There will not be a Mid-day Update today, Economic Week in Review or Market Week in Review. I will be traveling over the weekend and will try and post the Weekly Outlook and Monday Watch on Sunday evening.
Bottom Line: The Portfolio is up substantially today as my retail shorts are falling and Chinese ADR longs are rising. A few of my long stop-losses were triggered this morning, leaving the Portfolio 25% net short. The market's reaction to today's fall in interest rates is very disappointing. I expect stocks to move slightly higher into the close as investors digest the recent fall in rates and oil stabilizes.
Friday, July 16, 2004
Thursday, July 15, 2004
Friday Watch
Earnings of Note
Company/Estimate
CVTX/-1.16
HAS/.07
JBHT/.45
KEY/.56
NCC/.69
NVR/13.88
SMSI/.01
VANS/-.11
GWW/.68
Splits
MGPI 2-for-1
SWBT 2-for-1
Economic Data
Consumer Price Index for June estimated +.2% versus +.6% in May.
CPI Ex Food & Energy for June estimate +.2% versus +.2% in May.
Preliminary Univ. of Michigan Consumer Confidence for July estimated at 97.0 versus 95.6 in June.
Recommendations
Goldman Sachs reiterated Outperform on PFE and Underperform on DJ. Shares of DOW will increase by more than 20% because of rising prices from less-than-expected supply from Middle East competitors, Business Week reported. ENCY may get a boost when the drug developer releases new trial results early next year, Business Week reported.
Late-Night News
Asian indices are mostly higher, led by Chinese and Indian shares. Henry Blodget, Merrill Lynch's former Internet analyst, has established Cherry Hill Research in New York to provide industry analysis and consulting services, Business Week reported. ABN Amro, Citigroup and Merrill Lynch are in a final competition to arrange the sale of Jinro, South Korea's largest liquor maker, Korea Economic Daily said. China will soon allow insurance companies to invest up to 5% of their total assets directly in the stock market, Shanghai Securities News reported. Sun Microsystems CEO McNealy is being blamed by current and former company executives for the decline of Sun, which has lost 86% of its value since the end of 2000, Business Week reported. The U.K. and European biotechnology companies are lagging the U.S. on almost every financial measure, the Financial Times said. A wildfire that has burned 8,500 acres of dry brush, grass and timber near Carson City, Nevada, is threatening 550 homes and businesses, the AP reported. Telewest Global stock will start U.S. trading on Monday, ending the U.K. cable operator's two-year upheaval that consumed two chief executives and will convert 7.4 billion of debt into new equity, Bloomberg reported. The U.S. International Trade Commission ruled that U.S. makers of plastic bags and ironing boards are being hurt by surging imports from China, a final decision that will result in tariffs on those goods, Bloomberg said. The U.S. Senate agreed to sweeping changes for the cigarette industry, granting the FDA the power to regulate tobacco, and approving a $12 billion industry-financed buyout for farmers, Bloomberg said. China's economic growth unexpectedly slowed in the second quarter, suggesting government lending curbs are cooling the world's fastest-growing major economy, Bloomberg reported. The U.S. House of Representatives voted to cut financial aid to Saudi Arabia, as lawmakers registered their protest over the level of cooperation on terrorism form the world's largest oil producer, Bloomberg reported. The U.S. dollar fell from its strongest in a month against the yen and shed gains against the euro after Fed Governor Bies said the U.S. currency "needs to adjust" to the current-account deficit, Bloomberg reported.
Late-Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.19%.
NASDAQ 100 indicated +.39%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on receding inflation fears, better earnings reports and strength in Asia. The Portfolio is market neutral heading into tomorrow.
Company/Estimate
CVTX/-1.16
HAS/.07
JBHT/.45
KEY/.56
NCC/.69
NVR/13.88
SMSI/.01
VANS/-.11
GWW/.68
Splits
MGPI 2-for-1
SWBT 2-for-1
Economic Data
Consumer Price Index for June estimated +.2% versus +.6% in May.
