Thursday, June 30, 2005
Stocks Fall as Global Growth Concerns Intensify
I trimmed existing longs into the afternoon weakness, thus leaving the Portfolio 75% net long.
Today's Headlines
Bloomberg:
- Consumer Confidence in France fell to its lowest on record this month amid surging oil prices and the highest jobless rate since 1999.
- The US dollar is headed for the biggest quarterly advance against the euro since 2001 as the euro region’s political problems intensify and their economies stagnate.
- The Fed will raise interest rates at least three more times this year to keep inflation in check, according to a majority of Wall Street’s biggest bond dealers.
- Bank of America agreed to buy MBNA for about $35 billion, gaining the biggest non-bank credit card issuer.
- OPEC suspended talks to raise crude oil output quotas.
- Crude oil is falling to a two-week low after an Energy Dept. report showed that US imports surged as refineries increased production of gasoline and other fuels.
Wall Street Journal:
- Vodafone Group Plc will team up with Microsoft to let users of Microsoft’s MSN instant-message service exchange messages with people using Vodafone phones.
- Chevron has helped US congressmen to draft and circulate letters urging the Bush administration to examine and possibly block the Chinese bid to acquire Unocal.
- A decrease in May air-cargo traffic from a year earlier illustrates how high oil prices may be crimping economic growth worldwide, citing the International Air Transport Assoc.
- Financing for CNOOC’s bid for Unocal, which includes favorable terms from its government-owned parent, caused waves among rival bidder Chevron and some lawmakers who say CNOOC is getting unfair subsides.
- China’s state-controlled telephone companies may build fewer third-generation wireless networks as the government cuts back construction over cost concerns.
- Shares of AIG have dropped 15% since it emerged in February that the company’s accounting was under investigation, though delayed first-quarter results indicate that the stock might now be a good bet.
- Sling Media’s Slingbox enables users to watch television shows they receive at home in other locations and other devices besides a TV, Walter Mossberg wrote.
- US and Canadian municipalities are turning to wireless technologies to monitor parking spaces, as the old-fashioned, coin-operated mechanical parking meters are being replaced.
NY Times:
- Microsoft has been in talks for two weeks to buy closely held Claria Corp., which makes pop-up ads and software that tracks Web site visitors, for $500 milllion.
- Midwestern cities made up seven of the 10 US cities with the largest population drops between 2000 and 2004.
LA Times:
- Los Angeles, whose rainy season ends at midnight, will have had the second-wettest period since officials began keeping records.
Reuters:
- CNOOC expects Chevron to improve its $16.3 billion cash and stock bid for Unocal before shareholders vote on the matter in August.
- Consumer Confidence in France fell to its lowest on record this month amid surging oil prices and the highest jobless rate since 1999.
- The US dollar is headed for the biggest quarterly advance against the euro since 2001 as the euro region’s political problems intensify and their economies stagnate.
- The Fed will raise interest rates at least three more times this year to keep inflation in check, according to a majority of Wall Street’s biggest bond dealers.
- Bank of America agreed to buy MBNA for about $35 billion, gaining the biggest non-bank credit card issuer.
- OPEC suspended talks to raise crude oil output quotas.
- Crude oil is falling to a two-week low after an Energy Dept. report showed that US imports surged as refineries increased production of gasoline and other fuels.
Wall Street Journal:
- Vodafone Group Plc will team up with Microsoft to let users of Microsoft’s MSN instant-message service exchange messages with people using Vodafone phones.
- Chevron has helped US congressmen to draft and circulate letters urging the Bush administration to examine and possibly block the Chinese bid to acquire Unocal.
- A decrease in May air-cargo traffic from a year earlier illustrates how high oil prices may be crimping economic growth worldwide, citing the International Air Transport Assoc.
- Financing for CNOOC’s bid for Unocal, which includes favorable terms from its government-owned parent, caused waves among rival bidder Chevron and some lawmakers who say CNOOC is getting unfair subsides.
- China’s state-controlled telephone companies may build fewer third-generation wireless networks as the government cuts back construction over cost concerns.
