S&P 500 1,098.43 -.28%
NASDAQ 1,875.20 -.41%
Leading Sectors
Restaurants +.62%
Airlines +.56%
Computer Boxmakers +.48%
Lagging Sectors
Internet -1.79%
Homebuilders -1.89%
Biotech -2.52%
Other
Crude Oil 41.57 +.56%
Natural Gas 5.84 -.80%
Gold 406.10 -.15
Base Metals 112.61 -.37%
U.S. Dollar 87.16 +.02%
10-Yr. T-note Yield 4.36% +.22%
VIX 15.51 +8.16%
Put/Call .66 -39.45%
NYSE Arms 1.61 -12.50%
Market Movers
TASR -6.65% after the NY Times reported an increasing number of people have died after being shocked by Tasers.
BSX -3.88% on further sell-off after recalling 96,000 heart stents after 3 patients died and 43 were injured during implant surgery.
MMM -5.44% after slightly missing 2Q revenue forecast, lowering 3Q estimates and raising 04 forecast.
NFLX -9.2% after Thomas Weisel downgrade to Peerperform.
NTMD +108.2% after saying its experimental drug BiDil increased the survival of African Americans with heart failure in a study.
BDK +10.6% after beating 2Q estimates, raising 3Q and 04 guidance and agreeing to buy the tools business of Pentair.
SSNC +10.03% after JP Morgan upgrade to Overweight.
SWFT +7.96% after beating 2Q estimates substantially.
INSP -11.2% after announcing a partnership with Amplify.
LM -9.1% after missing 1Q estimates.
LXK -6.1% after slightly missing 2Q revenue estimate and lowering 3Q estimate.
Economic Data
NAHB Housing Market Index came in at 67 in July versus estimates of 67 and an upwardly revised reading of 68 in June.
Recommendations
AMX raised to Buy at UBS, target $44.07. SSNC raised to Overweight at JP Morgan. SIR rated Outperform at CSFB, target $33. PPDI raised to Outperform at Thomas Weisel, target $42. Goldman Sachs reiterated Outperform on MSFT, BSX, ITT, FS and INTC. Goldman reiterated Underperform on RKY. Citi SmithBarney raised SONSE to Buy, target $5.50. Citi reiterated Buy on HAS, target $24. Citi reiterated Buy on COX, target $34.
Mid-day News
U.S. stocks are lower mid-day on continuing earnings worries, stubbornly high oil prices and weakness in internet-related shares. The Bush administration is under pressure to develop policies to deal with Iran, as a pending report will say the country allowed terrorists to pass through its borders and as concern grows about the nation's nuclear weapon capacity, the Washington Post said. A U.S. Senate Intelligence Committee report raises serious questions about the credibility of former diplomat Joseph Wilson, whose wife, Valerie Plame, was publicly identified as a CIA operative, the Wall Street Journal reported. Lawyers who led a class-action lawsuit against AT&T Wireless Services could receive $3.75 million while customers won't receive any cash in the settlement, the Rocky Mountain News reported. Real estate prices in Baghdad are rising as wealthy Iraqis who guarded their money while Saddam controlled the country begin to spend, the LA Times said. Real estate prices in Iraq could multiply 10 times in two to three years if the nation becomes more secure, the Times said. Nasdaq is planning to increase the number of its non-U.S. listed companies by 50% to boost its global presence, the Financial Times said. General Dynamics has won a contract to supply U.S. troops with handheld radios, valued at $5-$10 billion, CNBC reported. Boeing won an order from Emirates airlines for four 777 aircraft with an additional nine options, valuing the contract at as much as $2.96 billion. Johnson & Johnson may sell more heart stents after Boston Scientific expanded a recall Friday of its Taxus stent, Bloomberg reported.
BOTTOM LINE: The Portfolio is slightly higher today as my retail and medical shorts are falling and Chinese ADR longs are rising. I have not traded this morning and the Portfolio is still 25% net short. The market's tone continues to deteriorate and investor complacency remains relatively high. The probability of the Fed raising rates in August is falling. Recent inflation data and a slowing in U.S. economic growth from blistering levels to more sustainable rates may prompt the Fed to adopt a wait and see approach with respect to raising rates. Greenspan's comments over the next 2 days should make his intentions evident. I would expect a tradable rally under this scenario.
