David Moenning�s Daily State of the Markets: 12/07
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Awaiting More Information
Good morning. Cutting to the chase, stocks spent the majority of yesterday biding their time and waiting on Friday�s employment data. With the market fixated on the state of the economy and stocks sitting at or near their highs, even the bulls appear hesitant to push things much farther without the all important jobs data in hand.
Although the ADP numbers provided an upbeat preview of the report, there appeared to be little impetus to take action yesterday. And while stock traders brushed aside the ADP report showing an increase of 158,000 jobs, which was far greater than the 100,000 economists had projected, it is interesting to note that the bond market did indeed recognize the possibility of a strong jobs report on Friday as the yield on the 10-year jumped on the news and remained higher throughout the day.
Stock traders, on the other hand, recalled that the correlation of the ADP numbers to those from the BLS hasn�t exactly been spot on lately. Therefore, there was little credence given to the report.
And in the big picture, there was little credence given to much of anything yesterday in the stock market. There was an interesting debate on whether or not we are seeing a bottom in the housing market, some movement in oil and metals, and a good deal of discussion about Yahoo�s decision to reorganize. But other that and the fact that the indices finished modestly lower, it was a fairly benign day.
Entering into today�s session, we find ourselves looking at a landscape which includes an upbeat view of valuations based on recent M&A activity, fairly low interest rates, a Goldilocks economy, no real fears of inflation, and several market indices sitting at new all-time highs. So, all in all, I guess even the bulls will probably agree that it�s ok to endure a sloppy session here and there.
Turning to this morning, there is no big economic news scheduled for release before the bell. However, there is some activity across the pond as the ECB has raised rates by 0.25% to 3.50% while the Bank of England decided to leave rates unchanged at 5.00%.
Running through the rest of the pre-game indicators, with the exception of Hong Kong, the overseas markets are all higher. Gold futures are a smidge lower this morning and are quoted at $635.70 right now. Crude futures are doing little so far with the latest quote showing the January contract unchanged at $62.19. Interest rates are moving a little lower this morning and the yield on the 2-year is currently quoted at 4.56% while the 10-yr is trading with a yield of 4.47% right now. And finally, with an hour before the bell, stock futures in the U.S. are looking to open a little higher. The Dow futures are currently ahead by about 10 points; the S&Ps are a point ahead of breakeven, and the NASDAQ looks to be about 4 points above fair value at the moment.
Stocks �In Play� This Morning:
Louisiana Pacific (LPX) � Upgraded at Bank of America
Advance Auto Parts (AAP) � Upgraded at Citigroup
Todco (THE) � Downgraded at Credit Suisse
KB Home (KBH) � Upgraded at Credit Suisse
Ryland (RYL) � Downgraded at Credit Suisse
Pogo Producing (PPP) � Downgraded at Deutsche Bank
Camden Property Trust (CPT) � Downgraded at Goldman Sachs
Hershey (HSY) � Downgraded at Goldman Sachs
Dollar General (DG) � Downgraded at HSBC
Tellabs (TLAB) � Downgraded at JP Morgan
Aon Corp (AOC) � Downgraded at Merrill Lynch
Goldman Sachs (GS) � Price target increased at Prudential
Research in Motion (RIMM) � Downgraded at RBC Capital
Yum Brands (YUM) � Downgraded at RBC Capital
Tidewater (TDW) � Downgraded at UBS
DuPont (DD) � Price target increased at UBS
Long positions in stocks mentioned: GS, MER
** 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. Cutting to the chase, stocks spent the majority of yesterday biding their time and waiting on Friday�s employment data. With the market fixated on the state of the economy and stocks sitting at or near their highs, even the bulls appear hesitant to push things much farther without the all important jobs data in hand.
Although the ADP numbers provided an upbeat preview of the report, there appeared to be little impetus to take action yesterday. And while stock traders brushed aside the ADP report showing an increase of 158,000 jobs, which was far greater than the 100,000 economists had projected, it is interesting to note that the bond market did indeed recognize the possibility of a strong jobs report on Friday as the yield on the 10-year jumped on the news and remained higher throughout the day.
Stock traders, on the other hand, recalled that the correlation of the ADP numbers to those from the BLS hasn�t exactly been spot on lately. Therefore, there was little credence given to the report.
And in the big picture, there was little credence given to much of anything yesterday in the stock market. There was an interesting debate on whether or not we are seeing a bottom in the housing market, some movement in oil and metals, and a good deal of discussion about Yahoo�s decision to reorganize. But other that and the fact that the indices finished modestly lower, it was a fairly benign day.
Entering into today�s session, we find ourselves looking at a landscape which includes an upbeat view of valuations based on recent M&A activity, fairly low interest rates, a Goldilocks economy, no real fears of inflation, and several market indices sitting at new all-time highs. So, all in all, I guess even the bulls will probably agree that it�s ok to endure a sloppy session here and there.
Turning to this morning, there is no big economic news scheduled for release before the bell. However, there is some activity across the pond as the ECB has raised rates by 0.25% to 3.50% while the Bank of England decided to leave rates unchanged at 5.00%.
Running through the rest of the pre-game indicators, with the exception of Hong Kong, the overseas markets are all higher. Gold futures are a smidge lower this morning and are quoted at $635.70 right now. Crude futures are doing little so far with the latest quote showing the January contract unchanged at $62.19. Interest rates are moving a little lower this morning and the yield on the 2-year is currently quoted at 4.56% while the 10-yr is trading with a yield of 4.47% right now. And finally, with an hour before the bell, stock futures in the U.S. are looking to open a little higher. The Dow futures are currently ahead by about 10 points; the S&Ps are a point ahead of breakeven, and the NASDAQ looks to be about 4 points above fair value at the moment.
Stocks �In Play� This Morning:
Louisiana Pacific (LPX) � Upgraded at Bank of America
Advance Auto Parts (AAP) � Upgraded at Citigroup
Todco (THE) � Downgraded at Credit Suisse
KB Home (KBH) � Upgraded at Credit Suisse
Ryland (RYL) � Downgraded at Credit Suisse
Pogo Producing (PPP) � Downgraded at Deutsche Bank
Camden Property Trust (CPT) � Downgraded at Goldman Sachs
Hershey (HSY) � Downgraded at Goldman Sachs
Dollar General (DG) � Downgraded at HSBC
Tellabs (TLAB) � Downgraded at JP Morgan
Aon Corp (AOC) � Downgraded at Merrill Lynch
Goldman Sachs (GS) � Price target increased at Prudential
Research in Motion (RIMM) � Downgraded at RBC Capital
Yum Brands (YUM) � Downgraded at RBC Capital
Tidewater (TDW) � Downgraded at UBS
DuPont (DD) � Price target increased at UBS
Long positions in stocks mentioned: GS, MER
** 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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