BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Computer longs, Medical longs, Internet longs and Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is about average. The ISE Sentiment Index plunged 42.0% this morning to a very depressed level of 40.0 This is the second lowest reading on record since the index began almost two years ago. Moreover, the 20-day moving average is at 106.8, a record low. This reading bodes well for a continuation of the recent stock rally. Apple Computer (AAPL) trades especially well and appears to be breaking free from the options worries that have engulfed the shares for months. I still expect Apple to test its all-time high of $86.40 during the fourth quarter. I remain long AAPL. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, more optimism, bargain hunting and declining energy prices.
Tuesday, September 05, 2006
Stocks Higher into Final Hour on Another Fall in Energy Prices and Less Pessimism
Today's Headlines
Bloomberg:
- Gasoline futures fell to their lowest price in almost six months as the peak-demand driving season came to a close with US inventories of the motor fuel above normal levels.
- Chevron Corp.(CVX) said it completed the deepest successful test of a Gulf of Mexico well, showing it may be possible to produce billions of barrels of oil from a new undersea deposit.
- European service industries from banking to telecom, the biggest part of the economy, expanded at the slowest pace in seven months in August.
- Abiomed Inc.(ABMD) won US approval to sell the first artificial heart that allows patients to walk away from a power source for an hour at a time.
- Compagnie Generale de Geophysigque SA agreed to buy Veritas DGC for $3.1 billion to become the world’s biggest surveyor of oil and gas fields as energy exploration surges.
- Katie Couric begins trying to lift CBS News from the ratings cellar tonight by becoming the first network tv anchor to go live on the Internet.
- Phelps Dodge(PD) dropped its $17.7 billion takeover bid for Canadian nickel-miner Inco Ltd.
- The Fed can be “patient” in considering whether to raise interest rates again, said St. Louis Fed President William Poole. He also said a housing crash is “very unlikely.”
- A tropical depression in the central Altantic Ocean developed into Tropical Storm Florence, making it the sixth named storm of the Atlantic hurricane season.
Wall Street Journal:
- Moody’s Investors Service will today publish its first public rating on a hedge fund, a move that brings some transparency to the industry, which has $1 trillion in assets.
- Some US hospitals are paying as much as $50/hour for replacement nurses to cope with a growing number of strikes and staff shortages.
- The World Health Organization, the Global Fund to Fight AIDS, Tuberculosis and Malaria and the World Bank are looking for new heads to help set strategies to combat global health risks including AIDS and pandemic flu.
- Large US companies are doing a better job of managing cash, a development that often lets them boost cash flow.
NY Times:
- American Eagle Outfitters(AEOS), Abercrombie & Fitch(ANF), Pacific Sunwear of California(PSUN), J. Crew Group(JCG) and Gap Inc.(GPS) are targeting post-collegiate customers with new clothing stores.
- TiVo will offer subscribers previews of CBS’s four new series this fall, while a majority stake in ITN Networks will be purchased by a group that includes Sony Corp.(SNE).
AP:
- Iranian President Mahmoud Ahmadinejad today called for a purge of liberal and secular faculty members from Iran’s universities.
- U.S. oil and gas reserves could grow by more than 50 percent as three companies said Tuesday that results from a deep-water exploratory drilling project in the Gulf of Mexico indicate a significant oil discovery.
Interfax:
- Kazakhstan produced 42.6 million metric tons of crude oil and gas condensate in the first eight months of the year, 4.5% more than in the year-earlier period.
- Gasoline futures fell to their lowest price in almost six months as the peak-demand driving season came to a close with US inventories of the motor fuel above normal levels.
- Chevron Corp.(CVX) said it completed the deepest successful test of a Gulf of Mexico well, showing it may be possible to produce billions of barrels of oil from a new undersea deposit.
- European service industries from banking to telecom, the biggest part of the economy, expanded at the slowest pace in seven months in August.
- Abiomed Inc.(ABMD) won US approval to sell the first artificial heart that allows patients to walk away from a power source for an hour at a time.
- Compagnie Generale de Geophysigque SA agreed to buy Veritas DGC for $3.1 billion to become the world’s biggest surveyor of oil and gas fields as energy exploration surges.
- Katie Couric begins trying to lift CBS News from the ratings cellar tonight by becoming the first network tv anchor to go live on the Internet.
- Phelps Dodge(PD) dropped its $17.7 billion takeover bid for Canadian nickel-miner Inco Ltd.
- The Fed can be “patient” in considering whether to raise interest rates again, said St. Louis Fed President William Poole. He also said a housing crash is “very unlikely.”
- A tropical depression in the central Altantic Ocean developed into Tropical Storm Florence, making it the sixth named storm of the Atlantic hurricane season.
