut production to help clear excess inventory that has caused prices to fall.
Xinhua News Agency:
- China won’t buy crude oil from the international market to fill its strategic reserves because of high prices, citing a senior Chinese government official.
Late Buy/Sell Recommendations
Business Week:
- Anadys Pharmaceuticals(ANDS), a drug developer will see its share price rise later this year as favorable results from early trials of certain drugs come in, citing Eric Schmidt, an analyst with Cowen & Co.
- Sierra Health Services(SIE) may rise as much as 34% because of its earnings and possible acquisition interest from other companies.
- Signature Bank(SBNY), a commercial bank started by 100 former First Republic Bank employees, is growing by targeting the underserved market of smaller private companies, citing David Long of William Blair.
Night Trading
Asian Indices are +.75% to +1.25% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated +.08%.
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
- None of note
Upcoming Splits
- (APC) 2-for-1
- (IMO) 3-for-1
- (NICE) 2-for-1
- (TLM) 3-for-1
- (UMBF) 2-for-1
Economic Releases
8:30 am EST
- Personal Income for April is estimated to rise .7% versus a .5% increase in March.
- Personal Spending for April is estimated to rise .6% versus a .6% gain in March.
- The PCE Core for April is estimated to rise .2% versus a .3% gain in March.
9:45 am EST
- The final Univ. of Mich. Consumer Confidence reading for May is estimated at 79.0 versus a prior estimate of 79.0.
BOTTOM LINE: Asian indices are higher, by technology and commodity stocks in the region. I expect US equities to open mixed and to rise into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.
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