David Moenning's Daily State of the Markets: 01/12
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Here Comes Tech!
Good morning. After struggling through a couple sloppy sessions earlier in the week, the bulls returned to form on Thursday. While one could argue that the bears basically fumbled the ball since they weren�t able do much with their recent opportunities, it now appears that the bulls were simply resting up for their next big push. And don�t look now, but after playing follow-the-commodities-leader for years, technology now appears to be back out in front.
Lower oil and a renewed enthusiasm for technology were the stories of the day that helped bump the Dow 4 points above its previous record close. And for those of you keeping score at home, yesterday�s modest new record marked the twenty-third new all-time high for the DJIA since October.
Despite a surprise rate-hike in the UK and interest rates in the U.S. moving to their highest levels in more than two months, stocks took off to the upside on Thursday. And while interest rates are clearly a critical consideration in the overall market outlook, a fourth straight plunge in oil prices seems to be the focal point this week.
Driven by continued warm weather in just about all parts of the U.S. save Denver, surprisingly high inventories, and skepticism regarding OPEC�s ability to actually implement the production cuts they�ve yammered on about, crude oil continued it�s plunge. Oil futures finished the day down another -$2.14 to $51.88 and it now appears that $50 is the level speculators are now gunning for.
Although oil is a pretty big story right now, we also find it very interesting that technology has suddenly established itself as a leader in 2007. After all the talk that �large is in charge,� it�s actually our friends over in four-letter-land that are stealing the show so far. To be sure, Apple�s new iPhone is the poster child for the move as AAPL has popped a quick $15 on the introduction of the product. But regardless of the reason, market analysts everywhere will concur that the bulls like to see technology in a leadership role during bull moves. And frankly, this hasn�t been the case for some time. So, with the NASDAQ posting nice gains and breaking to an impressive new 6-year high, the bull camp is definitely abuzz with excitement.
Turning to this morning, the tech bulls have been dealt a couple of blows as both Advanced Micro Devices and SAP disappointed analysts after the close yesterday. So, it will be interesting to see if the bears will try to make a stand in technology or just continue to roll over.
On the economic front, it�s been a very quiet week so far. But this morning we�ve got a couple of numbers to peruse. Import prices came in a bit higher than expected at 1.1% in December and the November number was revised higher as well. But the big report of the day is December Retail Sales. It was reported that total sales (excluding autos) jumped up 1% during the all-important holiday shopping season, which was much better than the 0.5% consensus.
Running through the pre-game indicators, the foreign markets were once again mixed by region. Japan and Hong Kong were higher while the UK, France, and Germany are waffling around breakeven. Gold futures are a little lower this morning with the last trade off $0.30 to $619.60. In the oil pits, crude futures were volatile overnight but the latest quote shows little change as the February futures contract is up $0.03 to $51.91. Interest rates are moving up again this morning, which is something that certainly should attract some attention as the 10-year is currently trading with a 4.78% yield. And finally, with an hour before the bell, stock futures in the U.S. are looking to open a little lower. The Dow futures are currently lower by 20 points; the S&P�s are 3.5 points underwater, while the NASDAQ looks to be about 2 points below fair value at the moment.
Stocks �In Play� This Morning:
Houston Exploration (THX) � Downgraded at AG Edwards
Anheuser Busch (BUD) � Upgraded at BofA
QLogic (QLGC) � Estimates increased at BofA
Advanced Micro Devices (AMD) � Downgraded at Bear Stearns, Citigroup, Morgan Stanley, Prudential
Canadian Nat�l Railway (CNI) � Upgraded at Bear Stearns
Principal Financial (PFG) � Upgraded at Bear Stearns
Astrazeneca (AZN) � Upgraded at Bear Stearns
SAP (SAP) � Downgraded at CIBC Capital, Goldman Sachs, Jefferies, JMP Sec
Oracle (ORCL) � Downgraded at CIBC Capital
Blue Nile (NILE) � Downgraded at Citigroup
American Eagle Outfitters (AEOS) � Estimates increased at Friedman, Billings
Sonic Automotive (SAH) � Added to Conviction Buy List at Goldman
Netflix (NFLX) � Downgraded at JP Morgan
Blockbuster (BBI) � Downgraded at JP Morgan
Columbia Sportswear (COLM) � Upgraded at Merrill Lynch
United Dominion Realty (UDR) � Upgraded at Merrill Lynch
Sun Microsystems (SUNW) � Downgraded at Morgan Stanley
Marvell (MRVL) � Downgraded at Oppenheimer
Apple Inc (AAPL) � Named to Top Picks for 2007 List at Think Equity
** 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. After struggling through a couple sloppy sessions earlier in the week, the bulls returned to form on Thursday. While one could argue that the bears basically fumbled the ball since they weren�t able do much with their recent opportunities, it now appears that the bulls were simply resting up for their next big push. And don�t look now, but after playing follow-the-commodities-leader for years, technology now appears to be back out in front.
