The stock markets are going to
open a bit higher from our last post on Wednesday last. Oil is a couple of
dollars higher in the $66 range and Treasuries are a bit higher in yield.
Overnight in Asia
the markets were mostly lower while Europe is mixed.
Gold is around $681 and Oil is $66.27.
Last Friday Citi raised it rating
on GE saying that the company is worth more split up into four parts. They must
be reading our Comments.
We would guess that today will be
unchanged to up since it is the last day of the month. The DJIA has been up for
20 of the last 22 days and is due for a pull back. Maybe that will begin
Personal Income for March was up
0.7%. Personal Spending was up 0.3%. Adjusted for inflation that means Consumer
Spending was down 0.2% in the month. The PCE Price Deflator (inflation) year
over year was 2.4% but the core rate was 2.1%.
1473 is the level the S&P 500
ahs to close below for the rally to be over. The S&P 500 is currently well
above that level at 1495.
The Chicago Purchasing Managers’
Index was 53 in April versus 67 in March.
Oil ended down 80 pennies at $65.68. Gold gained $2 to $683 and Treasuries
rallied on the tame inflation number with the two-year at 4.60% and the
ten-year at 4.62%.
European stocks closed mixed and many markets around the world are closed tomorrow for May Day. *****
We guessed wrong. Traders sold
stocks in the last hour to beat the rush tomorrow.
The DJIA closed down 60 points at 13060. The S&P 500 lost 12 points to 1482 and the NAZZ dropped 32 points to 2525.
Breadth was 2/1 negative and volume
There were 395 new highs and 105 new lows.
And the week has just begun.
25 April 2007 Daily Comments
We will be
traveling to Chicago for client and auditor meetings on Thursday and Friday and so the next
post will be on Monday April 30. *****
We read the following on AOL
yesterday. We read a story like this in the early 1990s and it was WashingtonDC then too. The folks in the story paid
$250,000 for their house in 2002 and sold it for a bit less than $400,000 this
year and from the tone of the story we ware supposed to feel sorry for them
because they couldn’t sell it for $600,000. They only made 60% on their sale while in the same period of time the
S&P 500 was up 29%. Obviously greed is still alive.
They Listed at $600,000 and Sold for $400,000 -- What Happened?
Inside Stories From Today's Real Estate Market
by Kate Morgenstern, AOL Real Estate
"The market was hot and we were
optimistic." That was the climate when Dave, who asked that we not use his
real name, and his wife put their house on the market for $600,000. The house,
located in a Washington, D.C. suburb, received no offers. More than a year
passed, during which time they painfully pecked away at the price, dropping the
listing $10,000 here, 20 grand there. It finally sold for less than $400,000.
What on earth went wrong?
Dave bought the three-bedroom, two-and-a-half bath house with his wife for
$250,000 in April 2002. He says, "It was a good buy; we were happy. It was
in a nice neighborhood on a nice, flat lot at the end of a cul-de-sac. It
wasn't a fixer-upper, but it needed some work." Soon after moving in, Dave
replaced the carpets on the lower level with wood flooring. He modernized the
kitchen with stainless steel appliances and updated the bathrooms. The
improvements ran about $10,000. *****
lower overnight except of course Shanghai.
European markets are higher as a group of banks raise the bid for ABN AMRO by a
mere $6 billion. Gold is up a few dollars and Oil is approaching $65. Treasuries
are lower on better than Durable Goods orders.
Amazon reported dynamite numbers last night and is up 15% this morning
and has added some juice to traders psyches.
Boston Scientifics’ coated stent sales are in decline after
studies have shown the there is risk to certain patients who have them
implanted. BSX announced lower earnings as expected early in the week and the
shares are back to where we bought them at the end of last year. We had a
profitable trade in them and we are going to try our luck
again buying shares at $15.83. At that price the company is selling
at 2 times sales which is cheap for a medical device maker. The company overpaid
for Guidant last year but at the time the shares were trading at $30. We think
Mr. Market has punished the shareholders enough.
Today’s stock markets are like
the zoom zoom car commercial. They were up at the start of the day and have
just moved inexorably higher all day. It will be interesting to see how Asia
and China react
The NYT had an article on China’s
new billionaires and we noticed that a solar power company was valued at $5
billion in the Chinese market. We immediately thought of Japan
in the late 1980s and the dotcom boom here a decade later. Both those markets’
bull moves lasted much longer than we expected and we don’t know how long this
world wide bull market will last but we do know it will end badly.
