David Moenning's Daily State of the Markets: 06/25
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Rough Outing
Good morning. Every once in a while, your favorite team takes the field and just stinks up the joint. On days like these, nothing seems to right for the good guys. Ground balls get booted, fly balls get lost in the sun, and every hit is right at a defender. And while the home town team struggles to do anything right, their opponents seem to makes every play with ease.
In short, this was the case for our heroes in horns on Friday. Nothing went right for the bulls and the grizzly gang made the pummeling look easy. In looking at the game summary, we see that the bears were able to capitalize early on the annual Russell rebalancing and the added volatility on Friday.
This was like a sacrifice bunt - everybody knows it is coming, but when you throw the ball over the first baseman\'s head, the play winds up being very effective anyway.
Next, our furry friends made the most of their opportunities that came from the worries that the collapse of Bear Stearns\' High-Grade Structured Credit Strategies fund would spread. The fear, which is the operative word here, is that we will see this problem expand into other funds and into other financial stocks. But, if you understand how the managers screwed up these funds, it is easy to see that this was a management error and not some structural issue with the market.
And finally, with the game in hand and the bases loaded, the news that Congress is trying to get Private Equity fund managers to pay higher taxes on carried interest acted like a line-drive off the wall to clear the bases. And so, with everything going their way, the bears were able to run up the score as the indices sank into the close.
Whenever this happens, and it does happen to the best of teams, the key question is how the team will react in their next outing. Will the crummy play from the recent rough outing carry over and infect the team for several more games or will they shake it off and come out strong the next game? We shall see in about an hour.
Turning to this morning, we don\'t have any economic data scheduled for release before the bell, but we will get a report on Existing Home Sales at 10:00 am. In the early going, it looks like the bulls have come out swinging hard. Stock trading here in the U.S. is so far ignoring the across the board decline overseas and the related worries over rates.
Running through the rest of the pre-game indicators, as we mentioned, the foreign markets are all lower. Gold futures are moving down this morning by $3.30 to $653.70. In the oil pits, crude futures are moving down by $1.16 with the latest quote at $67.98. Interest rates are moving down this morning with the yield on the 10-year currently trading at 5.12% level. And finally, with about an hour before the bell, stock futures in the U.S. are above fair value. The Dow futures are currently ahead by about 49 points; the S&P\'s are up by about 4.50, while the NASDAQ looks to be about 6 points ahead of fair value at the moment.
Stocks "In Play" This Morning:
News, Upgrades/Downgrades/Brokerage Research:*
MBIA Inc (NYSE: MBI) - Mentioned cautiously in Barron\'s
Crocs Inc (NASDAQ: CROX) - Mentioned cautiously in Barron\'s
Interpublic Group (NYSE: IPG) - Upgraded at Banc of America
Chevron Corp (NYSE: CVX) - Upgraded at Banc of America
Bristol Myers Squibb (NYSE: BMY) - Upgraded at Bear Stearns
Canadian National Railway (NYSE: CNI) - Estimates reduced at Deutsche Bank
Burlington Northern (NYSE: BNI) - Estimates reduced at Deutsche Bank
Nvidia (NASDAQ: NVDA) - Downgraded at Goldman Sachs
General Motors (NYSE: GM) - Upgraded at Goldman Sachs
Avis Budget (NYSE: CAR) - Downgraded at Morgan Stanley
Hertz Global (NYSE: HTZ) - Downgraded at Morgan Stanley
Motorola (NYSE: MOT) - Estimates reduced at Piper Jaffray
Pier 1 Imports (NYSE: PIR) - Upgraded at UBS
Mr. Moenning holds Long positions in stocks mentioned: GS, MS
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 morning. Every once in a while, your favorite team takes the field and just stinks up the joint. On days like these, nothing seems to right for the good guys. Ground balls get booted, fly balls get lost in the sun, and every hit is right at a defender. And while the home town team struggles to do anything right, their opponents seem to makes every play with ease.
In short, this was the case for our heroes in horns on Friday. Nothing went right for the bulls and the grizzly gang made the pummeling look easy. In looking at the game summary, we see that the bears were able to capitalize early on the annual Russell rebalancing and the added volatility on Friday.
This was like a sacrifice bunt - everybody knows it is coming, but when you throw the ball over the first baseman\'s head, the play winds up being very effective anyway.
Next, our furry friends made the most of their opportunities that came from the worries that the collapse of Bear Stearns\' High-Grade Structured Credit Strategies fund would spread. The fear, which is the operative word here, is that we will see this problem expand into other funds and into other financial stocks. But, if you understand how the managers screwed up these funds, it is easy to see that this was a management error and not some structural issue with the market.
And finally, with the game in hand and the bases loaded, the news that Congress is trying to get Private Equity fund managers to pay higher taxes on carried interest acted like a line-drive off the wall to clear the bases. And so, with everything going their way, the bears were able to run up the score as the indices sank into the close.
Whenever this happens, and it does happen to the best of teams, the key question is how the team will react in their next outing. Will the crummy play from the recent rough outing carry over and infect the team for several more games or will they shake it off and come out strong the next game? We shall see in about an hour.
Turning to this morning, we don\'t have any economic data scheduled for release before the bell, but we will get a report on Existing Home Sales at 10:00 am. In the early going, it looks like the bulls have come out swinging hard. Stock trading here in the U.S. is so far ignoring the across the board decline overseas and the related worries over rates.
Running through the rest of the pre-game indicators, as we mentioned, the foreign markets are all lower. Gold futures are moving down this morning by $3.30 to $653.70. In the oil pits, crude futures are moving down by $1.16 with the latest quote at $67.98. Interest rates are moving down this morning with the yield on the 10-year currently trading at 5.12% level. And finally, with about an hour before the bell, stock futures in the U.S. are above fair value. The Dow futures are currently ahead by about 49 points; the S&P\'s are up by about 4.50, while the NASDAQ looks to be about 6 points ahead of fair value at the moment.
Stocks "In Play" This Morning:
News, Upgrades/Downgrades/Brokerage Research:*
MBIA Inc (NYSE: MBI) - Mentioned cautiously in Barron\'s
Crocs Inc (NASDAQ: CROX) - Mentioned cautiously in Barron\'s
Interpublic Group (NYSE: IPG) - Upgraded at Banc of America
Chevron Corp (NYSE: CVX) - Upgraded at Banc of America
Bristol Myers Squibb (NYSE: BMY) - Upgraded at Bear Stearns
Canadian National Railway (NYSE: CNI) - Estimates reduced at Deutsche Bank
Burlington Northern (NYSE: BNI) - Estimates reduced at Deutsche Bank
Nvidia (NASDAQ: NVDA) - Downgraded at Goldman Sachs
General Motors (NYSE: GM) - Upgraded at Goldman Sachs
Avis Budget (NYSE: CAR) - Downgraded at Morgan Stanley
Hertz Global (NYSE: HTZ) - Downgraded at Morgan Stanley
Motorola (NYSE: MOT) - Estimates reduced at Piper Jaffray
Pier 1 Imports (NYSE: PIR) - Upgraded at UBS
Mr. Moenning holds Long positions in stocks mentioned: GS, MS
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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