David Moenning�s Daily State of the Markets: 04/21
Tweet
Share
E-mail
Hitching a Ride
The bulls hitched a ride from a relative stranger yesterday as, believe it or not, it was General Motors that gave the Dow and the S&P a lift to higher ground. Unfortunately though, the NASDAQ, NYSE, and Russell 2000 didn�t have such good luck and were left standing by the side of the road.
Earnings and commodities were the focus during yesterday�s session. A beleaguered GM reported a loss of $323 million for the quarter on revenues of $52.2 Billion, which was a new record and up 14% from last year. Traders either liked what they saw in the report or ran to cover their shorts (or both) as the stock was rewarded with a 10% gain on the day.
The move up in GM helped push the Dow to a gain of 64 points and its highest close in almost 6 years. But over in four-letter-land, traders were not nearly as pleased with the reports from EBay and Intel, and the tech-heavy index finished with a loss of -0.35% on the session.
The other major story of the day came from the commodities pits. Oil fell for the first time in four sessions, settling down -$0.22 to $71.95, while the metals encountered a notable correction. Traders noted that things were getting a little overheated in the complex. So with the dollar moving up and the options expiring, the metals corrected as traders locked in profits. Gold got tagged for a loss of $12.90 while silver fell 14% intraday, which actually created a 15-minute trading halt.
On the economic front, the Conference Board�s index of Leading Economic Indicators slipped 0.1% in March, which was below the consensus estimate. In addition, the February numbers were revised lower to a reading of -0.5% from -0.2%. Despite the short-term weakness, the index has risen by 1.9% over the past six months. The Conference Board indicated that �although moderate growth should continue in the near term, the LEI suggests growth will slow down into the summer months.�
The Philly Fed Business Activity Index also came in a bit below expectations yesterday with a reading of 13.2 (expectations were for 15.0). The report indicates a modest improvement in business conditions in April as the employment index jumped to its best reading in almost 2 years. However, companies also reported renewed price pressures as the prices paid index moved up by 11.8 points. And unfortunately, fewer firms expect to be able to pass along their higher prices. This is definitely something to watch closely going forward.
Returning to the stock market, the takeaway from this week�s action so far is that the bulls have been able to ignore the higher price of oil as well as higher interest rates and maintain their focus on earnings. While analysts came into this earnings season a bit skeptical, that attitude is beginning to change as the reports are coming in better than expected.
Turning to this morning, there is no economic data scheduled for release today, however, it is an expiration day, which could also lend the bulls a hand. In addition, Google�s earnings blew away estimates after the close yesterday and is trading higher by more than 9% in pre-market trading.
Running through the rest of the pre-game indicators, overseas markets were mostly higher. May Oil futures are currently trading lower by $0.10 to $72.07 while the June futures, which is the new front month, are off by -$0.46 to $73.23. Natural Gas is trading lower by $0.21 to $7.86. Gold is rebounding by $4.90 this morning to $628.40. Interest rates are steady with the yield on the 2-year trading at 4.87% right now, while the 10-year is at 5.01%. And finally, stock futures in the U.S. are pointing to yet another positive open with the Dow futures sporting a gain of +22 points, the S&Ps are above fair value by about 3.5 points, and the NASDAQ futures are gaining 5.0.
Stocks �In Play� This Morning:
Google (GOOG) � Reported $2.29 vs. $1.98, Revenues $2.25B vs. $2.15B, Upgraded at Merrill
Broadcom (BRCM) � Reported $0.36 vs. $0.34, Revenues $900.6M vs. $870.7M
Nasdaq (NDAQ) � Reported $0.16 vs. $0.11, Revenues $396.2M vs. $359.8M
Halliburton (HAL) Reported $0.90 vs. $0.88, Revenues $5.21B vs. $5.61B
Freeport McMoran (FCX) � Downgraded at Prudential
Valero (VLO) � Prudential initiates coverage with Overweight rating
Sunoco (SUN) � Prudential initiates coverage with Overweight rating
Bausch & Lomb (BOL) � Mentioned positively in WSJ
Schlumberger (SLB) Reported $0.59 vs. $0.55, Revenues $4.2B vs. $4.15B
Newmont Mining (NEM) � Upgraded at RBC
TXU Corp (TXU) � Upgraded at Morgan Stanley
Union Pacific (UNP) � Upgraded at Bear Stearns
BEA Systems (BEAS) � Upgraded at Goldman Sachs
Sprint Nextel (S) � Mentioned positively in Business Week
Ford (F) Reported $0.24 vs. $0.22, Revenues $2.7B vs. $2.69B
Ingersoll Rand (IR) Reported $0.79 vs. $073, Revenues $2.71B vs. $2.66B
Nokia (NOK) � Upgraded at Oppenheimer
3M (MMM) � Reported $1.17 vs. $1.14, Revenues $5.6B vs. $5.58B
Disclosure: Long positions in stocks mentioned: BRCM, HAL, VLO, SUN, SLB, BSC, GS, MER
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.