CPI Ex Food & Energy for June estimate +.2% versus +.2% in May.
Preliminary Univ. of Michigan Consumer Confidence for July estimated at 97.0 versus 95.6 in June.
Recommendations
Goldman Sachs reiterated Outperform on PFE and Underperform on DJ. Shares of DOW will increase by more than 20% because of rising prices from less-than-expected supply from Middle East competitors, Business Week reported. ENCY may get a boost when the drug developer releases new trial results early next year, Business Week reported.
Late-Night News
Asian indices are mostly higher, led by Chinese and Indian shares. Henry Blodget, Merrill Lynch's former Internet analyst, has established Cherry Hill Research in New York to provide industry analysis and consulting services, Business Week reported. ABN Amro, Citigroup and Merrill Lynch are in a final competition to arrange the sale of Jinro, South Korea's largest liquor maker, Korea Economic Daily said. China will soon allow insurance companies to invest up to 5% of their total assets directly in the stock market, Shanghai Securities News reported. Sun Microsystems CEO McNealy is being blamed by current and former company executives for the decline of Sun, which has lost 86% of its value since the end of 2000, Business Week reported. The U.K. and European biotechnology companies are lagging the U.S. on almost every financial measure, the Financial Times said. A wildfire that has burned 8,500 acres of dry brush, grass and timber near Carson City, Nevada, is threatening 550 homes and businesses, the AP reported. Telewest Global stock will start U.S. trading on Monday, ending the U.K. cable operator's two-year upheaval that consumed two chief executives and will convert 7.4 billion of debt into new equity, Bloomberg reported. The U.S. International Trade Commission ruled that U.S. makers of plastic bags and ironing boards are being hurt by surging imports from China, a final decision that will result in tariffs on those goods, Bloomberg said. The U.S. Senate agreed to sweeping changes for the cigarette industry, granting the FDA the power to regulate tobacco, and approving a $12 billion industry-financed buyout for farmers, Bloomberg said. China's economic growth unexpectedly slowed in the second quarter, suggesting government lending curbs are cooling the world's fastest-growing major economy, Bloomberg reported. The U.S. House of Representatives voted to cut financial aid to Saudi Arabia, as lawmakers registered their protest over the level of cooperation on terrorism form the world's largest oil producer, Bloomberg reported. The U.S. dollar fell from its strongest in a month against the yen and shed gains against the euro after Fed Governor Bies said the U.S. currency "needs to adjust" to the current-account deficit, Bloomberg reported.
Late-Night Trading
Asian Indices are unch. to +1.0% on average.
S&P 500 indicated +.19%.
NASDAQ 100 indicated +.39%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on receding inflation fears, better earnings reports and strength in Asia. The Portfolio is market neutral heading into tomorrow.
Thursday Close
S&P 500 1,106.69 -.43%
NASDAQ 1,912.71 -.11%
Leading Sectors
Disk Drives +3.72%
Oil Service +2.56%
HMO's +1.81%
Lagging Sectors
Telecom -1.28%
Wireless -1.61%
Drugs -1.66%
Other
Crude Oil 40.80 -.32%
Natural Gas 5.84 -.02%
Gold 405.00 +.15%
Base Metals 112.52 +.51%
U.S. Dollar 87.92 +.39%
10-Yr. T-note Yield 4.48% unch.
VIX 14.71 +6.90%
Put/Call .82 -11.83%
NYSE Arms 1.76 +26.62%
After-hours Movers
RECN +3.21% after beating 4Q estimates.
RMBS +11.45% after beating 2Q estimates and announcing agreement with CDN to deliver portfolio of high-speed serial link solutions.
BSTE +9.65% after boosting 2Q forecast due to continued success in defending its Triage BNP Test franchise.
TSRA +9.3% after boosting 04 guidance.
FARO +7.75% after reaffirming 2Q and 04 forecast.
SYK -3.39% after beating 2Q eps forecast, but slightly missing sales forecast.
HOTT -12.64% after lowering 2Q, 3Q and 4Q estimates.
