Bloomberg:
- NBC cut its advertising rates for this season by as much as 5%, reflecting the fourth-ranked network’s decline in ratings.
- The Univ. of California-San Francisco is gutting a lab originally financed with US government grants and rebuilding it for stem-cell research with $6 million in privately donated money.
- Eli Lilly(LLY) and Amylin(AMLN) said they may not have enough manufacturing capacity for their new Byetta diabetes drug to keep up with sales that increased by 40% this quarter.
- JPMorgan Chase(JPM) said investors should cut holdings in BHP Billiton(BHP) and Australian mining companies as rising interest rates reduce demand for commodities.
- Fed Bank of St. Louis President Poole said US inflation is too high and that the Fed may need to act should price gains quicken.
- China’s central bank ordered banks to set aside more money as reserves to curb an investment boom that’s creating excess manufacturing capacity in the world’s fastest-growing major economy.
- T. Boone Pickens, the Dallas-based hedge fund manager who has made billions of dollars speculating on higher oil prices, reiterated his call that crude will rise to $80/bbl.
- Hedge funds, designed to profit whether financial markets rise or fall have lost 2.3% in June after a 1.3% decline in May amid a sudden sell-off in emerging market stocks and commodities, according to Hedge Fund Research.
- The US House of Representatives voted to expel Louisiana Democrat William Jefferson from the tax-writing Ways and Means Committee after federal investigators last month videotaped him taking $100,000 from a government witness in a bribery probe.
- Bonds sold by US airlines that avoided bankruptcy are rallying more than any other high-yield debt as the carriers profit from rising demand for travel.
- Gasoline futures are falling to a four-week low as ramped-up refinery production signals sufficient supplies for the summer months.
- The number of active oil and natural-gas drilling rigs in the US rose by 11 to 1,672 in the week ending June 16, a 20-year high, according to Baker Hughes.
Wall Street Journal:
- Venezuelan President Hugo Chavez has become the new hero of some politically left-wing Americans despite serious concerns by human rights groups, venerated almost as much as Fidel Castro and Che Guevara.
- Intel Corp.(INTC) may now be cheap because possible bad news is already priced in, citing Goldman Sachs analyst James Covello.
Women’s Wear Daily:
- Polo Ralph Lauren(RL), which designs Chaps women’s clothing sold only at Kohl’s(KSS), may make an exclusive line for Kohl’s rival JC Penney(JCP).
AP:
- The son of billionaire T. Boone Pickens was arrested last weekend after police found him hiding under a table in a Connecticut fly fishing store near a stash of items. Micahel Pickens, 51, spent three days in jail following a burglary arraignment in Bantam Superior Court June 12. He was unable to post a $15,000 bond. He was also arrested last year on charges of fraudulently boosting stock prices by faxing fake tips to thousands of recipients.
Friday, June 16, 2006
Current Account Deficit Improves, Consumer Confidence Rises
- The Current Account Deficit for 1Q shrank to -$208.7B versus estimates of -$222.0B and -$223.1B in 4Q.
- Preliminary Univ. of Mich. Consumer Confidence for June rose to 82.4 versus estimates of 79.0 and a reading of 79.1 in May.
- Preliminary Univ. of Mich. Consumer Confidence for June rose to 82.4 versus estimates of 79.0 and a reading of 79.1 in May.
BOTTOM LINE: The US current-account deficit shrank more than forecast in the first quarter as the trade balance improved, Bloomberg reported. The gap shrank to 6.4% of GDP from 7% in 4Q. The current account gap will likely widen this quarter on lower overseas investment gains.
Preliminary Univ. of Mich. Consumer Confidence for June rose to 82.4 versus estimates of 79.0 and a reading of 79.1 in May. The expectations component of the index rose to 69.2 from 68.2 the prior month. The current conditions component of the index, which measures Americans’ perceptions of their financial situation and whether it’s a good time to buy big-ticket items like cares, surged to 103.1 from 96.1. I expect sentiment to make new cycle highs over the intermediate-term as stocks rise, gas prices fall, the job market remains relatively healthy, the situation in Iraq improves, inflation decelerates and long-term interest rates remain low.
Thursday, June 15, 2006
Friday Watch
Late-Night Headlines
Bloomberg:
- Oracle Corp.(ORCL) said fourth-quarter profit and revenue exceeded forecasts on soaring sales of database licenses.
- Bill Gates will step down from his day-to-day role at Microsoft(MSFT) in July 2008.