Oil closed up 1.24 at $65.82. Gold
was flat at $688 and Treasuries were
lower with the two-year at 4.63% and the ten-year at 4.65%.
European stocks were buoyed by the U.S.
markets and closed higher as did Mexico
The DJIA closed up 135 points at 13085. The S&P 500 gained 15 points to 1495 and the NAZZ jumped 24 points to 2548.
Breadth was 2/1 positive and volume
There were 590 new highs and 65 new lows.
There are two more trading days
this week at the casino. We’ll be absent from our usual perch but watching
24 April 2007 Daily Comments
The NYT has a short piece on
compensation of the highest paid hedge fund managers in today’s issue at
. A billion dollars for a year’s work seems a bit excessive especially when the
clients are taking all the financial risk.
Large returns entail assuming
large risks and eventually Mr. Market demands his due. Moreover we wonder whether
the outsized returns are blinding folks to the fact that they are taking all
the risk for only half the profit. With the leverage being employed odds are
that over time they could get close to the same return by buying the S&P
500 with the same degree of leverage.
small mixed overnight except India
which was up over 1%. European bourses are lower. Gold is unchanged at $695 and
Oil is over $66 in the early going in NYC. Stocks are going to open slightly to
the better and Treasuries are flat.
Texas Instruments offered positive guidance going forward saying it
had worked off its inventory problem and is up 10% in early trading and that
has given a small lift to some other tech stocks.
Existing Home Sales were down 8% in March. And Consumer Confidence dropped to 104 from 108. On the home sales news
stocks moved lower and bonds found a bid.
IBM raised its dividend 33% and increased its stock buyback and the
shares are $4 per share higher this morning. Where are all those reporters at
the WSJ and other media that predicted its demise in the early 1990s? The $4
gain this morning is worth 30 DJIA points and is the only reason that market
measure is not in negative territory.
Oil traded above $66 early in the day and then pulled pack to $64.58
this afternoon. Some of the reaction is technical in nature from the $66 high. It
is silly to be pricing gasoline on what a bunch of NYC traders decide oil is
worth at any second. But the oil companies are happy to raise prices as soon as
NYC futures jump but a little slower to lower them. It reminds of the
shenanigans with electricity in 2000 and 2001.
European bourses closed down large fractions and Mexico
was slightly higher while Brazil
Treasuries closed higher with the two-year at 4.60% and the
ten-year at 4.62%. Gold was down $7 at $688.
Since the beginning of 2002 the
S&P 500 is up 29% while the value of the dollar versus the euro is off 30%.
The DJIA gained 30 points o close at 12950. The S&P 500 was down 1 point to 1480 and the NAZZ rose 1 point to
Breadth was 5/4 negative and volume
There were 370 new highs and 95 new lows.
The there are three more days and
fund games this week.
23 April 2007 Daily Comments
Oil is higher this morning at
$64.32 on trouble in Nigeria.
Asian markets were mixed overnight with most small fractions changed except Shanghai
which was up over 3%. European bourses are also mixed and Gold is unchanged as
Barclay’s is going to buy ABN
AMRO for $91 billion and BankAmerica is going to buy LaSalle Bank for $21
billion from ABN. Do we hear $100 billion?
For those folks who want to worry
we present the following which we read at www.minyanville.com.
1887 saw a five-month fourteen percent decline.
1897 saw a two-month twenty percent decline.
1907 was the Rich Man's Panic which saw an eleven-month forty-five percent drop.
1917 saw a six-month thirty-three percent decline.
1927 had a one-month eleven percent decline.
1937 saw a three-month forty percent waterfall.
1947 saw a three-month nine percent decline.
1957 saw a five-month nineteen percent decline.
1967 saw a three-month ten percent decline.
1977 was a bear year, down almost the whole year, down eighteen percent.
1987 saw a twenty percent crash in one month.
1997 saw a two to three month sixteen percent decline.
CNBC presented statistics this
morning suggesting that $1 trillion in shares could be removed from public
trading by the end of the year through buybacks and leveraged buyouts. Since
there are about $11 trillion in public shares that represents a significant
amount of money available for reinvestment in shares.
Of course eventually all the
leveraged buyout shares will return to the markets at higher prices when the
LBO folks attempt to realize their profits but that is a worry for another day.