NFLX -11.72% after missing 2Q eps estimated, but meeting sales estimate and raising 3Q and 4Q estimates.
PMCS -9.96% after beating 2Q eps estimate, but slightly missing sales forecast.
RMBS +11.45% after beating 2Q estimates and announcing agreement with CDN to deliver portfolio of high-speed serial link solutions.
BSTE +9.65% after boosting 2Q forecast due to continued success in defending its Triage BNP Test franchise.
TSRA +9.3% after boosting 04 guidance.
FARO +7.75% after reaffirming 2Q and 04 forecast.
SYK -3.39% after beating 2Q eps forecast, but slightly missing sales forecast.
HOTT -12.64% after lowering 2Q, 3Q and 4Q estimates.
NFLX -11.72% after missing 2Q eps estimated, but meeting sales estimate and raising 3Q and 4Q estimates.
PMCS -9.96% after beating 2Q eps estimate, but slightly missing sales forecast.
PLXT -10.16% after missing 2Q and lowering 3Q estimates.
Recommendations
Goldman Sachs reiterated Outperform on TRB and PFE.
After-hours News
U.S. stocks finished modestly lower today as better economic and corporate earnings reports failed to spur investor enthusiasm. After the close, California air-quality regulators will vote next week on a measure that would put a five-minute limit on the idling of diesel trucks and buses statewide, the San Francisco Chronicle reported. Two American Indian tribes in Kansas plan to buy land Friday to build a $210 million casino resort, the Kansas City Kansan reported. IBM said second-quarter sales and profits exceeded expectations as the company sold more consulting services to businesses and governments, Bloomberg reported. The U.S. dollar advanced against the euro and yen in New York after manufacturing in the northeastern U.S. expanded more than forecast this month, easing concern among some investors that the economy is slowing, Bloomberg said.
BOTTOM LINE: The Portfolio finished slightly lower today as my falling retail shorts didn't quite offset my declining biotech longs. I added a few longs in the afternoon, bringing the Portfolio's market exposure to 25% net long. One of my new longs is KKD and I am using a $17.75 stop-loss on this position. Today was disappointing for the bulls as economic reports and earnings reports should have produced a gain for the day. Election worries and higher oil prices are currently trumping any good news. Oil prices should subside in the near future while election worries will likely increase for the next several weeks.
Mid-day Update
S&P 500 1,113.13 +.15%
NASDAQ 1,923.51 +.48%
Leading Sectors
Disk Drives +4.59%
Oil Service +2.44%
Computer Boxmakers +1.73%
Lagging Sectors
Banks -.73%
Fashion -.95%
Wireless -1.18%
Other
Crude Oil 40.92 -.53%
Natural Gas 5.85 -2.12%
Gold 405.50 unch.
Base Metals 111.70 -.22%
U.S. Dollar 87.84 +.30%
10-Yr. T-note Yield 4.49% +.22%
VIX 14.0 +1.74%
Put/Call .79 -15.0%
NYSE Arms 1.37 -1.44%
Market Movers
NOK -13.5% after saying third-quarter earnings per share may fall by as much as half and sales will decline as it cuts prices.
AAPL +9.8% after beating 3Q estimates, raising 4Q guidance and multiple upgrades.
OVTI +11.2% after strong SNDK report.
ERICY -5.9% after better-than-expected 2Q on worries over price war with Nokia.
SNDK +23.8% after beating 2Q estimates substantially and raising 3Q forecast.
PLNR +13.4% after beating 3Q estimates, lowering 4Q guidance and multiple upgrades.
FCS +12.1% after missing 2Q estimates but making positive comments regarding 3Q margins.
PPDI +13.12% after beating 2Q estimates and multiple upgrades.
MCS +15.9% after saying La Quinta agreed to buy almost all its hotel assets for about $395 million.
FCFS +14.6% after beating 2Q estimates, raising 04 guidance and announcing 1.6 million share buyback.
GIVN +10.7% on strong second-quarter report.
