David Moenning�s Daily State of the Markets: 01/09
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As the First 5 Days Go...
Good morning. One of the better known clich�s on Wall Street states that �As the first 5 days of January go, so goes the month.� And then from there, historians like to take things one step further and extrapolate that as January goes, so goes the year. So, in light of the fact that today is the fifth trading day of January and that both the Dow and S&P 500 are down about -0.3% so far, there might be a little pressure on the bulls to get things turned around.
Perhaps it was the looming results of this so-called �January Barometer� that was responsible for yesterday�s reversal of fortunes in stocks. The day started off on a dour note. However, the bulls were able to turn things around at lunchtime and hang on in the afternoon to finish with green screens. And while the gains were modest, the rally did put a positive result for the first five days of January within reach.
More accurately however, the move up appeared to be based on oil resuming its recent downtrend as well as a renewed stream of merger deals. While the fundamentals for stocks remain positive, everyone in the game recognizes that stocks are overdue for a pullback. Thus, right now it is the steady flow of mergers that seems to be the elixir that allows the bulls to just keep on keepin� on.
On the oil front, while the catalyst for yesterday�s slide wasn�t obvious, there was enough talk about OPEC not implementing their approved production cuts to take prices lower. And given the cartel�s propensity toward ignoring their own mandates, this argument makes a lot of sense. In any event, oil for February delivery finished the day well off the intraday high of $57.25 and closed at $56.09.
However, with the earnings parade about to begin, traders appeared to maintain a rather cautious stance during the afternoon. Stocks have run a long way and with Alcoa (AA) set to kick things off today after the close, it is certainly understandable that traders may want to see some earnings numbers before making any major commitments.
Turning to this morning, we don�t have any economic data to deal with today. But stocks are modestly higher in the early going on the back of oil�s continued slide. In addition, there seems to be some renewed enthusiasm toward tech these days in front of Apple�s showcase today.
Running through the rest of the pre-game indicators, Asian markets finished mixed with Japan higher and Hong Kong lower, but the European markets are all sporting nice gains again this morning. Gold futures are a little higher this morning with the last trade up $0.30 to $609.70. In the oil pits, crude futures are sliding again with the latest quote showing the February futures contract off by $1.93 to $54.16. Interest rates are steady this morning with the 10-year currently trading at a 4.66% yield. And finally, with about an hour before the bell, stock futures in the U.S. are looking to open modestly higher. The Dow futures are currently ahead by 31 points; the S&Ps are 2 points above breakeven, while the NASDAQ looks to be about 5.50 points higher than fair value at the moment.
Stocks �In Play� This Morning:
Vornado Realty Trust (VNO) � Mentioned cautiously in Barron�s
Lyondell Chemical (LYO) � Downgraded at BofA
China Unicom (CHU) � Downgraded at Bear Stearns
Harrah�s Ent (HET) � Downgraded at Buckingham
Sprint Nextel (S) � Downgraded at CIBC, Credit Suisse
Pactiv (PTV) � Downgraded at Citigroup
Loews Corp (LTR) � Citigroup starts coverage with Buy
Lazard (LAZ) � Upgraded at Goldman Sachs
Kroger (KR) � Upgraded at HSBC
Novell (NOVL) � Upgraded at JMP Securities
Armor Holdings (AH) � Upgraded at Lehman
United Dominion Realty (UDR) � Upgraded at JP Morgan
Aegon (AEG) � Upgraded at Merrill Lynch
Tidewater (TDW) � Upgraded at UBS
France Telecom (FTE) � Upgraded at UBS
Temple Inland (TIN) � Estimates reduced at UBS
** 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. One of the better known clich�s on Wall Street states that �As the first 5 days of January go, so goes the month.� And then from there, historians like to take things one step further and extrapolate that as January goes, so goes the year. So, in light of the fact that today is the fifth trading day of January and that both the Dow and S&P 500 are down about -0.3% so far, there might be a little pressure on the bulls to get things turned around.
Perhaps it was the looming results of this so-called �January Barometer� that was responsible for yesterday�s reversal of fortunes in stocks. The day started off on a dour note. However, the bulls were able to turn things around at lunchtime and hang on in the afternoon to finish with green screens. And while the gains were modest, the rally did put a positive result for the first five days of January within reach.
More accurately however, the move up appeared to be based on oil resuming its recent downtrend as well as a renewed stream of merger deals. While the fundamentals for stocks remain positive, everyone in the game recognizes that stocks are overdue for a pullback. Thus, right now it is the steady flow of mergers that seems to be the elixir that allows the bulls to just keep on keepin� on.
On the oil front, while the catalyst for yesterday�s slide wasn�t obvious, there was enough talk about OPEC not implementing their approved production cuts to take prices lower. And given the cartel�s propensity toward ignoring their own mandates, this argument makes a lot of sense. In any event, oil for February delivery finished the day well off the intraday high of $57.25 and closed at $56.09.
However, with the earnings parade about to begin, traders appeared to maintain a rather cautious stance during the afternoon. Stocks have run a long way and with Alcoa (AA) set to kick things off today after the close, it is certainly understandable that traders may want to see some earnings numbers before making any major commitments.
Turning to this morning, we don�t have any economic data to deal with today. But stocks are modestly higher in the early going on the back of oil�s continued slide. In addition, there seems to be some renewed enthusiasm toward tech these days in front of Apple�s showcase today.
Running through the rest of the pre-game indicators, Asian markets finished mixed with Japan higher and Hong Kong lower, but the European markets are all sporting nice gains again this morning. Gold futures are a little higher this morning with the last trade up $0.30 to $609.70. In the oil pits, crude futures are sliding again with the latest quote showing the February futures contract off by $1.93 to $54.16. Interest rates are steady this morning with the 10-year currently trading at a 4.66% yield. And finally, with about an hour before the bell, stock futures in the U.S. are looking to open modestly higher. The Dow futures are currently ahead by 31 points; the S&Ps are 2 points above breakeven, while the NASDAQ looks to be about 5.50 points higher than fair value at the moment.
Stocks �In Play� This Morning:
Vornado Realty Trust (VNO) � Mentioned cautiously in Barron�s
Lyondell Chemical (LYO) � Downgraded at BofA
China Unicom (CHU) � Downgraded at Bear Stearns
Harrah�s Ent (HET) � Downgraded at Buckingham
Sprint Nextel (S) � Downgraded at CIBC, Credit Suisse
Pactiv (PTV) � Downgraded at Citigroup
Loews Corp (LTR) � Citigroup starts coverage with Buy
Lazard (LAZ) � Upgraded at Goldman Sachs
Kroger (KR) � Upgraded at HSBC
Novell (NOVL) � Upgraded at JMP Securities
Armor Holdings (AH) � Upgraded at Lehman
United Dominion Realty (UDR) � Upgraded at JP Morgan
Aegon (AEG) � Upgraded at Merrill Lynch
Tidewater (TDW) � Upgraded at UBS
France Telecom (FTE) � Upgraded at UBS
Temple Inland (TIN) � Estimates reduced at UBS
** 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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