|
Daily State of the Markets Good morning. Stocks rallied a bit, albeit a wee bit, on Monday as the prospects for Ben Bernanke’s confirmation appeared to improve by the hour. However, after last week’s rather dramatic selloff, a gain of 24 points is hardly the type of energetic rebound the bulls might have been looking for. Given that the fears of Bernanke’s confirmation vote either not taking place or failing had been responsible for Friday’s drubbing, one might have expected to see a little more oomph behind the “sigh of relief” action seen on Monday. Especially given the fact that Greece’s debt auction was perceived to have gone fairly well. Yes, it is true that the report on Existing Home Sales was disappointing. However, this economic data was offset by a much better than expected report from the Dallas Fed Manufacturing Index. And when you factor in the fact that the dollar started off to the downside yesterday morning, it seemed as though the Bulls had something to work with. But, as they say, “It’s not the news; it’s how the market reacts to the news that counts.” And on a chart basis, the reaction to the news that Bernanke would survive to fight another day was lackluster at best. Make no mistake about it; the Bernanke story was the focus on the session. And with the White House pulling out all the stops in an attempt to bolster support for the Fed Chairman, it appeared that the votes were there to confirm Bernanke without fighting a filibuster. Even the president got into the act as he told ABC news that Bernanke has his strongest support and that “he is the right man for the job.” However, as traders learned during the Credit Crisis, making assumptions about what politicians may or may not vote for can be a dangerous game. So, despite the fact that by most counts Bernanke does appear to have the more than 60 votes needed to be confirmed for a second term, until the deal is sealed, uncertainty is likely to remain – and we all know how the market loves uncertainty. Turning to this morning, we don’t have any economic news to report before the bell. But we will get reports on US Home Prices, Consumer Confidence, and the Richmond Fed Index at 10:00 am eastern.
In addition to the steady stream of earnings that analysts will deal with, the FOMC begins their two-day meeting today. And while it is assumed that it will be business as usual in the meeting, the event highlights the concerns surrounding the Bernanke confirmation. In the news, there is word that the President will propose a 3-year spending freeze on domestic spending, which puts concerns about the recovery in play. On the earnings front, while most companies are “beating the street,” with the exception of companies like Apple (AAPL), it appears that most of the earnings beats continue to stem from cost cutting as opposed to sales growth. And while this was largely expected, it will be interesting to see if the bottom line numbers exceeding expectations will be enough going forward. Running through the rest of the pre-game indicators, the overseas markets are lower across the board. Crude futures are down $0.80 to $74.46. On the interest rate front, we’ve got the yield on the 10-yr trading higher at 3.58%. Next, gold is moving down by $9.20 and the dollar is higher against the Yen, the Euro, and the Pound. Finally, with about 60 minutes before the bell, stock futures in the U.S. are pointing to a slightly lower open. The Dow futures are currently off by about 20 points; the S&P’s are down about 4 points, while the NASDAQ looks to be about even with fair value at the moment.
* Report includes items that make comparisons to the consensus estimate questionable Wall Street Research Summary Upgrades: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lexmark (LXK) – Barclays Alcoa (AA) – BMO Capital Amylin Pharmaceutical s(AMLN) – Citi SunPower (SPWRA) – Jefferies Suntech Power (STP) – Jefferies Citrix Systems (CTXS) – Jefferies Eaton (ETN) – KeyBanc American Express (AXP) – Ladenburg Thalmann Volterra Semiconductor (VLTR) – Needham Applied Materials (AMAT) – Oppenheimer Comerica (CMA) – Oppenheimer Huntington Bancshares (HBAN) – Oppenheimer KeyCorp (KEY) – Oppenheimer PNC Bank (PNC) – Oppenheimer Cullen/Frost Bankers (CFR) – Oppenheimer Novellus (NVLS) – RBC Capital Microsoft (MSFT) – Estimates increased at UBS McDonalds (MCD) – Target increased at UBS
Anixter (AXE) – Credit Suisse Hershey (HSY) – Added to Conviction Sell list at Goldman Sachs St. Jude Medical (STJ) – Lazard Plains Exploration (PXP) – Morgan Stanley CIGNA (CI) – Oppenheimer Weatherford Intl (WFT) – RBC Capital
Long positions in stocks mentioned: AAPL, AXP, CI, ZRAN
Try doing something nice for someone today (for no reason at all) and until next time, “May the bulls be with you!”
David D. Moenning
Founder TopStockPortfolios.com
For more “top stock” portfolios and research, visit TopStockPortfolios.com
The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.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. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.
Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.
The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.
Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.
Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.