CEC +11.3% after beating 2Q estimates, raising 3Q/4Q guidance and multiple upgrades.
CNJ +9.0% after Luxottica increased its bid for the company to $495 million, exceeding the offer by rival Moulin International.
CME -5.0% after CFO quit.
SWIR -6.3% after National Bank cut rating to Underperform.
HET -4.7% after agreeing to purchase Caesars for $5.18 billion.
WDFC -9.1% after missing 3Q estimates.
Economic Data
Producer Price Index for June fell .3% versus estimates for .2% rise and a .8% rise in May.
PPI Ex Food & Energy for June rose .2% versus estimates of a .2% rise and a .3% rise in May.
Initial Jobless Claims for last week were 349K versus estimates of 345K and 309K prior week.
Continuing Claims were 2971K versus estimates of 2883K and 2859K prior.
Business Inventories for May rose .4% versus estimates of a .5% rise and a .7% rise in April.
Empire Manufacturing for July came in at 36.54 versus estimates of 27.80 and 29.93 in June.
Industrial Production for June fell .3% versus estimates of a .1% rise and a .9% gain in July.
Capacity Utilization for June was 77.2% versus estimates of 77.7% and 77.6% in May.
Philly Fed for July came in at 36.1 versus estimates of 25.0 and a reading of 28.9 in June.
Recommendations
PLXS cut to Underweight at JP Morgan. CBH cut to Underweight at Morgan Stanley, target $48. PAYX raised to Outperform at CSFB, target $38. ADP raised to Outperform at CSFB, target $48. CZR cut to Underweight at Prudential, target $18. LYO raised to Buy at Bank of America, target $20. ACV raised to Buy at Bank of America, target $56. CHTT raised to Buy at Bank of America, target $36. Goldman reiterated Outperform on AMD, ETN, CSCO, MAR, ATG, KRB, EQT and AIG. Goldman reiterated Underperform on QLGC and MTG. Citi SmithBarney said to Buy ROH, target $47. Citi reiterated Buy on HET, target $63. Citi reiterated Buy on CSCO, JNPR, FDRY, FFIV, RDWR, AXTR and ETS. Citi reiterated Buy on AAPL, target $37. Citi reiterated Sell on KFT, target $29.50. Citi reiterated Buy on BCII, target $30. Citi reiterated Buy on PNR, target $40. Citi reiterated Sell on RSH, target $28.
Mid-day News
U.S. stocks are modestly higher mid-day on mostly stronger economic reports and falling inflation readings. A U.S. government plan to collect personal information on airline passengers and rank them according to risk-level is being canceled after criticism about privacy and concern about its effectiveness, USA Today reported. Gary Kelly, CFO of Southwest Air told CNBC that revenue and airline traffic have been very strong in July, Bloomberg said. The price of some types of U.S. business insurance, which can include anything from broad decisions to property damage, is beginning to decline after three years of increases, according to two new surveys, the Wall Street Journal reported. Motorola may face a market cool to investment in chip-making today when it announces share prices for the planned IPO of its Freescale Semiconductor unit, the NY Times reported. Boeing plans to use voice over Internet technology for its communications, replacing traditional phones, the Chicago Tribune reported. Marriott said second-quarter profit rose 28% after an increase in business travels enabled the hotel company to charge higher room rates, Bloomberg reported. Harrah's Entertainment agreed to buy Caesars Entertainment for about $9.44 billion in cash, stock and assumed debt, Bloomberg reported. Nokia said third-quarter profit and sales will fall as it cuts prices to regain lost market share, Bloomberg said. U.S. producer prices fell .3% last month, the biggest drop in more than a year, reflecting declines in energy and food prices, Bloomberg reported. Enron won court confirmation of a plan to exit bankruptcy, Bloomberg said. U.S. industrial production unexpectedly fell for the first time since March, led by a slowdown in car production, Bloomberg reported. Iraq's interim Prime Minister Allawi today said he will visit several other Arab nations starting next week to open new relationships and ease tensions in the Middle East, Bloomberg reported. Intel plans to spend $400 million to add a second clean room at its Colorado plant and plans to hire several hundred workers, the Denver Post reported. Manufacturing in the Philadelphia region unexpectedly expanded at a faster pace this month than in June as more companies reported rising orders and higher employment, Bloomberg reported.
