David Moenning�s Daily State of the Markets:
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Dog Days
Good morning. One of the goals of our daily market missive is to identify the key drivers to the market each and every day. The thinking is that if you can stay in tune with what is moving the market at all times, then you shouldn�t find yourself surprised by the way the market moves or the reasons for the current direction of prices. Thus, if you can stay in line with the market�s moods on a consistent basis, then keeping your portfolio on the right side of the primary trend shouldn�t be too difficult.
However, one of the challenges to writing every day is every once in a while, nothing really happens � and in sum, yesterday was one of those days. While the media will talk about the little movements being tied to the economic data, the real driver to yesterday�s session was the calendar. Yes folks, the �Dog Days of Summer� are upon us.
While the report on sales of Durable Goods was worthy of note and the fact that sales of New Homes fell more than expected, neither bit of economic data was really surprising enough to convince traders to make any major adjustments. Volume was light once again and the major indices finished with fractional gains.
The bulls will argue it is positive that the market has been able to hold the vast majority of the recent gains during this inevitable consolidation phase. They are also quick to point out that a pullback on light volume is just what the doctor ordered for higher prices in the future.
On the other side of the aisle, the bears appear content to bide their time while counting up the risk factors. They surmise that the market is a single geopolitical event, or hurricane, or economic report away from a full blown decline.
So there you have it. In short, it�s late August and not much is happening at the moment.
Looking ahead to today�s session, the dull environment may change quickly as Mr. Bernanke could liven things up in a speech from Jackson Hole this morning at 10:00 a.m. The question on everyone�s mind is which Fed Head will we hear from? Will Gentle Ben make another appearance and talk about the risks of overshooting the rate hikes? Or will Mr. �Bearnanke� show up and discuss the need to fight inflation at every turn?
Turning to this morning, stocks are little changed in the early going. On the news front, Tropical Depression Five is being watched closely for its potential to develop into a hurricane, three more oil workers were kidnapped in Nigeria, and both the UK and Germany have joined the U.S. in saying that Iran�s response to the U.N.�s proposal falls far short of requirements. All three stories are helping traders move oil prices higher this morning.
Running through the rest of the pre-game indicators, the overseas markets appear to be mired in the doldrums as well. Gold futures are moving a little higher this morning and are currently exchanging hands at $631. Crude futures are higher by $0.99 at the moment and are trading at $73.35 so far. Interest rates are also little changed this morning with the 2-year currently quoted at 4.88% while the 10-yr is sitting right on its 200 day moving average with a yield of 4.80% right now. And finally, with about an hour before the bell, stock futures in the U.S. aren�t doing much. The Dow futures are currently ahead by 7, the S&Ps are higher by 1, and the NASDAQ is sporting an advance of about 2 points at the moment.
Stocks �In Play� This Morning:
Nabors Industries (NBR) � Upgraded at Merrill Lynch
Cummins (CMI) � Downgraded at UBS
Las Vegas Sands (LVS) � Mentioned positively in Business Week
Corning (GLW) � Estimates and price targets raised at UBS
H&R Block (HRB) � Downgraded at UBS
Checkfree (CKFR) � Upgraded at AG Edwards
Mylan Labs (MYL) � Downgraded at BofA
Louisiana Pacific (LPX) � Upgraded at Credit Suisse
Newfield Exploration (NFX) � Added to focus list at Merrill Lynch
Universal Health Svcs (UHS) � Downgraded at UBS
Goldman Sachs (GS) � Estimates reduced at BofA
Bear Stearns (BSC) � Estimates reduced at BofA
Lehman Brothers (LEH) � Estimates reduced at BofA
Intl Game Technology (IGT) � Wireless gaming device approved by Nevada Gaming Commission
1800Flowers (FLWS) � Price target reduced at ThinkEquity
Shuffle Master (SHFL) � Price target lowered at BofA
Cisco Systems (CSCO) � Estimates and price targets raised at UBS
Long positions in stocks mentioned: MER, GS, BSC, CMI, CSCO
** 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. One of the goals of our daily market missive is to identify the key drivers to the market each and every day. The thinking is that if you can stay in tune with what is moving the market at all times, then you shouldn�t find yourself surprised by the way the market moves or the reasons for the current direction of prices. Thus, if you can stay in line with the market�s moods on a consistent basis, then keeping your portfolio on the right side of the primary trend shouldn�t be too difficult.
