David Moenning's Daily State of the Markets: 11/14
Tweet
Share
E-mail
Data Deliberations
Good morning. With all eyes on this week�s crucial economic data, it is safe to say that most traders may have been content to spend yesterday reviewing the expectations for the upcoming reports on inflation, retail sales, and manufacturing and call it a day. However, at about 9:30 yesterday morning, Dallas Fed President Richard Fisher gave the bulls something to latch onto in the way of comments, which, this time, had absolutely nothing to do with baseball.
With the Fed�s game now over, Mr. Fisher didn�t have to spend any more time on his view of what inning the economic game is in. However he did indicate that the economy was �growing forcefully� which seemed to allay fears about the state of the soft landing. Mr. Baseball also gave no indication that inflation was providing any difficulty to the economy or the Fed at the present time � all of which seemed to put investors at ease
With most analysts fretting over the upcoming data, Mr. Fisher�s comments, coupled with another big drop in oil prices (crude dropped $1.01 to $58.58) gave the bulls all they needed to put another �W� up on the board. And while the move wasn�t exactly awe inspiring, as they say, a win is a win, and the DJIA finished just a stone�s throw from another all-time high.
However, the real key to the market�s next direction lies in the details of this week�s economic reports. This morning, we�ll get a peek at inflation at the producer level as well as a much anticipated report on retail sales.
But before we get to the domestic data, there were a couple of pretty big reports released overseas. For example, Core Inflation in the UK came in at an annual rate of +1.4%, which was lower than expectations. In addition, the Japanese economy grew by 2% over the last three months, which was double the consensus view.
Getting back to the U.S., October�s PPI came in at -1.6%, which was much better than the expectations for a drop of -0.5%. When you strip out food and energy, the Core Rate was also much weaker than anticipated at -0.9% versus expectations for an increase of +0.1%. Obviously, the drop in energy prices has a lot to do with the decline in the numbers. But, in addition, car prices played a big role in the number.
Perhaps the best way to look at the inflation picture is via the year-over-year Core Rate, which is up just +0.6% over the past 12 months and helps explain why most economists feel inflation remains under control.
We also got a look at Retail Sales for October, which, like the PPI data was weaker than expected � but not that far from the consensus expectations. Retails sales fell by -0.2% while the Ex Autos number dropped by -0.4%. However, it is disconcerting to see that September�s numbers were also revised downward.
Stocks and bonds have sprung to life on the reports as the focal point, at least initially, is the fact that the soft landing remains on track and that we should have absolutely no concerns with the Fed going forward. However, it will be interesting to see if the weakness in the Retail Sales gets any play as the day progresses.
Running through the rest of the pre-game indicators, the major overseas markets are once again mixed by region with Asian markets finishing with green screens while the European bourses are modestly lower so far this morning. Gold futures are moving up a little so far and are quoted at $627 right now. Crude futures are little changed, with the latest quote showing oil up $0.30 to $58.88. Interest rates are heading down in response to this morning�s data with the 2-year currently quoted at 4.75% while the 10-yr is trading near the recent lows with a yield of 4.55% right now. And finally, with about an hour before the bell, stock futures in the U.S. are moving higher. The Dow futures are currently ahead by 40 points, the S&Ps are up by a little more than 5 points, and the NASDAQ looks to be about 4 to 5 points ahead of fair value at the moment.
Stocks �In Play� This Morning:
American Eagle Outfitters (AEOS) � Reported $0.66 vs. $0.65
Wal-Mart (WMT) � Reported $0.61 vs. $0.60
Home Depot (HD) � Reported $0.73 vs. $0.75
Dillards (DDS) � Reported $0.17 vs. -$0.01
DR Horton (DHI) � Reported $0.88 vs. $0.69
Saks (SKS) � Reported $0.11 vs. $0.03
Target (TGT) � Reported $0.59 vs. $0.55
Sprint Nextel (S) � Downgraded at AG Edwards
Micron Technology (MU) � Mentioned positively at Bear Stearns
BT Group (BT) � Downgraded at Bear Stearns
Astrazeneca (AZN) � Price target increased at JP Morgan
Benneton Group (BNG) � Downgraded at Merrill Lynch
Wynn Resorts (WYNN) � Downgraded at Stifel Nicolaus
Las Vegas Sands (LVS) � Downgraded at Stifel Nicolaus
Express Scripts (ESRX) � Raises full year earnings guidance
Long positions in stocks mentioned: BSC, JPM, MER
** 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. With all eyes on this week�s crucial economic data, it is safe to say that most traders may have been content to spend yesterday reviewing the expectations for the upcoming reports on inflation, retail sales, and manufacturing and call it a day. However, at about 9:30 yesterday morning, Dallas Fed President Richard Fisher gave the bulls something to latch onto in the way of comments, which, this time, had absolutely nothing to do with baseball.
