David Moenning�s Daily State of the Markets: 06/01
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Posturing is a Positive
The bulls would like to think that they were solely responsible for yesterday�s rally. Yet, in reality, the glass-is-half-full crowd needed a helping hand to close out an otherwise crummy month on a positive note.
Shortly after the open, the U.S. made an offer to join talks to resolve the Iran nuclear standoff with diplomacy. If such a meeting were to happen, it would a somewhat historic event since it would be the first face-to-face talks since 1979.
While the move was viewed as mostly political posturing and was quickly labeled as propaganda by the Iranians, it represented an improvement in the situation, which certainly wasn�t lost on Wall Street. The thinking among traders was that more posturing means less potential for air strikes in the near future, which of course, means less risk of an interruption in the flow of oil.
Oil fell on the news and wound up finishing the day down -$0.74 at $71.29.
Stocks were clearly encouraged by the development and put on a nice show to end the month. The Dow�s gain of 74 points was in line with the major averages� gain of +0.7% and the smaller cap indices enjoyed a pop of +1% or more. But perhaps the best news of the day was that there was some decent volume for a change.
The improvement in geopolitical issues and the resulting fall in oil prices overshadowed the release of the minutes from the 5/10 FOMC meeting.
The bulls probably should have sat up and taken notice that the Fed doesn�t appear to be sure where rates will end up, but they instead focused on putting the finishing touches on the month of May.
The bulls also got some help from the calendar. Everybody knows that the last few trading days of each month as well as the first 5 days of a new month are historically strong. And while May wasn�t exactly a picnic for investors (the S&P experienced the worst May since 1984), the bulls will certainly take some gains to close out the month.
Turning to this morning, in the very early going, it looks like the green screens were a one-day thing. Worries over interest rates and today�s serving of economic data are pushing stocks lower before the bell. Today we�ll get data on Productivity at 8:30 as well as the ISM Manufacturing, Construction Spending and Pending Home Sales data at 10:00.
Running through the rest of the pre-game indicators, Asian markets were mixed while European bourses are modestly lower across the board. Gold is also moving down this morning on the easing of tensions with Iran and is currently quoted lower by -$14.40 to $634.60. Interest rates are a little higher this morning with the 2-year currently trading at 5.06% while the 10-yr is quoted at 5.14% right now. And finally, with about 90 minutes before the bell, stock futures in the U.S. are moving lower. The Dow futures are currently off by 27 points, the S&Ps are down by 2.60, while the NASDAQ is sporting a drop of 3 points.
In closing, let�s remember that everyone is �data dependent� these days and the focus is on what the Fed will do next. And as such, we will patiently wait to see what the data brings us today and tomorrow.
Stocks �In Play� This Morning:
Commerce Bancorp (CBH) � To be added to S&P 500 on 6/5
Motorola (MOT) � To acquire TTP Communications
Alcoa (AA) � Reaches agreement with employees to avert strike
Freeport McMoRan (FCX) � Upgraded at Rochdale
Yahoo (YHOO) � To launch web video service 6/1
Intel (INTC) � Rumored to be cutting 16,000 jobs
American Eagle Outfitters (AEOS) � May same store sales up 11%
Ford (F) � To offer 0% financing and free gasoline incentives
Hovnanian (HOV) � Reported $1.55 vs. $1.42, Revenues $1.57B vs. $1.39
Sun Microsystems (SUNW) � To cut 4,000 to 5,000 jobs this year
Gilead Sciences (GILD) � Upgraded at JP Morgan
Kyphon (KYPH) � Downgraded at Morgan Stanley
RH Donnelley (RHD) � Recommended at Goldman Sachs
AT&T (T) � Upgraded at CIBC
Positions in stocks mentioned: GS, FCX, JPM, MS
** 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.
The bulls would like to think that they were solely responsible for yesterday�s rally. Yet, in reality, the glass-is-half-full crowd needed a helping hand to close out an otherwise crummy month on a positive note.
Shortly after the open, the U.S. made an offer to join talks to resolve the Iran nuclear standoff with diplomacy. If such a meeting were to happen, it would a somewhat historic event since it would be the first face-to-face talks since 1979.
While the move was viewed as mostly political posturing and was quickly labeled as propaganda by the Iranians, it represented an improvement in the situation, which certainly wasn�t lost on Wall Street. The thinking among traders was that more posturing means less potential for air strikes in the near future, which of course, means less risk of an interruption in the flow of oil.
Oil fell on the news and wound up finishing the day down -$0.74 at $71.29.
Stocks were clearly encouraged by the development and put on a nice show to end the month. The Dow�s gain of 74 points was in line with the major averages� gain of +0.7% and the smaller cap indices enjoyed a pop of +1% or more. But perhaps the best news of the day was that there was some decent volume for a change.
The improvement in geopolitical issues and the resulting fall in oil prices overshadowed the release of the minutes from the 5/10 FOMC meeting.
The bulls probably should have sat up and taken notice that the Fed doesn�t appear to be sure where rates will end up, but they instead focused on putting the finishing touches on the month of May.
The bulls also got some help from the calendar. Everybody knows that the last few trading days of each month as well as the first 5 days of a new month are historically strong. And while May wasn�t exactly a picnic for investors (the S&P experienced the worst May since 1984), the bulls will certainly take some gains to close out the month.
Turning to this morning, in the very early going, it looks like the green screens were a one-day thing. Worries over interest rates and today�s serving of economic data are pushing stocks lower before the bell. Today we�ll get data on Productivity at 8:30 as well as the ISM Manufacturing, Construction Spending and Pending Home Sales data at 10:00.
Running through the rest of the pre-game indicators, Asian markets were mixed while European bourses are modestly lower across the board. Gold is also moving down this morning on the easing of tensions with Iran and is currently quoted lower by -$14.40 to $634.60. Interest rates are a little higher this morning with the 2-year currently trading at 5.06% while the 10-yr is quoted at 5.14% right now. And finally, with about 90 minutes before the bell, stock futures in the U.S. are moving lower. The Dow futures are currently off by 27 points, the S&Ps are down by 2.60, while the NASDAQ is sporting a drop of 3 points.
In closing, let�s remember that everyone is �data dependent� these days and the focus is on what the Fed will do next. And as such, we will patiently wait to see what the data brings us today and tomorrow.
Stocks �In Play� This Morning:
Commerce Bancorp (CBH) � To be added to S&P 500 on 6/5
Motorola (MOT) � To acquire TTP Communications
Alcoa (AA) � Reaches agreement with employees to avert strike
Freeport McMoRan (FCX) � Upgraded at Rochdale
Yahoo (YHOO) � To launch web video service 6/1
Intel (INTC) � Rumored to be cutting 16,000 jobs
American Eagle Outfitters (AEOS) � May same store sales up 11%
Ford (F) � To offer 0% financing and free gasoline incentives
Hovnanian (HOV) � Reported $1.55 vs. $1.42, Revenues $1.57B vs. $1.39
Sun Microsystems (SUNW) � To cut 4,000 to 5,000 jobs this year
Gilead Sciences (GILD) � Upgraded at JP Morgan
Kyphon (KYPH) � Downgraded at Morgan Stanley
RH Donnelley (RHD) � Recommended at Goldman Sachs
AT&T (T) � Upgraded at CIBC
Positions in stocks mentioned: GS, FCX, JPM, MS
** 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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