David Moenning�s Daily State of the Markets: 12/21
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Looking Elsewhere
Good morning and greetings from Blizzard Central (where there looks to be almost 3 feet of snow in my driveway). Don�t look now, but it�s been three full sessions since the S&P 500 has made a fresh cycle high and, try not to panic, but yesterday marked the second day in the last four that the Dow failed to break to a new all-time high. But, with the holidays upon us and strong five-month old rally to fall back on, I guess we shouldn�t complain too loudly as the bulls have probably earned the right to focus their attention elsewhere for a few days here.
Stocks started higher on the relief that the new Thai government flip-flopped on their imposition of currency controls. While the country�s argument that capital inflows are hurting their economy by strengthening their currency is indeed valid, the new kids on the block decided they needed to come up with a better plan than simply telling foreign investors they have to buy-and-hold in Thailand.
However, on a side note, it is interesting that big institutional investors around the globe balked rather loudly (to the tune of -14.8% in the Thai SET 50 Index) at the idea that they be forced to buy and hold Thai stocks for a year. What�s funny is that many of these same institutions have been singing the buy-and-don�t-you-dare-ever-consider-selling song to mutual fund investors here in the U.S. for more than 20 years and have even imposed similar restrictions on their mutual fund investors. Hmmm...
But, I digress. After opening higher, stocks got that sinking feeling and proceeded to do a lot of nothing for the rest of the day. Outside of the ongoing M&A stories and the game of Who�s Next being played by speculators, the only real story of the day came from the energy complex.
Crude futures climbed on the back of a big drop in energy stockpiles and finished higher by $0.26. However, it was actually the 4.4% drop in natural gas that got people�s attention and kept oil futures in check.
Other than that, it appears that traders were content to work on their holiday plans yesterday. And with a slew of economic data due out today, focusing attention elsewhere certainly made sense.
Turning to this morning, the first piece of economic data to be received today was a bit of a surprise, but is not getting much of a reaction from the markets. The final revision to Q3 GDP was revised down to 2.0% from 2.2%, which is indicative of slightly weaker growth in the economy. The Price Index came in a little higher at 1.9%, Consumption was also higher at 2.9% vs. 2.8%, and the Core PCE (the Fed�s favorite measure of inflation) came in right on target at 2.2%.
In addition, we�ll get the Index of Leading Economic Indicators at 10:00 am and the Philly Fed report at noon.
Running through the rest of the pre-game indicators, the overseas markets are quiet across the board. Gold futures are down a little this morning with the last trade at $624.00. Crude futures are also moving a bit lower this morning with the latest quote showing the February futures contract off $0.37 to $63.35. Interest rates are little changed on the GDP report as the yield on the 10-year currently stands almost unchanged at 4.59%. And finally, with about an hour before the bell, stock futures in the U.S. are looking to open flat to higher. The Dow futures are currently ahead by 7 points; the S&Ps are about 1 point above breakeven, and the NASDAQ looks to be about 4 points ahead of fair value at the moment.
Stocks �In Play� This Morning:
Broadcom (BRCM) � AG Edwards starts with Buy
AG Edwards (AGE) � Reported $1.03 vs. $0.91
Statoil (STO) � Downgraded at Citigroup
Blackrock (BLK) � Citigroup starts with Buy
Best Buy (BBY) � Upgraded at Credit Suisse
Bed Bath & Beyond (BBBY) � Downgraded at Credit Suisse
Jabil Circuits (JBL) � Downgraded at Credit Suisse, Jefferies
Pride Intl (PDE) � Upgraded at Goldman
MasterCard (MA) � Downgraded at HSBC
Jones Lang LaSalle (JLL) � JP Morgan starts at Buy
Conseco (CNO) � Downgraded at JP Morgan
Circuit City (CC) � Upgraded at JP Morgan
Darden Restaurants (DRI) � Upgraded at Raymond James
Accenture (ACN) � Upgraded at RBC
Lifepoint Hospitals (LPNT) � Upgraded at Stifel Nicolaus
Rackable Systems (RACK) � Estimates increased at Thomas Weisel
Long positions in stocks mentioned: GS, JLL, CC, DRI
** 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 and greetings from Blizzard Central (where there looks to be almost 3 feet of snow in my driveway). Don�t look now, but it�s been three full sessions since the S&P 500 has made a fresh cycle high and, try not to panic, but yesterday marked the second day in the last four that the Dow failed to break to a new all-time high. But, with the holidays upon us and strong five-month old rally to fall back on, I guess we shouldn�t complain too loudly as the bulls have probably earned the right to focus their attention elsewhere for a few days here.