With the Fed�s game now over, Mr. Fisher didn�t have to spend any more time on his view of what inning the economic game is in. However he did indicate that the economy was �growing forcefully� which seemed to allay fears about the state of the soft landing. Mr. Baseball also gave no indication that inflation was providing any difficulty to the economy or the Fed at the present time � all of which seemed to put investors at ease
With most analysts fretting over the upcoming data, Mr. Fisher�s comments, coupled with another big drop in oil prices (crude dropped $1.01 to $58.58) gave the bulls all they needed to put another �W� up on the board. And while the move wasn�t exactly awe inspiring, as they say, a win is a win, and the DJIA finished just a stone�s throw from another all-time high.
However, the real key to the market�s next direction lies in the details of this week�s economic reports. This morning, we�ll get a peek at inflation at the producer level as well as a much anticipated report on retail sales.
But before we get to the domestic data, there were a couple of pretty big reports released overseas. For example, Core Inflation in the UK came in at an annual rate of +1.4%, which was lower than expectations. In addition, the Japanese economy grew by 2% over the last three months, which was double the consensus view.
Getting back to the U.S., October�s PPI came in at -1.6%, which was much better than the expectations for a drop of -0.5%. When you strip out food and energy, the Core Rate was also much weaker than anticipated at -0.9% versus expectations for an increase of +0.1%. Obviously, the drop in energy prices has a lot to do with the decline in the numbers. But, in addition, car prices played a big role in the number.
Perhaps the best way to look at the inflation picture is via the year-over-year Core Rate, which is up just +0.6% over the past 12 months and helps explain why most economists feel inflation remains under control.
We also got a look at Retail Sales for October, which, like the PPI data was weaker than expected � but not that far from the consensus expectations. Retails sales fell by -0.2% while the Ex Autos number dropped by -0.4%. However, it is disconcerting to see that September�s numbers were also revised downward.
Stocks and bonds have sprung to life on the reports as the focal point, at least initially, is the fact that the soft landing remains on track and that we should have absolutely no concerns with the Fed going forward. However, it will be interesting to see if the weakness in the Retail Sales gets any play as the day progresses.
Running through the rest of the pre-game indicators, the major overseas markets are once again mixed by region with Asian markets finishing with green screens while the European bourses are modestly lower so far this morning. Gold futures are moving up a little so far and are quoted at $627 right now. Crude futures are little changed, with the latest quote showing oil up $0.30 to $58.88. Interest rates are heading down in response to this morning�s data with the 2-year currently quoted at 4.75% while the 10-yr is trading near the recent lows with a yield of 4.55% right now. And finally, with about an hour before the bell, stock futures in the U.S. are moving higher. The Dow futures are currently ahead by 40 points, the S&Ps are up by a little more than 5 points, and the NASDAQ looks to be about 4 to 5 points ahead of fair value at the moment.
Stocks �In Play� This Morning:
American Eagle Outfitters (AEOS) � Reported $0.66 vs. $0.65
Wal-Mart (WMT) � Reported $0.61 vs. $0.60
Home Depot (HD) � Reported $0.73 vs. $0.75
Dillards (DDS) � Reported $0.17 vs. -$0.01
DR Horton (DHI) � Reported $0.88 vs. $0.69
Saks (SKS) � Reported $0.11 vs. $0.03
Target (TGT) � Reported $0.59 vs. $0.55
Sprint Nextel (S) � Downgraded at AG Edwards
Micron Technology (MU) � Mentioned positively at Bear Stearns
BT Group (BT) � Downgraded at Bear Stearns
Astrazeneca (AZN) � Price target increased at JP Morgan
Benneton Group (BNG) � Downgraded at Merrill Lynch
Wynn Resorts (WYNN) � Downgraded at Stifel Nicolaus
Las Vegas Sands (LVS) � Downgraded at Stifel Nicolaus
Express Scripts (ESRX) � Raises full year earnings guidance
Long positions in stocks mentioned: BSC, JPM, MER
** 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.
You May Also Be Interested In
- After-Hours Movers: CSCO, COHR, HLIT, CBRS, STUB, ENS
- After-Hours Movers: P, RIOT, BW, RKLB, HIMS, UPWK
- After-Hours Movers: CRWV, NBIS, SMCI, LITE, CAVA, HRB
Create E-mail Alert Related Categories
Contributors, Special ReportsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
