Earnings Announcements
Company/Estimate
CKP/.17
HGSI/-.41
MANH/.22
MNST/.10
PCLN/.04
SCMR-.04
Economic Data
None of significance
Late-night News
North Korea denies it purchased nuclear secrets from Pakistani. Viacom is set to confirm that it will sell its majority stake in video-rental chain Blockbuster. The sale will most likely take place through a stock-swap offer to Viacom shareholders. US forces in Iraq apprehended Muhsin Khadr al-Khafaji, number 48 on the list of the 55 most wanted Iraqis. Vodafone, the world's largest mobile-phone operator, is looking at the idea of purchasing all of Verizon Communications, keeping the wireless business and selling the rest.
Asian markets are mostly unchanged.
S&P 500 indicated -.04%
NASDAQ indicated+.10%
BOTTOM LINE: Overseas markets are quiet for the most part. No significant market-moving news released late-night. Most likely another quiet day tomorrow ahead of Greenspan's testimony on Wed.
Tuesday, February 10, 2004
Monday, February 09, 2004
Monday Close
S&P 500 1,139.81-.26%
NASDAQ 2,060.57-.17%
Leading/Lagging Sectors
Oil Service+2.46%
Fashion+2.0%
Broadcasting+1.38%
Semis-1.01%
Airlines-1.03%
Networking-1.39%
After-hours Movers
LLTC up 3.4% after raising earnings guidance.
ESPD down 5.5% after earnings release.
After-hours News
US stocks fell for the first day in 3 as declines among health-care companies, some of this year's best performers, blunted the effect of a proposed $4B takeover in the networking-equipment industry on technology shares. OPEC should halt output above its quotas to prevent a drop in prices, a majority of ministers from the eleven-member group said. Mike Tyson, who earned $200M from his 20-year professional boxing career, had $5,553 left as of Dec. 31. CDC reports that elderly receive unsafe mediation from doctors in 8% of visits. Pakistan may prosecute its top nuclear scientist in the event he is found to have failed to provide full details about his involvement in selling atomic secrets.
BOTTOM LINE: Very quiet after-hours. Volume was light today. It wasn't the kind of follow-through I was looking for. It is likely that investors are waiting for confirmation from Greenspan on Wed. before moving further into equities. I took profits in a few names today on the close, leaving my net exposure to the market at 80%.
NASDAQ 2,060.57-.17%
Leading/Lagging Sectors
Oil Service+2.46%
Fashion+2.0%
Broadcasting+1.38%
Semis-1.01%
Airlines-1.03%
Networking-1.39%
After-hours Movers
LLTC up 3.4% after raising earnings guidance.
ESPD down 5.5% after earnings release.
After-hours News
US stocks fell for the first day in 3 as declines among health-care companies, some of this year's best performers, blunted the effect of a proposed $4B takeover in the networking-equipment industry on technology shares. OPEC should halt output above its quotas to prevent a drop in prices, a majority of ministers from the eleven-member group said. Mike Tyson, who earned $200M from his 20-year professional boxing career, had $5,553 left as of Dec. 31. CDC reports that elderly receive unsafe mediation from doctors in 8% of visits. Pakistan may prosecute its top nuclear scientist in the event he is found to have failed to provide full details about his involvement in selling atomic secrets.
BOTTOM LINE: Very quiet after-hours. Volume was light today. It wasn't the kind of follow-through I was looking for. It is likely that investors are waiting for confirmation from Greenspan on Wed. before moving further into equities. I took profits in a few names today on the close, leaving my net exposure to the market at 80%.
Mid-day Update
S&P 500 1,143.92 +.1%
NASDAQ 2072.71 +.42%
Leading/Lagging Sectors
Oil Service+2.72%
Fashion+1.98%
Iron/Steel+1.59%
Drugs-.43%
Telecom-.49%
Networking-.71%
Market Movers
JNPR down on NSCN acquisition....$3.3B price tag, 58% premium seen as steep.
TSN,PPC,SAFM down on Japanese import ban due to bird flu outbreak in Delaware.
SLAB up on new semi for mobile phones...seen adding $100M in revenue/.20 eps in 05....Wachovia upgrades to Outperform.
SHI,ACH,YZC,HNP,BYH up as Chinese cyclicals continue to outperform on strengthening fundamentals/technicals...relatively low valuations.
NTE up on strong earnings report.
AAII down on unexpectedly early generic competition.