Monday, July 19, 2004
Monday Watch
Earnings of Note
Company/Estimate
MMM/.96
ALL/1.15
DAL/-2.37
GLW/.09
FLEX/.14
JCOM/.28
JDAS/.04
LXK/.97
Splits
BLUD 3-for-2
Economic Data
NAHB Housing Market Index for July estimated at 67 versus 67 in June.
Weekend Recommendations
Forbes on Fox had guests that were positive on DSCP, ERES, IHP, MCD and mixed on ATG, FBC. Bulls and Bears had guests that were positive on JNS, HOV, TASR, FIC, mixed on FII, CSGP, COGN and negative on MSO. Cashin' In had guests that were positive on STZ, GE, FRO and mixed on ARO, GD, MGM, NT. Louis Rukeyser's Wall Street had guests that were positive on PD, AET, BER, UNH, MCD, APD, CMCSA, DJ, VIA, KO, LLY, AMGN, IACI. Wall St. Week w/Fortune had guests that were positive on LU, NT, CSCO, JNPR, CIEN, AV, CKR and negative on INTC, YUM. Barron's had positive comments on LOJN, LCUT, MCRS, CGNX, MBT, VIP, TROW and negative comments on KMRT. Goldman Sachs reiterated Outperform on ITT, BSX and Underperform on DPH.
Weekend News
An al-Qaeda-linked group threatened Italy with terror attacks for the second time in two day, Agence France-Presse reported. The U.S. Justice Department said it doesn't plan to examine federal laws to determine if the presidential election may be postponed because of the threat of a terrorist attack, the NY Times reported. At least 50 people have died after being shocked by Tasers, including six people last month, the NY Times reported. An Oracle victory in its antitrust dispute with the U.S. government might prompt consolidation in the software industry, especially after several companies missed sales targets, Barron's reported. Iraqi Interior Minister al-Nakib expects Iraqi police forces to be able to enforce security in the country within eight months, al-Hayat reported. Republican Senator McCain said he wouldn't serve in the Cabinet if Senator Kerry wins the election and he has no interest in replacing Dick Cheney as President Bush's running mate, Time magazine reported. General Electric is offering medical equipment, consulting services and financing to hospitals, boosting revenue in the $2 trillion U.S. healthcare industry, the NY Times said. Venture capital firms such as Sevin Rosen are attracting large numbers of investors, a change in course after a slump in the industry over the past 4 years, the NY Times reported. The Chinese government is ordering hundreds of companies in Shanghai to switch their operations to night time due to power shortages, the BBC reported. Philadelphia may replace Detroit as the largest U.S. urban city with full-scale gaming halls, the Philadelphia Inquirer reported. The panel investigating the 9/11 attacks found evidence that officials in Iran helped some al-Qaeda operatives enter the country from Afghanistan, including eight of the men who took part in the attacks, Newsweek reported. Adolph Coors and Molsen are in talks about a possible combination of the two breweries, the Wall Street Journal reported. Intel is delaying the introduction of a chip it has called "the linchpin" of its new product line for notebook computers, Reuters reported. Copper futures may rise for a sixth straight week in New York and London amid speculation that a week-old strike at Grupo Mexico SA's La Caridad complex will spread to sites in Mexico and the U.S., Bloomberg reported. France denounced as "unacceptable" a call by Israeli Prime Minister Sharon for French Jews to emigrate because of increasing anti-Semitism, Agence France-Presse reported.
Late-Night Trading
Asian indices are mixed, -.25% to +.25% on average.
S&P 500 indicated +.18%.
NASDAQ 100 indicated +.36%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on falling energy prices, an oversold bounce in tech shares and better earnings reports. The Portfolio is 25% net short heading into the week.
Company/Estimate
MMM/.96
ALL/1.15
DAL/-2.37
GLW/.09
FLEX/.14
JCOM/.28
JDAS/.04
LXK/.97
Splits
BLUD 3-for-2
Economic Data
NAHB Housing Market Index for July estimated at 67 versus 67 in June.