Wall Street Journal:
- Moody’s Investors Service will today publish its first public rating on a hedge fund, a move that brings some transparency to the industry, which has $1 trillion in assets.
- Some US hospitals are paying as much as $50/hour for replacement nurses to cope with a growing number of strikes and staff shortages.
- The World Health Organization, the Global Fund to Fight AIDS, Tuberculosis and Malaria and the World Bank are looking for new heads to help set strategies to combat global health risks including AIDS and pandemic flu.
- Large US companies are doing a better job of managing cash, a development that often lets them boost cash flow.
NY Times:
- American Eagle Outfitters(AEOS), Abercrombie & Fitch(ANF), Pacific Sunwear of California(PSUN), J. Crew Group(JCG) and Gap Inc.(GPS) are targeting post-collegiate customers with new clothing stores.
- TiVo will offer subscribers previews of CBS’s four new series this fall, while a majority stake in ITN Networks will be purchased by a group that includes Sony Corp.(SNE).
AP:
- Iranian President Mahmoud Ahmadinejad today called for a purge of liberal and secular faculty members from Iran’s universities.
- U.S. oil and gas reserves could grow by more than 50 percent as three companies said Tuesday that results from a deep-water exploratory drilling project in the Gulf of Mexico indicate a significant oil discovery.
Interfax:
- Kazakhstan produced 42.6 million metric tons of crude oil and gas condensate in the first eight months of the year, 4.5% more than in the year-earlier period.
Monday, September 04, 2006
Tuesday Watch
Weekend Headlines
Bloomberg:
- Crude oil fell to $68/bbl., a 15-week low, as the US summer travel season drew to a close and traders speculated a dispute with Iran about nuclear research may be resolved without curtailing exports.
- US Treasuries gained this week as the minutes of the Federal Reserve’s August meeting reinforced speculation the central bank is done raising interest rates.
- China Petroleum & Chemical Corp., the nation’s largest refiner, and Japan’s Nippon Oil Corp. are importing more oil from Africa and Russia as Asian nations try to reduce their dependence on Middle East crude.
- UK police officers were given “diversity training” at an Islamic school southeast of London that’s now at the center of a terrorism investigation.
- President Bush said the US must reduce its dependence on oil from overseas and expand technology and job training to keep the American economy the strongest in the world.
- Advancing age increases a man’s risk of having an autistic child as much as 600%, according to a study in the Archives of General Psychiatry.
Wall Street Journal:
- Yahoo!(YHOO) Treasurer Gideon Yu was hired by closely held YouTube Inc. to become the user-uploaded video Web site’s first CFO.
Barron’s:
- The US stock market will make a “key” move in the fourth quarter, although Wall Street strategists can’t agree on the dirction.
NY Times:
- Special Prosecutor Patrick Fitzgerald’s decision to continue investigating the disclosure of a CIA agent’s identity for two years when he already knew who gave out the name has raised questions.
- US automakers expect sales of vehicles that are a cross between a sport utility vehicle and a car to pass 2 million this year and exceed for the first time the number of standard SUVs sold.
- Wiki open-source software, which allows any Web user to write and edit information on a Wiki site, has expanded beyond Wikipedia, the popular online encyclopedia, to several commercial Web sites.
- Vonage Holding(VG) attained 2 million subscribers, an increase from 1.6 million at the end of the first quarter.
- Time magazine, the news magazine owned by Time Warner(TWX), and Newsweek, owned by Washington Post(WPO), are taking on new editors as they seek to retain relevance.
Crain’s NY Business:
- Howard Stern, who broadcast to more than 12 million listeners on commercial radio, has attracted a following of only about 1 million since his move to Sirius Satellite Radio(SIRI).
San Francisco Chronicle:
- Polysilicon, a material used in making semiconductor wafers and solar panels, has more than doubled in price as demand by chipmakers, and subsides that spurred solar panel installation, have diminished supplies.
LA Times:
- Some companies are forcing employees to use their vacation time, even resorting to punitive measures for those who don’t take a break.
Economist.com:
- The new science of synthetic biology is poised between hype and hope. But its time will soon come.
Star-Ledger of Newark:
- Two-thirds of 300 New Jersey employers surveyed by Rutgers University said they have difficulty finding skilled workers, a slight increase from last year.
Detroit News:
- Ford Motor(F) Chairman Bill Ford Jr. plans to fix the company’s North American business, make better use of global assets and boost the leadership team with outsiders when necessary.
Financial Times:
- Barneys New York will open its first store outside the US in a new shopping mall in White City, west London.
- Iran’s former president Mohammad Khatami said a Palestinian state “ready to live alongside Israel” would be acceptable to Iran.
