David Moenning's Daily State of the Markets: 10/18
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The Old Guard Returns
While not exactly awe inspiring, stocks put up a second plus sign in as many days yesterday. But frankly, with the litany of negatives the bears keep coming up with, it was nice to see the bulls fight for their turf for a change. Despite oil rallying almost $2 (crude closed up $1.73 to $64.36) and a surprisingly weak report on manufacturing in the New York region, the bulls found a friend amongst the old guard. Monday�s gains weren�t driven by homebuilders, refiners, drillers, retailers, or even tech. No, it was some stodgy old names such as GM, Altria (Philip Morris), and Cititgroup that helped the Dow put up a gain of 61 points yesterday.
Turning to this morning, we�ve got more inflation numbers to mull over. The PPI report came in stronger than expected at both the headline and core levels. The headline PPI soared by +1.9%, which was much higher than the already strong expectation of +1.2% and the biggest monthly jump in 15 years. In addition, the Core Rate was hotter than expected with a gain of +0.3% last month versus expectations of +0.2%. The report shows that there is potential pipeline pressure on prices and will more than likely be a cause for concern among traders. Although the 1.9% increase is clearly a function of energy prices, it is still an ugly number. Stock futures turned lower on the report and bond yields initially rose, but have since pulled back.
So with more inflammatory inflation headlines sure to hit the airwaves today, it will be interesting to see whether the bulls can stand their ground or if they will be simply overrun by a return of the bears.
Stocks "In Play" This Morning:
IBM � Estimates raised at Morgan Stanley
FCX � Reported earnings in-line and revenues beat estimates
JNJ � Earnings beat First Call estimates by $0.01
INTC � Reports after the bell
MOT � Reports after the bell
YHOO � Reports after the bell
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: IBM, FCX, JNJ, INTC
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
While not exactly awe inspiring, stocks put up a second plus sign in as many days yesterday. But frankly, with the litany of negatives the bears keep coming up with, it was nice to see the bulls fight for their turf for a change. Despite oil rallying almost $2 (crude closed up $1.73 to $64.36) and a surprisingly weak report on manufacturing in the New York region, the bulls found a friend amongst the old guard. Monday�s gains weren�t driven by homebuilders, refiners, drillers, retailers, or even tech. No, it was some stodgy old names such as GM, Altria (Philip Morris), and Cititgroup that helped the Dow put up a gain of 61 points yesterday.
Turning to this morning, we�ve got more inflation numbers to mull over. The PPI report came in stronger than expected at both the headline and core levels. The headline PPI soared by +1.9%, which was much higher than the already strong expectation of +1.2% and the biggest monthly jump in 15 years. In addition, the Core Rate was hotter than expected with a gain of +0.3% last month versus expectations of +0.2%. The report shows that there is potential pipeline pressure on prices and will more than likely be a cause for concern among traders. Although the 1.9% increase is clearly a function of energy prices, it is still an ugly number. Stock futures turned lower on the report and bond yields initially rose, but have since pulled back.
So with more inflammatory inflation headlines sure to hit the airwaves today, it will be interesting to see whether the bulls can stand their ground or if they will be simply overrun by a return of the bears.
Stocks "In Play" This Morning:
IBM � Estimates raised at Morgan Stanley
FCX � Reported earnings in-line and revenues beat estimates
JNJ � Earnings beat First Call estimates by $0.01
INTC � Reports after the bell
MOT � Reports after the bell
YHOO � Reports after the bell
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: IBM, FCX, JNJ, INTC
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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