- More than 33,000 union workers at GM(GM) and Delphi have signed up for a buyout program designed to help the companies with plant closings, the head of the UAW said.
- Leaders of Hamas, blocked by international sanctions from wiring funds, are filling the Palestinian Authority’s empty treasury by carrying millions of dollars in cash into the Gaza Strip, stashed in suitcases and hidden money belts.
- A long-range missile test by North Korea would violate an agreement Japanese Prime Minister Koizumi reached with the country’s leader, Kim Jong Il, in 2002, Japan’s chief cabinet secretary said.
Wall Street Journal:
- Metals prices may fall further if raw material consumers increase their use of alternatives such as plastics and less-expensive metals, citing analysts. Industries that use copper have started substituting, citing London-based research company CRU.
Financial Times:
- Russian President Putin said Iran is “ready to negotiate” over its nuclear program.
- The Sarbanes-Oxley Act has benefited accountancy firms as companies pay them more fees to ensure they meet corporate governance regulations, citing research by law firm Foley & Lardner.
London-based Times:
- BP Plc, Europe’s biggest oil company, plans to invest around $37 billion on US projects to explore and produce more oil and natural gas. The company will spend $16 billion in the next decade on exploration and production in the Gulf of Mexico, and plans to invest $17 billion at its onshore facilities.
Maeil Business Newspaper:
- The US will likely call a session of the UN Security Council if North Korea test fires a long-range missile this weekend.
Late Buy/Sell Recommendations
Lehman Brothers:
- Recommended selling the Canadian, Australian and New Zealand dollars and to buy the US dollar.
Business Week:
- Mirant Corp.(MIR), a US power company, could become a takeover target with utility holding company FPL Group(FPL) named as a possible buyer, citing unidentified analysts.
- RAE Systems(RAE), which makes instruments that detect gas and radiation levels, may rise on demand in homeland security products from the US and China governments, citing NY Global Securities’ Julie Chen.
- The shares of Black & Decker(BDK), which makes power tools, may fall because of declining sales, citing Christopher Laudani of Equity Research Online.
Night Trading
Asian Indices are +1.75% to +2.75% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated +.11%.
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
- (CCL)/.44
- (WGO)/.38
Upcoming Splits
- (IIIN) 2-for-1
- (OII) 2-for-1
- (PARL) 2-for-1
- (IFO) 2-for-1
Economic Releases
8:30 pm EST
- 1Q Current Account Deficit is estimated to shrink to -$222.0B versus -$224.9B in 4Q.
9:45 am EST
- Preliminary Univ. of Mich. Consumer Confidence for June is estimated to fall to 79.0 versus a reading of 79.1 in May.
1:00 am EST
- The NAHB Housing Market Index for June is estimated at 45 versus a reading of 45 in May.
Bloomberg:
- Oracle Corp.(ORCL) said fourth-quarter profit and revenue exceeded forecasts on soaring sales of database licenses.
- Bill Gates will step down from his day-to-day role at Microsoft(MSFT) in July 2008.
- More than 33,000 union workers at GM(GM) and Delphi have signed up for a buyout program designed to help the companies with plant closings, the head of the UAW said.
- Leaders of Hamas, blocked by international sanctions from wiring funds, are filling the Palestinian Authority’s empty treasury by carrying millions of dollars in cash into the Gaza Strip, stashed in suitcases and hidden money belts.
- A long-range missile test by North Korea would violate an agreement Japanese Prime Minister Koizumi reached with the country’s leader, Kim Jong Il, in 2002, Japan’s chief cabinet secretary said.
Wall Street Journal:
- Metals prices may fall further if raw material consumers increase their use of alternatives such as plastics and less-expensive metals, citing analysts. Industries that use copper have started substituting, citing London-based research company CRU.
Financial Times:
- Russian President Putin said Iran is “ready to negotiate” over its nuclear program.
- The Sarbanes-Oxley Act has benefited accountancy firms as companies pay them more fees to ensure they meet corporate governance regulations, citing research by law firm Foley & Lardner.
London-based Times:
- BP Plc, Europe’s biggest oil company, plans to invest around $37 billion on US projects to explore and produce more oil and natural gas. The company will spend $16 billion in the next decade on exploration and production in the Gulf of Mexico, and plans to invest $17 billion at its onshore facilities.
Maeil Business Newspaper:
- The US will likely call a session of the UN Security Council if North Korea test fires a long-range missile this weekend.