BOTTOM LINE: The Portfolio is unchanged again today as my falling retail shorts are being offset by my declining biotech longs. I have not traded and the Portfolio is still market neutral. Overall, the data released today were encouraging as manufacturing readings mostly exceeded expectations and measures of inflation fell. As well, a number of corporate earnings reports were very strong. I am a little disappointed in the market's reaction so far. However, stocks should gain into the close.
NASDAQ 1,923.51 +.48%
Leading Sectors
Disk Drives +4.59%
Oil Service +2.44%
Computer Boxmakers +1.73%
Lagging Sectors
Banks -.73%
Fashion -.95%
Wireless -1.18%
Other
Crude Oil 40.92 -.53%
Natural Gas 5.85 -2.12%
Gold 405.50 unch.
Base Metals 111.70 -.22%
U.S. Dollar 87.84 +.30%
10-Yr. T-note Yield 4.49% +.22%
VIX 14.0 +1.74%
Put/Call .79 -15.0%
NYSE Arms 1.37 -1.44%
Market Movers
NOK -13.5% after saying third-quarter earnings per share may fall by as much as half and sales will decline as it cuts prices.
AAPL +9.8% after beating 3Q estimates, raising 4Q guidance and multiple upgrades.
OVTI +11.2% after strong SNDK report.
ERICY -5.9% after better-than-expected 2Q on worries over price war with Nokia.
SNDK +23.8% after beating 2Q estimates substantially and raising 3Q forecast.
PLNR +13.4% after beating 3Q estimates, lowering 4Q guidance and multiple upgrades.
FCS +12.1% after missing 2Q estimates but making positive comments regarding 3Q margins.
PPDI +13.12% after beating 2Q estimates and multiple upgrades.
MCS +15.9% after saying La Quinta agreed to buy almost all its hotel assets for about $395 million.
FCFS +14.6% after beating 2Q estimates, raising 04 guidance and announcing 1.6 million share buyback.
GIVN +10.7% on strong second-quarter report.
CEC +11.3% after beating 2Q estimates, raising 3Q/4Q guidance and multiple upgrades.
CNJ +9.0% after Luxottica increased its bid for the company to $495 million, exceeding the offer by rival Moulin International.
CME -5.0% after CFO quit.
SWIR -6.3% after National Bank cut rating to Underperform.
HET -4.7% after agreeing to purchase Caesars for $5.18 billion.
WDFC -9.1% after missing 3Q estimates.
Economic Data
Producer Price Index for June fell .3% versus estimates for .2% rise and a .8% rise in May.
PPI Ex Food & Energy for June rose .2% versus estimates of a .2% rise and a .3% rise in May.
Initial Jobless Claims for last week were 349K versus estimates of 345K and 309K prior week.
Continuing Claims were 2971K versus estimates of 2883K and 2859K prior.
Business Inventories for May rose .4% versus estimates of a .5% rise and a .7% rise in April.
Empire Manufacturing for July came in at 36.54 versus estimates of 27.80 and 29.93 in June.
Industrial Production for June fell .3% versus estimates of a .1% rise and a .9% gain in July.
Capacity Utilization for June was 77.2% versus estimates of 77.7% and 77.6% in May.
Philly Fed for July came in at 36.1 versus estimates of 25.0 and a reading of 28.9 in June.
