More new shorts were added in Nasdaq stocks in the end of March, but they declined on NYSE names.» Read More
Oil closes at a new record of $100.88 per barrel, and is climbing higher in the electronic session, hitting levels of $101.28 and higher. How does that impact your prices at the pump?
The Department of Energy EIA Weekly Retail Gas National Average is now $3.13 per gallon as of February 25th, up almost $0.09 from last week.
The Lundberg Survey of about 7,000 gas stations across the country computed a national average of $3.1011 per gallon as of February 22nd, up 15.88 cents from two weeks earlier.
Do the grim economic reports point the U.S. economy towards stagflation? The markets seem to be shaking them off...
Today the producer price index \(PPI\) monthly report showed that producer price inflation surging in January to 1.0%, and that the core rate, also firmed at 0.4%.
The year-over-year PPI is at 7.7%, up from 6.5% in December, and is at the highest rate since September 1981.
-However, the Core CPI and PPI which exclude volatile food and energy costs, are still relatively tame in comparison to the highs seen in the late 70s and early 80s
Are airline stocks losing altitude as crude oil futures take off again, moving into the $100 a barrel territory? The AMEX Airline Index , an airline sector tracker has dropped more than 24% in the past six months, weighed by a surge in oil but is actually up 3% YTD.
As Matt Nesto reported , there is a new Industrial Revolution underway, particularly in areas affected by global demand. When compared to its peers, the overall S&P 500 Industrials Sector, down about 6% year-to-date, is right in the middle of the pack with about half the other sectors outperforming Industrials and half underperforming.
However, looking at the industries within the Sector, you begin to see some strong performers. Today, Matt reported on some of the metal and mining stocks. Other winners are railroads, truckers and aviation companies. Ryder leads the pack, up 27% YTD. It also has the third best performance YTD of the entire S&P 500.
Here are the top 10 performers within the S&P 500 Industrials Index:
Among the laggards are Industrial Conglomerate, Textron down 20% YTD and Truck Manufacturer PACCAR Inc. , down 19% YTD.
For the short week ending Friday, February 22, 2008, it was hard not to get whiplash. The Dow and the S&P managed to turn in a positive performance for the week with a stunning late-day reversal on Friday, led by news of a bail out for Ambac Financial \(ABK\).
The NASDAQ approached October 2006 lows, but ended Friday positive for the day, and down only slightly for the week.
The markets began the week with a rally on Wal-Mart's \(WMT\) and H-P's \(HPQ\) better than expected earnings but gains were quickly erased as oil surged above $100 per barrel, and settled above $100 for the first time. The FOMC minutes provided some positive momentum indicating that the Fed may continue cutting rates, but the higher than expected CPI, a weak Philly Fed report providing the lowest reading since the 2001 recession, and a downgrade of Fannie \(FNM\) and Freddie \(FRE\) applied the negative pressure.
- Geopolitical Unrest: The week started off with Fidel Castro's resignation after almost 50 years of rule in Cuba. Unrest in Serbia and a Turkish invasion into northern Iraq added uncertainty to the markets, especially oil.
- Volatility continues to rule, with an almost 243 point swing for the Dow on Friday to end closing up almost 100 points, Tuesday the Dow erased a 157 point gain to close in negative territory. On Wednesday the Dow traded within a ~240 point range, starting the day down over triple digits but rallying to close up 90 for the day.
*The VIX hit highs of almost 27 this week, coming within range of the key 30 threshold indicating high market volatility
- Merger News: Microsoft \(MSFT\) considers a proxy battle for Yahoo \(YHOO\), and the CME \(CME\) continues to pursue the NYMEX \(NMX\). Reed Elsevier announced a $4.1 billion acquisition of Choicepoint \(CPS\) which jumped 43% on the news. The Bain Capital $2.2 billion deal with 3Com \(COMS\) fell through and the Delta Airlines \(DAL\) and Northwest Airlines \(NWA\) talks continue.
