David Moenning�s Daily State of the Markets:
Tweet
Share
E-mail
Brief Respite?
According to the bull camp, Friday�s activity, if you can call it that, was simply a brief respite from last week�s fun. Although the market enjoyed a romp up of about 200 points for the week, on Friday, stocks pretty much ran in place in front of the long holiday weekend.
It wasn�t as if it was a lack of news that produced the stall. It was actually just the opposite as traders wrestled with an increase in PPI, crummy earnings from Dell, a decline in consumer sentiment, a rebound in oil prices, and the almost forgotten nuclear issue in Iran.
At first glance, it might be easy to conclude that the day�s news events would favor the bears. For example, the core rate of inflation came in double the expectations was and the highest in a year. While the inflation numbers weren�t surprising, the data did nothing to quell concerns over additional Fed tightening. Then the University of Michigan�s Consumer Sentiment index fell 3.8 points to 87.4 at midmonth, which was below the consensus estimate for a reading of 91.0. And finally, oil prices surged for the second straight session, and closed with a gain of +$1.42.
But the bulls hung tough through it all and surprisingly refused to give back any of the week�s spoils. It wasn�t until a couple of sell programs were run in the last hour that stocks finally moved down slightly. And in the end, although volume was light and there wasn�t much movement in the indices, the session has to be considered a modest victory for our barnyard buddies. In short, the bears simply failed to capitalize on the deserted trading desks.
Looking ahead, it would appear that the question of whether stocks can move higher from here will be tied directly to the issues of the economy and the Fed. The bulls will be searching for Goldilocks in every economic report as they will need to see data suggesting the economy is just right; i.e. not hot enough to encourage the Fed, yet not cold enough to cause concern about the expansion.
There will be some data this week to help guide the way as traders will be treated to the following reports on the economy: Today, 10:00am: Index of Leading Economic Indicators (consensus is for a gain of +0.6%). Wednesday: January�s CPI (consensus headline is +0.5% and core +0.2%). Thursday: Help Wanted Index and Weekly Jobless Claims (watch for continued tightening in labor market). Friday: January Durable Goods (consensus -1.4%, ex-transportation +0.5%)
Turning to this morning, it seems that all news is good news in the early going. Energy is up, there are concerns about Iran, there are stories of more militant activity in Nigeria, and Wal-Mart provided a weak outlook. But traders are instead focusing on positive earnings from Home Depot and strong overseas markets.
Running through this morning�s pre-game indicators, overseas bourses all sport green numbers, including an almost 3% surge in Japan. Gold futures are up +$1.00 this morning to $556.10. Oil is stronger again today and is up by +$1.42 to $61.40. Natural Gas is up $0.21 to $7.38 as colder weather moves across the country. Bond yields are steady with the 2-yr yield at 4.67% and 10-yr at 4.54% right now. And finally, stock futures in the U.S. are moving higher before the bell with the Dow down +24 points, the S&P +2.90, and the NASDAQ +4.5.
Stocks "In Play" This Morning:
AMT � Citigroup positive on stock and reinforces Buy rating
WMT � Reports $0.84 vs. $0.83 Revenues $89.3B vs. $89.7B, Guides lower
HD � Reports $0.60 vs. $0.56 Revenues $19.49B vs. $18.69B
TOL � Barron�s says shares look undervalued
MRK � Company confirms win in Vioxx case
RSH � President and CEO resigns
TWX � Announces $20B buyback
AMGN � Lehman makes positive comments on bone loss drug
GPS � Citigroup suggests buying in front of earnings
GOOG � Denies wrongdoing in China
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMT, AMGN
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) 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.
According to the bull camp, Friday�s activity, if you can call it that, was simply a brief respite from last week�s fun. Although the market enjoyed a romp up of about 200 points for the week, on Friday, stocks pretty much ran in place in front of the long holiday weekend.
It wasn�t as if it was a lack of news that produced the stall. It was actually just the opposite as traders wrestled with an increase in PPI, crummy earnings from Dell, a decline in consumer sentiment, a rebound in oil prices, and the almost forgotten nuclear issue in Iran.
At first glance, it might be easy to conclude that the day�s news events would favor the bears. For example, the core rate of inflation came in double the expectations was and the highest in a year. While the inflation numbers weren�t surprising, the data did nothing to quell concerns over additional Fed tightening. Then the University of Michigan�s Consumer Sentiment index fell 3.8 points to 87.4 at midmonth, which was below the consensus estimate for a reading of 91.0. And finally, oil prices surged for the second straight session, and closed with a gain of +$1.42.
But the bulls hung tough through it all and surprisingly refused to give back any of the week�s spoils. It wasn�t until a couple of sell programs were run in the last hour that stocks finally moved down slightly. And in the end, although volume was light and there wasn�t much movement in the indices, the session has to be considered a modest victory for our barnyard buddies. In short, the bears simply failed to capitalize on the deserted trading desks.
Looking ahead, it would appear that the question of whether stocks can move higher from here will be tied directly to the issues of the economy and the Fed. The bulls will be searching for Goldilocks in every economic report as they will need to see data suggesting the economy is just right; i.e. not hot enough to encourage the Fed, yet not cold enough to cause concern about the expansion.
There will be some data this week to help guide the way as traders will be treated to the following reports on the economy: Today, 10:00am: Index of Leading Economic Indicators (consensus is for a gain of +0.6%). Wednesday: January�s CPI (consensus headline is +0.5% and core +0.2%). Thursday: Help Wanted Index and Weekly Jobless Claims (watch for continued tightening in labor market). Friday: January Durable Goods (consensus -1.4%, ex-transportation +0.5%)
Turning to this morning, it seems that all news is good news in the early going. Energy is up, there are concerns about Iran, there are stories of more militant activity in Nigeria, and Wal-Mart provided a weak outlook. But traders are instead focusing on positive earnings from Home Depot and strong overseas markets.
Running through this morning�s pre-game indicators, overseas bourses all sport green numbers, including an almost 3% surge in Japan. Gold futures are up +$1.00 this morning to $556.10. Oil is stronger again today and is up by +$1.42 to $61.40. Natural Gas is up $0.21 to $7.38 as colder weather moves across the country. Bond yields are steady with the 2-yr yield at 4.67% and 10-yr at 4.54% right now. And finally, stock futures in the U.S. are moving higher before the bell with the Dow down +24 points, the S&P +2.90, and the NASDAQ +4.5.
Stocks "In Play" This Morning:
AMT � Citigroup positive on stock and reinforces Buy rating
WMT � Reports $0.84 vs. $0.83 Revenues $89.3B vs. $89.7B, Guides lower
HD � Reports $0.60 vs. $0.56 Revenues $19.49B vs. $18.69B
TOL � Barron�s says shares look undervalued
MRK � Company confirms win in Vioxx case
RSH � President and CEO resigns
TWX � Announces $20B buyback
AMGN � Lehman makes positive comments on bone loss drug
GPS � Citigroup suggests buying in front of earnings
GOOG � Denies wrongdoing in China
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMT, AMGN
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) 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.
Create E-mail Alert Related Categories
Contributors, Special ReportsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
