David Moenning�s Daily State of the Markets: 08/10
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Good morning. Every so often, the market winds up in one of these frustrating, sloppy environments where it seems there is always something new to worry about. Just the day before yesterday, traders appeared to finally be able to put worries over the Fed �overdoing it� behind them. Then yesterday, it was worries over the health of the economy that was the source of the stock market difficulties. And then this morning, terrorism will undoubtedly return to the top of the worry list.
Early this morning, British authorities said that they foiled a terrorist plan to detonate as many as 10 �liquid chemical devices� onboard aircraft heading to the United States. Britain�s Home Secretary, John Reid says that 21 people have been arrested in London, including the �main players� in the plot.
U.S. Counterterrorism officials said that they believe this was an incredibly complex plot, involving dozens of people, �which had the footprint of an Al Qaeda backing to it.� Apparently, the plan involved airline passengers hiding masked explosives in carry-on baggage. The current speculation is that the plan involved hair gel. And while those involved were not yet sitting on a plane, they were very close to boarding.
Department of Homeland Security Secretary Michael Chertoff announced this morning that the plot was �mostly disrupted,� but emphasized that we shouldn�t assume the terrorist effort was completely thwarted. He said that while the U.S. is not certain that Al Qaeda is involved, the plot is �suggestive� of the terror group�s �well planned� efforts.
In response to the plot, the U.S. has raised the Airline Threat Level to the highest level ever and has banned all liquids, hair gels, lotions etc. from carry-on baggage. Homeland Security Secretary Chertoff also made the point that there is no indication of a terror plot here in the U.S., but that they are taking measures to increase security at all airports.
The response in markets this morning is about as expected. The major European stock markets are significantly lower with France�s CAC off by -1.5%, the German DAX is down -2.2%, and the UK�s FTSE is currently lower by -1.3%. Here in the U.S., we are seeing crude futures losing ground as traders assume there will be less demand from the airlines. The stock futures have improved dramatically following the government�s press conference and are currently off by modest amounts.
Perhaps the thinking is that the stock market�s reaction to terrorist activity over the past couple of years has been to rebound smartly in the days following the attack. And while there was no actual attack today, we are seeing the same sort of buying interest, which is helping the futures bounce up off the lows this morning.
Running through the rest of the pre-game indicators, the overseas markets in Asia were slightly lower. Gold futures are moving a bit lower at the moment and are currently exchanging hands at $658.50. Crude futures are trading down by $1.00 to $75.35 right now. Interest rates are little changed this morning with the 2-year currently quoted at 4.90% while the 10-yr is trading with a yield of 4.92% right now. And finally, with about an hour before the bell, stock futures in the U.S. are now only modestly lower. The Dow futures are currently off by 21, the S&Ps are down by more than 5 points, and the NASDAQ is sporting a loss of about 7 points.
Stocks �In Play� This Morning:
MetLife (MET) � Upgraded at Goldman Sachs
News Corp (NWS.A) � Downgraded at Morgan Stanley
Red Hat (RHAT) � Upgraded at Banc of America
Lifepoint Hospitals (LPNT) � Downgraded at BofA
Affiliated Computer (ACS) � Downgraded at Bear Stearns
Avnet (AVT) � Upgraded at Deutsche Bank
BellSouth (BLS) � Mentioned positively at Deutsche Bank, also T, VZ, AT
Conseco (CNO) � Removed from Buy List at Goldman Sachs
Progressive Corp (PGR) � Upgraded at Merrill Lynch
Express Scripts (ESRX) � Upgraded at Morgan Stanley
Imax (IMAX) � Downgraded at Piper Jaffray, Susquehanna
Sirius Satellite Radio (SIRI) � Mentioned positively at UBS
WCI Communities (WCI) � Downgraded at UBS
Deutsche Telekom (DT) � Downgraded at West LB
Mirant (MIR) � Mentioned positively at Citigroup
Brinker Intl (EAT) � Reported $0.75 vs. $0.65
Staples (SPLS) � Mentioned positively at Citigroup
JC Penney (JCP) � Reports $0.75 vs. $0.71
Ralston Holdings (RAH) � Upgraded at AG Edwards
Transocean (RIG) � Upgraded at AG Edwards
Long positions in stocks mentioned: MER, BSC, GS, NWS.A, ACS, BLS, ESRX
** 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. Every so often, the market winds up in one of these frustrating, sloppy environments where it seems there is always something new to worry about. Just the day before yesterday, traders appeared to finally be able to put worries over the Fed �overdoing it� behind them. Then yesterday, it was worries over the health of the economy that was the source of the stock market difficulties. And then this morning, terrorism will undoubtedly return to the top of the worry list.