- Housing starts showed a modest increase of 1.012 above the expected 1.01 M, but remain badly depressed, down 28% from this time last year. The markets will look towards Existing Home Sales on Monday, and New Home Sales and Toll Brothers \(TOL\) earnings on Wednesday, for an update on the housing climate.
- Retail Earnings: Many key retailers report next week including Target \(TGT\), Home Depot \(HD\), Lowe's \(LOW\), Nordstrom \(JWN\), Macy's \(M\), Limited \(LTD\), Sears \(SHLD\), Kohl's \(KSS\)
-Oil for April delivery hit a record close of $100.74 and hit a record high of $101.32 on Wed. Prices pulled back on Thurs as US stockpiles grew by 4.2M barrels.
- Natural Gas for March delivery closed at over a 2-year high to $9.146 and is up 22.77% in 2008
- Gold for April delivery hit a new record $958.4, and a closing high of $949.2
- Platinum is up almost 42% year-to-date with a new intraday high of 2214.5 and a new closing high of 2188.2 in the April contract.
- Palladium which can be used as a substitute for platinum, is up 36.41% year-to-date
- Appalachian Coal futures on the NYMEX are up over 50% year-to-date.
- Soybeans are up almost 19% year-to-date and hit a new closing high of 1439 per bushel and new intraday high of 1440 in the May contract.
- Soy Meal is up over 7% in 2008, and hit a new intraday high of 367 and a new closing high of 361.7 in the March contract.
- The U.S. dollar lost ground against the yen, euro and pound, and is negative against all three in 2008. The dollar index ended the week down -0.80% on strong euro zone economic data and continued risk aversion.
*The Euro came close to its all-time high against the dollar of $1.4968 touching $1.4863
The Dow ended up 32.81 points or 0.27% for the week, and positive on Friday
-The Dow is Negative YTD down -6.66%
-The Dow is off by -1,783.51 or -12.59% market peak on October 9th of 14,164.53
The NASDAQ ended down -18.45 or -0.79% for the week but positive on Friday
-The NASDAQ is Negative YTD down -13.16%
-The NASDAQ is off by -555.77 or -19.44% from the market peak on October 31 of 2,859.12
The S&P 500 ended up 3.12 or 0.23% for the week and positive on Friday
-The S&P 500 is Negative YTD down -7.85%
-The S&P 500 is off by -212.04 or -13.55% from the market peak on October 9th of 1,565.15
S&P Sector Performance for the week ending Friday, February 22, 2008:
S&P 500 Energy Sector \(.GSPE\) Up 14.68 or 2.67%
S&P 500 Materials Sector \(.GSPM\) Up 5.16 or 2.05%
S&P 500 Financials Sector \(.GSPF\) Up 3.64 or 1.01%
S&P 500 Consumer Staples Sector \(.GSPS\) Up 0.97 or 0.34%
S&P 500 Information Technology Sector \(.GSPT\) Down -0.14 or -0.04%
S&P 500 Consumer Discretionary Sector \(.GSPD\) Down -0.59 or -0.23%
S&P 500 Industrials Sector \(.GSPI\) Down -1.29 or -0.39%
S&P 500 Health Care Sector \(.GSPHC\) Down -2.57 or -0.66%
S&P 500 Utilities Sector \(.GSPU\) Down -1.61 or -0.80%
S&P 500 Telecomm Services Sector \(.GSPTS\) Down -9.17 or -6.17%
S&P Top 10 Performers for the week ending Friday, February 22, 2008:
Terex Corp \(TEX \) Up 7.84 or 13.11%
DR Horton Inc \(DHI\) Up 1.40 or 10.13%
MGIC Investment Corp \(MTG\) Up 1.32 or 9.79%
Fluor Corp \(FLR\) Up 11.06 or 9.16%
Range Resources Corp \(RRC\) Up 5.12 or 8.89%
