David Moenning's Daily State of the Markets: 09/25

Not-So Rude Crude

Good Monday morning and welcome back. Stocks continued to sell off on Friday on worries that the economy might be getting too cold, too fast. There was no obvious catalyst for the continued selling, so I guess we�ll have to stick with the idea that the surprise weakness seen in Thursday�s Philly Fed report, which is usually a relatively obscure report, spilled over into Friday�s session.

After just one report, the talk is suddenly all about the economy being weaker than anybody thought. While we can�t refute the weakness in the Philly Fed numbers, we will continue to point out that the market was overbought and due for a pullback. And since traders have been supersensitive to all things economic lately, Thursday�s numbers seemed to provide a convenient excuse for traders to take some profits.

However, while the selling in the stock market has been relatively contained and perhaps a bit technical in nature, we shouldn�t ignore the action in the bond market. Bond yields continued to crater on Friday and the 10-Year finished the day with a yield of 4.60%, which is the lowest level since March 1st. Therefore, it will be a good idea to pay close attention to each and every data point from this week�s economic offerings.

Speaking of economic data, here�s a look at what�s on tap for this week:

Monday � Existing Home Sales (10:00 am)

Tuesday � Consumer Confidence, Richmond Fed Index

Wednesday � Durable Goods, New Home Sales

Thursday � GDP (Final 2Q)

Friday � Personal Income & Spending (includes PCE Core), University of Michigan�s Consumer Sentiment, Chicago Purchasing Managers

Turning to this morning, the world is looking a little brighter as crude prices have become a lot less rude lately. A combination of factors has crude futures trading under $60 for the first time since last November, which is certainly a mood enhancer.

Oil is falling in response to a triple dose of good news. Since Friday, we�ve learned that Saudi Arabia has announced plans to increase oil production, BP will restart the flow of oil from the eastern region of the Prudhoe Bay fields, and Iran�s President has said he is willing to discuss �everything� as long as the U.S. takes the threat of economic sanctions off the table.

Running through the rest of the pre-game indicators, overseas markets are higher in Europe. Gold futures are moving lower this morning and are quoted at $592.80 right now. As we mentioned, crude oil futures are continuing to move lower and are currently down another $0.66 at $59.89. Interest rates are also moving down again with the 2-year currently quoted at 4.67% while the 10-yr is trading with a yield of 4.58% right now. And finally, with about an hour before the bell, stock futures in the U.S. are looking to recover some ground. The Dow futures are currently ahead by 40, the S&Ps are higher by 3.90, and the NASDAQ is sporting a gain of 8.50 at the moment.

Stocks �In Play� This Morning:

Lam Research (LRCX) � Upgraded at CIBC Capital Markets
Baidu (BIDU) � Upgraded at Citigroup
Whirlpool (WHR) � Downgraded at Citigroup
Micron Technology (MU) � Recommended Sell at Goldman Sachs
Barnes & Noble (BKS) � Upgraded at Goldman Sachs
ING Groep (ING) � Downgraded at JP Morgan
Serono (SRA) � Downgraded at Merrill
Praxair (PX) � Downgraded at Merrill
Sandisk (SNDK) � Downgraded at Merrill
Deutsche Bank (DB) � Added to Buy list at Merrill
Time Warner (TWX) � Upgraded at Morgan Stanley
Alcan (AL) � Downgraded at Newcrest
US Steel (X) � Downgraded at UBS
Nucor (NUE) � Downgraded at UBS
Oneok (OKE) � Upgraded at UBS
Intel (INTC) � ThinkEquity suggests downside potential in Semis

Long positions in stocks mentioned: SNDK

** 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

You May Also Be Interested In

• After-Hours Movers: AMAT, DLO, GLOB, YSS, ETON
• After-Hours Movers: CRWV, NBIS, SMCI, LITE, CAVA, HRB
• After-Hours Movers: P, RIOT, BW, RKLB, HIMS, UPWK