David Moenning�s Daily State of the Markets: 04/11
Tweet
Share
E-mail
Waiting For the Parade
Stocks spent the vast majority of yesterday�s session worrying about oil and waiting on the parade � the earnings parade, that is. Without any economic news to guide them, traders were left ponder the impact of oil's latest rise and how the earnings season will turn out. The end result was a very modest 21 point bounce in the Dow and a pullback in tech.
There was some volatility as stocks gave up early gains for the second day in a row. Oil, interest rates, and the dollar were the focal points of what analysts were calling a muted day. And with volume coming in light, it appeared that traders may have been trying to get a jump on travel plans in front of Friday�s holiday.
There were no economic reports released yesterday, so the focus shifted from the question of what the Fed will do next to whether oil will go higher. The U.S. Dollar continued to rally, but this time, the move didn�t create selling in bonds. And speaking of yields, bond trading was also on the flat side. Without any impetus for movement, bonds traded in a tight range and the yield on the 10-yr finished about where it started at 4.96%
New reports of unrest in Nigeria, the introduction of the new oil ETF (USO), and speculation that the U.S. may be planning air strikes against Iran pushed oil higher once again yesterday. Since Iran is a major supplier of oil, crude futures closed up $1.35 to $68.74. The move created some discussion of $3 gasoline for the summer driving season and led to more speculation about a slowdown in the economy as the year progresses.
But after the close, the bulls got some good news. Alcoa kicked off the earnings parade with a big win by reporting $0.70 per share, which easily exceeded the Reuters consensus estimate for $0.50. Analysts had been expecting a strong report on the back of higher aluminum prices, but it was still nice to see a good report and AA is trading up $2.60, or almost 8%, before the bell.
Turning to this morning, once again there is no economic news scheduled for release today and there are no major earnings reports before the bell. Oil continues to be the focus with crude futures trading above $69 this morning. There is also talk this morning of higher rates in Europe as an ECB member suggested that the central bank may need to raise rates to combat inflation. In addition, the German Zew index, which is an indicator of business expectations, came in below estimates at 62.7 versus the consensus of 65.
Running through the rest of the pre-game indicators, the overseas markets are lower across the board. Hong Kong fell -0.3%, Japan was down -0.2%, France is declining -0.5%, Germany is off by -0.7%, and the UK is lower by -0.1%. Oil futures are currently trading up another $0.47 to $69.21 and will likely attract a lot of attention today. Natural Gas is trading higher by $0.11 to $7.00. Gold futures are trying to hang around $600 and are trading down $2.70 to $599.10 at the moment. Bond yields are a little lower so far with the 2-yr yield at 4.88% and 10-yr currently trading at 4.94%. And finally, stock futures in the U.S. are waffling around breakeven an hour before the bell with the Dow futures sporting a gain of +7 points on the back of AA�s gain, the S&Ps are up by $0.10, but the NASDAQ futures are up by 2.20
Stocks �In Play� This Morning:
AA � Reports $0.70 vs. $0.52, Upgraded at CIBC
FCX � Upgraded at Merrill
AAUK � Upgraded at Deutsche
BOL � Stops shipping ReNu MoistureLoc solutions, Downgraded by 4 firms
BBY � Will carry Lenova (formerly IBM) Thinkpads
GM � To Sell 7.9% of equity stake in Isuzu Motors
MU � Reports $0.27 including $230M gain, Revenues $1.23B vs. $134B
STN � Accelerates buyback program
NOK � Says average price of handsets was above expectations
WFMI � Reiterated buy at BofA
CHRW � BB&T Capital raises target price
CSCO � BofA expects normal seasonality patterns, mentions CSCO, ALA as favorites
UNH - Stifel believes stock is oversold and reiterates Buy
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: IBM, CHRW, CSCO
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.