- Shares of AIG have dropped 15% since it emerged in February that the company’s accounting was under investigation, though delayed first-quarter results indicate that the stock might now be a good bet.
- Sling Media’s Slingbox enables users to watch television shows they receive at home in other locations and other devices besides a TV, Walter Mossberg wrote.
- US and Canadian municipalities are turning to wireless technologies to monitor parking spaces, as the old-fashioned, coin-operated mechanical parking meters are being replaced.
NY Times:
- Microsoft has been in talks for two weeks to buy closely held Claria Corp., which makes pop-up ads and software that tracks Web site visitors, for $500 milllion.
- Midwestern cities made up seven of the 10 US cities with the largest population drops between 2000 and 2004.
LA Times:
- Los Angeles, whose rainy season ends at midnight, will have had the second-wettest period since officials began keeping records.
Reuters:
- CNOOC expects Chevron to improve its $16.3 billion cash and stock bid for Unocal before shareholders vote on the matter in August.
Jobless Claims Fall Again, Inflation Decelerates, Spending Slows
- Personal Income for May rose .2% versus estimates of a .3% increase and a .6% gain in April.
- Personal Spending for May was unchanged versus estimates of a .1% increase and a .6% gain in April.
- The PCE Deflator(YoY) for May rose 2.2% versus estimates of a 2.3% gain and a 2.6% increase in April.
- PCE Core(YoY) for May rose 1.6% versus estimates of a 1.7% increase and a downwardly revised 1.5% gain in April.
- Initial Jobless Claims for last week fell to 310K versus estimates of 325K and 316K the prior week.
- Continuing Claims rose to 2600K versus estimates of 2594K and 2596K prior.
- The Chicago Purchasing Manager for June fell to 53.6 versus estimates of 54.0 and a reading of 54.1 in May.
- Personal Spending for May was unchanged versus estimates of a .1% increase and a .6% gain in April.
- The PCE Deflator(YoY) for May rose 2.2% versus estimates of a 2.3% gain and a 2.6% increase in April.
- PCE Core(YoY) for May rose 1.6% versus estimates of a 1.7% increase and a downwardly revised 1.5% gain in April.
- Initial Jobless Claims for last week fell to 310K versus estimates of 325K and 316K the prior week.
- Continuing Claims rose to 2600K versus estimates of 2594K and 2596K prior.
- The Chicago Purchasing Manager for June fell to 53.6 versus estimates of 54.0 and a reading of 54.1 in May.
BOTTOM LINE: Blogging will be light from now through the weekend due to a scheduling conflict.
Thursday Watch
Late-Night Headlines
Bloomberg:
- Computer Associates Intl. restated results from 2001-2005 after it found contracts that weren't recorded properly.
- Career Education said the US Education Department is reviewing its restated financial results for 2000-2003 and barring campus expansions in the meantime.
- Shares of China Cosco Holdings, the nation's biggest container shipping line, fell as much as 10% on their first day of trade in Hong Kong on concern that excess capacity for sea freight may cut the company's earnings.
- Oil is little changed in NY after falling to a two-week low yesterday when a US government report showed the nation's crude oil stockpile rose.
- South Korean businesses are the most pessimistic they've been in five months on concern a recovery in domestic demand may falter, squeezing profits as higher oil prices and won gains curb exports.
Wall Street Journal:
- Boeing is expected to name 3M CEO James McNerney Jr. as its new CEO tomorrow.
Financial Times:
- CNOOC Ltd. may partner with private equity firms for its proposed takeover of Unocal Corp. to improve its international management expertise.
- US citizens living abroad and foreigners living in the US must report details of overseas financial accounts or risk a minimum fine of $10,000.
Xinhua News Agency:
- Shanghai plans to spend $121 million building a wind farm to boost the city's electricity supply.
South China Morning Post:
- China has no plan to cap rising property prices, particularly in coastal cities, amid calls from urban dwellers.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on COH.
- Said aluminum fundamentals deteriorating due to excess capacity from China.
Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated +.08%.
NASDAQ 100 indicated +.17%.
