David Moenning's Daily State of the Markets: 12/13
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Still Talking Tough
Good morning. Traders spent the vast majority of yesterday�s session fretting over what the Fed might say at the close of their December meeting. And although Mr. Bernanke and Company changed a grand total of two lines in their statement, the meaning was clear. In short, the FOMC wants to be perceived as tough on inflation and therefore, they continued to try to talk tough on the subject.
As expected, the Fed left the Fed Funds target rate unchanged at 5.25%. And the much anticipated statement accompanying the decision was almost identical to the one issued last time. The differences were minor, but for those of you keeping score at home, we should review the particulars. First, Mr. Bernanke�s crew addressed the cooling in the housing market, which they now described as �substantial.�
The FOMC also modified their assessment of the economy ever so slightly. They basically acknowledged the recent spate of punk reports by stating, �Although recent indicators have been mixed, the economy seems likely to expand at a moderate pace on balance over coming quarters.�
On the topic of inflation, there was no change from the previous statement as the Fed believes that there continues to be a risk of inflation going forward. Thus, Mr. Bernanke would like to leave the door open a crack for the possibility of further rate hikes - if the data should dictate the need. This would make Mr. Jeffrey Lacker very happy as the lone hawk on the committee who once again voted to raise rates at yesterday�s meeting.
After the requisite spike up and down following the release of the report, stocks settled back into the day�s trend, which was rather uninspiring. Although, with the bulls standing on the sideline waiting on the Fed, a disappointing report from Best Buy (BBY), and a Quadruple-Witch Expiry on Friday it wasn�t terribly surprising to see a little volatility yesterday. But at the end of the day, the overall trend remained intact and for now at least, the bulls appear to be firmly in control.
Turning to this morning, the mood has improved rather dramatically as once gain, the urge to merge has put some green on the screens. So far today, there is discussion of Altria (MO) bidding for Gallaher Group (GLH), talk of a potential merger between UAL and Continental (CAL), and Air Tran�s (AAI) proposal to purchase Midwest Express (MEH).
Running through the rest of the pre-game indicators, with the exception of Hong Kong, the overseas markets are all higher before the open here in the U.S. Gold futures were little changed in the overnight session and closed at $628.60. Crude futures are down a couple cents in the very early going today with the latest quote showing the January contract at $60.98. Interest rates will start the pre-market trading in a few minutes with the 10-yr currently trading with a yield of 4.49%. And finally, with 90 minutes before the bell, stock futures in the U.S. are looking to open stronger. The Dow futures are currently ahead by about 32 points; the S&Ps are 4.87 above breakeven, and the NASDAQ looks to be about 5 points above fair value at the moment.
Stocks �In Play� This Morning:
Micron Technology (MU) � Downgraded at AG Edwards
Universal Health Svcs (UHS) � Downgraded at BofA
CSX (CSX) � Downgraded at Bear Stearns
BB&T Corp (BBT) � Downgraded at Citigroup
Apria Healthcare (AHG) � Downgraded at Citigroup
DirecTV (DTV) � Downgraded at Credit Suisse
Cowen & Co (COWN) � Downgraded at Credit Suisse
Safeway (SWY) � Upgraded at Credit Suisse
YRC Worldwide (YRCW) � Downgraded at Deutsche Bank
JB Hunt (JBHT) � Downgraded at Deutsche Bank
Anadarko Petroleum (APC) � Downgraded at Goldman Sachs
Harmony Gold (HMY) � Upgraded at JP Morgan
Tyson (TSN) � Downgraded at JP Morgan
Crane (CR) � Downgraded at Lehman
Apple Computer (AAPL) � Estimates increased at Morgan Stanley
Best Buy (BBY) � Downgraded at Prudential
Circuit City (CC) � Downgraded at Prudential
Long positions in stocks mentioned: BSC, MS, GS, CC, MO
** For More of David Moenning�s Market Analysis, Stock Portfolios, and Trading Ideas, visit: www.TopGunsTrading.com
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management and Co-Founder of TopGunsTrading.com 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.