Pulte Homes \(PHM\) Up 1.13 or 8.32%
CB Richard Ellis Group Inc \(CBG\) Up 1.59 or 8.19%
TJX Companies Inc \(TJX\) Up 2.43 or 8.09%
Hewlett-Packard Co \(HPQ\) Up 3.53 or 8.05%
QLogic Corp \(QLGC\) Up 1.20 or 7.98%
S&P 10 Worst Performers for the week ending Friday, February 22, 2008:
Intuit Inc \(INTU\) Down -3.33 or -10.96%
Apollo Group Inc \(APOL\) Down -6.64 or -9.56%
Quest Diagnostics Inc \(DGX\) Down -4.65 or -9.09%
Embarq Corp \(EQ\) Down -4.26 or -8.94%
General Motors Corp \(GM\) Down -2.05 or -7.85%
Sovereign Bancorp Inc \(SOV\) Down -0.98 or -7.78%
Dillards Inc \(DDS\) Down -1.34 or -7.68%
AT&T Inc \(T\) Down -2.90 or -7.66%
CenturyTel Inc \(CTL\) Down -2.88 or -7.28%
Safeway Inc \(SWY\) Down -2.24 or -7.00%
Dow Top Performers for the week ending Friday, February 22, 2008:
Hewlett-Packard Co \(HPQ\) Up 3.53 or 8.05%
American International Group Inc \(AIG\) Up 2.77 or 6.01%
ALCOA Inc \(AA\) Up 0.83 or 2.32%
Chevron Corp \(CVX\) Up 1.82 or 2.18%
Exxon Mobil Corp \(XOM\) Up 1.80 or 2.11%
International Business Machines Corp \(IBM\) Up 1.91 or 1.80%
Caterpillar Inc \(CAT\) Up 1.23 or 1.76%
JPMorgan Chase and Co \(JPM\) Up 0.68 or 1.57%
Wal-Mart Stores Inc \(WMT\) Up 0.53 or 1.07%
E I du Pont de Nemours and Co \(DD\) Up 0.47 or 1.03%
Dow Worst Performers for the week ending Friday, February 22, 2008:
General Motors Corp \(GM\) Down -2.05 or -7.85%
AT&T Inc \(T\) Down -2.90 or -7.66%
Verizon Communications \(VZ\) Down -1.63 or -4.31%
Merck & Co Inc \(MRK\) Down -1.46 or -3.07%
Microsoft Corp \(MSFT\) Down -0.74 or -2.60%
The Boeing Co \(BA\) Down -2.14 or -2.51%
General Electric Co \(GE\) Down -0.82 or -2.39%
Intel Corp \(INTC\) Down -0.29 or -1.44%
Citigroup Inc \(C\) Down -0.36 or -1.41%
The Coca Cola Co \(KO\) Down -0.50 or -0.85%
- PPI on Tues
- Durable Goods and New Home Sales on Wed
- GDP on Thurs
- Personal Income and Outlays on Fri
- Home Depot and Target on Tues
- Toll Brothers on Wed
- Sprint, AIG, Dell on Thurs
- Berkshire Hathaway on Fri
As of this past Friday, 441 of the S&P 500 companies (just under 90%) have reported earnings.
Here's how things stand:
So far, the tech sector has had the biggest surprises to the upside, with Lexmark reporting EPS that was 122% above expectations. In absolute dollars, Exxon still leads with its $982 million surprise. Microsoft and GM follow with $380 million and $352 million respectively.
Delta Air Lines and Northwest Airlines are approaching a merger agreement that would create the largest airline by traffic, according to the WSJ. Both emerged from bankruptcy in the spring of 2007.
Bankruptcy which can allow reductions in labor costs, pensions, and the shedding of costly assets, such as planes and redundant routes, often helps potential partners realign their operations. Mergers can yield many of the same benefits but are often viewed as expensive and sloppy, especially if cultures differ. The Delta and Northwest deal is currently being held up as pilot unions debate seniority integration.
Here is a table of how fleet sizes have changed since airlines have merged. On an annualized basis, most fleets have grown less than 1% per year. Only low cost players Southwest and AirTran have significantly grown their fleets.
