David Moenning�s Daily State of the Markets: 02/14
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Snow Day!
To every kid in America, news of a storm dumping 29 inches of snow brings sheer joy and visions of a snow day (or two). To the New York Stock Exchange however, the storm meant frustrated commuters and the lightest trading day of the year.
With trading desks less than fully staffed, the day�s news flow and program trades both took on added emphasis yesterday. But despite the intraday gyrations, overall it has to be considered a rather quiet day since volume totaled just 1.36 billion shares.
In the early going it looked like the bears were ready to take full advantage of the fact that the bulls were slow in getting to work. The Barron�s cover story on Google and worries over what Mr. Bernanke will say in his first testimony before Congress on Wednesday were the focal points early, and stocks started the day in the red.
Early losses were promptly extended after Cleveland Fed President Sandra Pianalto noted in a speech that preliminary indications for January show the economy looks to be perking up. She went on to suggest that there is some concern over the potential for inflation in response to the recent tightening of the labor market. While the speech provided no new insights, it did serve as a reminder that traders are no longer certain when the Fed will quit. In addition, there is concern that the Fed�s transparency provided by Mr. Greenspan, which helped the markets remain steady during the onslaught of 14 straight rate hikes, may become less prominent under Bernanke.
In addition to trepidation over Bernanke�s testimony, stocks were also hurt by weakness in tech � thanks to Google�s continued fall from grace. Google fell another -4.7% yesterday and is now down $126, or -26.7% in the last month.
Traders were also given pause by the Lowry�s report which suggested that the tone of the market has been weakening of late. The report told of an increase in selling pressure and waning buying pressure, which is leading to the trend of traders selling into rallies.
Turning to this morning, both the weekly report on Same Store Sales and the government�s report on January�s Retail Sales show that the consumer is alive and well. Same Store Sales for retailers are coming in well above expectations and Retail Sales for the month came in very strong in at +2.3% versus expectations for a gain of +0.8%. The story was the same when you strip out autos as the ex-transportation number shows a gain of +2.2% versus the consensus estimate for a gain of +0.7%.
Stocks aren�t showing much reaction to the report, but do appear to be headed higher in the early going. The reports on the retail front may present a bit of a conundrum for traders since the numbers may be strong enough to encourage more worry on the topic of what the Fed will do next.
Running through the rest of the pre-game indicators, Overseas markets were up in Asia but down a bit in Europe; Gold is rebounding this morning with a gain of $5.10 to $547.20. Oil is moving lower by -$0.59 to $60.65; Natural Gas is down by -$0.14 to $7.10; bond yields are moving higher with the 2-yr at 4.71% and 10-yr at 4.63%. And finally, stock futures in the U.S. are moving up before the bell (Dow +29, S&P +2.90, and NASDAQ +6.50).
Best wishes for a sweetheart of a day.
Stocks "In Play" This Morning:
QCOM � AmTech says collaboration with NOK/Sanyo is a positive
AMGN � Will offer $4B in convertible securities and buy back $3B in stock
MMM � Raises dividend, announces buyback of $2B
WAG � Upgraded at Raymond James
AMAT � Upgraded at A.G. Edwards
AAPL � Begins shipping INTC-based MacBook Pro
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: QCOM, AMGN, AMAT
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) 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.
To every kid in America, news of a storm dumping 29 inches of snow brings sheer joy and visions of a snow day (or two). To the New York Stock Exchange however, the storm meant frustrated commuters and the lightest trading day of the year.
With trading desks less than fully staffed, the day�s news flow and program trades both took on added emphasis yesterday. But despite the intraday gyrations, overall it has to be considered a rather quiet day since volume totaled just 1.36 billion shares.
In the early going it looked like the bears were ready to take full advantage of the fact that the bulls were slow in getting to work. The Barron�s cover story on Google and worries over what Mr. Bernanke will say in his first testimony before Congress on Wednesday were the focal points early, and stocks started the day in the red.
Early losses were promptly extended after Cleveland Fed President Sandra Pianalto noted in a speech that preliminary indications for January show the economy looks to be perking up. She went on to suggest that there is some concern over the potential for inflation in response to the recent tightening of the labor market. While the speech provided no new insights, it did serve as a reminder that traders are no longer certain when the Fed will quit. In addition, there is concern that the Fed�s transparency provided by Mr. Greenspan, which helped the markets remain steady during the onslaught of 14 straight rate hikes, may become less prominent under Bernanke.
In addition to trepidation over Bernanke�s testimony, stocks were also hurt by weakness in tech � thanks to Google�s continued fall from grace. Google fell another -4.7% yesterday and is now down $126, or -26.7% in the last month.
Traders were also given pause by the Lowry�s report which suggested that the tone of the market has been weakening of late. The report told of an increase in selling pressure and waning buying pressure, which is leading to the trend of traders selling into rallies.
Turning to this morning, both the weekly report on Same Store Sales and the government�s report on January�s Retail Sales show that the consumer is alive and well. Same Store Sales for retailers are coming in well above expectations and Retail Sales for the month came in very strong in at +2.3% versus expectations for a gain of +0.8%. The story was the same when you strip out autos as the ex-transportation number shows a gain of +2.2% versus the consensus estimate for a gain of +0.7%.
Stocks aren�t showing much reaction to the report, but do appear to be headed higher in the early going. The reports on the retail front may present a bit of a conundrum for traders since the numbers may be strong enough to encourage more worry on the topic of what the Fed will do next.
Running through the rest of the pre-game indicators, Overseas markets were up in Asia but down a bit in Europe; Gold is rebounding this morning with a gain of $5.10 to $547.20. Oil is moving lower by -$0.59 to $60.65; Natural Gas is down by -$0.14 to $7.10; bond yields are moving higher with the 2-yr at 4.71% and 10-yr at 4.63%. And finally, stock futures in the U.S. are moving up before the bell (Dow +29, S&P +2.90, and NASDAQ +6.50).
Best wishes for a sweetheart of a day.
Stocks "In Play" This Morning:
QCOM � AmTech says collaboration with NOK/Sanyo is a positive
AMGN � Will offer $4B in convertible securities and buy back $3B in stock
MMM � Raises dividend, announces buyback of $2B
WAG � Upgraded at Raymond James
AMAT � Upgraded at A.G. Edwards
AAPL � Begins shipping INTC-based MacBook Pro
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: QCOM, AMGN, AMAT
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) 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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