Lower oil and a renewed enthusiasm for technology were the stories of the day that helped bump the Dow 4 points above its previous record close. And for those of you keeping score at home, yesterday�s modest new record marked the twenty-third new all-time high for the DJIA since October.
Despite a surprise rate-hike in the UK and interest rates in the U.S. moving to their highest levels in more than two months, stocks took off to the upside on Thursday. And while interest rates are clearly a critical consideration in the overall market outlook, a fourth straight plunge in oil prices seems to be the focal point this week.
Driven by continued warm weather in just about all parts of the U.S. save Denver, surprisingly high inventories, and skepticism regarding OPEC�s ability to actually implement the production cuts they�ve yammered on about, crude oil continued it�s plunge. Oil futures finished the day down another -$2.14 to $51.88 and it now appears that $50 is the level speculators are now gunning for.
Although oil is a pretty big story right now, we also find it very interesting that technology has suddenly established itself as a leader in 2007. After all the talk that �large is in charge,� it�s actually our friends over in four-letter-land that are stealing the show so far. To be sure, Apple�s new iPhone is the poster child for the move as AAPL has popped a quick $15 on the introduction of the product. But regardless of the reason, market analysts everywhere will concur that the bulls like to see technology in a leadership role during bull moves. And frankly, this hasn�t been the case for some time. So, with the NASDAQ posting nice gains and breaking to an impressive new 6-year high, the bull camp is definitely abuzz with excitement.
Turning to this morning, the tech bulls have been dealt a couple of blows as both Advanced Micro Devices and SAP disappointed analysts after the close yesterday. So, it will be interesting to see if the bears will try to make a stand in technology or just continue to roll over.
On the economic front, it�s been a very quiet week so far. But this morning we�ve got a couple of numbers to peruse. Import prices came in a bit higher than expected at 1.1% in December and the November number was revised higher as well. But the big report of the day is December Retail Sales. It was reported that total sales (excluding autos) jumped up 1% during the all-important holiday shopping season, which was much better than the 0.5% consensus.
Running through the pre-game indicators, the foreign markets were once again mixed by region. Japan and Hong Kong were higher while the UK, France, and Germany are waffling around breakeven. Gold futures are a little lower this morning with the last trade off $0.30 to $619.60. In the oil pits, crude futures were volatile overnight but the latest quote shows little change as the February futures contract is up $0.03 to $51.91. Interest rates are moving up again this morning, which is something that certainly should attract some attention as the 10-year is currently trading with a 4.78% yield. And finally, with an hour before the bell, stock futures in the U.S. are looking to open a little lower. The Dow futures are currently lower by 20 points; the S&P�s are 3.5 points underwater, while the NASDAQ looks to be about 2 points below fair value at the moment.
Stocks �In Play� This Morning:
Houston Exploration (THX) � Downgraded at AG Edwards
Anheuser Busch (BUD) � Upgraded at BofA
QLogic (QLGC) � Estimates increased at BofA
Advanced Micro Devices (AMD) � Downgraded at Bear Stearns, Citigroup, Morgan Stanley, Prudential
Canadian Nat�l Railway (CNI) � Upgraded at Bear Stearns
Principal Financial (PFG) � Upgraded at Bear Stearns
Astrazeneca (AZN) � Upgraded at Bear Stearns
SAP (SAP) � Downgraded at CIBC Capital, Goldman Sachs, Jefferies, JMP Sec
Oracle (ORCL) � Downgraded at CIBC Capital
Blue Nile (NILE) � Downgraded at Citigroup
American Eagle Outfitters (AEOS) � Estimates increased at Friedman, Billings
Sonic Automotive (SAH) � Added to Conviction Buy List at Goldman
Netflix (NFLX) � Downgraded at JP Morgan
Blockbuster (BBI) � Downgraded at JP Morgan
Columbia Sportswear (COLM) � Upgraded at Merrill Lynch
United Dominion Realty (UDR) � Upgraded at Merrill Lynch
Sun Microsystems (SUNW) � Downgraded at Morgan Stanley
Marvell (MRVL) � Downgraded at Oppenheimer
Apple Inc (AAPL) � Named to Top Picks for 2007 List at Think Equity
** 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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