David Moenning�s Daily State of the Markets: 03/28
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Braking for Bernanke
Traders and investors alike tapped the brakes a little yesterday as they simply put off most decisions in front of today�s FOMC announcement. The indices wound up mixed with the blue chips finishing down slightly while the NASDAQ was up on Google scrambling and an upgrade at Intel. As expected, volume was light and was indicative of the hesitancy in front of Mr. Bernanke�s first Fed meeting.
The FOMC began its two day meeting yesterday and will announce their decision today at 2:15 pm eastern time. Everyone on the planet expects a 15th straight rate increase, which will take the Fed Funds rate to 4.75%. However, everyone is also waiting with bated breath for what Mr. Bernanke will have to say in the statement accompanying the rate announcement.
The expectations are for Mr. Bernanke to put his own stamp on the language in the statement, but most are looking for the fed to continue to keep their cards close. However, traders have happily tossed aside the Greenspan dictionary and are hopeful that that it will be easier to understand the new Fed head�s intentions. A key topic today will be inflation. For example, we know Mr. Bernanke favors inflation targets, but what we don�t know is when or how he plans to implement them. Thus, analysts will be very interested to learn what specific verbiage will be used on the inflation front this afternoon.
Stocks have enjoyed a nice run in anticipation of the Fed ending its rate hike campaign sometime soon. And while we would love to think that today�s statement will somehow suggest that the FOMC is done for now, or at the very least, one and done, this expectation may be a little unrealistic. The Fed has mentioned that it wants to become more data dependent going forward, so it is unlikely that they will lock themselves into any specific plan at this stage.
Turning to this morning, things are fairly quiet at the present time as there is no economic data before the bell. In addition to the Fed announcement today, we will also get reports on Consumer Confidence report and the Richmond Fed at 10:00 a.m. However, it will suffice to say that the Fed is going to get most of the attention today.
Running through the pre-game indicators, overseas markets are mixed with Asian markets higher and European bourses down for the second straight day. Gold is trading lower this morning by $2 to $565.40. And although all eyes are on the Fed, oil futures are moving higher again and may soon attract some attention. Crude futures are up by $0.73 this morning to $64.89. Concerns over supplies in front of the summer driving season, unrest in Nigeria, and the Iran situation are said to be behind the increase. Natural Gas is trading lower at $7.11 right now. Bond yields are moving up this morning with both the 2-year and the 10-yr currently trading at 4.73%. And finally, stock futures in the U.S. are up a bit at the moment with the DJIA futures up +1, the S&Ps are higher by +0.50, and the NASDAQ futures are stronger by +0.50 as well.
Stocks �In Play� This Morning:
DELL � WSJ reports PC growth is expected to slow
VOD � Goldman estimates new EU proposal on roaming will cut earnings by 3% � 4%
SII � Downgraded at Wachovia
GOOG � NYT reports company hiring lobbyists to promote net as communication tool
LEN � Reported $1.58 vs. $1.54, Revenues of $3.24B vs. $3.08B
LLY � Downgraded at Merrill
ATYT � Downgraded at Lehman
LEXR � Guides lower
NTDOY - Nintendo downgraded at Lehman
ALTR - JPM reduces estimates
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: none
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) 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.
Traders and investors alike tapped the brakes a little yesterday as they simply put off most decisions in front of today�s FOMC announcement. The indices wound up mixed with the blue chips finishing down slightly while the NASDAQ was up on Google scrambling and an upgrade at Intel. As expected, volume was light and was indicative of the hesitancy in front of Mr. Bernanke�s first Fed meeting.
The FOMC began its two day meeting yesterday and will announce their decision today at 2:15 pm eastern time. Everyone on the planet expects a 15th straight rate increase, which will take the Fed Funds rate to 4.75%. However, everyone is also waiting with bated breath for what Mr. Bernanke will have to say in the statement accompanying the rate announcement.
The expectations are for Mr. Bernanke to put his own stamp on the language in the statement, but most are looking for the fed to continue to keep their cards close. However, traders have happily tossed aside the Greenspan dictionary and are hopeful that that it will be easier to understand the new Fed head�s intentions. A key topic today will be inflation. For example, we know Mr. Bernanke favors inflation targets, but what we don�t know is when or how he plans to implement them. Thus, analysts will be very interested to learn what specific verbiage will be used on the inflation front this afternoon.
Stocks have enjoyed a nice run in anticipation of the Fed ending its rate hike campaign sometime soon. And while we would love to think that today�s statement will somehow suggest that the FOMC is done for now, or at the very least, one and done, this expectation may be a little unrealistic. The Fed has mentioned that it wants to become more data dependent going forward, so it is unlikely that they will lock themselves into any specific plan at this stage.
Turning to this morning, things are fairly quiet at the present time as there is no economic data before the bell. In addition to the Fed announcement today, we will also get reports on Consumer Confidence report and the Richmond Fed at 10:00 a.m. However, it will suffice to say that the Fed is going to get most of the attention today.
Running through the pre-game indicators, overseas markets are mixed with Asian markets higher and European bourses down for the second straight day. Gold is trading lower this morning by $2 to $565.40. And although all eyes are on the Fed, oil futures are moving higher again and may soon attract some attention. Crude futures are up by $0.73 this morning to $64.89. Concerns over supplies in front of the summer driving season, unrest in Nigeria, and the Iran situation are said to be behind the increase. Natural Gas is trading lower at $7.11 right now. Bond yields are moving up this morning with both the 2-year and the 10-yr currently trading at 4.73%. And finally, stock futures in the U.S. are up a bit at the moment with the DJIA futures up +1, the S&Ps are higher by +0.50, and the NASDAQ futures are stronger by +0.50 as well.
Stocks �In Play� This Morning:
DELL � WSJ reports PC growth is expected to slow
VOD � Goldman estimates new EU proposal on roaming will cut earnings by 3% � 4%
SII � Downgraded at Wachovia
GOOG � NYT reports company hiring lobbyists to promote net as communication tool
LEN � Reported $1.58 vs. $1.54, Revenues of $3.24B vs. $3.08B
LLY � Downgraded at Merrill
ATYT � Downgraded at Lehman
LEXR � Guides lower
NTDOY - Nintendo downgraded at Lehman
ALTR - JPM reduces estimates
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: none
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) 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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