Oil in NYC trading closed higher by $1.68 at $65.89. Gold was down $2 to $693 and Treasuries had a bid with the two-year
at 4.63% and the ten-year at 4.65%.
European bourses were lower at the close as were
Mexico and Brazil.
The DJIA dropped 45 points to end at 12915. The S&P 500 was down 4 points at 1480 and the NAZZ lost 4 points to 2522.
Breadth was 5/4 negative at the close and volume was moderate.
There were 475 new highs and 70 new lows.
And the fun has just begun.
20 April 2007 Daily Comments
rebounded overnight with Shanghai
up 3.6% and India
up 2.6% and Hong Kong up over 1%. Europe
is following that lead at midday with
France and Germany
and London all up over 1% and U.S. futes are goings to open higher. Caterpillar and Google had better than numbers
and today is expiration day and traders are going to move stocks higher this
Gold is up $5 and Oil is up over
$1 in early NYC trading. Treasuries are flat.
As we watch various issues pop $2
or $3 per share on better than earnings
reports we are reminded of other Goldilocks
periods in the past. We are trying to keep an open mind and for that reason
we own stocks but also don’t want to overdue our investments because we believe
that the surface positive feeling is masking underlying speculation. The
speculation is occurring in the big cap
stocks and momentum players are
having fun moving CAT and Boeing instead of Microsoft and Yahoo. But
momentum remains a game and there
are games being played.
had lousy numbers on Wednesday and the stocks dropped from $31 to $27.50 today.
We are buying shares in our larger accounts
for a trade. Hopefully we got it right this time.
After an hour of trading the
major measures are up about 1% in heavy expiration trading. Breadth is over 3/1
positive. Gold is now up $8 at $596.
had better than earnings but sales of
key drugs were lower and the share price is off a few pennies. Going forward
the company expects flat sales but better profits form cost cutting which means
firing folks. With a yield of 4.3% we are repurchasing
in larger accounts. PFE is the one offew drug stock that hasn’t really
rebounded and we are hoping for a rising tide lifts all boats effect. The
dividend gives us some security.
Short interest is at an all time
high and represents 7 days of buying. That means that in order to cover all the
shares sold short it would take the trading volume of seven days of nothing but
short covering to buy back all the shares sold short.A rising short interest is considered bullish
since the shares eventually have to be repurchased.
This morning a stock technician
mentioned the 1982-1987 bull market as somewhat similar to the present market. That comment mirrored what we had been thinking last night on our walk
which was that the bull market of the 1980s began in 1982 and ended in 1987
which would mirror the 2002 bottom to a 2007 top. In the spring of 1987 after a
correction that was greater than the recent one, stocks took off and kept
rising into August. One of Don Yarling’s maxims was that the last leg of a bull market is the most profitable and the most
dangerous. And we do see more to go
on the upside but also the risks continue to increase as the markets move up.
The DJIA has been higher 14 of
the last 15 days. It is time for it to rest and with expiration over today next
week may be the time.
Oil ended the day in NYC at $63.38 up $1.55.Gold gained $7 to $695 and Treasuries
were weaker as stocks held their gains with the two-year at 4.65% and the
ten-year at 4.67%. Several gurus want the Fed to lower rates so that stocks
will go higher but as stocks go higher the odds of Fed lowering rates recede.
European bourses closed strongly higher as did Brazil
The DJIA gained 155 points to end at 12960. The S&P 500 rose 13 points to 1483 and the NAZZ jumped 20 points to 2525.
Breadth was over 2/1 positive at the close and volume was active.
There were 500 new highs and 60 new lows.
And the casino is closed for
19 April 2007 Daily Comments
Shanghai (China) was down 4.5% overnight and the rest
of Asia followed suit as have Europe
futures. So goes the new mantra as China
goes so goes the world. China
dropped on news that its GDP was up 11% in the first quarter and its inflation
grew at 3.5%. We have a feeling that Chinese officials figure their inflation
with the same computer that U.S.
European markets are lower at with Germany
down over 1%. Gold is down $3 and oil is off 75 pennies in the early going in
NYC. Treasuries again have a bid on the down markets around the world.
Jobless claims were down 4,000 to 339,000 in the latest repeating
Stocks opened lower with breadth
3/1 negative but after three hours of trading the major measures have moved to
the plus side and but breadth remains 2/1 negative. Oil is down $1.43 and
Treasuries are to the downside.