Reuters:
- The number of new oil tankers delivered into service next year will rise 20%.
- Starbucks(SBUX) plans to open its first store in Brazil in November in a city yet to be announced.
Observer:
- Nasdaq Stock Market(NDAQ) is mulling a hostile bid for the London Stock Exchange.
AP:
- Iraq arrested Al-Qaeda’s second-in-command in the country, leaving the terror group’s leadership in “crisis,” citing National Security Advisor Muwafiq al-Rubaie.
Haaretz:
- Deployment of UN troops in southern Lebanon may lead to a complete Israeli withdrawal within 10-to-14 days.
Focus:
- The publication in Germany early this year of cartoons depicting the prophet Muhammad triggered July’s failed terrorist attack on two German trains, the President of the Federal Criminal Office Joerg Ziercke said.
El Universal:
- Most Mexicans oppose protests carried out by Andres Manual Lopez Obrador, the presidential candidate who claims he lost the July 2 elections because of fraud, a poll found.
Weekend Recommendations
Barron's:
- Had positive comments on (BUD) and (SORC).
- Had negative comments on (MED), (IMCL), (DHR) and (IMAX).
Night Trading
Asian indices are -.25% to +.25% on average.
S&P 500 indicated +.17%
NASDAQ 100 indicated +.20%.
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/Estimate
- (FNSR)/.03
- (HAIN)/.23
Upcoming Splits
- (RDY) 2-for-1
Economic Releases
- None of note
Bloomberg:
- Crude oil fell to $68/bbl., a 15-week low, as the US summer travel season drew to a close and traders speculated a dispute with Iran about nuclear research may be resolved without curtailing exports.
- US Treasuries gained this week as the minutes of the Federal Reserve’s August meeting reinforced speculation the central bank is done raising interest rates.
- China Petroleum & Chemical Corp., the nation’s largest refiner, and Japan’s Nippon Oil Corp. are importing more oil from Africa and Russia as Asian nations try to reduce their dependence on Middle East crude.
- UK police officers were given “diversity training” at an Islamic school southeast of London that’s now at the center of a terrorism investigation.
- President Bush said the US must reduce its dependence on oil from overseas and expand technology and job training to keep the American economy the strongest in the world.
- Advancing age increases a man’s risk of having an autistic child as much as 600%, according to a study in the Archives of General Psychiatry.
Wall Street Journal:
- Yahoo!(YHOO) Treasurer Gideon Yu was hired by closely held YouTube Inc. to become the user-uploaded video Web site’s first CFO.
Barron’s:
- The US stock market will make a “key” move in the fourth quarter, although Wall Street strategists can’t agree on the dirction.
NY Times:
- Special Prosecutor Patrick Fitzgerald’s decision to continue investigating the disclosure of a CIA agent’s identity for two years when he already knew who gave out the name has raised questions.
- US automakers expect sales of vehicles that are a cross between a sport utility vehicle and a car to pass 2 million this year and exceed for the first time the number of standard SUVs sold.
- Wiki open-source software, which allows any Web user to write and edit information on a Wiki site, has expanded beyond Wikipedia, the popular online encyclopedia, to several commercial Web sites.
- Vonage Holding(VG) attained 2 million subscribers, an increase from 1.6 million at the end of the first quarter.
- Time magazine, the news magazine owned by Time Warner(TWX), and Newsweek, owned by Washington Post(WPO), are taking on new editors as they seek to retain relevance.
Crain’s NY Business:
- Howard Stern, who broadcast to more than 12 million listeners on commercial radio, has attracted a following of only about 1 million since his move to Sirius Satellite Radio(SIRI).
San Francisco Chronicle:
- Polysilicon, a material used in making semiconductor wafers and solar panels, has more than doubled in price as demand by chipmakers, and subsides that spurred solar panel installation, have diminished supplies.
LA Times:
- Some companies are forcing employees to use their vacation time, even resorting to punitive measures for those who don’t take a break.
Economist.com:
- The new science of synthetic biology is poised between hype and hope. But its time will soon come.
Star-Ledger of Newark:
- Two-thirds of 300 New Jersey employers surveyed by Rutgers University said they have difficulty finding skilled workers, a slight increase from last year.
Detroit News:
- Ford Motor(F) Chairman Bill Ford Jr. plans to fix the company’s North American business, make better use of global assets and boost the leadership team with outsiders when necessary.
Financial Times:
- Barneys New York will open its first store outside the US in a new shopping mall in White City, west London.
- Iran’s former president Mohammad Khatami said a Palestinian state “ready to live alongside Israel” would be acceptable to Iran.
Reuters:
- The number of new oil tankers delivered into service next year will rise 20%.
