Daily State of the Markets 7/28: A Good, Bad Day?
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Good morning. Tuesday was the type of session that market commentators dread. In short, nothing happened as even the HFT boyz appeared to be on the golf course. Sure, there were some news items, a wee bit of volatility, and a couple of stories. But I swore many years ago that this daily missive on the state of the stock market would not morph into an AP-like rehash of the news, which, by the way can be found just about anywhere.
So, what can we take away from a day in which the DJIA finished up a less-than inspiring 12 points, while the S&P 500 gave up a point, and the NASDAQ lost -0.4%? For starters, don't let the Dow's green on the screen fool you - Tuesday was a down day. However, as down days go, this was indeed a good one.
Before you click on the delete button or throw your cup of coffee into the screen, give me another 15 seconds to explain. You see, stocks came into Tuesday's session looking like they were "set up" to pull back. The market had become overbought after a quick jaunt of 400 Dow points and all the indices, save the DJIA, were bumping into very important resistance levels. And with the two teams still arguing vehemently about the direction of the next move, a pullback would not have surprised anyone.
Thus, the glass-is-half-full gang will suggest that it was actually a good thing that stocks didn't go down. Our heroes on horns contend that the long-lost dip buyers returned into the early morning bout of selling, meaning that there is finally something besides computer programs in the market. The bulls also point to the strong demand for Spain's auction, the better-than-expected reading from the German sentiment data, and an upbeat report on retail sales in the U.K.
On the other side of this particular discussion, our furry friends had the punk consumer confidence numbers in the U.S. and the usual uninspiring data on housing. Thus, the bears will tell anyone and everyone that it is only a matter of time before they return to prominence.
However, as a semi-objective observer (for the record, I am a card-carrying member of the glass-is-half-full club), I'm going to award the bulls a moral victory for Tuesday's effort. While we could still see a pullback, the evidence of some buying was modestly encouraging. So, for now at least, the bulls appear to have the advantage.
Turning to this morning... Orders for long-lasting goods fell in June. The Commerce Department reported that Durable Goods orders declined -1.0% during the month, which was well below the consensus expectations for an increase of +1.0%. When you strip out the volatile orders for transportation, orders also fell by -0.6%, which was below the consensus for +0.5%. Stock futures have moved a little lower in response to the report.
Finally, regardless of the colors on the screens, make the decision to have a great day...
Pre-Game Indicators
Here are the important indicators we review each morning before the opening bell...
Major Foreign Markets:
Australia: +0.62%
Shanghai: +2.26%
Hong Kong: +0.56%
Japan: +2.70%
France: +0.51%
Germany: -0.51%
London: -0.33%
Crude Oil Futures: - $0.20 to $77.30
Gold: + $3.20 to $1161.20
Dollar: higher against Yen, Euro and Pound
10-Year Bond Yield: Currently trading lhigher at 3.04%
Stocks Futures Ahead of Open in U.S. (relative to fair value):
S&P 500: -2.69
Dow Jones Industrial Average: -27
NASDAQ Composite: -4.5
Wall Street Research Summary
Upgrades:
Liberty Global (LBTYA) - Initiated Buy at BofA/Merrill
CH Robinsin (CHRW) - BB&T Capital Markets
Carrizo Oil & Gas (CRZO) - BMO Capital
Rowan Companies (RDC) - Morgan Stanley
PACCAR (PCAR) - RW Baird
BE Aerospace (BEAV) - Societe Generale
Sohu.com (SOHU) - UBS
Downgrades:
Patriot Coal (PCX) - BMO Capital
Range Resources (RRC) - Canaccord Genuity
Global Payment (GPN) - Janney Capital, Morgan Stanley
Websense (WBSN) - JPMorgan
Ensco PLC (ESV) - Morgan Stanley
Noble Corp (NE) - Morgan Stanley
Pride Intl (PDE) - Morgan Stanley
Spectra Energy (SEP) - UBS
Yesterday's Earnings After the Bell