Weekend Recommendations
Forbes on Fox had guests that were positive on DSCP, ERES, IHP, MCD and mixed on ATG, FBC. Bulls and Bears had guests that were positive on JNS, HOV, TASR, FIC, mixed on FII, CSGP, COGN and negative on MSO. Cashin' In had guests that were positive on STZ, GE, FRO and mixed on ARO, GD, MGM, NT. Louis Rukeyser's Wall Street had guests that were positive on PD, AET, BER, UNH, MCD, APD, CMCSA, DJ, VIA, KO, LLY, AMGN, IACI. Wall St. Week w/Fortune had guests that were positive on LU, NT, CSCO, JNPR, CIEN, AV, CKR and negative on INTC, YUM. Barron's had positive comments on LOJN, LCUT, MCRS, CGNX, MBT, VIP, TROW and negative comments on KMRT. Goldman Sachs reiterated Outperform on ITT, BSX and Underperform on DPH.
Weekend News
An al-Qaeda-linked group threatened Italy with terror attacks for the second time in two day, Agence France-Presse reported. The U.S. Justice Department said it doesn't plan to examine federal laws to determine if the presidential election may be postponed because of the threat of a terrorist attack, the NY Times reported. At least 50 people have died after being shocked by Tasers, including six people last month, the NY Times reported. An Oracle victory in its antitrust dispute with the U.S. government might prompt consolidation in the software industry, especially after several companies missed sales targets, Barron's reported. Iraqi Interior Minister al-Nakib expects Iraqi police forces to be able to enforce security in the country within eight months, al-Hayat reported. Republican Senator McCain said he wouldn't serve in the Cabinet if Senator Kerry wins the election and he has no interest in replacing Dick Cheney as President Bush's running mate, Time magazine reported. General Electric is offering medical equipment, consulting services and financing to hospitals, boosting revenue in the $2 trillion U.S. healthcare industry, the NY Times said. Venture capital firms such as Sevin Rosen are attracting large numbers of investors, a change in course after a slump in the industry over the past 4 years, the NY Times reported. The Chinese government is ordering hundreds of companies in Shanghai to switch their operations to night time due to power shortages, the BBC reported. Philadelphia may replace Detroit as the largest U.S. urban city with full-scale gaming halls, the Philadelphia Inquirer reported. The panel investigating the 9/11 attacks found evidence that officials in Iran helped some al-Qaeda operatives enter the country from Afghanistan, including eight of the men who took part in the attacks, Newsweek reported. Adolph Coors and Molsen are in talks about a possible combination of the two breweries, the Wall Street Journal reported. Intel is delaying the introduction of a chip it has called "the linchpin" of its new product line for notebook computers, Reuters reported. Copper futures may rise for a sixth straight week in New York and London amid speculation that a week-old strike at Grupo Mexico SA's La Caridad complex will spread to sites in Mexico and the U.S., Bloomberg reported. France denounced as "unacceptable" a call by Israeli Prime Minister Sharon for French Jews to emigrate because of increasing anti-Semitism, Agence France-Presse reported.
Late-Night Trading
Asian indices are mixed, -.25% to +.25% on average.
S&P 500 indicated +.18%.
NASDAQ 100 indicated +.36%.
BOTTOM LINE: I expect U.S. stocks to open modestly higher in the morning on falling energy prices, an oversold bounce in tech shares and better earnings reports. The Portfolio is 25% net short heading into the week.
Sunday, July 18, 2004
Weekly Outlook
There are a few important economic reports and a number of significant corporate earnings reports scheduled for release this week. Economic reports this week include the NAHB Housing Market Index, Housing Starts, Building Permits, Initial Jobless Claims and Leading Indicators. Housing Starts and Leading Indicators both have market-moving potential.
3M(MMM), Delta Air(DAL), Lexmark(LXK), Corning(GLW), Phillip Morris(MO), EMC Corp.(EMC), Ford Motor(F), Forest Labs(FRX), Taser(TASR), Motorola(MOT), Texas Instruments(TXN), D.R. Horton(DHI), Fannie Mae(FNM), General Dynamics(GD), General Motors(GM), Harrah's Entertainment(HET), ImClone(IMCL), Schlumberger(SLB), Microsoft(MSFT), United Parcel Service(UPS), Amazon(AMZN), Broadcom(BRCM), Office Depot(ODP), International Game Technology(IGT), Nextel Communications(NXTL), SAP AG(SAP) and Qualcomm(QCOM) are some of the more important companies that release quarterly earnings this week. There are also a few other events that have market-moving potential. The SEMI Book-to-Bill report, Strategic Research Institute Energy Technology Conference and Greenspan's congressional testimony could also impact trading this week.