Stocks started higher on the relief that the new Thai government flip-flopped on their imposition of currency controls. While the country�s argument that capital inflows are hurting their economy by strengthening their currency is indeed valid, the new kids on the block decided they needed to come up with a better plan than simply telling foreign investors they have to buy-and-hold in Thailand.
However, on a side note, it is interesting that big institutional investors around the globe balked rather loudly (to the tune of -14.8% in the Thai SET 50 Index) at the idea that they be forced to buy and hold Thai stocks for a year. What�s funny is that many of these same institutions have been singing the buy-and-don�t-you-dare-ever-consider-selling song to mutual fund investors here in the U.S. for more than 20 years and have even imposed similar restrictions on their mutual fund investors. Hmmm...
But, I digress. After opening higher, stocks got that sinking feeling and proceeded to do a lot of nothing for the rest of the day. Outside of the ongoing M&A stories and the game of Who�s Next being played by speculators, the only real story of the day came from the energy complex.
Crude futures climbed on the back of a big drop in energy stockpiles and finished higher by $0.26. However, it was actually the 4.4% drop in natural gas that got people�s attention and kept oil futures in check.
Other than that, it appears that traders were content to work on their holiday plans yesterday. And with a slew of economic data due out today, focusing attention elsewhere certainly made sense.
Turning to this morning, the first piece of economic data to be received today was a bit of a surprise, but is not getting much of a reaction from the markets. The final revision to Q3 GDP was revised down to 2.0% from 2.2%, which is indicative of slightly weaker growth in the economy. The Price Index came in a little higher at 1.9%, Consumption was also higher at 2.9% vs. 2.8%, and the Core PCE (the Fed�s favorite measure of inflation) came in right on target at 2.2%.
In addition, we�ll get the Index of Leading Economic Indicators at 10:00 am and the Philly Fed report at noon.
Running through the rest of the pre-game indicators, the overseas markets are quiet across the board. Gold futures are down a little this morning with the last trade at $624.00. Crude futures are also moving a bit lower this morning with the latest quote showing the February futures contract off $0.37 to $63.35. Interest rates are little changed on the GDP report as the yield on the 10-year currently stands almost unchanged at 4.59%. And finally, with about an hour before the bell, stock futures in the U.S. are looking to open flat to higher. The Dow futures are currently ahead by 7 points; the S&Ps are about 1 point above breakeven, and the NASDAQ looks to be about 4 points ahead of fair value at the moment.
Stocks �In Play� This Morning:
Broadcom (BRCM) � AG Edwards starts with Buy
AG Edwards (AGE) � Reported $1.03 vs. $0.91
Statoil (STO) � Downgraded at Citigroup
Blackrock (BLK) � Citigroup starts with Buy
Best Buy (BBY) � Upgraded at Credit Suisse
Bed Bath & Beyond (BBBY) � Downgraded at Credit Suisse
Jabil Circuits (JBL) � Downgraded at Credit Suisse, Jefferies
Pride Intl (PDE) � Upgraded at Goldman
MasterCard (MA) � Downgraded at HSBC
Jones Lang LaSalle (JLL) � JP Morgan starts at Buy
Conseco (CNO) � Downgraded at JP Morgan
Circuit City (CC) � Upgraded at JP Morgan
Darden Restaurants (DRI) � Upgraded at Raymond James
Accenture (ACN) � Upgraded at RBC
Lifepoint Hospitals (LPNT) � Upgraded at Stifel Nicolaus
Rackable Systems (RACK) � Estimates increased at Thomas Weisel
Long positions in stocks mentioned: GS, JLL, CC, DRI
** 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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