David Moenning�s Daily State of the Markets: 09/11
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Dueling Governesses
Good morning. Although today many on Wall Street will have their thoughts focused on the events of five years ago, we should note that the Street officially gets back to work this week as there is little vacation time left on the calendar. Most everyone will find some private time to recall the events of 9/11, but when it�s time to refocus on the present, analysts will return to a market that has been marked by light volume and a duel of words coming from the Fed.
It has become quite obvious that stocks continue to hang on everything economic and every word that members of the FOMC utter. For example, stocks were pushed and pulled on Thursday and Friday by diametrically opposed comments from Fed Governors Janet Yellen and Sandra Pianalto.
Yellen helped the Bears win Thursday�s bout by stating that the Fed must remain vigilant with regard to inflation. There was nothing new in Ms. Yellen�s comments, but this type of rhetoric clearly is meant to remind us that the Fed hasn�t put away the hiking boots just yet.
On the other side of the line, Sandra Pianalto came to the bulls rescue on Friday by defending the Fed�s decision to pause the hike down the measured path. Pianalto said it was appropriate for the Fed to pause before deciding if more hiking is necessary. She suggested that the full effect of the prior 17 rate hikes have not yet been felt by the economy and that she expects inflation to stabilize.
Stocks reacted positively and with Mr. Bernanke and company slated to meet in just nine days, we should probably expect more of the �good cop � bad cop� routine. But on Friday anyway, it was good cop Pianalto that came out on top as stocks rebounded after two days of selling.
The bulls were also aided by a decline in both oil and interest rates. Rates were lower in reaction to more bad news in the housing sector. In short, profit warnings from the likes of Lennar, Beazer Homes, and Hovnanian last week left traders concerned about the prospects for the economy going forward.
Turning to this morning, the bulls are being pushed back on their heels a bit in the early going. Stock futures in the U.S. are following foreign markets lower as falling commodity prices are hurting many of the material stocks. While this may sound strange, we have to remember that although falling prices is a good thing for inflation, it isn�t very positive for the profits of the companies leveraged to the commodities themselves.
On the news front, there is no economic data scheduled for release before the bell today. However, it is a positive that Iran has said it will consider halting the enrichment of uranium for a month or two and traders will be very interested to hear what comes out of today�s OPEC meeting. In looking at the week ahead, we�ll get a peek at the Trade Balance on Tuesday, the Monthly Budget Statement on Wednesday, Import Prices, Retail Sales, and Business Inventories on Thursday, and then on Friday, we�ll get the August CPI report as well as data on Industrial Production and the University of Michigan�s report on Consumer Sentiment.
Running through the rest of the pre-game indicators, the overseas markets are lower across the board. Gold futures are continuing their pullback and are currently down another $14.60 to $602.70. Crude futures are also falling this morning and are exchanging hands $0.97 lower at $65.28 right now. Interest rates are little changed this morning and the 2-year currently quoted at 4.81% while the 10-yr is trading with a yield of 4.78% right now. And finally, with about an hour before the bell, stock futures in the U.S. are moving lower. The Dow futures are currently about 30 points below of fair value, the S&Ps are off by 3.60, and the NASDAQ is sporting a loss of about 6 points.
Stocks �In Play� This Morning:
Symantec (SYMC) � Mentioned positively in Barron�s
Johnson & Johnson (JNJ) � Ranked in Barron�s Most Respected Companies. Also: GE, PG, TM, BRK.A
Gold Fields (GFI) � Announces 3 transactions to acquire mining operations
Bear Stearns (BSC) � Estimates reduced at Goldman Sachs. Also LEH and MS
Intel (INTC) � Mentioned positively at BofA. EU to widen antitrust probe
Texas Instruments (TXN) � Mentioned positively at Bernstein
Apple Computer (AAPL) � Restated Buy at Credit Suisse
Micron Technology (MU) � Upgraded at JP Morgan
Textron (TXT) � Upgraded at Prudential
Citrix Systems (CTXS) � Upgraded at RBC Capital
Whole Foods (WFMI) � Upgraded at UBS
Bank of America � Downgraded at UBS
Lennar (LEN) � Downgraded at UBS
Dell (DELL) � To delay filing of 10Q and announces suspension of share repurchase program until further notice
Long positions in stocks mentioned: JNJ, SYMC, INTC, CTXS
** 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 today many on Wall Street will have their thoughts focused on the events of five years ago, we should note that the Street officially gets back to work this week as there is little vacation time left on the calendar. Most everyone will find some private time to recall the events of 9/11, but when it�s time to refocus on the present, analysts will return to a market that has been marked by light volume and a duel of words coming from the Fed.