Bottom Line: I expect U.S. stocks to rise modestly this week on a bounce in technology stocks from oversold levels, Greenspan's comments, better earnings reports, falling interest rates and a decline in oil. My short-term trading indicators are giving sell signals and the Portfolio is 25% net short heading into the week.
3M(MMM), Delta Air(DAL), Lexmark(LXK), Corning(GLW), Phillip Morris(MO), EMC Corp.(EMC), Ford Motor(F), Forest Labs(FRX), Taser(TASR), Motorola(MOT), Texas Instruments(TXN), D.R. Horton(DHI), Fannie Mae(FNM), General Dynamics(GD), General Motors(GM), Harrah's Entertainment(HET), ImClone(IMCL), Schlumberger(SLB), Microsoft(MSFT), United Parcel Service(UPS), Amazon(AMZN), Broadcom(BRCM), Office Depot(ODP), International Game Technology(IGT), Nextel Communications(NXTL), SAP AG(SAP) and Qualcomm(QCOM) are some of the more important companies that release quarterly earnings this week. There are also a few other events that have market-moving potential. The SEMI Book-to-Bill report, Strategic Research Institute Energy Technology Conference and Greenspan's congressional testimony could also impact trading this week.
Bottom Line: I expect U.S. stocks to rise modestly this week on a bounce in technology stocks from oversold levels, Greenspan's comments, better earnings reports, falling interest rates and a decline in oil. My short-term trading indicators are giving sell signals and the Portfolio is 25% net short heading into the week.
Saturday, July 17, 2004
Weekly Scoreboard*
Indices
S&P 500 1,101.39 -1.03%
Dow 10,139.78 -.72%
NASDAQ 1883.15 -3.2%
Russell 2000 555.48 -1.46%
S&P Equity Long/Short Index 970.26 -.25%
Put/Call 1.09 +47.3%
NYSE Arms 1.84 +80.39%
Volatility(VIX) 14.34 -9.1%
AAII % Bulls 47.37 -14.03%
US Dollar 87.14 -.24%
CRB 272.30 -.14%
Futures Spot Prices
Gold 406.80 -.32%
Crude Oil 41.30 +3.09%
Unleaded Gasoline 130.05 -1.48%
Natural Gas 5.88 -4.04%
Base Metals 113.03 -.26%
10-year US Treasury Yield 4.35% -2.47%
Average 30-year Mortgage Rate 6.0 -.17%
Leading Sectors
Iron/Steel +6.62%
HMO's +4.72%
Oil Service +4.1%
Lagging Sectors
Software -4.09%
Semis -9.02%
Airlines -9.65%
*% Gain or loss for the week
S&P 500 1,101.39 -1.03%
Dow 10,139.78 -.72%
NASDAQ 1883.15 -3.2%
Russell 2000 555.48 -1.46%
S&P Equity Long/Short Index 970.26 -.25%
Put/Call 1.09 +47.3%
NYSE Arms 1.84 +80.39%
Volatility(VIX) 14.34 -9.1%
AAII % Bulls 47.37 -14.03%
US Dollar 87.14 -.24%
CRB 272.30 -.14%
Futures Spot Prices
Gold 406.80 -.32%
Crude Oil 41.30 +3.09%
Unleaded Gasoline 130.05 -1.48%
Natural Gas 5.88 -4.04%
Base Metals 113.03 -.26%
10-year US Treasury Yield 4.35% -2.47%
Average 30-year Mortgage Rate 6.0 -.17%
Leading Sectors
Iron/Steel +6.62%
HMO's +4.72%
Oil Service +4.1%
Lagging Sectors
Software -4.09%
Semis -9.02%
Airlines -9.65%
*% Gain or loss for the week
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