It turned into a nice day here
and so we went out and played with our horses for the afternoon.
Oil ended down $1.30 at $61.83. Gold lost $5 to $688 and Treasuries closed flat to lower with
the two-year at 4.64% and the ten-year at 4.67%.
European bourses lost ground today as did Mexico
All eyes will be on Shanghai tonight.
The DJIA closed up 6 points at 12810. The S&P 500 dropped 2 points
to end at 1470 and the NAZZ end 8 points lower at 2502.
Breadth was 2/1 negative and volume
There were 215 new highs and 60 new lows.
And another Friday is around the
18 April 2007 Daily Comments
Asian markets were mostly higher
overnight while European bourses are lower at .
Treasuries have a bid, Gold is up $1 and oil is back under $63 as the trading
CNBC reports that RealtyTrac
says that foreclosures were up 7% in March and 47% year over year and that now
1 of every 747 residential mortgages is in foreclosure.
Lehman lowered its price target
on Starbucks to $45. Since the
shares are trading at $31 we’ll be delighted to reach the lowered level.
JP Morgan upped Intel to overweight from neutral. INTC earnings
were about as expected.
Motorola met lowered expectations and predicted flat results for
the rest of the year.
Blackberry users are out of luck today as the Blackberry system suffered
a catastrophic failure last night and is out of service to day for all U.S.
Investors Intelligence is now 52% bulls and 25% bears.
Crude Oil inventories were down 1
million barrels in the latest week and gasoline inventories were down 2.3
million barrels. Oil futures traders are not reacting to the news.
It’s interesting that the
Blackberry system crashed on tax filing day. Also Intuit which makes the popular TurboTax and
ProSeries tax software said it expected to hear from the Internal Revenue
Service Wednesday whether any taxpayers who used its e-filing system would be
penalized for submitting late returns.
A flood of last-minute tax filers swamped the servers of Intuit on Tuesday,
causing hours-long delays in getting forms sent in electronically to the
government. Intuit is still filing the returns with the government this
Oil ended the day at $63.13 up 3 pennies and Gold was up $1 and $693. Treasuries
gained ground with the two-year at 4.64% and the ten-year at 4.65%.
European markets closed lower on the day. Mexico
and Brazil were up.
The Vet is coming at to check our horses and so we are leaving
early today. At the DJIA was up 50 points at 12825 and the S&P 500 was up 4 points at 1475.
The NAZZ was down 2 points at 2515.
Breadth was 5/4 negative on the day and volume was moderate.
There were 325 new highs and 50 new lows.
And there are two more days of
trading for the big boys and girls.
17 April 2007 Daily Comments
Treasuries were lower as were
stocks until CPI was released at . Core
CPI was only 0.1% and so the bond bulls spiked short Treasuries higher and
stock futures moved to the plus side before the open in NYC.
Oil is over $64 in the early
going and Gold is off $2 at $693.
Asian markets were mostly lower
overnight and European bourses are mixed at .
Johnson & Johnson and Coke
had good numbers this morning but after opening higher the major measures are mixed
to lower on the day.
For the record, CPI was up 0.6%
which is certainly not good but since the Fed doesn’t care about what folks
pay for food or energy the markets are responding to the lower core number of
0.1%. year over year CPI was up 2.8% while core was up 2.5%.
Housing Starts were up 0.8% and Industrial
Production was down 0.2%.
Intel announces earnings and gives forward guidance after the close
tonight. Last quarter INTC moved higher in price into the earnings announcement
and then the stock dropped 10% on disappointment in the actual news.
Yesterday new highs exceeded 600.
In the last few months whenever the new highs approached the 700 number there has
been at least a mini correction.
Gold closed down $3 at $692 in NYC. Oil backed off in the afternoon and closed down 51 pennies at
$63.10. Treasuries held their gains
with the two-year finishing at 4.68% and the ten-year at 4.69%.
European bourses were lightly mixed at their closes and Mexico
The DJIA gained 50 points to 12770. The S&P 500 rose 3 points to 1471 and the NAZZ dropped 2 points to 2516.
Breadth was negative and volume was active.
There were 520 new highs and 60 new lows.
And Triple Witching is Friday.
