David Moenning�s Daily State of the Markets: 12/29
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Closing the Book on �06
Good morning. Dave is on out today (there�s another blizzard pounding Colorado) but we've got you covered on the key data.
Stocks did a lot of nothing yesterday as most traders have already closed the book on 2006. However, yesterday�s economic data was worth a quick look.
The report on Existing Home Sales confirmed that things might be looking up in the housing market. Sales of existing homes rose +0.6% in November to an annual rate of 6.28 million units. This was far better than the expectations for a drop of -1.0% to the 6.18 million unit rate. In addition, prices were little changed. And while the prices being received by home sellers remain 2% to 3% below year ago levels, it appears that the rate of decline in the housing market is slowing.
Next, the consumer appears to be feeling better about things in general. The Consumer Confidence index climbed 3.7 points in December to 109.0, which is the highest reading since April. In short, the report doesn�t support the Bear camp�s thesis of crumbling consumer spending and a significant economic slowdown.
Finally, The Chicago Purchasing Managers� Index climbed 2.5 points to 52.4 in December, which was better than expectations for a reading of 50.2. (Remember that readings below 50 are indicative of economic contraction in the manufacturing sector.) It was also good news that the Prices Paid Index held steady with a reading that was the lowest since June 2005.
Our take is these reports continue to support the Soft Landing scenario. So, unless Goldilocks gets hit by a bus, we should probably continue to give the bulls the benefit of the doubt.
Turning to this morning, once again there is no any major economic news to review before the bell. However, another drop in oil prices and news that Apple�s Steve Jobs did not benefit from the dating of $7.5 million in options in 2001 is keeping things steady before the open.
Running through the rest of the pre-game indicators, the overseas markets are mixed with most languishing around breakeven Gold futures are higher again this morning with the last trade up $0.70 to $637.10. Crude futures moving lower this morning without any obvious catalyst. The latest quote shows the February futures contract down $0.50 to $60.03. Interest rates are a smidge higher again today and bear watching as the yield on the 10-year currently stands at 4.70%. And finally, with about an hour before the bell, stock futures in the U.S. are looking to open flat to a little higher. The Dow futures are currently ahead by 5 points; the S&Ps are about 1.5 points above breakeven, and the NASDAQ looks to be about 4.5 points ahead of fair value at the moment.
Stocks �In Play� This Morning:
General Electric (GE) � Estimates increased at AG Edwards
Echostar Comm (DISH) � Mentioned positively at Deutsche Bank
Telik (TELK) � Downgraded at JP Morgan
Medtronic (MDT) � Target increased at Lehman
St. Jude Medical (STJ) � Target increased at Lehman
Foundry Networks (FDRY) � Mentioned positively at UBS
Reinsurance Group of America (RGA) � Upgraded at UBS
Oregon Steel Mills (OS) � Downgraded at UBS
NII Holdings (NIHD) � Top Pick for 07 at Wachovia
Long positions in stocks mentioned: LEH
** 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. Dave is on out today (there�s another blizzard pounding Colorado) but we've got you covered on the key data.
Stocks did a lot of nothing yesterday as most traders have already closed the book on 2006. However, yesterday�s economic data was worth a quick look.
The report on Existing Home Sales confirmed that things might be looking up in the housing market. Sales of existing homes rose +0.6% in November to an annual rate of 6.28 million units. This was far better than the expectations for a drop of -1.0% to the 6.18 million unit rate. In addition, prices were little changed. And while the prices being received by home sellers remain 2% to 3% below year ago levels, it appears that the rate of decline in the housing market is slowing.
Next, the consumer appears to be feeling better about things in general. The Consumer Confidence index climbed 3.7 points in December to 109.0, which is the highest reading since April. In short, the report doesn�t support the Bear camp�s thesis of crumbling consumer spending and a significant economic slowdown.
Finally, The Chicago Purchasing Managers� Index climbed 2.5 points to 52.4 in December, which was better than expectations for a reading of 50.2. (Remember that readings below 50 are indicative of economic contraction in the manufacturing sector.) It was also good news that the Prices Paid Index held steady with a reading that was the lowest since June 2005.
Our take is these reports continue to support the Soft Landing scenario. So, unless Goldilocks gets hit by a bus, we should probably continue to give the bulls the benefit of the doubt.
Turning to this morning, once again there is no any major economic news to review before the bell. However, another drop in oil prices and news that Apple�s Steve Jobs did not benefit from the dating of $7.5 million in options in 2001 is keeping things steady before the open.
Running through the rest of the pre-game indicators, the overseas markets are mixed with most languishing around breakeven Gold futures are higher again this morning with the last trade up $0.70 to $637.10. Crude futures moving lower this morning without any obvious catalyst. The latest quote shows the February futures contract down $0.50 to $60.03. Interest rates are a smidge higher again today and bear watching as the yield on the 10-year currently stands at 4.70%. And finally, with about an hour before the bell, stock futures in the U.S. are looking to open flat to a little higher. The Dow futures are currently ahead by 5 points; the S&Ps are about 1.5 points above breakeven, and the NASDAQ looks to be about 4.5 points ahead of fair value at the moment.
Stocks �In Play� This Morning:
General Electric (GE) � Estimates increased at AG Edwards
Echostar Comm (DISH) � Mentioned positively at Deutsche Bank
Telik (TELK) � Downgraded at JP Morgan
Medtronic (MDT) � Target increased at Lehman
St. Jude Medical (STJ) � Target increased at Lehman
Foundry Networks (FDRY) � Mentioned positively at UBS
Reinsurance Group of America (RGA) � Upgraded at UBS
Oregon Steel Mills (OS) � Downgraded at UBS
NII Holdings (NIHD) � Top Pick for 07 at Wachovia
Long positions in stocks mentioned: LEH
** 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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