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January 26, 2008

Daily Report for Sat, Jan 26, 2008

Markets Re-cap

Despite strong quarterly earnings reports from Dow 30 components Microsoft (MSFT), Caterpillar (CAT), and Honeywell (HON), which pumped the US equity market at the open, the rally fizzled.

By the closing bell, the DJIA (-171.44 -1.38 pct to 12207), S&P 500 (-21.46 -1.59 pct to 1330.6), and Nasdaq Composite (-34.72 -1.47 pct to 2326) had been pulled down by weakness in the Financials (XLF -2.62 pct), Cons Discretionary (XLY -2.06 pct), Energy (XLE -1.79 pct) and Healthcare (XLV -1.58 pct). Only Basic Materials (XLB +0.50 pct) lifted among the ten sectors, and barely so.

In the final hour of the week, the DJIA appeared on the verge of a breakdown of technical support at 12200.

Earlier in the day, after the Asia-Pacific equity markets had been red hot, the European bourses closed mostly flat with the UK FTSE -0.10 pct and German DAX -0.06 pct down a bit. On the heels of a shocking -$7.14 billion trading loss in the quarter by French bank Societe Generale, which the management claims, somewhat incredulously, was done with no one’s knowledge by an individual 31 y.o. rogue trader, the CAC 40 dropped -0.70 pct.

On the earnings front, Microsoft reported 2Q profit jumped +81 pct to $4.7 billion vs $2.6 billion a year ago, based on strong sales of its Windows software. Honeywell’s 4Q net income lifted +18 pct to $689 million vs $585 million a year earlier; however, the company warned of a "softer" global environment in 2008. Caterpillar’s 4Q net income lifted +11 pct to $975 million vs $882 million a year earlier, largely due to strong overseas sales.

Crude Oil moved back to the 90’s with a close for the $WTIC of 90.71, up +1.30/bbl on speculation that the US $150 billion stimulus plan will boost fuel demand.

$Gold started the day strong, but gave back some of its early momentum. At the close, $GOLD was up +0.54 pct to 910.70.

The $USD climbed +0.38 pct. The Euro ($XEU) dropped -0.66 pct to 146.66.

US Treasury instruments lifted from flight-to-safety bids. The 30-year long bond ($USB) gained +0.76 pct to 119.88 as the yield ($TYX) dropped -1.63 pct to 4.282. The 10-year yield ($TNX) dropped -1.54 pct to 3.584. And the 2-year ($IRX) yield dropped -3.48 pct to 2.22.


Comments & Outlook

On Friday, Value Line published its quarterly review of Caterpillar, and also United Technologies.

(CAT: Value Line Report Jan. 25: next one is due Apr. 25)

(UTX: Value Line Report Jan. 25: next one is due Apr. 25)

With respect to the earnings bump reported on Friday by Microsoft, Honeywell and Caterpillar, traders are not fooled by results that are boosted as a result of huge share buy-backs.

To show how earnings are increased via financial balance sheet restructuring rather than from operations, look to the number of outstanding shares as reported by Value Line:

MSFT
2005: 10700 mil shs
2006: 10062
2007: 9380
2008: 9000e

HON
2005: 829.48 mil shs
2006: 800.59
2007: 745.00
2008: 745.00e

CAT
2005: 670.87 mil shs
2006: 645.81
2007: 635.00
2008: 615.00e

Despite higher internal rate of return from operations, these corporations were buying back treasury stock in the open market at cycle-high prices. As I see it, these companies seek to boost their per share profit in order to derive higher management bonuses and/or to rationalize extreme compensation.

It’s a case of everybody has to get theirs as soon as they can get it.

To get another insight into the mindset of the people who run these shareholder-owned corporations, look at the insider buying/selling reports as also shown in the top left corner of the Value Line reports.

http://valueline.com/dow30/f5905.pdf
http://valueline.com/dow30/f337.pdf
http://valueline.com/dow30/f1767.pdf

You should not be shocked to see that of these three companies over a period of 12 months, there was a single insider Buy in a single month for one company vs a total of 26 sellers. These insiders, by the way, are the senior officers and directors who are guiding shareholders with confident, optimistic reviews of management performance.

