David Moenning Daily State of the Markets: 1/20
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Deal? No Deal!
After a couple of down days, positive earnings from the likes of Advanced Micro, Lam Research, EBay, Merrill Lynch, Lehman Bros., Pfizer, and Union Pacific were the catalyst for a rebound in stocks. Although the day�s gains wound up being a bit muted by the time the closing bell rang, there was enough green on the screen to erase much of the losses from Tuesday and Wednesday.
This is not to say that there weren�t some tense moments during the session. A new tape, which the CIA has confirmed to be from Osama bin Laden, was aired in the early going. On the tape, America�s most wanted criminal warned of new attacks on the U.S. but offered a truce if we would leave Afghanistan and Iraq alone. President Bush immediately reminded the nation that we don�t negotiate with terrorists and responded with something along the lines of �No Deal!�
While stock traders were almost completely unfazed by this new threat, traders in the oil pits were not quite so cavalier. When you add the Bin Laden tape to the existing tensions in the Middle East, the result is higher prices for oil. In addition, we have to remember that refiners began what is expected to be a heavy maintenance season last week. And unfortunately, as refineries are taken off line for repairs, a smaller amount refined products are produced, which also causes concern about supplies. Crude oil futures finished the day up +$1.10 to $66.83.
Although stock traders seemed to want to make the point that we will not be intimidated by terrorist thugs, they could not completely ignore the increase in oil prices late in the day. So stocks wound up yielding some gains as the session drew to a close, which left the indices with a modest uptick on the day.
Turning back to the markets, it was quite positive that the Russell 2000 and S&P Small Cap indices moved on up to new all-time highs, while the Mid Caps and NYSE indices are knocking on the door. Couple this with the fact that volume was strong and breadth was excellent, and it one would guess that the bulls have to be pleased with their work on the day.
Looking at this morning�s action, stocks are sagging before the opening bell. An earnings miss by Citigroup, a revenue shortage from GE, and higher oil prices are keeping stock future soft. There is no economic data scheduled for release before the opening bell, although we will get the University of Michigan�s reading on Consumer Sentiment at 9:45.
Running down the pre-game indicators, gold is currently unchanged at $559, crude oil is trading higher by $0.57 to $67.40 on more difficulty in Nigeria and OPEC�s revised demand estimates for 2006, natural gas is up by $0.04 to $9.31, the yield curve is slightly inverted with the 2-yr yield at 4.37% while the 10-yr is yielding 4.36%, and stock futures are all lower (Dow -26, S&P -3.30, and NASDAQ -4.50).
So with discouraging news this morning on the earnings and oil front, the question of the day is if the bulls will be able to focus on the future or succumb to the problems of the present?
Stocks "In Play" This Morning:
NFLX � Downgraded by Bear Stearns
MOT � Reported $0.35 vs. $0.34, Oppenheimer says buy on weakness
UNP � Downgraded at Citigroup
C � Reported $0.98 vs. $1.00, raised dividend to $0.49/qtr
GE � Reported $0.55 vs. $0.55, but revenues of $40.705B vs. $42.39B
QCOM � Reiterated buy at BofA
MWD � Negotiating for stake in BLK
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: none
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
After a couple of down days, positive earnings from the likes of Advanced Micro, Lam Research, EBay, Merrill Lynch, Lehman Bros., Pfizer, and Union Pacific were the catalyst for a rebound in stocks. Although the day�s gains wound up being a bit muted by the time the closing bell rang, there was enough green on the screen to erase much of the losses from Tuesday and Wednesday.
This is not to say that there weren�t some tense moments during the session. A new tape, which the CIA has confirmed to be from Osama bin Laden, was aired in the early going. On the tape, America�s most wanted criminal warned of new attacks on the U.S. but offered a truce if we would leave Afghanistan and Iraq alone. President Bush immediately reminded the nation that we don�t negotiate with terrorists and responded with something along the lines of �No Deal!�
While stock traders were almost completely unfazed by this new threat, traders in the oil pits were not quite so cavalier. When you add the Bin Laden tape to the existing tensions in the Middle East, the result is higher prices for oil. In addition, we have to remember that refiners began what is expected to be a heavy maintenance season last week. And unfortunately, as refineries are taken off line for repairs, a smaller amount refined products are produced, which also causes concern about supplies. Crude oil futures finished the day up +$1.10 to $66.83.
Although stock traders seemed to want to make the point that we will not be intimidated by terrorist thugs, they could not completely ignore the increase in oil prices late in the day. So stocks wound up yielding some gains as the session drew to a close, which left the indices with a modest uptick on the day.
Turning back to the markets, it was quite positive that the Russell 2000 and S&P Small Cap indices moved on up to new all-time highs, while the Mid Caps and NYSE indices are knocking on the door. Couple this with the fact that volume was strong and breadth was excellent, and it one would guess that the bulls have to be pleased with their work on the day.
Looking at this morning�s action, stocks are sagging before the opening bell. An earnings miss by Citigroup, a revenue shortage from GE, and higher oil prices are keeping stock future soft. There is no economic data scheduled for release before the opening bell, although we will get the University of Michigan�s reading on Consumer Sentiment at 9:45.
Running down the pre-game indicators, gold is currently unchanged at $559, crude oil is trading higher by $0.57 to $67.40 on more difficulty in Nigeria and OPEC�s revised demand estimates for 2006, natural gas is up by $0.04 to $9.31, the yield curve is slightly inverted with the 2-yr yield at 4.37% while the 10-yr is yielding 4.36%, and stock futures are all lower (Dow -26, S&P -3.30, and NASDAQ -4.50).
So with discouraging news this morning on the earnings and oil front, the question of the day is if the bulls will be able to focus on the future or succumb to the problems of the present?
Stocks "In Play" This Morning:
NFLX � Downgraded by Bear Stearns
MOT � Reported $0.35 vs. $0.34, Oppenheimer says buy on weakness
UNP � Downgraded at Citigroup
C � Reported $0.98 vs. $1.00, raised dividend to $0.49/qtr
GE � Reported $0.55 vs. $0.55, but revenues of $40.705B vs. $42.39B
QCOM � Reiterated buy at BofA
MWD � Negotiating for stake in BLK
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: none
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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