Stocks spent the vast majority of yesterday�s session worrying about oil and waiting on the parade � the earnings parade, that is. Without any economic news to guide them, traders were left ponder the impact of oil's latest rise and how the earnings season will turn out. The end result was a very modest 21 point bounce in the Dow and a pullback in tech.
There was some volatility as stocks gave up early gains for the second day in a row. Oil, interest rates, and the dollar were the focal points of what analysts were calling a muted day. And with volume coming in light, it appeared that traders may have been trying to get a jump on travel plans in front of Friday�s holiday.
There were no economic reports released yesterday, so the focus shifted from the question of what the Fed will do next to whether oil will go higher. The U.S. Dollar continued to rally, but this time, the move didn�t create selling in bonds. And speaking of yields, bond trading was also on the flat side. Without any impetus for movement, bonds traded in a tight range and the yield on the 10-yr finished about where it started at 4.96%
New reports of unrest in Nigeria, the introduction of the new oil ETF (USO), and speculation that the U.S. may be planning air strikes against Iran pushed oil higher once again yesterday. Since Iran is a major supplier of oil, crude futures closed up $1.35 to $68.74. The move created some discussion of $3 gasoline for the summer driving season and led to more speculation about a slowdown in the economy as the year progresses.
But after the close, the bulls got some good news. Alcoa kicked off the earnings parade with a big win by reporting $0.70 per share, which easily exceeded the Reuters consensus estimate for $0.50. Analysts had been expecting a strong report on the back of higher aluminum prices, but it was still nice to see a good report and AA is trading up $2.60, or almost 8%, before the bell.
Turning to this morning, once again there is no economic news scheduled for release today and there are no major earnings reports before the bell. Oil continues to be the focus with crude futures trading above $69 this morning. There is also talk this morning of higher rates in Europe as an ECB member suggested that the central bank may need to raise rates to combat inflation. In addition, the German Zew index, which is an indicator of business expectations, came in below estimates at 62.7 versus the consensus of 65.
Running through the rest of the pre-game indicators, the overseas markets are lower across the board. Hong Kong fell -0.3%, Japan was down -0.2%, France is declining -0.5%, Germany is off by -0.7%, and the UK is lower by -0.1%. Oil futures are currently trading up another $0.47 to $69.21 and will likely attract a lot of attention today. Natural Gas is trading higher by $0.11 to $7.00. Gold futures are trying to hang around $600 and are trading down $2.70 to $599.10 at the moment. Bond yields are a little lower so far with the 2-yr yield at 4.88% and 10-yr currently trading at 4.94%. And finally, stock futures in the U.S. are waffling around breakeven an hour before the bell with the Dow futures sporting a gain of +7 points on the back of AA�s gain, the S&Ps are up by $0.10, but the NASDAQ futures are up by 2.20
Stocks �In Play� This Morning:
AA � Reports $0.70 vs. $0.52, Upgraded at CIBC
FCX � Upgraded at Merrill
AAUK � Upgraded at Deutsche
BOL � Stops shipping ReNu MoistureLoc solutions, Downgraded by 4 firms
BBY � Will carry Lenova (formerly IBM) Thinkpads
GM � To Sell 7.9% of equity stake in Isuzu Motors
MU � Reports $0.27 including $230M gain, Revenues $1.23B vs. $134B
STN � Accelerates buyback program
NOK � Says average price of handsets was above expectations
WFMI � Reiterated buy at BofA
CHRW � BB&T Capital raises target price
CSCO � BofA expects normal seasonality patterns, mentions CSCO, ALA as favorites
UNH - Stifel believes stock is oversold and reiterates Buy
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: IBM, CHRW, CSCO
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.
You May Also Be Interested In
- After-Hours Movers: AMAT, DLO, GLOB, YSS, ETON
- After-Hours Movers: CRWV, NBIS, SMCI, LITE, CAVA, HRB
- After-Hours Movers: CSCO, COHR, HLIT, CBRS, STUB, ENS
Create E-mail Alert Related Categories
Contributors, Special ReportsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