Company
Symbol
EPS Reuters
Estimate
Aetna AET $0.75 v $0.73
Aflac AFL $1.35 v $1.33
Broadcom BRCM $0.52* v $0.61
Boston Properties BXP $1.12 v $0.99
CB Richard Ellis CBG $0.18 v $0.09
Cephalon CEPH $2.05v $1.77
C.H. Robinson CHRW $0.59 v $0.55
Fiserv FISV $1.00 v $0.96
International Game Technology IGT $0.21 v $0.21
Illumina ILMN $0.26 v $0.22
Kimco Realty KIM $0.31 v $0.27
Massey Energy MEE -$0.88 v $0.33
Nabors Industries NBR $0.19 v $0.18
Norfolk Southern NSC $1.04 v $0.98
Earnings Before The Bell
Allegheny Technologies ATI $0.36 v $0.37
Boeing BA $1.06 v $1.01
Coca-Cola Enterprises CCE $0.79 v $0.70
Constellation Energy CEG $0.71v $0.75
Comcast CMCSA $0.33 v $0.32
CMS Energy CMS $0.26 v $0.27
CVS Caremark CVS $0.65 v $0.67
Dominion D $0.72 v $0.66
Eastman Kodak EK -$0.51 v -$0.31
General Dynamics GD $1.68 v $1.61
Corning GLW $0.58 v $0.53
Hess Corp HES $1.15 v $1.13
Hospira HSP $0.85 v $0.79
International Paper IP $0.42 v $0.40
Meadwestvaco MWV $0.35v $0.32
Newmont Mining NEM $0.77 v $0.86
Praxair PX $1.19 v $1.14
Rockwell Automation ROK $0.83 v $0.79
Sprint Nextel S -$0.25 v -$0.19
Sealed Air SEE $0.35 v $0.36
Southern Co SO $0.62 v $0.58
Waters WAT $0.93 v $0.90
WellPoint Health WLP $1.67 v $1.55
Wyndham Worldwide WYN $0.51 v $0.41
* Report includes items that make comparisons to the consensus estimate questionable
Long positions in stocks mentioned: WYN
For more "top stock" portfolios and research, visit TopStockPortfolios.com
The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.com and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.
Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.
The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.
Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.
Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.
So, what can we take away from a day in which the DJIA finished up a less-than inspiring 12 points, while the S&P 500 gave up a point, and the NASDAQ lost -0.4%? For starters, don't let the Dow's green on the screen fool you - Tuesday was a down day. However, as down days go, this was indeed a good one.
Before you click on the delete button or throw your cup of coffee into the screen, give me another 15 seconds to explain. You see, stocks came into Tuesday's session looking like they were "set up" to pull back. The market had become overbought after a quick jaunt of 400 Dow points and all the indices, save the DJIA, were bumping into very important resistance levels. And with the two teams still arguing vehemently about the direction of the next move, a pullback would not have surprised anyone.
Thus, the glass-is-half-full gang will suggest that it was actually a good thing that stocks didn't go down. Our heroes on horns contend that the long-lost dip buyers returned into the early morning bout of selling, meaning that there is finally something besides computer programs in the market. The bulls also point to the strong demand for Spain's auction, the better-than-expected reading from the German sentiment data, and an upbeat report on retail sales in the U.K.
On the other side of this particular discussion, our furry friends had the punk consumer confidence numbers in the U.S. and the usual uninspiring data on housing. Thus, the bears will tell anyone and everyone that it is only a matter of time before they return to prominence.
However, as a semi-objective observer (for the record, I am a card-carrying member of the glass-is-half-full club), I'm going to award the bulls a moral victory for Tuesday's effort. While we could still see a pullback, the evidence of some buying was modestly encouraging. So, for now at least, the bulls appear to have the advantage.
Turning to this morning... Orders for long-lasting goods fell in June. The Commerce Department reported that Durable Goods orders declined -1.0% during the month, which was well below the consensus expectations for an increase of +1.0%. When you strip out the volatile orders for transportation, orders also fell by -0.6%, which was below the consensus for +0.5%. Stock futures have moved a little lower in response to the report.