For the week ending Friday, February 15, 2008 the major US Indexes ended the week slightly positve. The markets began the week with a rally on better than expected retail sales, but glum remarks by Bernanke on the economic outlook, weak manufacturing data, consumer confidence at a 16-yr low, and rising oil prices contributed to the week ending on a sour note.
-Volatility still ruled the markets, as the Dow swung more than 350 points from Wed to Thursday. Wednesday’s 178.83 point rally driven by retail sales 0.3% increase, and was the highest point & percentage gain for the month of February. Thursday’s –175.26 point loss was fueled by Bernanke's testimony and comments on "sluggish growth" fueling recession fears. Thursday Greenspan also stated that the economy is "clearly on the edge" of a recession.
*The VIX hit a high for the week of almost 30 on Monday, and values above 30 usually correspond with a high degree of volatility.
-All S&P Sectors ended the week in positive territory, led by the energy sector up 4.71%, except for Financials which fell -1.05% on more subprime write-downs. UBS reported $18 billion in write-downs.
-Merger News: Yahoo rejects Microsoft's bid, as Northwest and Delta hammer out their merger agreement and news of talks between Continental and AMR help lift the sector.
-Platinum for April delivery set a new record high in the electronic session of $2089.5 on Friday, and also closed at a new record of $2063.7 for the 12th day in a row, up 9.54% for the week impacted by continuing electrical-supply problems in South Africa and slow mining operations.
-Central Appalachian Coal that trades on the NYMEX is up 50% in 2008.
*Coal producers fell today on the Goldman downgrades due to historic multiples and the run up in commodity prices that are most likely at a top. Foundation Coal is trading at a P/E of 72.1.
-Soy for July delivery hit a record surpassing $14 per bushel as China's worst winter storm in 50 years damaged 40% of the rapeseed crop so experts feel China will increase its imports of soybeans to compensate
**According to Reuters, China imported 3.44 million tonnes of soybeans in January, a 41.5% increase from last year.
-Oil jumped up 4.06% for the week, closing at $95.50 per barrel.
*Crude Oil is off –4.14% from its record close of $99.62 per barrel hit on January 2nd.
-Dollar: The dollar fell against most major currencies this week on a gloomy U.S. economy, poor consumer confidence and the possibility of future rate cuts.
*Year-to-date the dollar is up 1.72% against the pound and 0.16% vs. the euro. However, many experts feel that the dollar will not hold on to any strength against the euro, and the dollar suffered its worst weekly performance against the euro in 2008, down 1.2% and topping $1.47 per euro for the first time since 2/5.
*YTD the dollar has fallen almost 4% against the yen.
The Dow ended up 166.08 or 1.36% for the week, though it closed down for the day on Friday
-The Dow is Negative YTD down -6.91%
-The Dow is off by -1,816.32 or -12.82% from the market peak on October 9th of 14,164.53
The NASDAQ ended up 16.95 or 0.74% for the week, though it closed down for the day on Friday
-The NASDAQ is Negative YTD down -12.46%
-The NASDAQ is off by -537.32 or -18.79% from the market peak on October 31 of 2,859.12
The S&P 500 ended up 18.70 or 1.40% for the week
-The S&P is Negative YTD down -8.06%
-The S&P is off by -215.16 or -13.75% from the market peak on October 9th of 1,565.15
S&P Sector Performance for the week ending Friday, February 15, 2008:
S&P 500 Energy Sector Up 24.73 or 4.71%
S&P 500 Telecomm Services Sector Up 5.64 or 3.95%
S&P 500 Consumer Discretionary Sector Up 4.99 or 2.01%
S&P 500 Materials Sector Up 4.44 or 1.80%
S&P 500 Consumer Staples Sector Up 4.78 or 1.71%
S&P 500 Industrials Sector Up 5.09 or 1.55%
S&P 500 Utilities Sector Up 2.63 or 1.33%
S&P 500 Health Care Sector Up 3.10 or 0.81%
S&P 500 Information Technology Sector Up 2.73 or 0.79%
S&P 500 Financials Sector Down -3.83 or-1.05%