David Moenning's Daily State of the Markets: 12/18
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Price: $77.99 +0.98%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 5.3%
Revenue Growth %: +0.8%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 5.3%
Revenue Growth %: +0.8%
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When Greenspan Speaks...
Here's a link to listen to an Audio Version of the report
Although Ben Bernanke is the man sitting in the chair at the Federal Reserve these days, it appears that the markets still listen to what former Chairman Alan Greenspan has to say. And unfortunately, what Mr. Greenspan had to say on Sunday wasn’t exactly taken as a positive by the markets on Monday.
If you watched the entire interview (we did), it didn't appear that the man who had successfully guided us through situations such as the Crash of 1987, two Gulf Wars, the LTCM crisis, an emerging markets crisis or two, and the aftermath of 9/11, was being overtly negative. However, when broken up into sound bites and headlines, it sounded like Mr. Greenspan might be expecting the worst.
Although most of his statements were substantially hedged (shocker), the former Fed Chairman stated that the chances of a recession are indeed rising and that there is a potential for stagflation to develop. Of course, taken by themselves, these two statements don’t do much in the way of confidence building. So, with little other news to guide them, traders seized the negative and continued to hit the sell button on Monday.
Unlike some of the previous sessions, there didn’t appear to be any emotion in the air yesterday. But unfortunately, there weren't any buyers to be found either. Thus, without any meaningful rally attempt, stocks wound up sinking into the sunset and closed near the low of the day. This was the second straight plunge of more than 170 points and stocks have now lost 560 points over the past four sessions.
The problem is that there doesn’t appear to be much argument with the bear case right now. A slowing economy, when coupled with rising commodity inflation and the ongoing credit/housing mess spells lower growth expectations. And with another earnings season right around the corner, this means that it is tough to find reasons to do a lot of buying at the present time.
Why not sell everything and head for the hills, you ask? Well, the good news, at least from a big-picture standpoint, is that valuations are not even remotely elevated at the moment. So, while things could stay sloppy for a while, it doesn’t look like we’re in for a prolonged, nasty decline such as the 2000 – 2003 affair.
Turning to this morning, things look a little brighter in the early going as the foreign markets did not follow Wall Street lower for a change and European Central banks are pumping Euros into the system. On the earnings front, both Best Buy (BBY) and Goldman Sachs (GS) came in with reports that were better than expectations and neither said anything negative about the future, which is an encouraging sign.
In economic news, the number of Housing Starts and Building Permits were down from last month, but pretty much in line with expectations. Neither number is a positive, but neither is a surprise either.
Running through the rest of the pre-game indicators; as we mentioned the overseas markets are higher across the board. Crude futures up this morning with the latest quote showing the January contract higher by $1.44 to $92.07. Interest rates are lower so far with the 10-yr trading at a yield of 4.18% at the moment. And finally, with about an hour before the bell, stock futures in the U.S. are pointing to a higher open for a change. The Dow futures are currently ahead by about 100 points; the S&Ps are up by about 12 points, while the NASDAQ looks to be about 21 points above fair value at the moment.
Stocks "In Play" This Morning:
Today's Earnings Before the Bell:
Best Buy (NYSE: BBY) – Reported $0.53 vs. $0.41 on revenues of $9.93B vs. $9.42B. Increased full-year guidance range to $3.10 to $3.20 vs. Reuters $3.12
Goldman Sachs (NYSE: GS) – Reported $7.01 vs. $6.68 on revenues of $10.71B vs. $10.12B.
News, Upgrades/Downgrades/Brokerage Research:
Transocean (NYSE: RIG) – Target increased at Bank of America
Noble Corp (NYSE: NE) – Target increased at Bank of America
Ensco Intl (NYSE: ESV) – Target increased at Bank of America
Symantec (SYMC) – Upgraded at Bear Stearns
Target (NYSE: TGT) – Mentioned positively at Bernstein
Grant Prideco (NYSE: GRP) – Upgraded at Citi
Intl Paper (NYSE: IP) – Upgraded at Credit Suisse
Ingersoll Rand (NYSE: IR) – Upgraded at Deutsche Bank
Adobe Systems (ADBE) – Upgraded at Deutsche Bank
Occidental Petroleum (NYSE: OXY) – Upgraded at Friedman Billings
Western Union (NYSE: WU) – Estimates increased at JMP Securities
DaVita Inc (NYSE: DVA) – Upgraded at Oppenheimer
GlaxoSmithKline (NYSE: GSK) – Downgraded at Raymond James
Mr. Moenning holds Long positions in stocks mentioned: MER, MUR
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.
