Tuesday, January 24, 2006
Monday, January 23, 2006
Tuesday Watch
Late-Night Headlines
Bloomberg:
- The United Nations is investigating about 200 allegations of fraud in its purchase of “tens of millions” of dollars of equipment, supplies and services for 18 peacekeeping operations.
- Shares of Japan’s Liverdoor Co. are poised to fall by their daily limit for a sixth day after Takafumi Horie, the Internet company’s 33-year-old president, was arrested on allegations of violating securities laws.
- BHP Billiton(BHP), the world’s biggest mining company, had record copper and nickel production in the second quarter.
- Stephen Harper led Canada’s Conservatives to their first national election win in 18 years over the Liberal Party, according to projections from three television networks.
International Oil Daily:
- India’s oil demand in the year to March 2006 may decline .5% because of lower naphtha consumption as substitution to natural gas occurs.
Financial Times:
- Advertised job vacancies in London’s financial district increased 52% in the first two weeks of 2006, citing research by recruiter Morgan McKinley Ltd.
Business Standard:
- Tata Consultancy Services Ltd. is in talks to buy software developers in the US specializing in health-care and pharmaceutical services.
AFP:
- Kuwait’s Emir Sheikh Saad al-Abdullah al-Sabah will abdicate and the Prime Minister Sheikh Sabah al-Ahmad al-Sabah will take over as the country’s ruler, citing a government official.
Sing Tao Daily:
- China may ban private investment in the automobile industry due to overcapacity and plans to restrict approvals for new factories as well as expansion plans, citing the Economic Observer.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on (SGMS), (BAC), (SYMC), (TYC), (DKS) and (EBAY).
Night Trading
Asian Indices are unch. to +1.25% on average.
S&P 500 indicated +.03%.
NASDAQ 100 indicated -.09%.
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
(MMM)/1.03
(AVB)/.86
(AVY)/.84
(BJS)/.47
(EAT)/.46
(BNI)/1.16
(CDWC)/.84
(CTX)/2.48
(CKFR)/.41
(CNF)/1.00
(COH)/.44
(CA)/.24
(CVG)/.14
(GLW)/.22
(CSX)/.90
(EMC)/.17
(EXC)/.73
(GDW)/1.24
(HMA)/.34
(IMCL)/.28
(JNJ)/.73
(KMB)/.95
(LM)/1.03
(LXK)/.50
(LU)/.04
(MCD)/.48
(NOC)/.83
(NFLX)/.18
(RYL)/3.12
(SAFC)/1.28
(TDW)/.95
(UTX)/.70
(WAT)/.64
Upcoming Splits
- None of note
Economic Releases
10:00 am EST
- The Richmond Fed Index for January is estimated to rise to 5 versus a reading of -2 in December.
Bloomberg:
- The United Nations is investigating about 200 allegations of fraud in its purchase of “tens of millions” of dollars of equipment, supplies and services for 18 peacekeeping operations.
- Shares of Japan’s Liverdoor Co. are poised to fall by their daily limit for a sixth day after Takafumi Horie, the Internet company’s 33-year-old president, was arrested on allegations of violating securities laws.
- BHP Billiton(BHP), the world’s biggest mining company, had record copper and nickel production in the second quarter.
- Stephen Harper led Canada’s Conservatives to their first national election win in 18 years over the Liberal Party, according to projections from three television networks.
International Oil Daily:
- India’s oil demand in the year to March 2006 may decline .5% because of lower naphtha consumption as substitution to natural gas occurs.
Financial Times:
- Advertised job vacancies in London’s financial district increased 52% in the first two weeks of 2006, citing research by recruiter Morgan McKinley Ltd.
Business Standard:
- Tata Consultancy Services Ltd. is in talks to buy software developers in the US specializing in health-care and pharmaceutical services.
AFP:
- Kuwait’s Emir Sheikh Saad al-Abdullah al-Sabah will abdicate and the Prime Minister Sheikh Sabah al-Ahmad al-Sabah will take over as the country’s ruler, citing a government official.
Sing Tao Daily:
- China may ban private investment in the automobile industry due to overcapacity and plans to restrict approvals for new factories as well as expansion plans, citing the Economic Observer.
Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on (SGMS), (BAC), (SYMC), (TYC), (DKS) and (EBAY).
Night Trading
Asian Indices are unch. to +1.25% on average.
S&P 500 indicated +.03%.
NASDAQ 100 indicated -.09%.