- Starbucks(SBUX) plans to open its first store in Brazil in November in a city yet to be announced.
Observer:
- Nasdaq Stock Market(NDAQ) is mulling a hostile bid for the London Stock Exchange.
AP:
- Iraq arrested Al-Qaeda’s second-in-command in the country, leaving the terror group’s leadership in “crisis,” citing National Security Advisor Muwafiq al-Rubaie.
Haaretz:
- Deployment of UN troops in southern Lebanon may lead to a complete Israeli withdrawal within 10-to-14 days.
Focus:
- The publication in Germany early this year of cartoons depicting the prophet Muhammad triggered July’s failed terrorist attack on two German trains, the President of the Federal Criminal Office Joerg Ziercke said.
El Universal:
- Most Mexicans oppose protests carried out by Andres Manual Lopez Obrador, the presidential candidate who claims he lost the July 2 elections because of fraud, a poll found.
Weekend Recommendations
Barron's:
- Had positive comments on (BUD) and (SORC).
- Had negative comments on (MED), (IMCL), (DHR) and (IMAX).
Night Trading
Asian indices are -.25% to +.25% on average.
S&P 500 indicated +.17%
NASDAQ 100 indicated +.20%.
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/Estimate
- (FNSR)/.03
- (HAIN)/.23
Upcoming Splits
- (RDY) 2-for-1
Economic Releases
- None of note
BOTTOM LINE: Asian Indices are mostly mixed as losses in energy stocks are offsetting gains by mining shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.
Weekly Outlook
Click here for The Week Ahead by Reuters
There are a number of economic reports of note and several significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - US Markets Closed
Tues. - None of note
Wed. - Final 2Q Non-farm Productivity, Final 2Q Unit Labor Costs, ISM Non-Manufacturing, Fed’s Beige Book
Thur. - Initial Jobless Claims, Wholesale Inventories
Fri. - Consumer Credit
Some of the more noteworthy companies that release quarterly earnings this week are:
Mon. - US Markets Closed
Tues. - Hain Celestial(HAIN)
Wed. - Donaldson Co.(DCI), Hovnanian(HOV), Martek Bioscience(MATK)
Thur. - Cooper Cos.(COO), JOS A Bank(JOSB), Korn/Ferry Intl.(KFI), National Semi(NSM), Quiksilver(ZQK), Shuffle Master(SHFL), UTI Worldwide(UTIW)
Fri. - Stage Stores(SSI)
Other events that have market-moving potential this week include:
Mon. - US Markets Closed
Tue. - Citigroup Global Tech Conference, Lehman Brothers Energy Conference
Wed. - Citigroup Global Tech Conference, Lehman Brothers Energy Conference
Thur. - Goldman Sachs Global Retail Conference, Prudential Back-to-School Consumer Conference, Piper Jaffray Software/Services Symposium, Lehman Brothers Energy Conference, CSFB Global Automotive Conference, Citigroup Global Tech Conference
Fri. - Citigroup Global Tech Conference
There are a number of economic reports of note and several significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - US Markets Closed
Tues. - None of note
Wed. - Final 2Q Non-farm Productivity, Final 2Q Unit Labor Costs, ISM Non-Manufacturing, Fed’s Beige Book
Thur. - Initial Jobless Claims, Wholesale Inventories
Fri. - Consumer Credit
Some of the more noteworthy companies that release quarterly earnings this week are:
Mon. - US Markets Closed
Tues. - Hain Celestial(HAIN)
Wed. - Donaldson Co.(DCI), Hovnanian(HOV), Martek Bioscience(MATK)
Thur. - Cooper Cos.(COO), JOS A Bank(JOSB), Korn/Ferry Intl.(KFI), National Semi(NSM), Quiksilver(ZQK), Shuffle Master(SHFL), UTI Worldwide(UTIW)
Fri. - Stage Stores(SSI)
Other events that have market-moving potential this week include:
Mon. - US Markets Closed
Tue. - Citigroup Global Tech Conference, Lehman Brothers Energy Conference
Wed. - Citigroup Global Tech Conference, Lehman Brothers Energy Conference
Thur. - Goldman Sachs Global Retail Conference, Prudential Back-to-School Consumer Conference, Piper Jaffray Software/Services Symposium, Lehman Brothers Energy Conference, CSFB Global Automotive Conference, Citigroup Global Tech Conference
Fri. - Citigroup Global Tech Conference
BOTTOM LINE: I expect US stocks to finish the week modestly higher on short-covering, bargain hunting, lower energy prices, less pessimism and mostly positive economic data. My trading indicators are still giving bullish signals and the Portfolio is 100% net long heading into the week.
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