Early this morning, British authorities said that they foiled a terrorist plan to detonate as many as 10 �liquid chemical devices� onboard aircraft heading to the United States. Britain�s Home Secretary, John Reid says that 21 people have been arrested in London, including the �main players� in the plot.
U.S. Counterterrorism officials said that they believe this was an incredibly complex plot, involving dozens of people, �which had the footprint of an Al Qaeda backing to it.� Apparently, the plan involved airline passengers hiding masked explosives in carry-on baggage. The current speculation is that the plan involved hair gel. And while those involved were not yet sitting on a plane, they were very close to boarding.
Department of Homeland Security Secretary Michael Chertoff announced this morning that the plot was �mostly disrupted,� but emphasized that we shouldn�t assume the terrorist effort was completely thwarted. He said that while the U.S. is not certain that Al Qaeda is involved, the plot is �suggestive� of the terror group�s �well planned� efforts.
In response to the plot, the U.S. has raised the Airline Threat Level to the highest level ever and has banned all liquids, hair gels, lotions etc. from carry-on baggage. Homeland Security Secretary Chertoff also made the point that there is no indication of a terror plot here in the U.S., but that they are taking measures to increase security at all airports.
The response in markets this morning is about as expected. The major European stock markets are significantly lower with France�s CAC off by -1.5%, the German DAX is down -2.2%, and the UK�s FTSE is currently lower by -1.3%. Here in the U.S., we are seeing crude futures losing ground as traders assume there will be less demand from the airlines. The stock futures have improved dramatically following the government�s press conference and are currently off by modest amounts.
Perhaps the thinking is that the stock market�s reaction to terrorist activity over the past couple of years has been to rebound smartly in the days following the attack. And while there was no actual attack today, we are seeing the same sort of buying interest, which is helping the futures bounce up off the lows this morning.
Running through the rest of the pre-game indicators, the overseas markets in Asia were slightly lower. Gold futures are moving a bit lower at the moment and are currently exchanging hands at $658.50. Crude futures are trading down by $1.00 to $75.35 right now. Interest rates are little changed this morning with the 2-year currently quoted at 4.90% while the 10-yr is trading with a yield of 4.92% right now. And finally, with about an hour before the bell, stock futures in the U.S. are now only modestly lower. The Dow futures are currently off by 21, the S&Ps are down by more than 5 points, and the NASDAQ is sporting a loss of about 7 points.
Stocks �In Play� This Morning:
MetLife (MET) � Upgraded at Goldman Sachs
News Corp (NWS.A) � Downgraded at Morgan Stanley
Red Hat (RHAT) � Upgraded at Banc of America
Lifepoint Hospitals (LPNT) � Downgraded at BofA
Affiliated Computer (ACS) � Downgraded at Bear Stearns
Avnet (AVT) � Upgraded at Deutsche Bank
BellSouth (BLS) � Mentioned positively at Deutsche Bank, also T, VZ, AT
Conseco (CNO) � Removed from Buy List at Goldman Sachs
Progressive Corp (PGR) � Upgraded at Merrill Lynch
Express Scripts (ESRX) � Upgraded at Morgan Stanley
Imax (IMAX) � Downgraded at Piper Jaffray, Susquehanna
Sirius Satellite Radio (SIRI) � Mentioned positively at UBS
WCI Communities (WCI) � Downgraded at UBS
Deutsche Telekom (DT) � Downgraded at West LB
Mirant (MIR) � Mentioned positively at Citigroup
Brinker Intl (EAT) � Reported $0.75 vs. $0.65
Staples (SPLS) � Mentioned positively at Citigroup
JC Penney (JCP) � Reports $0.75 vs. $0.71
Ralston Holdings (RAH) � Upgraded at AG Edwards
Transocean (RIG) � Upgraded at AG Edwards
Long positions in stocks mentioned: MER, BSC, GS, NWS.A, ACS, BLS, ESRX
** 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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