David Moenning Daily State of the Markets: 02/10
Tweet
Share
E-mail
Greenspeak Still With Us
The Bulls� rebound appeared to be firing on all cylinders in the early going yesterday as the Dow stepped lively to a gain of almost 100 points. The move had people giddy with excitement and there was talk of the best 2-day gain since October.
Unfortunately however, the enthusiasm over the day�s gains proved premature as the rally came to a screeching halt as comments from both current and former Fed officials started to make the rounds. First it was Chicago Fed President Moskow who said, in typical �on the one hand� econospeak, that while the Fed Fund rate had reached neutral, this did not mean that we have seen an end to the rate hikes. He added that inflation is currently contained, but that a rise would be a �serious concern.�
Although Mr. Moscow�s comments weren�t exactly groundbreaking, since almost everyone would probably agree that an increase in inflation might be a serious concern, they did seem to give the market pause. Up to that point it appeared that stocks were off to the races and ignoring the ongoing difficulty in the former leaders (Apple was dropping another 5.6% and Google was putting the finishing touches on its -24% dive from its January highs). Semiconductors appeared to be breaking out and resuming a leadership role as the �energy for tech� trade seemed to be in full swing.
But then before you could say, �yeah, but he�s retired� the rally came to a screeching halt. After spending 20 years as Fed Chairman, Alan Greenspan began cashing in yesterday. In a speech before a major brokerage house, Mr. Greenspan mentioned that we should probably expect more rate hikes to come. Maybe he was trying to pave the way for Mr. Bernanke. Or maybe he was just trying to make a splash in his first speech. But considering that this is a guy who spent the last 20 years choosing his words very carefully, traders decided to listen to what he had to say. And since it is reported that the former Fed-head will fetch $150k per speech, we may be hearing a lot more from him on the lecture circuit than we did as Chairman of the FOMC.
So in looking at the day�s action, it is little wonder that stocks sold off into the close. After all, Mr. Moskow told us that the rate hikes hadn�t ended and then Mr. Greenspan told us to expect a lot more.
Stocks closed near the lows of the day in what appears to be a reversal day on the charts. The only saving grace for the bulls is that volume didn�t pick up on the decline and that the S&P held above support at 1260,
Turning to this morning, stocks are showing little movement in the early going. Once again, there is a distinct lack of economic data to guide traders. In addition, we should also keep in mind that with the Olympics set to begin; there may be some anxiety about security � which could easily lead to traders �doing less.�
Running through the rest of the pre-market indicators, Overseas markets are mostly lower; Gold is down this morning with a loss of more than $6 to $561.50. Oil is bouncing a bit higher this morning and is currently trading up a dime to $62.72; Natural Gas is higher by $0.10 to $7.58; the yield curve remains inverted with the 2 yr at 4.63% and 10 yr at 4.51%; and finally, stock futures in the U.S. are hovering around breakeven before the bell (Dow +4, S&P -0.10, and NASDAQ -1.50).
Stocks "In Play" This Morning:
AAPL � AmTech would be buyers of weakness
PD � Downgraded at Prudential
AOC � Reported $0.67 vs. $0.55 Revenue $2.53B vs. $ 2.63B
BYD � Reported $0.76 vs. $0.61 Revenue $565.4M vs. $555.0M
CHB � Reported $0.20 vs. $0.11 Revenue $375.5M vs. $342.2M
MFE � Reported $0.27 vs. $0.26 Revenue $253.3M vs. $254.0M
MET � Reported $1.04 vs. $1.01 Revenue $11.55B vs. $12.1B
AMAT � Lehman Positive on bookings
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: PD, AMAT, PRU
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.
The Bulls� rebound appeared to be firing on all cylinders in the early going yesterday as the Dow stepped lively to a gain of almost 100 points. The move had people giddy with excitement and there was talk of the best 2-day gain since October.
Unfortunately however, the enthusiasm over the day�s gains proved premature as the rally came to a screeching halt as comments from both current and former Fed officials started to make the rounds. First it was Chicago Fed President Moskow who said, in typical �on the one hand� econospeak, that while the Fed Fund rate had reached neutral, this did not mean that we have seen an end to the rate hikes. He added that inflation is currently contained, but that a rise would be a �serious concern.�
Although Mr. Moscow�s comments weren�t exactly groundbreaking, since almost everyone would probably agree that an increase in inflation might be a serious concern, they did seem to give the market pause. Up to that point it appeared that stocks were off to the races and ignoring the ongoing difficulty in the former leaders (Apple was dropping another 5.6% and Google was putting the finishing touches on its -24% dive from its January highs). Semiconductors appeared to be breaking out and resuming a leadership role as the �energy for tech� trade seemed to be in full swing.
But then before you could say, �yeah, but he�s retired� the rally came to a screeching halt. After spending 20 years as Fed Chairman, Alan Greenspan began cashing in yesterday. In a speech before a major brokerage house, Mr. Greenspan mentioned that we should probably expect more rate hikes to come. Maybe he was trying to pave the way for Mr. Bernanke. Or maybe he was just trying to make a splash in his first speech. But considering that this is a guy who spent the last 20 years choosing his words very carefully, traders decided to listen to what he had to say. And since it is reported that the former Fed-head will fetch $150k per speech, we may be hearing a lot more from him on the lecture circuit than we did as Chairman of the FOMC.
So in looking at the day�s action, it is little wonder that stocks sold off into the close. After all, Mr. Moskow told us that the rate hikes hadn�t ended and then Mr. Greenspan told us to expect a lot more.
Stocks closed near the lows of the day in what appears to be a reversal day on the charts. The only saving grace for the bulls is that volume didn�t pick up on the decline and that the S&P held above support at 1260,
Turning to this morning, stocks are showing little movement in the early going. Once again, there is a distinct lack of economic data to guide traders. In addition, we should also keep in mind that with the Olympics set to begin; there may be some anxiety about security � which could easily lead to traders �doing less.�
Running through the rest of the pre-market indicators, Overseas markets are mostly lower; Gold is down this morning with a loss of more than $6 to $561.50. Oil is bouncing a bit higher this morning and is currently trading up a dime to $62.72; Natural Gas is higher by $0.10 to $7.58; the yield curve remains inverted with the 2 yr at 4.63% and 10 yr at 4.51%; and finally, stock futures in the U.S. are hovering around breakeven before the bell (Dow +4, S&P -0.10, and NASDAQ -1.50).
Stocks "In Play" This Morning:
AAPL � AmTech would be buyers of weakness
PD � Downgraded at Prudential
AOC � Reported $0.67 vs. $0.55 Revenue $2.53B vs. $ 2.63B
BYD � Reported $0.76 vs. $0.61 Revenue $565.4M vs. $555.0M
CHB � Reported $0.20 vs. $0.11 Revenue $375.5M vs. $342.2M
MFE � Reported $0.27 vs. $0.26 Revenue $253.3M vs. $254.0M
MET � Reported $1.04 vs. $1.01 Revenue $11.55B vs. $12.1B
AMAT � Lehman Positive on bookings
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: PD, AMAT, PRU
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!
