David Moenning Daily State of the Markets: 12/21
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A Struggle to Get Moving
As most workers in New York City will likely agree, yesterday was a struggle in more ways than one. Workers certainly had their work cut out for them just finding a way to the office, and the stock market once again struggled to keep the current uptrend intact.
While the transit strike didn�t really affect volume on the day, stocks once again struggled in the afternoon and succumbed to late-day pressure for the sixth straight session. However, the selling wasn�t particularly intense and was led primarily by another drop in GM, which fell -5.7% on the day, finishing at its lowest level since the Crash of 1987.
Those looking for a rally right now shouldn�t get too discouraged just yet. Since 1969, the average �Santa Claus Rally� has added +1.6% to the DJIA during the last five trading days of December and the first two days of January. So technically, the Santa Rally isn�t even due to begin until Friday. The reasons for the traditional advance are a combination of year-end mark ups as well as investors looking to invest some of that Holiday bonus before the start of the New Year.
Turning to this morning, as has been the trend lately, the mood on the Street is pretty good before the bell on the back of strong gains in overseas markets. It is also a positive that Bullish Sentiment has declined a bit. According to Investor�s Intelligence, those leaning bullish fell in ranks to 55%, which is down from last week�s reading of 58.8%.
On the economic front, the final revision for economic growth in the third quarter was just released. The report shows that GDP grew by 4.1%, which was slightly below the estimates of 4.3%. Personal Consumption also came in with a gain of 4.1% versus expectations of 4.2%. And finally, the Prices Index (a measure of inflation) was reported at 3.3%, which was a bit hotter than the expectations of 3.0%.
In response to the data, stock futures have pulled back a bit but are still pointing higher. Looking at the rest of the pre-market indicators, oil is trading higher again this morning and is currently up by $0.24 to $58.33, natural gas is down by -$0.02 to $13.87, gold is off by -$0.70 at 496.30, the yield on the 10-year is up a smidge to 4.47%, and stock futures are still green at the moment (Dow +27, S&P +3.40, and NASDAQ +5.50).
So with Santa due to arrive any day now, it will be interesting to see of the bulls can take their queue from our friends overseas and put an end to the current struggle.
Stocks "In Play" This Morning:
MXO � STX acquiring MXO for $1.9B
FDX � Reported $1.53 vs. $1.40 and raised guidance
GOOG � Reiterated Buy at Citigroup
ERTS � Says earnings will be �well below� guidance
IBM � Buying MUSE for $10 in cash
PALM � Needham raises 2006 estimates
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: FDX, IBM
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
As most workers in New York City will likely agree, yesterday was a struggle in more ways than one. Workers certainly had their work cut out for them just finding a way to the office, and the stock market once again struggled to keep the current uptrend intact.
While the transit strike didn�t really affect volume on the day, stocks once again struggled in the afternoon and succumbed to late-day pressure for the sixth straight session. However, the selling wasn�t particularly intense and was led primarily by another drop in GM, which fell -5.7% on the day, finishing at its lowest level since the Crash of 1987.
Those looking for a rally right now shouldn�t get too discouraged just yet. Since 1969, the average �Santa Claus Rally� has added +1.6% to the DJIA during the last five trading days of December and the first two days of January. So technically, the Santa Rally isn�t even due to begin until Friday. The reasons for the traditional advance are a combination of year-end mark ups as well as investors looking to invest some of that Holiday bonus before the start of the New Year.
Turning to this morning, as has been the trend lately, the mood on the Street is pretty good before the bell on the back of strong gains in overseas markets. It is also a positive that Bullish Sentiment has declined a bit. According to Investor�s Intelligence, those leaning bullish fell in ranks to 55%, which is down from last week�s reading of 58.8%.
On the economic front, the final revision for economic growth in the third quarter was just released. The report shows that GDP grew by 4.1%, which was slightly below the estimates of 4.3%. Personal Consumption also came in with a gain of 4.1% versus expectations of 4.2%. And finally, the Prices Index (a measure of inflation) was reported at 3.3%, which was a bit hotter than the expectations of 3.0%.
In response to the data, stock futures have pulled back a bit but are still pointing higher. Looking at the rest of the pre-market indicators, oil is trading higher again this morning and is currently up by $0.24 to $58.33, natural gas is down by -$0.02 to $13.87, gold is off by -$0.70 at 496.30, the yield on the 10-year is up a smidge to 4.47%, and stock futures are still green at the moment (Dow +27, S&P +3.40, and NASDAQ +5.50).
So with Santa due to arrive any day now, it will be interesting to see of the bulls can take their queue from our friends overseas and put an end to the current struggle.
Stocks "In Play" This Morning:
MXO � STX acquiring MXO for $1.9B
FDX � Reported $1.53 vs. $1.40 and raised guidance
GOOG � Reiterated Buy at Citigroup
ERTS � Says earnings will be �well below� guidance
IBM � Buying MUSE for $10 in cash
PALM � Needham raises 2006 estimates
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: FDX, IBM
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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