Here's a link to listen to an Audio Version of the report
Although Ben Bernanke is the man sitting in the chair at the Federal Reserve these days, it appears that the markets still listen to what former Chairman Alan Greenspan has to say. And unfortunately, what Mr. Greenspan had to say on Sunday wasn’t exactly taken as a positive by the markets on Monday.
If you watched the entire interview (we did), it didn't appear that the man who had successfully guided us through situations such as the Crash of 1987, two Gulf Wars, the LTCM crisis, an emerging markets crisis or two, and the aftermath of 9/11, was being overtly negative. However, when broken up into sound bites and headlines, it sounded like Mr. Greenspan might be expecting the worst.
Although most of his statements were substantially hedged (shocker), the former Fed Chairman stated that the chances of a recession are indeed rising and that there is a potential for stagflation to develop. Of course, taken by themselves, these two statements don’t do much in the way of confidence building. So, with little other news to guide them, traders seized the negative and continued to hit the sell button on Monday.
Unlike some of the previous sessions, there didn’t appear to be any emotion in the air yesterday. But unfortunately, there weren't any buyers to be found either. Thus, without any meaningful rally attempt, stocks wound up sinking into the sunset and closed near the low of the day. This was the second straight plunge of more than 170 points and stocks have now lost 560 points over the past four sessions.
The problem is that there doesn’t appear to be much argument with the bear case right now. A slowing economy, when coupled with rising commodity inflation and the ongoing credit/housing mess spells lower growth expectations. And with another earnings season right around the corner, this means that it is tough to find reasons to do a lot of buying at the present time.
Why not sell everything and head for the hills, you ask? Well, the good news, at least from a big-picture standpoint, is that valuations are not even remotely elevated at the moment. So, while things could stay sloppy for a while, it doesn’t look like we’re in for a prolonged, nasty decline such as the 2000 – 2003 affair.
Turning to this morning, things look a little brighter in the early going as the foreign markets did not follow Wall Street lower for a change and European Central banks are pumping Euros into the system. On the earnings front, both Best Buy (BBY) and Goldman Sachs (GS) came in with reports that were better than expectations and neither said anything negative about the future, which is an encouraging sign.
In economic news, the number of Housing Starts and Building Permits were down from last month, but pretty much in line with expectations. Neither number is a positive, but neither is a surprise either.
Running through the rest of the pre-game indicators; as we mentioned the overseas markets are higher across the board. Crude futures up this morning with the latest quote showing the January contract higher by $1.44 to $92.07. Interest rates are lower so far with the 10-yr trading at a yield of 4.18% at the moment. And finally, with about an hour before the bell, stock futures in the U.S. are pointing to a higher open for a change. The Dow futures are currently ahead by about 100 points; the S&Ps are up by about 12 points, while the NASDAQ looks to be about 21 points above fair value at the moment.
Stocks "In Play" This Morning:
Today's Earnings Before the Bell:
Best Buy (NYSE: BBY) – Reported $0.53 vs. $0.41 on revenues of $9.93B vs. $9.42B. Increased full-year guidance range to $3.10 to $3.20 vs. Reuters $3.12
Goldman Sachs (NYSE: GS) – Reported $7.01 vs. $6.68 on revenues of $10.71B vs. $10.12B.
News, Upgrades/Downgrades/Brokerage Research:
Transocean (NYSE: RIG) – Target increased at Bank of America
Noble Corp (NYSE: NE) – Target increased at Bank of America
Ensco Intl (NYSE: ESV) – Target increased at Bank of America
Symantec (SYMC) – Upgraded at Bear Stearns
Target (NYSE: TGT) – Mentioned positively at Bernstein
Grant Prideco (NYSE: GRP) – Upgraded at Citi
Intl Paper (NYSE: IP) – Upgraded at Credit Suisse
Ingersoll Rand (NYSE: IR) – Upgraded at Deutsche Bank
Adobe Systems (ADBE) – Upgraded at Deutsche Bank
Occidental Petroleum (NYSE: OXY) – Upgraded at Friedman Billings
Western Union (NYSE: WU) – Estimates increased at JMP Securities
DaVita Inc (NYSE: DVA) – Upgraded at Oppenheimer
GlaxoSmithKline (NYSE: GSK) – Downgraded at Raymond James
Mr. Moenning holds Long positions in stocks mentioned: MER, MUR
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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