Good morning. Traders spent the vast majority of yesterday�s session fretting over what the Fed might say at the close of their December meeting. And although Mr. Bernanke and Company changed a grand total of two lines in their statement, the meaning was clear. In short, the FOMC wants to be perceived as tough on inflation and therefore, they continued to try to talk tough on the subject.
As expected, the Fed left the Fed Funds target rate unchanged at 5.25%. And the much anticipated statement accompanying the decision was almost identical to the one issued last time. The differences were minor, but for those of you keeping score at home, we should review the particulars. First, Mr. Bernanke�s crew addressed the cooling in the housing market, which they now described as �substantial.�
The FOMC also modified their assessment of the economy ever so slightly. They basically acknowledged the recent spate of punk reports by stating, �Although recent indicators have been mixed, the economy seems likely to expand at a moderate pace on balance over coming quarters.�
On the topic of inflation, there was no change from the previous statement as the Fed believes that there continues to be a risk of inflation going forward. Thus, Mr. Bernanke would like to leave the door open a crack for the possibility of further rate hikes - if the data should dictate the need. This would make Mr. Jeffrey Lacker very happy as the lone hawk on the committee who once again voted to raise rates at yesterday�s meeting.
After the requisite spike up and down following the release of the report, stocks settled back into the day�s trend, which was rather uninspiring. Although, with the bulls standing on the sideline waiting on the Fed, a disappointing report from Best Buy (BBY), and a Quadruple-Witch Expiry on Friday it wasn�t terribly surprising to see a little volatility yesterday. But at the end of the day, the overall trend remained intact and for now at least, the bulls appear to be firmly in control.
Turning to this morning, the mood has improved rather dramatically as once gain, the urge to merge has put some green on the screens. So far today, there is discussion of Altria (MO) bidding for Gallaher Group (GLH), talk of a potential merger between UAL and Continental (CAL), and Air Tran�s (AAI) proposal to purchase Midwest Express (MEH).
Running through the rest of the pre-game indicators, with the exception of Hong Kong, the overseas markets are all higher before the open here in the U.S. Gold futures were little changed in the overnight session and closed at $628.60. Crude futures are down a couple cents in the very early going today with the latest quote showing the January contract at $60.98. Interest rates will start the pre-market trading in a few minutes with the 10-yr currently trading with a yield of 4.49%. And finally, with 90 minutes before the bell, stock futures in the U.S. are looking to open stronger. The Dow futures are currently ahead by about 32 points; the S&Ps are 4.87 above breakeven, and the NASDAQ looks to be about 5 points above fair value at the moment.
Stocks �In Play� This Morning:
Micron Technology (MU) � Downgraded at AG Edwards
Universal Health Svcs (UHS) � Downgraded at BofA
CSX (CSX) � Downgraded at Bear Stearns
BB&T Corp (BBT) � Downgraded at Citigroup
Apria Healthcare (AHG) � Downgraded at Citigroup
DirecTV (DTV) � Downgraded at Credit Suisse
Cowen & Co (COWN) � Downgraded at Credit Suisse
Safeway (SWY) � Upgraded at Credit Suisse
YRC Worldwide (YRCW) � Downgraded at Deutsche Bank
JB Hunt (JBHT) � Downgraded at Deutsche Bank
Anadarko Petroleum (APC) � Downgraded at Goldman Sachs
Harmony Gold (HMY) � Upgraded at JP Morgan
Tyson (TSN) � Downgraded at JP Morgan
Crane (CR) � Downgraded at Lehman
Apple Computer (AAPL) � Estimates increased at Morgan Stanley
Best Buy (BBY) � Downgraded at Prudential
Circuit City (CC) � Downgraded at Prudential
Long positions in stocks mentioned: BSC, MS, GS, CC, MO
** For More of David Moenning�s Market Analysis, Stock Portfolios, and Trading Ideas, visit: www.TopGunsTrading.com
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management and Co-Founder of TopGunsTrading.com 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.
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