David Moenning Daily State of the Markets: 1/19
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Bark Worse than the Bite
Yesterday morning�s pre-market bark turned out to be much worse than the actual bite. Armed with lousy reports from INTC and YHOO, very weak markets overseas, as well as distress in Japan over a malfunction by the exchange�s computers, it appeared that the bears were ready to attack. Before the bell, stock futures were extremely weak and investors were braced for the worst.
But a funny thing happened on the way to the slaughter. It simply didn�t happen. While the dynamic tech duo of Intel and Yahoo were severely punished for their sins of disappointing the street (INTC fell -11.5% on the day and YHOO dropped -12.2%), the red ink failed to spill over into the overall market.
Sure the open wasn�t a pretty sight, but it wasn�t nearly as bad as the pre-market indications had suggested. Almost immediately, the bulls stepped in to begin defending their turf. The glass-is-half-full gang pointed to a positive report on inflation and suggested that problems at Intel and Yahoo were simply problems at Intel and Yahoo. And then before you knew it, stocks were moving up off their lows and threatening to move in to positive territory.
Besides the CPI report coming in a bit better than expected, the bulls were also assisted by lower energy prices and a generally positive flow of verbiage from the Fed. The Fed�s Beige Book, which gets a lot of press despite the fact that it is of little use to the FOMC itself, reported that inflation pressures had eased as 2005 came to a close. In addition, Fed Governor Susan Bies said in a speech in Maryland that the Fed is �much closer to our end point� in terms of rate increases.
The bulls also got a hand after the close from some encouraging earnings from the likes of AMD and Lam Research, which both blew away estimates, and even EBay reported numbers better than the street had expected.
Turning to this morning, the market continues to have a pretty good feel to it before the bell. The economic data showed that some weakness is finally starting to creep into the new home market as Housing Starts fell by 8.9% and Building Permits dropped by 4.4%. Both numbers were more than expected.
Running through the pre-market indicators, overseas markets are rebounding nicely with Japan showing a gain of +2.3%. Gold is rebounding this morning and is up $5.80 at the moment to $550.30. Oil is a little higher and is trading up $0.17 to $65.90. Natural Gas continues to be weak in response to warm winter temperatures and is off another $0.06 to $8.63. The yield curve is flat once again with both the 2-yr and the 10-yr currently yielding 4.37%. And finally, stock futures are pointing to a rebound at the open (Dow +27, S&P +3.60, and NASDAQ +8.50).
So given that the bull survived yesterday�s attack in fine fashion, the question of the day is if they will be able to reverse course and resume their New Year rally?
Stocks "In Play" This Morning:
AAPL � Reported $0.65 vs. $0.63, Guides Q1 $0.68 vs. $0.63
AMD � Reported $0.45 vs. $0.26
EBAY � Reported $0.24 vs. $0.22
LRCX � Reported $0.55 vs. $0.38, guided higher
QLGC � Reported $0.38 vs. $0.35, guides rev to $126 - $129M vs. $123.5M
DIS � WSJ says in talks to acquire Pixar
HAL � Upgraded at Morgan, B of A increases target price
NEM � Downgraded at Citigroup
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMD
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
Yesterday morning�s pre-market bark turned out to be much worse than the actual bite. Armed with lousy reports from INTC and YHOO, very weak markets overseas, as well as distress in Japan over a malfunction by the exchange�s computers, it appeared that the bears were ready to attack. Before the bell, stock futures were extremely weak and investors were braced for the worst.
But a funny thing happened on the way to the slaughter. It simply didn�t happen. While the dynamic tech duo of Intel and Yahoo were severely punished for their sins of disappointing the street (INTC fell -11.5% on the day and YHOO dropped -12.2%), the red ink failed to spill over into the overall market.
Sure the open wasn�t a pretty sight, but it wasn�t nearly as bad as the pre-market indications had suggested. Almost immediately, the bulls stepped in to begin defending their turf. The glass-is-half-full gang pointed to a positive report on inflation and suggested that problems at Intel and Yahoo were simply problems at Intel and Yahoo. And then before you knew it, stocks were moving up off their lows and threatening to move in to positive territory.
Besides the CPI report coming in a bit better than expected, the bulls were also assisted by lower energy prices and a generally positive flow of verbiage from the Fed. The Fed�s Beige Book, which gets a lot of press despite the fact that it is of little use to the FOMC itself, reported that inflation pressures had eased as 2005 came to a close. In addition, Fed Governor Susan Bies said in a speech in Maryland that the Fed is �much closer to our end point� in terms of rate increases.
The bulls also got a hand after the close from some encouraging earnings from the likes of AMD and Lam Research, which both blew away estimates, and even EBay reported numbers better than the street had expected.
Turning to this morning, the market continues to have a pretty good feel to it before the bell. The economic data showed that some weakness is finally starting to creep into the new home market as Housing Starts fell by 8.9% and Building Permits dropped by 4.4%. Both numbers were more than expected.
Running through the pre-market indicators, overseas markets are rebounding nicely with Japan showing a gain of +2.3%. Gold is rebounding this morning and is up $5.80 at the moment to $550.30. Oil is a little higher and is trading up $0.17 to $65.90. Natural Gas continues to be weak in response to warm winter temperatures and is off another $0.06 to $8.63. The yield curve is flat once again with both the 2-yr and the 10-yr currently yielding 4.37%. And finally, stock futures are pointing to a rebound at the open (Dow +27, S&P +3.60, and NASDAQ +8.50).
So given that the bull survived yesterday�s attack in fine fashion, the question of the day is if they will be able to reverse course and resume their New Year rally?
Stocks "In Play" This Morning:
AAPL � Reported $0.65 vs. $0.63, Guides Q1 $0.68 vs. $0.63
AMD � Reported $0.45 vs. $0.26
EBAY � Reported $0.24 vs. $0.22
LRCX � Reported $0.55 vs. $0.38, guided higher
QLGC � Reported $0.38 vs. $0.35, guides rev to $126 - $129M vs. $123.5M
DIS � WSJ says in talks to acquire Pixar
HAL � Upgraded at Morgan, B of A increases target price
NEM � Downgraded at Citigroup
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMD
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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