16 April 2007 Daily Comments
Sallie Mae, the education loan folks, agreed to be sold to two
private-investment funds and JP Morgan and BankAmerica for $25 billion. And the
two banks will loan the money for the buyout while each owning 25% of the equity.
strongly higher overnight with Japan
up 1.5%, and India,
Hong Kong and Shanghai
all up over 2%. Europe is also up at and gold is at $691 soon to be over $700. Oil touched
$64 and stocks are going to open higher.
Only Treasuries are lower as the
good news in other markets is dampening hopes fora rate cut.
Retail Sales were up 0.7% in
March and ex autos they were up 0.8%.
Businesses inventories were up
0.3% in February versus up 0.2% in January.
Crude has turned lower after a
higher opening and stocks are up strongly an hour and one half into the trading
day. Breadth is 3/1 positive and the bulls are in control with momentum stocks
seeing a lot of action.
It seems the fear of not making
money has overcome the fear of losing money. This rally looks a lot the rally
that began last August and carried into the end of the year. Our guess is that
this one has legs at least into June.
31 people are dead and 29 injured
at Virginia Tech. So sad.
European bourses closed strongly higher following or leading the U.S.
and Asian markets. Mexico was slightly higher and Brazil
was up 2%.
Oil ended at $63.61 down a few pennies and Gold was up $5 to $695. Treasuries
caught a bid and the two-year was 4.74% and the ten-year 4.73% at the close.
The DJIA gained 108 points to 12720. The S&P 500 rose 15 points to 1468 and the NAZZ jumped 26 points to 2518.
Breadth was better than 2/1 positive and volume was moderate.
There were a greatly expanded 650 new highs
and 50 new lows.
And there are four more trading
days this week with CPI tomorrow morning
for the big boys and girls to play off. Friday
is Triple Witching Day.
13 April 2007 Daily Comments
True terror is to wake up one morning and discover that
your high school class is running the country.
Happy Friday the 13th. *****
Asian markets were lower
overnight except for India
which was up 2%. European bourses are higher at ,
Treasuries are flat, Gold is up $3 and oil is over $64.
The Producer Price Index (PPI) for March was up 1% while the core rate
was unchanged. Year over year the PPI was up 3.2% while the core rate was up
1.7%. And so if folks don’t need food or energy there is no inflation in their
Carl Icahn says that if shareholders elect him to the board of
directors of Motorola he will serve
with an open mind. What a guy!
GE reported in line earnings and better than revenues.
The University of Michigan preliminary
consumer sentiment survey for April was 85 down from 87 for March. Do we
care?Only day traders care.
We are beginning
to reestablish our Verizon holdings in accounts. We began today by
purchasing shares in our larger accounts and will use any pullbacks to add. The
shares yield 4.4%.
Oil ended the day down 38 pennies at $63.45. Gold gained $10 to $690 in NYC. Treasuries gave ground as talk of a
rate increase instead of a cut began to surface in media circles with the
two-year at 4.76% and the ten-year at 4.76%.
European stocks closed higher and Brazil
were also up.
Merck added thirty points to the DJIA toady as it jumped on news
that a judge in Texas had thrown
out a Vioxx class action lawsuit.
The DJIA gained 60 points to finish at 12610. The S&P 500 gained 5 points to 1452 and the NAZZ was up 10 points to 2490. The major measures are at levels
from which they corrected a few weeks ago. With the earnings reports next week
traders should have some fun.
Breadth was 5/4 positive on the day and volume was
There were 395 new highs and 65 new lows.
And the casino is closed for the
12 April 2007 Daily Comments
Asian markets were lower overnight
except for Shanghai which was up
over 1%. European bourses are lower at
and Treasuries are firm at the lower levels of yesterday’s close. Gold is up $1
and Oil is up to $62.75.
UBS upped Kraft to a buy.
Jobless claims were 342,000 which were higher than expected but
inflation statistics released this morning as expert and import price gains
were negative for interest rates.
Gap same store sales were up 6%. GPS had the advantage of an early
Easter and also easier comparisons but we’ll take any positive news.
Earlier this year we traded Starbucks for a slight loss selling it at $35.75. We are buying a few shares in our larger accounts at $30.46
today. it isn’t cheap but then it never is and it has
been basing around this level for the past few months.
Stocks opened lower today and
early on the DJIA was down over 50 points but around stocks moved positive and led by the oils the DJIA
was up 50 points heading into the last hour of trading.