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
(MMM)/1.03
(AVB)/.86
(AVY)/.84
(BJS)/.47
(EAT)/.46
(BNI)/1.16
(CDWC)/.84
(CTX)/2.48
(CKFR)/.41
(CNF)/1.00
(COH)/.44
(CA)/.24
(CVG)/.14
(GLW)/.22
(CSX)/.90
(EMC)/.17
(EXC)/.73
(GDW)/1.24
(HMA)/.34
(IMCL)/.28
(JNJ)/.73
(KMB)/.95
(LM)/1.03
(LXK)/.50
(LU)/.04
(MCD)/.48
(NOC)/.83
(NFLX)/.18
(RYL)/3.12
(SAFC)/1.28
(TDW)/.95
(UTX)/.70
(WAT)/.64
Upcoming Splits
- None of note
Economic Releases
10:00 am EST
- The Richmond Fed Index for January is estimated to rise to 5 versus a reading of -2 in December.
BOTTOM LINE: Asian indices are higher, boosted by Internet companies in the region. I expect US equities to open mixed and to rally later in the day, finishing modestly higher. The Portfolio is 75% net long heading into the day.
Stocks Finish Modestly Higher as Energy Prices Fall and Tech Leaders Rebound
Indices
S&P 500 1,263.82 +.18%
DJIA 10,688.77 +.20%
NASDAQ 2,248.47 +.03%
Russell 2000 707.82 +.46%
S&P Barra Growth 604.41 +.07%
S&P Barra Value 655.08 +.31%
Morgan Stanley Consumer 596.68 +.21%
Morgan Stanley Cyclical 774.16 +1.09%
Morgan Stanley Technology 532.77 +.05%
Transports 4,175.75 +.42%
Utilities 421.74 +.10%
Put/Call .87 -17.92%
NYSE Arms 1.04 -50.58%
Volatility(VIX) 13.93 -4.33%
ISE Sentiment 184.00 +3.95%
US Dollar 87.90 -1.20%
CRB 344.78 -.11%
Futures Spot Prices
Crude Oil 67.86 -.35%
Unleaded Gasoline 178.87 -.25%
Natural Gas 8.54 -.34%
Heating Oil 184.05 -.02%
Gold 558.70 unch.
Base Metals 163.80 +2.0%
Copper 212.25 +.14%
10-year US Treasury Yield 4.35% +.13%
Leading Sectors
Steel +3.39%
Oil Service +2.30%
Airlines +1.68%
Lagging Sectors
HMOs -.74%
Biotech -.87%
Gaming -1.03%
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:
- Upgraded (WMT) to Outperform.
- Reiterated Outperform on (ECL).
Afternoon/Evening Headlines
Bloomberg:
- ThyssenKrupp AG, Germany’s largest steelmaker, pulled out of the bidding for Dofasco Inc., leaving Arlelor SA poised to buy Canada’s biggest steel producer for $4.7 billion.
- American Express(AXP) said quarterly profit rose 12% as consumers bought more goods and services using its cards, boosting fees from merchants.
- Microsoft(MSFT) is failing to move quickly enough to comply with its antitrust settlement with the government, the Bush administration said in its strongest show of impatience with the company since they reached their agreement in 2001.
- Symantec Corp.(SYMC) said President Gary Bloom plans to leave the company by the end of March.
- Avaya Inc.(AV) said first-quarter profit more than doubled to $71 million, boosted by acquisitions and demand for gear to make calls over the Internet.
- E*Trade(ET) said profit jumped 44% as stock-trading volume rose following the purchase of two rival firms.
- Texas Instruments(TXN) said fourth-quarter profit rose 34% even as sales disappointed investors.
- Walt Disney(DIS) may have its debt rating raised by Moody’s Investors Service, which cited Disney’s improving balance sheet and comfort with CEO Iger’s strategic plans.
S&P 500 1,263.82 +.18%
DJIA 10,688.77 +.20%
NASDAQ 2,248.47 +.03%
Russell 2000 707.82 +.46%
S&P Barra Growth 604.41 +.07%
S&P Barra Value 655.08 +.31%
Morgan Stanley Consumer 596.68 +.21%
Morgan Stanley Cyclical 774.16 +1.09%
Morgan Stanley Technology 532.77 +.05%
Transports 4,175.75 +.42%
Utilities 421.74 +.10%
Put/Call .87 -17.92%
NYSE Arms 1.04 -50.58%
Volatility(VIX) 13.93 -4.33%
ISE Sentiment 184.00 +3.95%
US Dollar 87.90 -1.20%
CRB 344.78 -.11%
Futures Spot Prices
Crude Oil 67.86 -.35%
Unleaded Gasoline 178.87 -.25%
Natural Gas 8.54 -.34%
Heating Oil 184.05 -.02%
Gold 558.70 unch.
