David Moenning's Daily State of the Markets: 4/29

April 29, 2008 10:39 AM EDT

Lying In Wait

Here’s a link to listen to an Audio Version of the report:

In all honesty, I was a little concerned about sleeping through the alarm clock this morning. But then once I got the lights and the screens on I remembered that other than the sweet deal between Mars Candy and Wrigley, not too much happened yesterday.

It looked like the bulls might be able to get something going early on as traders were very excited about the idea of financing for M&A becoming available from the likes of Berkshire Hathaway (BRK.A). Suddenly, there was a lot of talk about “who’s next?� and it felt a little like the credit crisis really was behind us.

While we are unlikely to enter into the type of merger mania we say before the subprime slime began to infect the credit markets, it is encouraging to see a deal get done here and there. And it looks like nowadays, instead of deals being driven by REALLY easy money, the mergers will be based only on fundamentals – which, of course, is a good thing.

One argument for yesterday’s rather lackluster performance and pathetic volume is the idea that traders are waiting on the Fed meeting. While this has been the modus operandi in front of the FOMC meetings for quite some time now, we’re not exactly sure what traders are waiting for this time around.

With the recent economic numbers coming in well above the disaster levels having been projected, the current consensus is that Mr. Bernanke really doesn’t need to continue to aggressively slash rates. But, in light of the fact that the statement from the last Fed meeting was more than a little on the pessimistic side, Gentle Ben can’t really just come out and say, “Hey, everything looks rosy now.� So, look for another rate cut of 25 basis points (0.25%) tomorrow afternoon and then some mention in the statement that a pause is on the way.

Turning to this morning, once again, we don’t have any economic data to review before the opening bell and it appears that stocks may spend another day lying in wait. Waiting for what, I’m not exactly sure. Perhaps there is some concern that the Fed’s view of the economy might be different than the markets, but we shall see.

Running through the rest of the pre-game indicators; the foreign markets are mixed. Crude futures are moving down with the latest quote showing oil lower by $1.57 to $117.18.The yield on the 10-yr is currently trading at 3.81% at the moment. And finally, with about an hour before the bell, stock futures in the U.S. are pointing to slightly lower open . The Dow futures are currently off by about 20 points; the S&P’s are down about a point, while the NASDAQ looks to be about even with fair value at the moment.

Stocks “In Play� This Morning:

Yesterday’s Earnings After the Bell:

Choice Hotels (CHH) – Reported $0.30 vs. $0.27
CDC Corp (China) – Reported -$0.03 vs. $0.05
Hartford Financial (HIG) – Reported $2.61 vs. $2.48
Manitowoc (MTW) – Reported $0.78 vs. $0.73
Visa (V) – Reported $0.52 vs. $0.48

Today’s Earnings Before the Bell:

AGCO (NYSE: AG) Reported $0.63 vs. $0.49
Archer Daniels Midland (NYSE: ADM) – Reported $0.80 vs. $0.70
Avon Products (NYSE: AVP) – Reported $0.47 vs. $0.45
Burlington Northern (NYSE: BNI) – Reported $1.30 vs. $1.23
Boyd Gaming (NYSE: BYD) – Reported $0.34 vs. $0.32
CBS Corp (NYSE: CBS) – Reported $0.36 vs. $0.34
Countrywide Financial (NYSE: CFC) – Reported -$1.60 vs. -$0.12
Corning (NYSE: GLW) – Reported $0.44 vs. $0.42
MasterCard (NYSE: MA) – Reported $2.59 vs. $2.00
Medco Health (NYSE: MHS) – Reported $0.55 vs. $0.53
Office Depot (NYSE: ODP) – Reported $0.29 vs. $0.23
Royal Dutch Shell (NYSE: RDS.A) – Reported $1.46 vs. $2.17
Techne Corp (Tech) – Reported $0.76 vs. $0.66
Valero Energy (NYSE: VLO) – Reported $0.36 vs. $0.26
U.S. Steel (NYSE: X) – Reported $1.98 vs. $1.82

News, Upgrades/Downgrades/Brokerage Research:

William Wrigley (NYSE: WWY) – Downgraded at Citi
CB Richard Ellis (NYSE: CBG) – Downgraded at Citi
Tenet Healthcare Group (NYSE: THC) – Downgraded at Deutsche Bank
Wachovia (NYSE: WB) – Upgraded at Deutsche Bank
Abbott Labs (NYSE: ABT) – Mentioned positively at Goldman
China Mobile (NYSE: CHL) – Downgraded at Goldman
Affiliated Computer (NYSE: ACS) – Upgraded at Goldman
Chevron Corp (NYSE: CVX) – Upgraded at Goldman
Potash (NYSE: POT) – Downgraded at RBC

Mr. Moenning holds Long positions in stocks mentioned: BNI, MA, CHL

Note: All earnings reports compared to Reuter’s consensus estimates

** For More of David Moenning’s Market Analysis, Stock Portfolios, and Trading Ideas, visit www.TopGunsTrading.com

The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management and Co-Founder of TopGunsTrading.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 of any specific security or Heritage Capital program. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of HCM’s programs. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Moenning or Heritage Capital Management nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Mr. Moenning and employees of HCM may at times have positions in the securities referred to and may make purchases or sales of these securities while this publication is in circulation. The analysis contained is based on both technical and fundamental research. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

David D. Moenning
Heritage Capital Management
Main: 630-250-4700
Direct: 303-670-9761
email: DMoenning@HeritageCapitalManagement.com

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