However, one of the challenges to writing every day is every once in a while, nothing really happens � and in sum, yesterday was one of those days. While the media will talk about the little movements being tied to the economic data, the real driver to yesterday�s session was the calendar. Yes folks, the �Dog Days of Summer� are upon us.
While the report on sales of Durable Goods was worthy of note and the fact that sales of New Homes fell more than expected, neither bit of economic data was really surprising enough to convince traders to make any major adjustments. Volume was light once again and the major indices finished with fractional gains.
The bulls will argue it is positive that the market has been able to hold the vast majority of the recent gains during this inevitable consolidation phase. They are also quick to point out that a pullback on light volume is just what the doctor ordered for higher prices in the future.
On the other side of the aisle, the bears appear content to bide their time while counting up the risk factors. They surmise that the market is a single geopolitical event, or hurricane, or economic report away from a full blown decline.
So there you have it. In short, it�s late August and not much is happening at the moment.
Looking ahead to today�s session, the dull environment may change quickly as Mr. Bernanke could liven things up in a speech from Jackson Hole this morning at 10:00 a.m. The question on everyone�s mind is which Fed Head will we hear from? Will Gentle Ben make another appearance and talk about the risks of overshooting the rate hikes? Or will Mr. �Bearnanke� show up and discuss the need to fight inflation at every turn?
Turning to this morning, stocks are little changed in the early going. On the news front, Tropical Depression Five is being watched closely for its potential to develop into a hurricane, three more oil workers were kidnapped in Nigeria, and both the UK and Germany have joined the U.S. in saying that Iran�s response to the U.N.�s proposal falls far short of requirements. All three stories are helping traders move oil prices higher this morning.
Running through the rest of the pre-game indicators, the overseas markets appear to be mired in the doldrums as well. Gold futures are moving a little higher this morning and are currently exchanging hands at $631. Crude futures are higher by $0.99 at the moment and are trading at $73.35 so far. Interest rates are also little changed this morning with the 2-year currently quoted at 4.88% while the 10-yr is sitting right on its 200 day moving average with a yield of 4.80% right now. And finally, with about an hour before the bell, stock futures in the U.S. aren�t doing much. The Dow futures are currently ahead by 7, the S&Ps are higher by 1, and the NASDAQ is sporting an advance of about 2 points at the moment.
Stocks �In Play� This Morning:
Nabors Industries (NBR) � Upgraded at Merrill Lynch
Cummins (CMI) � Downgraded at UBS
Las Vegas Sands (LVS) � Mentioned positively in Business Week
Corning (GLW) � Estimates and price targets raised at UBS
H&R Block (HRB) � Downgraded at UBS
Checkfree (CKFR) � Upgraded at AG Edwards
Mylan Labs (MYL) � Downgraded at BofA
Louisiana Pacific (LPX) � Upgraded at Credit Suisse
Newfield Exploration (NFX) � Added to focus list at Merrill Lynch
Universal Health Svcs (UHS) � Downgraded at UBS
Goldman Sachs (GS) � Estimates reduced at BofA
Bear Stearns (BSC) � Estimates reduced at BofA
Lehman Brothers (LEH) � Estimates reduced at BofA
Intl Game Technology (IGT) � Wireless gaming device approved by Nevada Gaming Commission
1800Flowers (FLWS) � Price target reduced at ThinkEquity
Shuffle Master (SHFL) � Price target lowered at BofA
Cisco Systems (CSCO) � Estimates and price targets raised at UBS
Long positions in stocks mentioned: MER, GS, BSC, CMI, CSCO
** 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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