David Moenning's Daily State of the Markets: 12/28
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The Finishing Touches
Good morning. Although there are still 2 trading sessions remaining in 2006, it appears the bulls decided to put the finishing touches on a good year a little early yesterday. Another solid effort by the glass-is-half-full crowd pushed the Dow past 12,500 for the first time and to yet another new all-time closing high.
Once again, there were no specific catalysts for the move, so given the thin trading volume, we�ll have to assume that it was positive sentiment that helped the Dow scale new heights. More specifically, another couple of takeover deals, a second straight drop in oil prices, and a surprisingly strong report on New Home sales set the stage for the advance. And not even a move up in interest rates seemed to spoil the bulls� fun.
While everyone knows that the housing industry has taken its lumps recently, the game of trying to guess where the bottom is seems to be heating up. Yesterday�s data on New Home Sales helped support the idea that the market is stabilizing. The report showed that sales of new homes rose by 3.4% to an annual rate of 1.05 million units, which was well above the expectations for a rate of 1.02 million units. More importantly, sales have risen in three of the last four months, October�s numbers were revised higher, and inventories fell to their lowest level since February. Thus, all of the above argues that the much feared collapse in the housing market doesn�t appear likely at this time.
For much of the 6-month rally, the bears have been clinging to the idea that the housing market is going to continue to decline in earnest, which will severely impact the consumer, which will hurt spending, etc., etc. But for now, at least, it appears that these fears may need to be put aside for a while.
While the Dow and the NYSE managed to close at new highs, we should recognize that the volume was nothing to write home about and that both the S&P and the NASDAQ failed to join in the fun. And with trading desks all but vacant today and tomorrow, it will be interesting to see if the bulls can continue to dress up the windows.
Turning to this morning, once again we don�t have any major economic news to review before the bell, but, we will get the report on Existing Home Sales at 10:00 am. In the early going, the news that Apple�s Steve Jobs did not have proper authorization for $7.5 million in options from 2001 is putting a bit of a damper on the day.
Running through the rest of the pre-game indicators, with the exception of a nice gain in Hong Kong, the overseas markets are all languishing just below breakeven. Gold futures are higher again this morning with the last trade up $2.40 to $632.70. Crude futures are also a little higher this morning with the latest quote showing the February futures contract up $0.24 to $60.58. Interest rates are a smidge lower today after yesterday�s move higher and the yield on the 10-year currently stands at 4.65%. And finally, with about an hour before the bell, stock futures in the U.S. are looking to open flat to lower. The Dow futures are currently off by 6 points; the S&Ps are about 1 point below breakeven, and the NASDAQ looks to be about 4 points under fair value at the moment.
Stocks �In Play� This Morning:
Apple Computer (AAPL) � FT reports that $7.5m in options given to Steve Jobs were not approved properly by board
FormFactor (FORM) � BofA reduces estimates
Orient Express Hotels (OEH) � Bear Stearns raises price target
Pinnacle Entertainment (PNK) � Bear Stearns reduces estimates
BP PLC (BP) � Named Top Oil Pick at Oppenheimer
Murphy Oil (MUR) � Named Top Oil Pick at Oppenheimer
Kayne Anderson Energy (KED) � Merrill starts coverage with Buy
CDC Corp (CHINA) � Oppenheimer starts coverage with Buy
Alcan (AL) � Morgan Stanley raises estimates
Alcoa (AA) � Morgan Stanley reduces estimates
Saul Ctrs (BFS) � Downgraded at RW Baird
Long positions in stocks mentioned: MS, BSC, MER
** 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. Although there are still 2 trading sessions remaining in 2006, it appears the bulls decided to put the finishing touches on a good year a little early yesterday. Another solid effort by the glass-is-half-full crowd pushed the Dow past 12,500 for the first time and to yet another new all-time closing high.
Once again, there were no specific catalysts for the move, so given the thin trading volume, we�ll have to assume that it was positive sentiment that helped the Dow scale new heights. More specifically, another couple of takeover deals, a second straight drop in oil prices, and a surprisingly strong report on New Home sales set the stage for the advance. And not even a move up in interest rates seemed to spoil the bulls� fun.
While everyone knows that the housing industry has taken its lumps recently, the game of trying to guess where the bottom is seems to be heating up. Yesterday�s data on New Home Sales helped support the idea that the market is stabilizing. The report showed that sales of new homes rose by 3.4% to an annual rate of 1.05 million units, which was well above the expectations for a rate of 1.02 million units. More importantly, sales have risen in three of the last four months, October�s numbers were revised higher, and inventories fell to their lowest level since February. Thus, all of the above argues that the much feared collapse in the housing market doesn�t appear likely at this time.
For much of the 6-month rally, the bears have been clinging to the idea that the housing market is going to continue to decline in earnest, which will severely impact the consumer, which will hurt spending, etc., etc. But for now, at least, it appears that these fears may need to be put aside for a while.
While the Dow and the NYSE managed to close at new highs, we should recognize that the volume was nothing to write home about and that both the S&P and the NASDAQ failed to join in the fun. And with trading desks all but vacant today and tomorrow, it will be interesting to see if the bulls can continue to dress up the windows.
Turning to this morning, once again we don�t have any major economic news to review before the bell, but, we will get the report on Existing Home Sales at 10:00 am. In the early going, the news that Apple�s Steve Jobs did not have proper authorization for $7.5 million in options from 2001 is putting a bit of a damper on the day.
Running through the rest of the pre-game indicators, with the exception of a nice gain in Hong Kong, the overseas markets are all languishing just below breakeven. Gold futures are higher again this morning with the last trade up $2.40 to $632.70. Crude futures are also a little higher this morning with the latest quote showing the February futures contract up $0.24 to $60.58. Interest rates are a smidge lower today after yesterday�s move higher and the yield on the 10-year currently stands at 4.65%. And finally, with about an hour before the bell, stock futures in the U.S. are looking to open flat to lower. The Dow futures are currently off by 6 points; the S&Ps are about 1 point below breakeven, and the NASDAQ looks to be about 4 points under fair value at the moment.
Stocks �In Play� This Morning:
Apple Computer (AAPL) � FT reports that $7.5m in options given to Steve Jobs were not approved properly by board
FormFactor (FORM) � BofA reduces estimates
Orient Express Hotels (OEH) � Bear Stearns raises price target
Pinnacle Entertainment (PNK) � Bear Stearns reduces estimates
BP PLC (BP) � Named Top Oil Pick at Oppenheimer
Murphy Oil (MUR) � Named Top Oil Pick at Oppenheimer
Kayne Anderson Energy (KED) � Merrill starts coverage with Buy
CDC Corp (CHINA) � Oppenheimer starts coverage with Buy
Alcan (AL) � Morgan Stanley raises estimates
Alcoa (AA) � Morgan Stanley reduces estimates
Saul Ctrs (BFS) � Downgraded at RW Baird
Long positions in stocks mentioned: MS, BSC, MER
** 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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