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
AM/.30
BMET/.42
CAG/.26
STZ/.30
MKC/.30
PLMO/.31
RHAT/.05
Upcoming Splits
FBP 2-for-1
LOGI 2-for-1
JWN 2-for-1
KWK 3-for-2
Economic Releases
8:30 am EST:
- Personal Income for May is estimated to rise .3% versus a .7% gain in April.
- Personal Spending for May is estimated to rise .1% versus a .6% increase in April.
- The PCE Deflator for May is estimated to rise 2.3% versus a 2.7% increase in April.
- Initial Jobless Claims for last week are estimated to rise to 325K versus 314K the prior week.
- Continuing Claims are estimated to fall to 2594K versus 2600K prior.
10:00 am EST:
- The Chicago Purchasing Manager for June is estimated to fall to 54.0 versus a reading of 54.1 in May.
- The Help Wanted Index for May is estimated to rise to 40 versus a reading of 39 in April.
2:15 pm EST:
- FOMC expected to raise Fed Funds Rate 25 basis points to 3.25%.
Bloomberg:
- Computer Associates Intl. restated results from 2001-2005 after it found contracts that weren't recorded properly.
- Career Education said the US Education Department is reviewing its restated financial results for 2000-2003 and barring campus expansions in the meantime.
- Shares of China Cosco Holdings, the nation's biggest container shipping line, fell as much as 10% on their first day of trade in Hong Kong on concern that excess capacity for sea freight may cut the company's earnings.
- Oil is little changed in NY after falling to a two-week low yesterday when a US government report showed the nation's crude oil stockpile rose.
- South Korean businesses are the most pessimistic they've been in five months on concern a recovery in domestic demand may falter, squeezing profits as higher oil prices and won gains curb exports.
Wall Street Journal:
- Boeing is expected to name 3M CEO James McNerney Jr. as its new CEO tomorrow.
Financial Times:
- CNOOC Ltd. may partner with private equity firms for its proposed takeover of Unocal Corp. to improve its international management expertise.
- US citizens living abroad and foreigners living in the US must report details of overseas financial accounts or risk a minimum fine of $10,000.
Xinhua News Agency:
- Shanghai plans to spend $121 million building a wind farm to boost the city's electricity supply.
South China Morning Post:
- China has no plan to cap rising property prices, particularly in coastal cities, amid calls from urban dwellers.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on COH.
- Said aluminum fundamentals deteriorating due to excess capacity from China.
Night Trading
Asian Indices are unch. to +.50% on average.
S&P 500 indicated +.08%.
NASDAQ 100 indicated +.17%.
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
AM/.30
BMET/.42
CAG/.26
STZ/.30
MKC/.30
PLMO/.31
RHAT/.05
Upcoming Splits
FBP 2-for-1
LOGI 2-for-1
JWN 2-for-1
KWK 3-for-2
Economic Releases
8:30 am EST:
- Personal Income for May is estimated to rise .3% versus a .7% gain in April.
- Personal Spending for May is estimated to rise .1% versus a .6% increase in April.
- The PCE Deflator for May is estimated to rise 2.3% versus a 2.7% increase in April.
- Initial Jobless Claims for last week are estimated to rise to 325K versus 314K the prior week.
- Continuing Claims are estimated to fall to 2594K versus 2600K prior.
10:00 am EST:
- The Chicago Purchasing Manager for June is estimated to fall to 54.0 versus a reading of 54.1 in May.
- The Help Wanted Index for May is estimated to rise to 40 versus a reading of 39 in April.
2:15 pm EST:
- FOMC expected to raise Fed Funds Rate 25 basis points to 3.25%.
BOTTOM LINE: Asian indices are mostly higher, boosted by automaker shares in the region after the US dollar rose. I expect US equities to open mixed and rise modestly later in the afternoon. The Portfolio is 100% net long heading into the day.