Recommendations
PLXS cut to Underweight at JP Morgan. CBH cut to Underweight at Morgan Stanley, target $48. PAYX raised to Outperform at CSFB, target $38. ADP raised to Outperform at CSFB, target $48. CZR cut to Underweight at Prudential, target $18. LYO raised to Buy at Bank of America, target $20. ACV raised to Buy at Bank of America, target $56. CHTT raised to Buy at Bank of America, target $36. Goldman reiterated Outperform on AMD, ETN, CSCO, MAR, ATG, KRB, EQT and AIG. Goldman reiterated Underperform on QLGC and MTG. Citi SmithBarney said to Buy ROH, target $47. Citi reiterated Buy on HET, target $63. Citi reiterated Buy on CSCO, JNPR, FDRY, FFIV, RDWR, AXTR and ETS. Citi reiterated Buy on AAPL, target $37. Citi reiterated Sell on KFT, target $29.50. Citi reiterated Buy on BCII, target $30. Citi reiterated Buy on PNR, target $40. Citi reiterated Sell on RSH, target $28.
Mid-day News
U.S. stocks are modestly higher mid-day on mostly stronger economic reports and falling inflation readings. A U.S. government plan to collect personal information on airline passengers and rank them according to risk-level is being canceled after criticism about privacy and concern about its effectiveness, USA Today reported. Gary Kelly, CFO of Southwest Air told CNBC that revenue and airline traffic have been very strong in July, Bloomberg said. The price of some types of U.S. business insurance, which can include anything from broad decisions to property damage, is beginning to decline after three years of increases, according to two new surveys, the Wall Street Journal reported. Motorola may face a market cool to investment in chip-making today when it announces share prices for the planned IPO of its Freescale Semiconductor unit, the NY Times reported. Boeing plans to use voice over Internet technology for its communications, replacing traditional phones, the Chicago Tribune reported. Marriott said second-quarter profit rose 28% after an increase in business travels enabled the hotel company to charge higher room rates, Bloomberg reported. Harrah's Entertainment agreed to buy Caesars Entertainment for about $9.44 billion in cash, stock and assumed debt, Bloomberg reported. Nokia said third-quarter profit and sales will fall as it cuts prices to regain lost market share, Bloomberg said. U.S. producer prices fell .3% last month, the biggest drop in more than a year, reflecting declines in energy and food prices, Bloomberg reported. Enron won court confirmation of a plan to exit bankruptcy, Bloomberg said. U.S. industrial production unexpectedly fell for the first time since March, led by a slowdown in car production, Bloomberg reported. Iraq's interim Prime Minister Allawi today said he will visit several other Arab nations starting next week to open new relationships and ease tensions in the Middle East, Bloomberg reported. Intel plans to spend $400 million to add a second clean room at its Colorado plant and plans to hire several hundred workers, the Denver Post reported. Manufacturing in the Philadelphia region unexpectedly expanded at a faster pace this month than in June as more companies reported rising orders and higher employment, Bloomberg reported.
BOTTOM LINE: The Portfolio is unchanged again today as my falling retail shorts are being offset by my declining biotech longs. I have not traded and the Portfolio is still market neutral. Overall, the data released today were encouraging as manufacturing readings mostly exceeded expectations and measures of inflation fell. As well, a number of corporate earnings reports were very strong. I am a little disappointed in the market's reaction so far. However, stocks should gain into the close.
Thursday Watch
Earnings of Note
Company/Estimate
VOXX/.09
CSL/1.08
C/.97
CMA/.93
CY/.23
FCS/.23
ETN/1.02
DJ/.38
IBM/1.12
LEXR/-.19
LSS/.99
MAR/.61
NFLX/.13
PEP/.61
RMBS/.06
PMCS/.07
RDC/-.03
LUV/.16
SYK/.33
TRB/.61
UNH/.92
WB/.96
Splits
None of note.
Economic Data
Producer Price Index for June estimated +.2% versus +.8% in May.
PPI Ex Food & Energy for June estimated +.2% versus +.3% in May.
Initial Jobless Claims for last week estimated at 345K versus 310K prior week.
Continuing Claims estimated at 2883K versus 2872K prior.
Business Inventories for May estimated +.5% versus +.5% in April.
Empire Manufacturing for July estimated at 27.80 versus 30.17 in June.
