David Moenning's Daily State of the Markets: 05/29
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Overall Analyst Rating:
NEUTRAL ( Up)
Dividend Yield: 3.6%
EPS Growth %: +16.2%
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Getting Back to Work
Good Tuesday (but doesn’t it still feel like Monday?) morning. After four days of selling, apparently the bulls had seen enough on Friday and decided it was time to get back to work. So, despite the fact that a long holiday weekend was upon us, investors decided to put their worries aside and do a little bargain hunting before firing up the grill.
As has been the trend lately, stocks opened higher on Friday morning. But this time, instead of selling off all afternoon, the market indices actually found a way to advance into the close. The primary reason for the move was very familiar as analysts credited a couple fresh M&A deals for the renewed buying interest.
While it was primarily a quiet session with volume on the light side, it is worthy of note that traders continued to focus on M&A activity while ignoring the negative housing data that was released. I guess it is safe to say that the new deals represent the future while any news showing a punk housing market could be considered a glance in the rearview mirror.
Looking ahead, the big question of the day is if last week’s four-day decline was a precursor of things to come or simply a pause that refreshes. While time will tell, we should note that there is some negativity cropping up here and there is a great deal of skepticism relating the current rally.
However, unlike last week, this week we have a boatload of economic data on tap to help guide traders. Unfortunately though, most of the data comes on Thursday on Friday. And with the bond market continuing to sell off and yields sitting at or near the highs for the year, it will be interesting to see how the markets react to the data this week.
Speaking of data, we will get another look at the first quarter’s GDP on Thursday as well as the Chicago PMI, the Help Wanted Index, and data on home pricing. Then on Friday, the mother of all economic data, the Employment report will be released along with the University of Michigan’s Consumer Confidence survey.
Turning to this morning, there is no economic data scheduled for release before the bell, but we will get a report on Consumer Confidence at 10:00 am.
Running through the rest of the pre-game indicators, the major foreign markets are mixed. Gold futures are moving up by $2.70 to $658.00. In the oil pits, crude futures are lower by $0.93 with the latest quote at $64.27. Interest rates are moving down a little this morning with the yield on the 10-year currently trading at 4.86%. And finally, with about an hour before the bell, stock futures in the U.S. are looking to move a little higher at the open. The Dow futures are currently ahead by about 18 points; the S&P’s are 2.50 ahead of breakeven, while the NASDAQ looks to be 2 points better than fair value at the moment.
Stocks “In Play” This Morning:
News, Upgrades/Downgrades/Brokerage Research:*
Intl Business Machines (NYSE: IBM) – Mentioned positively in Barron’s
Goldman Sachs (NYSE: GS) – Mentioned positively in Barron’s
General Electric (NYSE: GE) – Mentioned positively in Barron’s
Johnson & Johnson (NYSE: JNJ) – Mentioned positively in Barron’s
Anadarko Petroleum (NYSE: APC) – Upgraded at BofA
NVR Inc (NYSE: NVR) – Downgraded at BofA
Merck (NYSE: MRK) – Upgraded at HSBC
Astrazeneca (NYSE: AZN) – Upgraded at HSBC
Yahoo! (Nasdaq: YHOO) – Downgraded at Merrill Lynch
eBay (Nasdaq: EBAY) – Downgraded at Merrill Lynch
Limited Brands (NYSE: LTD) – Downgraded at Morgan Stanley
Unum Group (NYSE: UNM) – Downgraded at Morgan Stanley
Netflix (Nasdaq: NFLX) – Downgraded at Piper Jaffray
Southwest Airlines (NYSE: LUV) – Downgraded at Prudential
Marvell Technology (Nasdaq: MRVL) – Upgraded at UBS
Steel Dynamics (Nasdaq: STLD) – Downgraded at UBS
Mr. Moenning holds Long positions in stocks mentioned: GS, MER, IBM, STLD
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.
Good Tuesday (but doesn’t it still feel like Monday?) morning. After four days of selling, apparently the bulls had seen enough on Friday and decided it was time to get back to work. So, despite the fact that a long holiday weekend was upon us, investors decided to put their worries aside and do a little bargain hunting before firing up the grill.
As has been the trend lately, stocks opened higher on Friday morning. But this time, instead of selling off all afternoon, the market indices actually found a way to advance into the close. The primary reason for the move was very familiar as analysts credited a couple fresh M&A deals for the renewed buying interest.
While it was primarily a quiet session with volume on the light side, it is worthy of note that traders continued to focus on M&A activity while ignoring the negative housing data that was released. I guess it is safe to say that the new deals represent the future while any news showing a punk housing market could be considered a glance in the rearview mirror.
Looking ahead, the big question of the day is if last week’s four-day decline was a precursor of things to come or simply a pause that refreshes. While time will tell, we should note that there is some negativity cropping up here and there is a great deal of skepticism relating the current rally.
However, unlike last week, this week we have a boatload of economic data on tap to help guide traders. Unfortunately though, most of the data comes on Thursday on Friday. And with the bond market continuing to sell off and yields sitting at or near the highs for the year, it will be interesting to see how the markets react to the data this week.
Speaking of data, we will get another look at the first quarter’s GDP on Thursday as well as the Chicago PMI, the Help Wanted Index, and data on home pricing. Then on Friday, the mother of all economic data, the Employment report will be released along with the University of Michigan’s Consumer Confidence survey.
Turning to this morning, there is no economic data scheduled for release before the bell, but we will get a report on Consumer Confidence at 10:00 am.
Running through the rest of the pre-game indicators, the major foreign markets are mixed. Gold futures are moving up by $2.70 to $658.00. In the oil pits, crude futures are lower by $0.93 with the latest quote at $64.27. Interest rates are moving down a little this morning with the yield on the 10-year currently trading at 4.86%. And finally, with about an hour before the bell, stock futures in the U.S. are looking to move a little higher at the open. The Dow futures are currently ahead by about 18 points; the S&P’s are 2.50 ahead of breakeven, while the NASDAQ looks to be 2 points better than fair value at the moment.
Stocks “In Play” This Morning:
News, Upgrades/Downgrades/Brokerage Research:*
Intl Business Machines (NYSE: IBM) – Mentioned positively in Barron’s
Goldman Sachs (NYSE: GS) – Mentioned positively in Barron’s
General Electric (NYSE: GE) – Mentioned positively in Barron’s
Johnson & Johnson (NYSE: JNJ) – Mentioned positively in Barron’s
Anadarko Petroleum (NYSE: APC) – Upgraded at BofA
NVR Inc (NYSE: NVR) – Downgraded at BofA
Merck (NYSE: MRK) – Upgraded at HSBC
Astrazeneca (NYSE: AZN) – Upgraded at HSBC
Yahoo! (Nasdaq: YHOO) – Downgraded at Merrill Lynch
eBay (Nasdaq: EBAY) – Downgraded at Merrill Lynch
Limited Brands (NYSE: LTD) – Downgraded at Morgan Stanley
Unum Group (NYSE: UNM) – Downgraded at Morgan Stanley
Netflix (Nasdaq: NFLX) – Downgraded at Piper Jaffray
Southwest Airlines (NYSE: LUV) – Downgraded at Prudential
Marvell Technology (Nasdaq: MRVL) – Upgraded at UBS
Steel Dynamics (Nasdaq: STLD) – Downgraded at UBS
Mr. Moenning holds Long positions in stocks mentioned: GS, MER, IBM, STLD
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.
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