David Moenning Daily State of the Markets: 12/27
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More Happy Holidays?
To the 12 of you that are actually at your desks this morning - welcome to the final week of 2005.
Looking back, stocks barely budged on Friday, despite some better-than expected economic news. One might have thought that the largest jump in six months for Durable Goods, a much better-than expected reading from the University of Michigan�s Consumer Sentiment Index, and another drop in Natural Gas prices would have given traders more reasons to celebrate the holidays. But instead, the session wound up being an up-and-down affair on exceptionally light volume that, in the end, didn�t really amount to much.
Stocks did open higher as traders were encouraged by the surprisingly strong Durable Goods numbers and then the upbeat reading on the mood of the consumer from our friends at the University of Michigan. The U of M index for consumer sentiment continued to rebound in December and was reported at 91.5, which was up from 88.7 at mid-month, and higher than the consensus of 89.0.
However, the mood on the street changed rather quickly after the report on New Home Sales. Sales of newly built homes plummeted -11.3% in November to 1.245 million units, which was less than the expectations and the lowest level of the year. The drop was the largest since the beginning of 1994 and gave traders the opportunity to run some sell programs.
Looking at the week ahead, the action is expected to be light, which also means there could be some added volatility, because, well, boys will boys when it comes to program trading. There is very little in the way of economic news to guide the action. However, the calendar does say that we will get a report on December Consumer Confidence on Wednesday, the report on Existing Home Sales on Thursday, and then the Chicago Purchasing Managers Index on Friday.
Turning to this morning�s action, lower energy prices have traders thinking green so far. The forecast for above-normal temperatures has oil falling by -$0.64 to $57.79 and natural gas continuing to drop. Natural gas is trading down another $0.994 to $11.289. Running through the rest of the pre-market indicators, gold is up by $3.50 on talk of the yellow metal being in an extended bull market. Bonds are little changed, with the yield on the 10-yr at 4.39%. And finally, stock futures in the U.S. are moving higher before the bell (Dow +30, S&P +3.0, and NASDAQ +5.50).
So, with the action expected to be light today, as well as the rest of the week, the only real question is whether the bulls will be able to extend the �Happy Holidays� spirit for four more trading sessions.
Stocks "In Play" This Morning:
GE � Barron�s says earnings were inflated
SIRI � Reports surpassing the 3M subscriber mark
GDT � Receives FDA warning letter
BA � Looks to receive contract from Russia�s Aeroflot
DNA � Reiterated outperform at Leerink
XEC � Barron�s says stock is cheap
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
To the 12 of you that are actually at your desks this morning - welcome to the final week of 2005.
Looking back, stocks barely budged on Friday, despite some better-than expected economic news. One might have thought that the largest jump in six months for Durable Goods, a much better-than expected reading from the University of Michigan�s Consumer Sentiment Index, and another drop in Natural Gas prices would have given traders more reasons to celebrate the holidays. But instead, the session wound up being an up-and-down affair on exceptionally light volume that, in the end, didn�t really amount to much.
Stocks did open higher as traders were encouraged by the surprisingly strong Durable Goods numbers and then the upbeat reading on the mood of the consumer from our friends at the University of Michigan. The U of M index for consumer sentiment continued to rebound in December and was reported at 91.5, which was up from 88.7 at mid-month, and higher than the consensus of 89.0.
However, the mood on the street changed rather quickly after the report on New Home Sales. Sales of newly built homes plummeted -11.3% in November to 1.245 million units, which was less than the expectations and the lowest level of the year. The drop was the largest since the beginning of 1994 and gave traders the opportunity to run some sell programs.
Looking at the week ahead, the action is expected to be light, which also means there could be some added volatility, because, well, boys will boys when it comes to program trading. There is very little in the way of economic news to guide the action. However, the calendar does say that we will get a report on December Consumer Confidence on Wednesday, the report on Existing Home Sales on Thursday, and then the Chicago Purchasing Managers Index on Friday.
Turning to this morning�s action, lower energy prices have traders thinking green so far. The forecast for above-normal temperatures has oil falling by -$0.64 to $57.79 and natural gas continuing to drop. Natural gas is trading down another $0.994 to $11.289. Running through the rest of the pre-market indicators, gold is up by $3.50 on talk of the yellow metal being in an extended bull market. Bonds are little changed, with the yield on the 10-yr at 4.39%. And finally, stock futures in the U.S. are moving higher before the bell (Dow +30, S&P +3.0, and NASDAQ +5.50).
So, with the action expected to be light today, as well as the rest of the week, the only real question is whether the bulls will be able to extend the �Happy Holidays� spirit for four more trading sessions.
Stocks "In Play" This Morning:
GE � Barron�s says earnings were inflated
SIRI � Reports surpassing the 3M subscriber mark
GDT � Receives FDA warning letter
BA � Looks to receive contract from Russia�s Aeroflot
DNA � Reiterated outperform at Leerink
XEC � Barron�s says stock is cheap
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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