Base Metals 163.80 +2.0%
Copper 212.25 +.14%
10-year US Treasury Yield 4.35% +.13%
Leading Sectors
Steel +3.39%
Oil Service +2.30%
Airlines +1.68%
Lagging Sectors
HMOs -.74%
Biotech -.87%
Gaming -1.03%
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:
- Upgraded (WMT) to Outperform.
- Reiterated Outperform on (ECL).
Afternoon/Evening Headlines
Bloomberg:
- ThyssenKrupp AG, Germany’s largest steelmaker, pulled out of the bidding for Dofasco Inc., leaving Arlelor SA poised to buy Canada’s biggest steel producer for $4.7 billion.
- American Express(AXP) said quarterly profit rose 12% as consumers bought more goods and services using its cards, boosting fees from merchants.
- Microsoft(MSFT) is failing to move quickly enough to comply with its antitrust settlement with the government, the Bush administration said in its strongest show of impatience with the company since they reached their agreement in 2001.
- Symantec Corp.(SYMC) said President Gary Bloom plans to leave the company by the end of March.
- Avaya Inc.(AV) said first-quarter profit more than doubled to $71 million, boosted by acquisitions and demand for gear to make calls over the Internet.
- E*Trade(ET) said profit jumped 44% as stock-trading volume rose following the purchase of two rival firms.
- Texas Instruments(TXN) said fourth-quarter profit rose 34% even as sales disappointed investors.
- Walt Disney(DIS) may have its debt rating raised by Moody’s Investors Service, which cited Disney’s improving balance sheet and comfort with CEO Iger’s strategic plans.
BOTTOM LINE: The Portfolio finished slightly higher today on gains in my Semi longs, Internet longs and Computer longs. I did not trade in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was modestly positive today as the advance/decline line finished slightly higher, sector performance was mixed and volume was above average. Measures of investor anxiety were lower into the close. The major averages and breadth finished slightly higher on decent volume. This is likely disappointing to the bulls and bears alike. Natural gas showed little ability to bounce throughout the day, finishing down 7.7%. As I have said before, natural gas inventories are set to hit all-time highs at the end of winter. I would like to see U.S. stocks display more underlying strength before adding further market exposure.
Stocks Slightly Higher into Final Hour as Bears Fail to Capitalize on Friday's Losses
BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Internet longs, Computer longs and Semi longs. I covered some of my IWM and QQQQ shorts, thus leaving the Portfolio 75% net long. The tone of the market is modestly positive as the advance/decline line is slightly higher, most sectors are gaining and volume is about average. Measures of investor anxiety are lower. Overall, today’s performance is mixed as the bears could not follow-through on Friday’s panic, but the bulls are unable to mount a meaningful rally. I expect US stocks to trade modestly higher from current levels into the close on short-covering.
Today's Headlines
Bloomberg:
- William Poole, who developed a reputation as one of the Fed’s most forceful inflation fighters, said he’s less concerned about prices than six months earlier and suggested the central bank may soon stop raising interest rates.
- Falling demand for gold jewelry in India, the world’s largest consumer, and the Middle East may cause the precious metal to drop.
- Albertson’s(ABS) agreed to be sold for $17.4 billion to a group led by Supervalu(SVU) and CVS Corp.(CVS).
- Natural gas is plunging another 8.0%, pushed lower by mild US weather that’s expected to leave supplies near all-time record high levels at the end of winter even as a substantial amount of Gulf of Mexico production remains shut-in.
- The US Supreme Court rejected an appeal by Research In Motion(RIMM), leaving intact a patent-infringement ruling that threatens to shut down BlackBerry e-mail service to as many as 3 million of the company’s US customers.
- Ford Motor Co.(F) will close 14 manufacturing facilities over the next six years on CEO William Clay Ford’s plan to end North American losses in 2008.
- The US dollar is falling to a four-month low against the euro after ECB officials suggesting higher interest rates are needed to prevent a surge in oil prices from spurring faster inflation.
Wall Street Journal:
- Oil prices are unlikely to rise as much this year as they did in 2005, so it will be hard for oil companies to maintain the rapid profit growth that will be seen this week, when they report fourth-quarter earnings.
- Newly started hedge funds may have a tough time raising capital this year as industry returns slow, and investors growth more selective, citing market participants including Jack Inglis, Morgan Stanley’s co-head of European prime brokerage.
- William Perez may step down today as CEO and president of Nike Inc.(NKE).