The bulls hitched a ride from a relative stranger yesterday as, believe it or not, it was General Motors that gave the Dow and the S&P a lift to higher ground. Unfortunately though, the NASDAQ, NYSE, and Russell 2000 didn�t have such good luck and were left standing by the side of the road.
Earnings and commodities were the focus during yesterday�s session. A beleaguered GM reported a loss of $323 million for the quarter on revenues of $52.2 Billion, which was a new record and up 14% from last year. Traders either liked what they saw in the report or ran to cover their shorts (or both) as the stock was rewarded with a 10% gain on the day.
The move up in GM helped push the Dow to a gain of 64 points and its highest close in almost 6 years. But over in four-letter-land, traders were not nearly as pleased with the reports from EBay and Intel, and the tech-heavy index finished with a loss of -0.35% on the session.
The other major story of the day came from the commodities pits. Oil fell for the first time in four sessions, settling down -$0.22 to $71.95, while the metals encountered a notable correction. Traders noted that things were getting a little overheated in the complex. So with the dollar moving up and the options expiring, the metals corrected as traders locked in profits. Gold got tagged for a loss of $12.90 while silver fell 14% intraday, which actually created a 15-minute trading halt.
On the economic front, the Conference Board�s index of Leading Economic Indicators slipped 0.1% in March, which was below the consensus estimate. In addition, the February numbers were revised lower to a reading of -0.5% from -0.2%. Despite the short-term weakness, the index has risen by 1.9% over the past six months. The Conference Board indicated that �although moderate growth should continue in the near term, the LEI suggests growth will slow down into the summer months.�
The Philly Fed Business Activity Index also came in a bit below expectations yesterday with a reading of 13.2 (expectations were for 15.0). The report indicates a modest improvement in business conditions in April as the employment index jumped to its best reading in almost 2 years. However, companies also reported renewed price pressures as the prices paid index moved up by 11.8 points. And unfortunately, fewer firms expect to be able to pass along their higher prices. This is definitely something to watch closely going forward.
Returning to the stock market, the takeaway from this week�s action so far is that the bulls have been able to ignore the higher price of oil as well as higher interest rates and maintain their focus on earnings. While analysts came into this earnings season a bit skeptical, that attitude is beginning to change as the reports are coming in better than expected.
Turning to this morning, there is no economic data scheduled for release today, however, it is an expiration day, which could also lend the bulls a hand. In addition, Google�s earnings blew away estimates after the close yesterday and is trading higher by more than 9% in pre-market trading.
Running through the rest of the pre-game indicators, overseas markets were mostly higher. May Oil futures are currently trading lower by $0.10 to $72.07 while the June futures, which is the new front month, are off by -$0.46 to $73.23. Natural Gas is trading lower by $0.21 to $7.86. Gold is rebounding by $4.90 this morning to $628.40. Interest rates are steady with the yield on the 2-year trading at 4.87% right now, while the 10-year is at 5.01%. And finally, stock futures in the U.S. are pointing to yet another positive open with the Dow futures sporting a gain of +22 points, the S&Ps are above fair value by about 3.5 points, and the NASDAQ futures are gaining 5.0.
Stocks �In Play� This Morning:
Google (GOOG) � Reported $2.29 vs. $1.98, Revenues $2.25B vs. $2.15B, Upgraded at Merrill
Broadcom (BRCM) � Reported $0.36 vs. $0.34, Revenues $900.6M vs. $870.7M
Nasdaq (NDAQ) � Reported $0.16 vs. $0.11, Revenues $396.2M vs. $359.8M
Halliburton (HAL) Reported $0.90 vs. $0.88, Revenues $5.21B vs. $5.61B
Freeport McMoran (FCX) � Downgraded at Prudential
Valero (VLO) � Prudential initiates coverage with Overweight rating
Sunoco (SUN) � Prudential initiates coverage with Overweight rating
Bausch & Lomb (BOL) � Mentioned positively in WSJ
Schlumberger (SLB) Reported $0.59 vs. $0.55, Revenues $4.2B vs. $4.15B
Newmont Mining (NEM) � Upgraded at RBC
TXU Corp (TXU) � Upgraded at Morgan Stanley
Union Pacific (UNP) � Upgraded at Bear Stearns
BEA Systems (BEAS) � Upgraded at Goldman Sachs
Sprint Nextel (S) � Mentioned positively in Business Week
Ford (F) Reported $0.24 vs. $0.22, Revenues $2.7B vs. $2.69B
Ingersoll Rand (IR) Reported $0.79 vs. $073, Revenues $2.71B vs. $2.66B
Nokia (NOK) � Upgraded at Oppenheimer
3M (MMM) � Reported $1.17 vs. $1.14, Revenues $5.6B vs. $5.58B
Disclosure: Long positions in stocks mentioned: BRCM, HAL, VLO, SUN, SLB, BSC, GS, MER
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 Stock Movers: NKE, BE, STZ, RIG
- Comcast, Viridian Therapeutics jump premarket; Doximity slips
- After-Hours Stock Movers: AVAV, PRAX, VSH, CNXC, SHAZ
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!