IACI up on strong earnings as Expedia travel division reported a 41% increase in sales.
Mid-day News
Bush administration is now projecting 2.6M new jobs created in 04. Visa CEO said they saw 16% growth in Jan. and bankruptcies down 5%. SAP may lower prices to compete as MSFT takes share. PIMCO's McCulley told CNBC bond prices will fall soon as Fed raises rates. He is especially negative on long-dated and low-rated corporate paper. Nintendo will exit video game console market to focus on software.
BOTTOM LINE: Quiet day for the most part. JNPR acquisition and continued rotation into cyclicals and out of healthcare are 2 main areas of focus. I would like to see more follow-through from Fri. Small-cap growth is outperforming market. I haven't made any trades today. Very good day so far for the Portfolio. I will look to take profits into any unexpected weakness later today, otherwise I will maintain 100% net long stance.
NASDAQ 2072.71 +.42%
Leading/Lagging Sectors
Oil Service+2.72%
Fashion+1.98%
Iron/Steel+1.59%
Drugs-.43%
Telecom-.49%
Networking-.71%
Market Movers
JNPR down on NSCN acquisition....$3.3B price tag, 58% premium seen as steep.
TSN,PPC,SAFM down on Japanese import ban due to bird flu outbreak in Delaware.
SLAB up on new semi for mobile phones...seen adding $100M in revenue/.20 eps in 05....Wachovia upgrades to Outperform.
SHI,ACH,YZC,HNP,BYH up as Chinese cyclicals continue to outperform on strengthening fundamentals/technicals...relatively low valuations.
NTE up on strong earnings report.
AAII down on unexpectedly early generic competition.
IACI up on strong earnings as Expedia travel division reported a 41% increase in sales.
Mid-day News
Bush administration is now projecting 2.6M new jobs created in 04. Visa CEO said they saw 16% growth in Jan. and bankruptcies down 5%. SAP may lower prices to compete as MSFT takes share. PIMCO's McCulley told CNBC bond prices will fall soon as Fed raises rates. He is especially negative on long-dated and low-rated corporate paper. Nintendo will exit video game console market to focus on software.
BOTTOM LINE: Quiet day for the most part. JNPR acquisition and continued rotation into cyclicals and out of healthcare are 2 main areas of focus. I would like to see more follow-through from Fri. Small-cap growth is outperforming market. I haven't made any trades today. Very good day so far for the Portfolio. I will look to take profits into any unexpected weakness later today, otherwise I will maintain 100% net long stance.
Monday Watch
Earnings Announcements
Company/Estimates
CKSW/.02
FII/.47
FWHT/.14
IACI/.23
ZMH/.48
Economic Data
None of significance
Weekend News
Voice-over-internet-protocol is rapidly becoming a disruptive technology in Asia. James Cramer of the Street.com likes FFIV,YHOO,NT,JNPR and BRCM for a quick trade on the long-side. Barron's positive on RIG,TXN,LOW,TOY and DCN. Walmart talking up its RFID plans in Business Week, saying it will be buying printers and scanners as well as the tags. This should benefit ZBRA and UNA. Close analysis of the recent budget proposal for 04 shows a significant decrease in the rate of growth in Federal IT spending. The head of the IAEA, Mr El Baradei, says Dr Khan's admission shows many countries now have the ability to produce the necessary materials for nuclear weapons programs. An Arab newspaper is reporting that Al-Qaeda purchased nuclear arms from the Ukraine in 1998 and is storing them for later use. John Kerry won the Maine caucus a day after winning political contests in Michigan and Washington. His nomination is now just a formality. Shortages in components starting to appear in some areas of tech. 2 more human cases of bird flu in Vietnam. Officials in Delaware have ordered a flock of 12,000 chickens be destroyed on avian flu fears. This strain is not transferable to humans. Analysts underestimated earnings forecasts by 6% last year, the widest margin of error since tracking began in 1994. The US and Australia reached a free trade agreement that would reduce tariffs on almost all manufactured goods. Should benefit heavy machinery manufacturers most.
Asian stocks are up on avg. 1.5%.
S&P 500 indicated unch.
NASDAQ indicated +.1%
BOTTOM LINE: US equity markets should continue rallying tomorrow. I will re-evaluate my 100% net long stance based on tomorrow's action. I would like to see more volume on a follow-through rally. I will look to take profits on any unexpected weakness.