It has become quite obvious that stocks continue to hang on everything economic and every word that members of the FOMC utter. For example, stocks were pushed and pulled on Thursday and Friday by diametrically opposed comments from Fed Governors Janet Yellen and Sandra Pianalto.
Yellen helped the Bears win Thursday�s bout by stating that the Fed must remain vigilant with regard to inflation. There was nothing new in Ms. Yellen�s comments, but this type of rhetoric clearly is meant to remind us that the Fed hasn�t put away the hiking boots just yet.
On the other side of the line, Sandra Pianalto came to the bulls rescue on Friday by defending the Fed�s decision to pause the hike down the measured path. Pianalto said it was appropriate for the Fed to pause before deciding if more hiking is necessary. She suggested that the full effect of the prior 17 rate hikes have not yet been felt by the economy and that she expects inflation to stabilize.
Stocks reacted positively and with Mr. Bernanke and company slated to meet in just nine days, we should probably expect more of the �good cop � bad cop� routine. But on Friday anyway, it was good cop Pianalto that came out on top as stocks rebounded after two days of selling.
The bulls were also aided by a decline in both oil and interest rates. Rates were lower in reaction to more bad news in the housing sector. In short, profit warnings from the likes of Lennar, Beazer Homes, and Hovnanian last week left traders concerned about the prospects for the economy going forward.
Turning to this morning, the bulls are being pushed back on their heels a bit in the early going. Stock futures in the U.S. are following foreign markets lower as falling commodity prices are hurting many of the material stocks. While this may sound strange, we have to remember that although falling prices is a good thing for inflation, it isn�t very positive for the profits of the companies leveraged to the commodities themselves.
On the news front, there is no economic data scheduled for release before the bell today. However, it is a positive that Iran has said it will consider halting the enrichment of uranium for a month or two and traders will be very interested to hear what comes out of today�s OPEC meeting. In looking at the week ahead, we�ll get a peek at the Trade Balance on Tuesday, the Monthly Budget Statement on Wednesday, Import Prices, Retail Sales, and Business Inventories on Thursday, and then on Friday, we�ll get the August CPI report as well as data on Industrial Production and the University of Michigan�s report on Consumer Sentiment.
Running through the rest of the pre-game indicators, the overseas markets are lower across the board. Gold futures are continuing their pullback and are currently down another $14.60 to $602.70. Crude futures are also falling this morning and are exchanging hands $0.97 lower at $65.28 right now. Interest rates are little changed this morning and the 2-year currently quoted at 4.81% while the 10-yr is trading with a yield of 4.78% right now. And finally, with about an hour before the bell, stock futures in the U.S. are moving lower. The Dow futures are currently about 30 points below of fair value, the S&Ps are off by 3.60, and the NASDAQ is sporting a loss of about 6 points.
Stocks �In Play� This Morning:
Symantec (SYMC) � Mentioned positively in Barron�s
Johnson & Johnson (JNJ) � Ranked in Barron�s Most Respected Companies. Also: GE, PG, TM, BRK.A
Gold Fields (GFI) � Announces 3 transactions to acquire mining operations
Bear Stearns (BSC) � Estimates reduced at Goldman Sachs. Also LEH and MS
Intel (INTC) � Mentioned positively at BofA. EU to widen antitrust probe
Texas Instruments (TXN) � Mentioned positively at Bernstein
Apple Computer (AAPL) � Restated Buy at Credit Suisse
Micron Technology (MU) � Upgraded at JP Morgan
Textron (TXT) � Upgraded at Prudential
Citrix Systems (CTXS) � Upgraded at RBC Capital
Whole Foods (WFMI) � Upgraded at UBS
Bank of America � Downgraded at UBS
Lennar (LEN) � Downgraded at UBS
Dell (DELL) � To delay filing of 10Q and announces suspension of share repurchase program until further notice
Long positions in stocks mentioned: JNJ, SYMC, INTC, CTXS
** 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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