Late Buy/Sell Recommendations
Lehman Brothers:
- Recommended selling the Canadian, Australian and New Zealand dollars and to buy the US dollar.
Business Week:
- Mirant Corp.(MIR), a US power company, could become a takeover target with utility holding company FPL Group(FPL) named as a possible buyer, citing unidentified analysts.
- RAE Systems(RAE), which makes instruments that detect gas and radiation levels, may rise on demand in homeland security products from the US and China governments, citing NY Global Securities’ Julie Chen.
- The shares of Black & Decker(BDK), which makes power tools, may fall because of declining sales, citing Christopher Laudani of Equity Research Online.
Night Trading
Asian Indices are +1.75% to +2.75% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated +.11%.
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
- (CCL)/.44
- (WGO)/.38
Upcoming Splits
- (IIIN) 2-for-1
- (OII) 2-for-1
- (PARL) 2-for-1
- (IFO) 2-for-1
Economic Releases
8:30 pm EST
- 1Q Current Account Deficit is estimated to shrink to -$222.0B versus -$224.9B in 4Q.
9:45 am EST
- Preliminary Univ. of Mich. Consumer Confidence for June is estimated to fall to 79.0 versus a reading of 79.1 in May.
1:00 am EST
- The NAHB Housing Market Index for June is estimated at 45 versus a reading of 45 in May.
BOTTOM LINE: Asian indices are sharply higher, boosted by technology and exporting stocks in the region. I expect US equities to open modestly higher and to maintain gains into the afternoon. The Portfolio is 100% net long heading into the day.
Stocks Finish Sharply Higher on Positive Economic Data, Short-covering and Bargain Hunting
Indices
S&P 500 1,256.13 +2.12%
DJIA 11,014.47 +1.83%
NASDAQ 2,144.15 +2.79%
Russell 2000 701.06 +3.54%
Wilshire 5000 12,616.78 +2.35%
S&P Barra Growth 582.83 +1.87%
S&P Barra Value 671.40 +2.38%
Morgan Stanley Consumer 603.55 +1.05%
Morgan Stanley Cyclical 806.14 +2.90%
Morgan Stanley Technology 491.22 +3.21%
Transports 4,638.92 +3.76%
Utilities 410.61 +1.65%
Put/Call .86 -23.21%
NYSE Arms .19 -67.15%
Volatility(VIX) 15.92 -25.86%
ISE Sentiment 117.00 +23.16%
US Dollar 86.02 -.14%
CRB 337.56 +1.67%
Futures Spot Prices
Crude Oil 69.76 +.37%
Unleaded Gasoline 203.96 +.18%
Natural Gas 7.26 +.75%
Heating Oil 194.41 +.37%
Gold 581.50 +1.96%
Base Metals 208.54 +4.27%
Copper 315.00 +.59%
10-year US Treasury Yield 5.09% +.68%
Leading Sectors
Steel +6.72%
Airlines +5.88%
I-Banks +5.79%
Lagging Sectors
Foods +1.03%
HMOs +.94%
Broadcasting +.50%
Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play
Afternoon Recommendations
Deutsche Bank:
- Upgraded (IGT) to Buy.
Afternoon/Evening Headlines
Bloomberg:
- Mark Oberle, CFO of ethanol maker Corn Plus LLP, is sitting out his industry’s biggest building boom in a quarter century, and Microsoft(MSFT) Chairman Bill Gates may wish he’d done the same. Within two years, planned expansion by ethanol producers will push US supplies pas demand, resulting in a glut, according to Standard and Poor’s.
- The US Senate Judiciary Committee approved a constitutional amendment that would empower Congress to outlaw flag burning, setting the stage for an election-year debate about “desecration” of the national symbol.
- Fed Chairman Bernanke said soaring energy prices may slow economic growth and spur inflation in the short-run, while being manageable over a longer period of time.
- Shares of Cnooc Ltd., China’s largest offshore oil producer, had their biggest gain in more than 10 months after a foreign partner found a field big enough to meet the nation’s natural-gas needs for four years.
CNBC:
- Millennium Pharmaceuticals(MLNM), a drugmaker focused on cancer and inflammatory disease treatments, has hired Morgan Stanley to entertain offers from prospective buyers.