Company/Estimates
CKSW/.02
FII/.47
FWHT/.14
IACI/.23
ZMH/.48
Economic Data
None of significance
Weekend News
Voice-over-internet-protocol is rapidly becoming a disruptive technology in Asia. James Cramer of the Street.com likes FFIV,YHOO,NT,JNPR and BRCM for a quick trade on the long-side. Barron's positive on RIG,TXN,LOW,TOY and DCN. Walmart talking up its RFID plans in Business Week, saying it will be buying printers and scanners as well as the tags. This should benefit ZBRA and UNA. Close analysis of the recent budget proposal for 04 shows a significant decrease in the rate of growth in Federal IT spending. The head of the IAEA, Mr El Baradei, says Dr Khan's admission shows many countries now have the ability to produce the necessary materials for nuclear weapons programs. An Arab newspaper is reporting that Al-Qaeda purchased nuclear arms from the Ukraine in 1998 and is storing them for later use. John Kerry won the Maine caucus a day after winning political contests in Michigan and Washington. His nomination is now just a formality. Shortages in components starting to appear in some areas of tech. 2 more human cases of bird flu in Vietnam. Officials in Delaware have ordered a flock of 12,000 chickens be destroyed on avian flu fears. This strain is not transferable to humans. Analysts underestimated earnings forecasts by 6% last year, the widest margin of error since tracking began in 1994. The US and Australia reached a free trade agreement that would reduce tariffs on almost all manufactured goods. Should benefit heavy machinery manufacturers most.
Asian stocks are up on avg. 1.5%.
S&P 500 indicated unch.
NASDAQ indicated +.1%
BOTTOM LINE: US equity markets should continue rallying tomorrow. I will re-evaluate my 100% net long stance based on tomorrow's action. I would like to see more volume on a follow-through rally. I will look to take profits on any unexpected weakness.
Sunday, February 08, 2004
Outlook
Investors will focus on Greenspan's testimony to Congress on Wed. for affirmation that an imminent rate hike is not forthcoming. A preliminary reading from the Univ. of Mich. on consumer confidence will be released Fri. These are the only 2 significant economic events for the week. The short-term technical indicators I follow turned positive on Fri. I expect the recent strength in retail, homebuilding and technology will continue this week. Consumer spending will only strengthen throughout the year with major tax cuts, low interest rates and decreasing unemployment continuing. Investors are anticipating this now.
BOTTOM LINE: On Fri. I positioned the portfolio 100% net long(%longs-%shorts). I covered some shorts and added a few new longs in the above mentioned sectors. I initiated a position in OHB, a small-cap homebuilder, on fri. It is down 40% from its high on interest rate fears. It has a great track record, low valuation and strong fundamentals. Technicals confirmed my buy decision and I expect it to outperform until interest rate fears resurface.
BOTTOM LINE: On Fri. I positioned the portfolio 100% net long(%longs-%shorts). I covered some shorts and added a few new longs in the above mentioned sectors. I initiated a position in OHB, a small-cap homebuilder, on fri. It is down 40% from its high on interest rate fears. It has a great track record, low valuation and strong fundamentals. Technicals confirmed my buy decision and I expect it to outperform until interest rate fears resurface.
Markets Week in Review
The S&P 500 Index rose for the 10th time in the last 11 weeks as strong economic reports and subsequent comments by a Fed Governor led investors to conclude that an imminent interest rate hike was not in the cards. Wednesday's technology weakness, led on the downside by CSCO, proved fleeting as investors focused on improving corporate profits with exceptionally low inflation. Profits for the S&P 500 are now projected to rise a healthy 14.2% in the 1st Q and 13.6% for all of 04. Thursday and Friday saw a rotation back into cyclicals, especially retail and technology.
BOTTOM LINE: Friday's strong positive reaction to underwhelming employment numbers shows the underlying strength in the US equity market. I would like to see follow-through on Mon. I expect we will. Seemingly overnight, investors decided that interest rates were not going to rise significantly anytime soon, thus rotating viciously back into cyclicals. I suspect a short-squeeze also contributed to the strength Fri.
BOTTOM LINE: Friday's strong positive reaction to underwhelming employment numbers shows the underlying strength in the US equity market. I would like to see follow-through on Mon. I expect we will. Seemingly overnight, investors decided that interest rates were not going to rise significantly anytime soon, thus rotating viciously back into cyclicals. I suspect a short-squeeze also contributed to the strength Fri.
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