Oil ended the day up $1.83 at $63.85. Gold was down $2 at $680 in NYC and Treasuries were weaker with the two-year at 4.73% and the ten-year
European bourses closed mostly lower while Mexico
were open when the DJIA rallied and that helped them close higher on the
The DJIA closed up 70 points at 12555. The S&P 500 gained 9 points to 1448 and the NAZZ rose 20 points to 2480.
Breadth was 5/4 positive and volume
There were 280 new highs and 95 new lows.
And tomorrow is Friday the 13th.
11 April 2007 Daily Comments
Yesterday’s close marked the
eight day in a row that the DJIA was higher for the trading session. While the
last few days saw an anemic rise, the fact that there have been so many higher
closes in a row suggests that a pullback might be in order. Moreover, the
S&P 500 is approaching 1450 which is the level from which the 5% correction
occurred and so it is technically resistance for a move higher.
mostly higher overnight as are European bourses at . Gold is up $2 and Oil was higher early on trading
over $62 but now is in the negative column in early NYC trading. Treasuries are
Investors Intelligence shows a drop in bulls from 50% to 48% and a
rise in bears form 25% to 27%.
Wachovia upped TheGap to outperform.
Citigroup, and American institution, is going to fire 17,000 folks
and send 7500 jobs to third world countries so executives can keep their jobs
and bonuses and it can earn an extra $10 billion over the next three years. It
will take a $1.5 billion write down to accompany the firings.
Stocks sold off after these
minutes were released at .
That is the exact opposite of what happened when the comments of the meeting
were released in March. Treasuries also gave up their gains as chances of a
rate cut were dampened by the minutes.
Oil ended up 19 pennies at $62.09. Gold was basically unchanged in NYC at the close. Treasuries were weaker on the day with
the two-year at 4.72% and the ten-year at 4.74%.
We read in the NYT that well heeled
investors are borrowing to increase the bang they get from their hedge fund
investments. According to the NYT some investors are borrowing up to 3 times
the amount of money they invest in hedge funds. Thus they go to the bank with
$25 million and ask the bank to loan $75 million and invest the $100 million in
20 different hedge funds. Of course the hedge funds also buy on margin. The NYT
says up to $800billion has been borrowed for this type of speculating.
As the US
markets sank European bourses
reversed course and most closed lower on the day as did Mexico
The DJIA dropped 85 points to close at 12490. The S&P 500 was down 9 points at 1439 and the NAZZ dropped 18 points to 2060.
Breadth was 2/1 negative and volume
There were 280 new highs and 100 new lows.
And tomorrow brings individual
retail sales numbers and Friday the thirteenth is just around the corner.
10 April 2007 Daily Comments
Asian markets were mixed
overnight and European bourses which are all open today after the Easter
holiday are higher. Treasuries have a bid, Gold is up $5 and oil is also higher
trading over $62 per share. Stocks are opening higher but without much
The latest rumor is that Dow Chemical will be purchased by Saudi
businessmen for $50 billion. The rumor has been denied but it did help DOW add
$3 to its share price yesterday.
European markets closed on their highs.
Gold closed up $4 at $681 and Oil
also gained in NYC to close at $61.89 up 31 pennies. Treasuries had a bid all day with the two-year at 4.70% and the
ten-year at 4.72%.
The DJIA gained 7 points to finish at 12575. The S&P 500 was 4 points at 1449 and the NAZZ jumped 9 points to 2478.
Breadth was 5/4 positive and volume
There were 395 new highs and 70 new lows.
Tomorrow the Fed releases the
Beige Book which contains the minutes of the last Fed meeting and we are to get
a snow storm. Happy Spring.
9 April 2007 Daily Comments
The prince and
princess are visiting for the week and so our posts will be necessarily light
as we visit with them. *****
The March Employment numbers were
released Friday and they were plus 180,000 jobs, which was much larger than
expected. And the February numbers were also adjusted upward. Cine stocks
weren’t trading we will have to see today how that number affects the stock
markets. The immediate effect of the number was to send bond prices lower and
yields higher as there was thin bond trading on Friday after the release. The
ten-year jumped form a 4.60% yield to a 4.74% yield and the ten-year moved from
a 4.66% yield to a 4.74% yield. This morning those yields are flat.