Industrial Production for June estimated +.1% versus +1.1% in May.
Capacity Utilization for June estimated at 77.7% versus 77.8% in May.
Philly Fed for July estimated at 25.0 versus 28.9 in June.
Recommendations
Goldman Sachs reiterated Outperform on STN, IBM and UPS.
Late-Night News
Asian indices are mostly lower after a Citigroup downgrade of several semiconductor makers in the region. Former U.S. president Bill Clinton backed U.K. Prime Minister Tony Blair's decision to go to war with Iraq, the Financial Times said, citing an interview with Clinton. Harrah's Entertainment has agreed to buy Caesars Entertainment for $5.28 billion, the Wall Street Journal reported on its Web site. Nokia may report falling sales today, while Sony Ericsson Mobile will probably say revenue jumped by a fifth, underscoring the Finnish company's loss of market share this year, Bloomberg said. The U.S. free-trade agreement with Australia, approved by the U.S. House of Representatives yesterday, should spark support by Australia's parliament, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.50 to +.25% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated +.25%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on a rebound in technology shares, however a lot will depend on the numerous economic data releases. Higher-than-expected inflation readings and reports showing more evidence of slowing economic growth could send shares lower on the open. The Portfolio is market neutral heading into tomorrow.
Company/Estimate
VOXX/.09
CSL/1.08
C/.97
CMA/.93
CY/.23
FCS/.23
ETN/1.02
DJ/.38
IBM/1.12
LEXR/-.19
LSS/.99
MAR/.61
NFLX/.13
PEP/.61
RMBS/.06
PMCS/.07
RDC/-.03
LUV/.16
SYK/.33
TRB/.61
UNH/.92
WB/.96
Splits
None of note.
Economic Data
Producer Price Index for June estimated +.2% versus +.8% in May.
PPI Ex Food & Energy for June estimated +.2% versus +.3% in May.
Initial Jobless Claims for last week estimated at 345K versus 310K prior week.
Continuing Claims estimated at 2883K versus 2872K prior.
Business Inventories for May estimated +.5% versus +.5% in April.
Empire Manufacturing for July estimated at 27.80 versus 30.17 in June.
Industrial Production for June estimated +.1% versus +1.1% in May.
Capacity Utilization for June estimated at 77.7% versus 77.8% in May.
Philly Fed for July estimated at 25.0 versus 28.9 in June.
Recommendations
Goldman Sachs reiterated Outperform on STN, IBM and UPS.
Late-Night News
Asian indices are mostly lower after a Citigroup downgrade of several semiconductor makers in the region. Former U.S. president Bill Clinton backed U.K. Prime Minister Tony Blair's decision to go to war with Iraq, the Financial Times said, citing an interview with Clinton. Harrah's Entertainment has agreed to buy Caesars Entertainment for $5.28 billion, the Wall Street Journal reported on its Web site. Nokia may report falling sales today, while Sony Ericsson Mobile will probably say revenue jumped by a fifth, underscoring the Finnish company's loss of market share this year, Bloomberg said. The U.S. free-trade agreement with Australia, approved by the U.S. House of Representatives yesterday, should spark support by Australia's parliament, Bloomberg reported.
Late-Night Trading
Asian Indices are -1.50 to +.25% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated +.25%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on a rebound in technology shares, however a lot will depend on the numerous economic data releases. Higher-than-expected inflation readings and reports showing more evidence of slowing economic growth could send shares lower on the open. The Portfolio is market neutral heading into tomorrow.
Wednesday, July 14, 2004
Wednesday Close
S&P 500 1,111.47 -.33%
NASDAQ 1,914.88 -.87%
Leading Sectors
Iron/Steel +2.98%
Oil Service +2.24%
Restaurants +1.83%
Lagging Sectors
Disk Drives -1.84%
Airlines -3.29%
Semis -4.48%
Other
Crude Oil 41.00 -.36%
Natural Gas 6.00 +.47%
Gold 405.20 -.10%
Base Metals 111.95 +.01%
U.S. Dollar 87.86 +.54%
10-Yr. T-note Yield 4.48% +.22%
VIX 13.76 -4.84%
Put/Call .93 +19.23%
NYSE Arms 1.39 +59.77%
After-hours Movers
SNDK +19.32% after beating 2Q estimates substantially and raising 3Q forecast.
