David Moenning's Daily State of the Markets: 11/26

On Holiday?

Stocks popped higher during Friday's abbreviated session. However, with just 670 million shares trading hands, it appears that this might have been a case of "when the cat's away, the mice will play." Thus, the key question to be asked at this stage of the game is this: Did the bulls manage to find their mojo on Friday or were the gains simply a result of the bears being on holiday?

Although the major indices did manage to climb by more than 1.3% across the board on Friday, the session was anything but inspiring as there were next to no catalysts available for the advance. Sure, stocks were oversold and with the Dow sinking past August’s closing low on Wednesday, the indices were due for a rebound. But unfortunately, the 181 point pop higher on the Dow did little to reverse the downtrend that has been in place since Halloween.

I guess we could say that investors got into the spirit of shopping in the early going on Black Friday. Or we could try to argue that the bulls hoped that the biggest shopping day of the year would prove to be a turning point. But, in reality, Friday was more likely just a case of a thin market being moved by programs.

Speaking of shopping, the VERY early results show that the level of purchases were up nicely over last year’s numbers. According to ShopperTrak, sales rose 8.3% year-over-year on Black Friday, which was the largest increase in three years. However, a survey conducted for the National Retail Federation found that shoppers spent a total of $348 each over the weekend, down from $360 last year. And according to the NY Times, the reports suggest that consumers are largely focused on finding the lowest prices, which is a dynamic that bodes well for discount stores, but might pose problems for higher-end chains. The article goes on to highlight a survey conducted by BIGresearch that supports that notion of consumers "trading down" this holiday season.

So, while it is tough to argue that Black Friday was a huge success, it does appear that the reports of the death of the consumer may be greatly exaggerated. However, one day does not a shopping season make, so we will continue to monitor the results of the season.

Turning to this morning, we don't have any economic data to review but today's "Cyber Monday" shopping event is keeping hopes for a positive holiday shopping season going. So, I guess the plan is to forget your boss’s instruction today and get cyber-shopping on company time.

Running through the rest of the pre-game indicators; the overseas markets are higher in Asia and fractionally mixed in Europe. Crude futures are holding steady right now with the latest quote showing the December contract up $0.09 to $98.27. Interest rates are a little higher this morning with the 10-yr trading at a yield of 4.03% at the moment. And finally, with about an hour before the bell, stock futures in the U.S. are looking to open a bit higher. The Dow futures are currently ahead by about 10 points; the S&Ps are up by about 2 points, while the NASDAQ looks to be about 8 points above fair value at the moment.

Stocks "In Play" This Morning:


News, Upgrades/Downgrades/Brokerage Research:

Deere & Co (NYSE: DE) – Upgraded at BofA
Celgene (Nasdaq: CELG) – Upgraded at BofA
MasterCard (NYSE: MA) – Target increased at Calyon
Corning (NYSE: GLW) – Mentioned positively at Deutsche Bank
First Marblehead (NYSE: FMD) – Downgraded at Friedman Billings
HSBC Holdings (NYSE: HBC) – Downgraded at Goldman Sachs
Tidewater (NYSE: TDW) – Upgraded at Jefferies
Fomento Econmico Mexicano (NYSE: FMX) – Upgraded at JP Morgan
Aetna (ANYSE: ET) – Upgraded at JP Morgan
Kimberly Clark (NYSE: KMB) – Upgraded at Lehman
Fannie Mae (NYSE: FNM) – Downgraded at UBS
Freddie Mac (NYSE: FRE) – Downgraded at UBS
Laboratory Corp (NYSE: LH) – Upgraded at Wachovia

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

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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