Wednesday, June 29, 2005
Stocks Finish Modestly Lower Ahead of Fed Announcement
Indices
S&P 500 1,199.85 -.14%
DJIA 10,374.48 -.30%
NASDAQ 2,068.89 -.05%
Russell 2000 642.76 +.20%
DJ Wilshire 5000 11,930.50 -.07%
S&P Barra Growth 572.41 -.36%
S&P Barra Value 623.32 +.07%
Morgan Stanley Consumer 574.12 -.43%
Morgan Stanley Cyclical 722.24 +.04%
Morgan Stanley Technology 475.53 -.25%
Transports 3,513.88 +.95%
Utilities 385.35 -.16%
Put/Call .78 +4.0%
NYSE Arms 1.21 +81.62%
Volatility(VIX) 11.77 +1.64%
ISE Sentiment 211.00 +19.89%
US Dollar 89.15 +.18%
CRB 303.10 -.45%
Futures Spot Prices
Crude Oil 57.11 -.26%
Unleaded Gasoline 158.60 +.09%
Natural Gas 7.09 +.11%
Heating Oil 160.37 +.13%
Gold 438.50 -.02%
Base Metals 122.58 -.75%
Copper 156.05 -.10%
10-year US Treasury Yield 3.98% +.24%
Leading Sectors
Gold & Silver +3.79%
Insurance +1.63%
Networking +1.21%
Lagging Sectors
Foods -.86%
Semis -.90%
Broadcasting -1.19%
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
Goldman Sachs:
- Reiterated Outperform on DNA.
Afternoon/Evening Headlines
Bloomberg:
- UK Prime Minister Tony Blair said in an interview with the AP that coalition forces need to stay in Iraq until the insurgency is defeated.
- Home Depot will put convenience stores selling gasoline and food next to four of its Nashville warehouse stores to increase customer visits.
- Canada will seek to ban bulk sales of patented medicines to the US to prevent shortages that could arise if that country’s government allows citizens to buy Canadian drugs.
S&P 500 1,199.85 -.14%
DJIA 10,374.48 -.30%
NASDAQ 2,068.89 -.05%
Russell 2000 642.76 +.20%
DJ Wilshire 5000 11,930.50 -.07%
S&P Barra Growth 572.41 -.36%
S&P Barra Value 623.32 +.07%
Morgan Stanley Consumer 574.12 -.43%
Morgan Stanley Cyclical 722.24 +.04%
Morgan Stanley Technology 475.53 -.25%
Transports 3,513.88 +.95%
Utilities 385.35 -.16%
Put/Call .78 +4.0%
NYSE Arms 1.21 +81.62%
Volatility(VIX) 11.77 +1.64%
ISE Sentiment 211.00 +19.89%
US Dollar 89.15 +.18%
CRB 303.10 -.45%
Futures Spot Prices
Crude Oil 57.11 -.26%
Unleaded Gasoline 158.60 +.09%
Natural Gas 7.09 +.11%
Heating Oil 160.37 +.13%
Gold 438.50 -.02%
Base Metals 122.58 -.75%
Copper 156.05 -.10%
10-year US Treasury Yield 3.98% +.24%
Leading Sectors
Gold & Silver +3.79%
Insurance +1.63%
Networking +1.21%
Lagging Sectors
Foods -.86%
Semis -.90%
Broadcasting -1.19%
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
Goldman Sachs:
- Reiterated Outperform on DNA.
Afternoon/Evening Headlines
Bloomberg:
- UK Prime Minister Tony Blair said in an interview with the AP that coalition forces need to stay in Iraq until the insurgency is defeated.
- Home Depot will put convenience stores selling gasoline and food next to four of its Nashville warehouse stores to increase customer visits.
- Canada will seek to ban bulk sales of patented medicines to the US to prevent shortages that could arise if that country’s government allows citizens to buy Canadian drugs.
BOTTOM LINE: The Portfolio finished slightly lower today on losses in my Internet and Homebuilding longs. I did not trade in the afternoon, thus leaving the Portfolio 100% net long. The tone of the market was slightly negative today as the advance/decline finished nearly unchanged, sector performance was modestly negative and volume was around average. Measures of investor anxiety were mostly higher into the close. Overall, today’s market action was negative. The 5.0% decline in Google (GOOG) over the last two days looks like healthy profit-taking to me. I would look to buy more GOOG around the $280-$290 level.
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