Most of Europe
was closed Friday and many markets in Asia were also
was lower Friday but Shanghai was
Overnight Monday in Asia
the Asian markets were strong and European bourses are higher in Monday
Gold is down a bit at $678 and
Oil is lower at $63.84.
Oil lost $2.77 to close at $61.51 and Gold also closed lower in NYC at $677 down $2. Treasuries were flat on the day with the two-year at 4.74% and the
ten-year at 4.75%.
European bourses that were open were modestly higher and Mexico
was up 1% with Brazil fractionally higher.
The DJIA closed up 8 point at 12568. The S&P 500 rose 1 point to 1444 and the NAZZ was down 2pointsto 2470.
Breadth was 5/4 to the good on the NYSE and 5/4 the other way on
the NAZZ. Volume was light.
There were 460 new highs and 82 new lows.
And maybe more folks will be at
the casino tomorrow.
5 April 2007 Daily Comments
Asian markets were mixed to lower
overnight and Europe is mixed at . Gold is down $1 in the early going and Oil is off
20 pennies. Treasuries are firm.
Jobless claims were 321,000 which
were a bit more than expected.
The Employment Report will be released tomorrow morning even though the
stock markets and most commodity markets will be closed. The Treasury market
will trade for a couple of hours after the report closing at . We will not be in the office.
purchased UPS at $69.90. The delivery company’s share price dropped
from the mid $80 range last summer and hasn’t recovered. It was trading at $75
last month but the share price tailed off and when Fed Ex had a punk report
last week the share price dropped under $70 and we decided to stick our toes in
the water in our larger accounts.
released disappointing earnings this morning but said that DRAM prices are
firming. The stock is back under $12 and we are buying shares for
accounts at $11.66. We sold shares in January at $13.93. Micron has almost $4
per share in cash in the company and is leveraged to DRAM prices so when there
is an up tick in prices MU will benefit greatly.
We are also repurchasing
a portion of the Ford we sold in January. Upon further review we
want to own one speculative stock that has potential. Ford seems to have
weathered the financial crisis for now. We
are not taking a large position.
We have added stocks this month because we think that the trading
trends favor the markets into June. We are not taking large positions in any
stocks and have concentrated - except for Ford - on value stocks. We are saving
room for any blue chips that blow up in the 2nd quarter earnings season that begins
in the next few weeks. We also remain long term bearish but that
may be just our cynical nature.
The CEO of Ford made $28 million
last year and Billy Ford took in $12 million when he left. He did forgo a
salary in 2005 but the $12 million repaid him for his efforts which resulted in
Ford Motor losing billions last year.
We are bemused when the retort is
issued that if a shareholder doesn’t like the CEO’s salary he/she/it should
sell the stock. We learned in Money and Banking 101 that shareholders own the
company and have the say in how the companies are run. Actually back in the last
century that was true but it is no longer true.
Tracinda Corp has offered Daimler
$4.5 billion for Chrysler. Daimler Benz paid $38 billion for the company,
Mother Merrill says that Ford
Motor’s Volvo unit is worth $7 billion which is about 50% of where the entire
Ford Motor Company is priced.
CircuitCity is firing its 3500 highest
paid retail clerks and is going to hire novice sales people to replace them in
an effort to cut costs. That is disgusting.
Oil ended at $64.28 down 10 pennies in NYC. Gold was up $2 to $679. Treasuries
closed weaker with the two-year at 4.62% and the ten-year at 4.68%.
European bourse indexes closed to the plus side across the continent
indexes were also up.
The DJIA gained 25 points to finish at 12555. The S&P 500 gained 4 points to 1443 and the NAZZ was up 12 points to 2470.
Breadth was 3/2 positive on the NYSE and 5/4 on the NAZZ and volume was holiday light.
There were 395 new highs and 65 new lows.
And the casino is closed for an
Easter egg hunt.
4 April 2007 Daily Comments
Asian market indexes were higher
overnight with Japan
and Hong Kong and India
up over 1%. European bourses are mixed at
and Oil is down 30 pennies with gold down $1 in early NYC trading. Treasuries
The Iranians are going to release
the sailors and on that news the stock markets have a more positive tone and
Oil is now down 60 pennies. Treasuries have a bid on weak economic numbers
released this morning that the ISM Non Manufacturing Index was 52 in March
versus 54 in February.