AAPL +6.83% after beating 3Q estimates and raising 4Q guidance.
PLNR +8.98% after beating 3Q estimates and lowering 4Q guidance.
IFIN +5.91% after exceeding 2Q forecast.
QLGC +3.88% after meeting lowered 1Q forecast and lowering 2Q guidance.
Recommendations
Goldman Sachs reiterated Underperform on CNET and RKY. Goldman reiterated Outperform on HD and STN.
After-hours News
U.S. stocks finished modestly lower today as oil prices rose and technology shares remained under pressure after Intel's report. After the close, the Department of Housing and Urban Development sent letters to Fannie Mae and Freddie Mac seeking information on their international businesses, Dow Jones reported. Apple Computer said third-quarter profit more than tripled on a three-fold surge in iPod shipments. SanDisk said second-quarter profit climbed 71%, more than forecast, on record sales of equipment that stores digital photos and music, Bloomberg reported. Sudan's government hasn't met its commitments to end the humanitarian crisis in Darfur, where militias are forcing people to leave camps that provide food and shelter, a UN official said.
BOTTOM LINE: The Portfolio finished unchanged today and I did not trade in the afternoon, leaving market exposure at market neutral. It looks as though more technology companies are being rewarded for good reports in after-hours, which may lead to a better bounce tomorrow. The market's recent action is frustrating for bulls and bears and fits my expectation for a continuation of the trading range. However, the falling VIX and rising oil prices are still of concern.
NASDAQ 1,914.88 -.87%
Leading Sectors
Iron/Steel +2.98%
Oil Service +2.24%
Restaurants +1.83%
Lagging Sectors
Disk Drives -1.84%
Airlines -3.29%
Semis -4.48%
Other
Crude Oil 41.00 -.36%
Natural Gas 6.00 +.47%
Gold 405.20 -.10%
Base Metals 111.95 +.01%
U.S. Dollar 87.86 +.54%
10-Yr. T-note Yield 4.48% +.22%
VIX 13.76 -4.84%
Put/Call .93 +19.23%
NYSE Arms 1.39 +59.77%
After-hours Movers
SNDK +19.32% after beating 2Q estimates substantially and raising 3Q forecast.
AAPL +6.83% after beating 3Q estimates and raising 4Q guidance.
PLNR +8.98% after beating 3Q estimates and lowering 4Q guidance.
IFIN +5.91% after exceeding 2Q forecast.
QLGC +3.88% after meeting lowered 1Q forecast and lowering 2Q guidance.
Recommendations
Goldman Sachs reiterated Underperform on CNET and RKY. Goldman reiterated Outperform on HD and STN.
After-hours News
U.S. stocks finished modestly lower today as oil prices rose and technology shares remained under pressure after Intel's report. After the close, the Department of Housing and Urban Development sent letters to Fannie Mae and Freddie Mac seeking information on their international businesses, Dow Jones reported. Apple Computer said third-quarter profit more than tripled on a three-fold surge in iPod shipments. SanDisk said second-quarter profit climbed 71%, more than forecast, on record sales of equipment that stores digital photos and music, Bloomberg reported. Sudan's government hasn't met its commitments to end the humanitarian crisis in Darfur, where militias are forcing people to leave camps that provide food and shelter, a UN official said.
BOTTOM LINE: The Portfolio finished unchanged today and I did not trade in the afternoon, leaving market exposure at market neutral. It looks as though more technology companies are being rewarded for good reports in after-hours, which may lead to a better bounce tomorrow. The market's recent action is frustrating for bulls and bears and fits my expectation for a continuation of the trading range. However, the falling VIX and rising oil prices are still of concern.
Subscribe to:
Posts (Atom)