- Stanford University’s endowment rose 23%, faster than any other of the top-10 wealthiest US universities, as the educational institution benefited from its investments in private venture-capital funds.
- Hedge funds are getting bigger and more complex and many investment managers are finding they need more than one “prime” broker for their trading, borrowing and portfolio-monitoring.
- Applied Materials(AMAT) is going against the trend at other corporations and bringing a standalone venture capital fund back under its own management at the semiconductor-equipment marker.
NY Times:
- Some online stores have found that personalized recommendations for shoppers can significantly boost sales.
- The supply of crystal methamphetamine has increased in the US, as officials have clamped down on a home-made powdered variety of the drug.
- Walt Disney(DIS) will begin publishing a parenting magazine next month about how children learn from birth to age 6.
- Walk Disney(DIS) may reach an agreement in the next two weeks to sell its ABC broadcasting unit to Citadel Broadcasting for almost $3 billion.
Reuters:
- China, the world’s biggest steelmaker, became a net exporter of the metal for the first time last year.
NY Post:
- Sirius Satellite Radio(SIRI) executives are writing internal guidelines for what shock jocks such as Howard Stern can broadcast.
Nikkei English News:
- Hitachi Ltd., Matsushita Electric Industrial Co., and Toshiba Corp. will start joint production of liquid crystal displays ahead of schedule in May.
7 Days:
- Persian Gulf stock markets are overvalued by at least $300 billion as earnings growth among companies in the region slows, citing Nomura Holdings.
- William Poole, who developed a reputation as one of the Fed’s most forceful inflation fighters, said he’s less concerned about prices than six months earlier and suggested the central bank may soon stop raising interest rates.
- Falling demand for gold jewelry in India, the world’s largest consumer, and the Middle East may cause the precious metal to drop.
- Albertson’s(ABS) agreed to be sold for $17.4 billion to a group led by Supervalu(SVU) and CVS Corp.(CVS).
- Natural gas is plunging another 8.0%, pushed lower by mild US weather that’s expected to leave supplies near all-time record high levels at the end of winter even as a substantial amount of Gulf of Mexico production remains shut-in.
- The US Supreme Court rejected an appeal by Research In Motion(RIMM), leaving intact a patent-infringement ruling that threatens to shut down BlackBerry e-mail service to as many as 3 million of the company’s US customers.
- Ford Motor Co.(F) will close 14 manufacturing facilities over the next six years on CEO William Clay Ford’s plan to end North American losses in 2008.
- The US dollar is falling to a four-month low against the euro after ECB officials suggesting higher interest rates are needed to prevent a surge in oil prices from spurring faster inflation.
Wall Street Journal:
- Oil prices are unlikely to rise as much this year as they did in 2005, so it will be hard for oil companies to maintain the rapid profit growth that will be seen this week, when they report fourth-quarter earnings.
- Newly started hedge funds may have a tough time raising capital this year as industry returns slow, and investors growth more selective, citing market participants including Jack Inglis, Morgan Stanley’s co-head of European prime brokerage.
- William Perez may step down today as CEO and president of Nike Inc.(NKE).
- Stanford University’s endowment rose 23%, faster than any other of the top-10 wealthiest US universities, as the educational institution benefited from its investments in private venture-capital funds.
- Hedge funds are getting bigger and more complex and many investment managers are finding they need more than one “prime” broker for their trading, borrowing and portfolio-monitoring.
- Applied Materials(AMAT) is going against the trend at other corporations and bringing a standalone venture capital fund back under its own management at the semiconductor-equipment marker.
NY Times:
- Some online stores have found that personalized recommendations for shoppers can significantly boost sales.
- The supply of crystal methamphetamine has increased in the US, as officials have clamped down on a home-made powdered variety of the drug.
- Walt Disney(DIS) will begin publishing a parenting magazine next month about how children learn from birth to age 6.
- Walk Disney(DIS) may reach an agreement in the next two weeks to sell its ABC broadcasting unit to Citadel Broadcasting for almost $3 billion.
Reuters:
- China, the world’s biggest steelmaker, became a net exporter of the metal for the first time last year.
NY Post:
- Sirius Satellite Radio(SIRI) executives are writing internal guidelines for what shock jocks such as Howard Stern can broadcast.
Nikkei English News:
- Hitachi Ltd., Matsushita Electric Industrial Co., and Toshiba Corp. will start joint production of liquid crystal displays ahead of schedule in May.
7 Days:
- Persian Gulf stock markets are overvalued by at least $300 billion as earnings growth among companies in the region slows, citing Nomura Holdings.
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