Finally, regardless of the colors on the screens, make the decision to have a great day...
Pre-Game Indicators
Here are the important indicators we review each morning before the opening bell...
Major Foreign Markets:
Australia: +0.62%
Shanghai: +2.26%
Hong Kong: +0.56%
Japan: +2.70%
France: +0.51%
Germany: -0.51%
London: -0.33%
Crude Oil Futures: - $0.20 to $77.30
Gold: + $3.20 to $1161.20
Dollar: higher against Yen, Euro and Pound
10-Year Bond Yield: Currently trading lhigher at 3.04%
Stocks Futures Ahead of Open in U.S. (relative to fair value):
S&P 500: -2.69
Dow Jones Industrial Average: -27
NASDAQ Composite: -4.5
Wall Street Research Summary
Upgrades:
Liberty Global (LBTYA) - Initiated Buy at BofA/Merrill
CH Robinsin (CHRW) - BB&T Capital Markets
Carrizo Oil & Gas (CRZO) - BMO Capital
Rowan Companies (RDC) - Morgan Stanley
PACCAR (PCAR) - RW Baird
BE Aerospace (BEAV) - Societe Generale
Sohu.com (SOHU) - UBS
Downgrades:
Patriot Coal (PCX) - BMO Capital
Range Resources (RRC) - Canaccord Genuity
Global Payment (GPN) - Janney Capital, Morgan Stanley
Websense (WBSN) - JPMorgan
Ensco PLC (ESV) - Morgan Stanley
Noble Corp (NE) - Morgan Stanley
Pride Intl (PDE) - Morgan Stanley
Spectra Energy (SEP) - UBS
Yesterday's Earnings After the Bell
Company
Symbol
EPS Reuters
Estimate
Aetna AET $0.75 v $0.73
Aflac AFL $1.35 v $1.33
Broadcom BRCM $0.52* v $0.61
Boston Properties BXP $1.12 v $0.99
CB Richard Ellis CBG $0.18 v $0.09
Cephalon CEPH $2.05v $1.77
C.H. Robinson CHRW $0.59 v $0.55
Fiserv FISV $1.00 v $0.96
International Game Technology IGT $0.21 v $0.21
Illumina ILMN $0.26 v $0.22
Kimco Realty KIM $0.31 v $0.27
Massey Energy MEE -$0.88 v $0.33
Nabors Industries NBR $0.19 v $0.18
Norfolk Southern NSC $1.04 v $0.98
Earnings Before The Bell
Allegheny Technologies ATI $0.36 v $0.37
Boeing BA $1.06 v $1.01
Coca-Cola Enterprises CCE $0.79 v $0.70
Constellation Energy CEG $0.71v $0.75
Comcast CMCSA $0.33 v $0.32
CMS Energy CMS $0.26 v $0.27
CVS Caremark CVS $0.65 v $0.67
Dominion D $0.72 v $0.66
Eastman Kodak EK -$0.51 v -$0.31
General Dynamics GD $1.68 v $1.61
Corning GLW $0.58 v $0.53
Hess Corp HES $1.15 v $1.13
Hospira HSP $0.85 v $0.79
International Paper IP $0.42 v $0.40
Meadwestvaco MWV $0.35v $0.32
Newmont Mining NEM $0.77 v $0.86
Praxair PX $1.19 v $1.14
Rockwell Automation ROK $0.83 v $0.79
Sprint Nextel S -$0.25 v -$0.19
Sealed Air SEE $0.35 v $0.36
Southern Co SO $0.62 v $0.58
Waters WAT $0.93 v $0.90
WellPoint Health WLP $1.67 v $1.55
Wyndham Worldwide WYN $0.51 v $0.41
* Report includes items that make comparisons to the consensus estimate questionable
Long positions in stocks mentioned: WYN
For more "top stock" portfolios and research, visit TopStockPortfolios.com
The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.com and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.
Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.
The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.
Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.
Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.
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