S&P 500 1,256.13 +2.12%
DJIA 11,014.47 +1.83%
NASDAQ 2,144.15 +2.79%
Russell 2000 701.06 +3.54%
Wilshire 5000 12,616.78 +2.35%
S&P Barra Growth 582.83 +1.87%
S&P Barra Value 671.40 +2.38%
Morgan Stanley Consumer 603.55 +1.05%
Morgan Stanley Cyclical 806.14 +2.90%
Morgan Stanley Technology 491.22 +3.21%
Transports 4,638.92 +3.76%
Utilities 410.61 +1.65%
Put/Call .86 -23.21%
NYSE Arms .19 -67.15%
Volatility(VIX) 15.92 -25.86%
ISE Sentiment 117.00 +23.16%
US Dollar 86.02 -.14%
CRB 337.56 +1.67%
Futures Spot Prices
Crude Oil 69.76 +.37%
Unleaded Gasoline 203.96 +.18%
Natural Gas 7.26 +.75%
Heating Oil 194.41 +.37%
Gold 581.50 +1.96%
Base Metals 208.54 +4.27%
Copper 315.00 +.59%
10-year US Treasury Yield 5.09% +.68%
Leading Sectors
Steel +6.72%
Airlines +5.88%
I-Banks +5.79%
Lagging Sectors
Foods +1.03%
HMOs +.94%
Broadcasting +.50%
Evening Review
Detailed Market Summary
Market Gauges
Daily ETF Performance
Style Performance
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Economic Calendar
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Movers
Real-time/After-hours Stock Quote
In Play
Afternoon Recommendations
Deutsche Bank:
- Upgraded (IGT) to Buy.
Afternoon/Evening Headlines
Bloomberg:
- Mark Oberle, CFO of ethanol maker Corn Plus LLP, is sitting out his industry’s biggest building boom in a quarter century, and Microsoft(MSFT) Chairman Bill Gates may wish he’d done the same. Within two years, planned expansion by ethanol producers will push US supplies pas demand, resulting in a glut, according to Standard and Poor’s.
- The US Senate Judiciary Committee approved a constitutional amendment that would empower Congress to outlaw flag burning, setting the stage for an election-year debate about “desecration” of the national symbol.
- Fed Chairman Bernanke said soaring energy prices may slow economic growth and spur inflation in the short-run, while being manageable over a longer period of time.
- Shares of Cnooc Ltd., China’s largest offshore oil producer, had their biggest gain in more than 10 months after a foreign partner found a field big enough to meet the nation’s natural-gas needs for four years.
CNBC:
- Millennium Pharmaceuticals(MLNM), a drugmaker focused on cancer and inflammatory disease treatments, has hired Morgan Stanley to entertain offers from prospective buyers.
BOTTOM LINE: The Portfolio finished substantially higher today on gains in my Biotech longs, Networking longs, Internet longs and Semi longs. I added to my Intuitive Surgical(ISRG) long and took profits in a few trading longs in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was very positive today as the advance/decline line finished substantially higher, every sector rose and volume was heavy. Measures of investor anxiety were lower into the close. Overall, today's market performance was very bullish. I expect to see some follow-through or consolidation tomorrow. I would be very surprised to see a substantial giveback of today's gains. The 10-year was stable today, rising only 3 basis points. Considering the huge rally in stocks the last two days, recent inflation hysteria and stronger economic data that basically puts to rest the notion of a plunging economy, the 10-year acts very well.
Stocks Sharply Higher into Final Hour on Bargain Hunting, Short-Covering and Positive Economic Data
BOTTOM LINE: The Portfolio is substantially higher into the final hour on gains in my Computer longs, Internet longs, Biotech longs and Semi longs. I took profits in some more of my (EEM) short, added to my Apple Computer(AAPL) long and exited the remainder of my (QQQQ) and (IWM) shorts this morning, thus leaving the Portfolio 100% net long. The tone of the market is very positive as the advance/decline line is substantially higher, almost every sector is higher and volume is heavy. The AAII percentage of Bulls remained unchanged at 26.41% this week from 26.23% the prior week. This reading is still at depressed levels. The AAII percentage of Bears soared to 54.98% this week from 45.08% the prior week. This reading is now at very elevated levels. The percentage bears is the highest since February 2003. The S&P 500 has rallied 57% since bearish sentiment hit this level. I expect bullish sentiment to rise next week. I continue to believe overall investor sentiment toward U.S. stocks is at levels associated with meaningful market bottoms. I expect US stocks to trade mixed-to-higher into the close from current levels on more short-covering and bargain hunting.
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