Corn plantings will reach levels
not seen since WWII. And since that time yields are probably 100% higher per
acre planted. And all that corn is going for ethanol which is a zero sum game
when it comes to energy in/versus energy out just as most of the gambling done
in the financial markets is a zero sum game.
Investors Intelligence has 50%
bulls and 25% bears in its latest survey. That’s a move up of 2% in bulls and a
drop of 3% in bears.
Dallas Fed President Fisher said
on Wednesday "There is symmetry to the (recent Fed) statement that was
issued ... (that) inflation is running at too high a rate now. There is no
denying that this kind of situation (sub prime mortgage problems) dampens
economic growth…. (But) I would like to see inflation lower than it currently
Oil ended down 25 pennies at $64.39. Gold popped $7 higher to $678 and Treasuries were a bit better with the two-year at 4.60% and the
ten-year at 4.65%.
European stocks closed mixed and Mexico
were small better.
The DJIA gained 15 points to 12525. The S&P 500 was up 2 points to 1439 and the NAZZ rose 7 points to 2457.
Breadth was flat on the day and volume was light and will be lighter tomorrow.
There were 370 new highs and 50 new
And the casino is open for one
more day this week.
3 April 2007 Daily Comments
Asian indexes were gangbusters
overnight and Europe is also higher at . Treasuries are weaker and Oil and Gold
are both lower.
We bought Kraft
today in accounts that own GE. It has a 3.3% yield and is with 3% of
its 12 month low.
Pending home sales were up 0.7%
in February after falling 4.2% in January. In the absence of other news and
some traders because of the holidays the markets are finding that up is the
path of least resistance.
shares in Whole Foods in our larger accounts. Whole Foods is buying
Wild Oats and the acquisition will be positive for WFMI. After announcing the
buyout WFMI ran up to $52 but it is now back at $45 and we want to own a few
shares. We sold last month before the takeover announcement because when we
bought at year end we purchased for a bounce which didn’t occur. In fact the
share price headed south.
We are buying in small amounts
because it is volatile and at 30 times earnings it is only cheap in relation to
where it sold earlier in the year. Moreover next quarter’s same store sales may
disappoint. The same store sales figures disappointed traders this quarter but
the company announced the Wild Oats takeover at the same time and that
mitigated any share price damage. That won’t be the case next time.
Fifth Third Bank at $38.55. FITB yields over 4.3% and is within 10%
of the low in for the last three years and down over 40% from it high during the
Gold closed down $2 at $670 and Oil lost $1.50 to close at $64.44 in NYC. Treasuries were weak as the stocks stuff was strong with the
two-year going out at 4.62% and the ten-year at 4.67%.
European bourse indexes closed higher.
The DJIA gained 125 points to 12505. The S&P 500 was up 12 points to 1437 and the NAZZ rose 28 points to 2450.
Breadth was over 2/1 positive all day and volume was good for a holiday week.
There were 455 new highs and 80 new lows.
And there are only two more trading
days this week.
2 April 2007 Daily Comments
April 2007 begins with KKR buying
FirstData for $28 billion and Altria
(Phillip Morris) spinning off KraftNabisco. The Nabisco part of Kraft was
KKR’s first big time buyout back in 1987 so there is symmetry to the day and
activity. We are interested in KFT now that it is not part of the tobacco
Last Friday the stock markets
were volatile with the DJIA down points at
before finishing slightly higher. This morning stocks began the day on the
upside but moved lower on the ISM data which was lower than expected while the Prices
Paid data was higher than expected.
Across the seas Asian indexes
were mixed overnight with Japan
down 1.5% while India
was up and Shanghai was up over 2%.
European bourse indexes are to the higher side as our trading day begins.
Gold is off $7 and Oil is also
lower at $65.50. Treasuries are flat.
With Passover tonight and Easter
on Sunday trading activity is going to be muted for the week. That doesn’t mean
there won’t be volatility in fact there may be more. That’s because volume will
be holiday light and so the big boys and girls who stay around may be able to
create some fun.
The sun is out and it is supposed
to snow tomorrow night so we are going to play hookie this afternoon and go for
a bike ride.
As we leave the major measures
are doodling around break even with breadth flat and volume low. Gold reversed course
today and ended $2 higher at $671 and oil was also higher at $66.20 at
There are only three more trading
days this week as the markets are closed on Friday but the banks are open.
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