If shareholders, not management, controlled the Boards of these corporations, you would see an immediate change in compensation practices. What you read in college textbooks fails to grasp today’s reality. Shareholders are an after-thought.


Links & Charts


International Economics Review

US Economic Calendar.

Here is more bad news – the negative wealth effect of a declining US housing market. As the Econoday economist reported: “Treasury yields and the dollar slipped in immediate reaction to the headline disappointment.”

US Existing Home Sales report for December.


Knobias Cara100 Tables

 Portfolio GAINERS
SYMB LAST CHG %C VOL
IBN 62.260 +3.200 +5.4 3.6M
TCK 32.510 +1.440 +4.6 2.3M
ABX 52.170 +1.540 +3 13.5M
HDB 118.300 +2.670 +2.3 458.7K
TM 102.000 +2.300 +2.3 688.7K
PBR 104.620 +2.190 +2.1 9.1M
BHP 63.420 +1.130 +1.8 4.7M
YHOO 21.940 +0.250 +1.2 28.2M
SWK 46.580 +0.520 +1.1 1.5M
PTR 147.830 +1.520 +1 1.3M
IMO 48.850 +0.450 +0.9 397.7K
DOW 36.310 +0.300 +0.8 5.6M
ADBE 34.840 +0.200 +0.6 9.2M
NTES 18.610 +0.080 +0.4 930.3K
CEO 145.500 +0.620 +0.4 524.4K
TGP 28.280 +0.100 +0.4 46.3K
UTX 72.750 +0.190 +0.3 7.9M
WBK 114.260 +0.270 +0.2 25.4K
CTSH 26.870 +0.060 +0.2 3.9M
PAYX 33.140 +0.050 +0.2 3.2M

 Portfolio LOSERS
SYMB LAST CHG %C VOL
GFI 15.150 -1.550 -9.3 13.8M
KB 64.650 -3.360 -4.9 746.5K
DELL 20.060 -1.030 -4.9 41.7M
UBS 41.620 -2.060 -4.7 3.3M
ERTS 47.220 -2.240 -4.5 4.7M
BBBY 29.360 -1.360 -4.4 5.6M
DB 111.430 -5.060 -4.3 1.3M
GOL 18.230 -0.820 -4.3 482.3K
IBKR 31.450 -1.410 -4.3 3M
GRMN 64.940 -2.870 -4.2 4.5M
SNDK 25.620 -1.130 -4.2 11M
RIMM 91.050 -3.950 -4.2 26.9M
SBUX 19.660 -0.790 -3.9 17.7M
NOK 35.080 -1.400 -3.8 31.3M
GS 191.370 -7.480 -3.8 14M
CSCO 24.200 -0.910 -3.6 79.1M
STO 25.770 -0.930 -3.5 1.6M
MICC 99.330 -3.540 -3.4 944K
TEF 85.580 -3.010 -3.4 776.6K
INTC 20.000 -0.690 -3.3 104.4M
CCL 41.410 -1.400 -3.3 5.4M
WFMI 37.550 -1.170 -3 3.6M
VIP 33.180 -1.030 -3 5.2M
AMAT 17.420 -0.540 -3 22.5M
CHL 75.570 -2.280 -2.9 4.7M

 Portfolio 52-Wk HIGHS
SYMB DAY HIGH LAST CHG %CHG VOL
ABX 53.380 52.170 +1.540 +3.04 13.45M

 Portfolio 52-Wk LOWS
SYMB DAY LOW LAST CHG %CHG VOL
GSK 46.600 46.920 -1.030 -2.15 2.29M

 Portfolio VOLUME
SYMB LAST %C VOL %ADSV
IBKR 31.450 -4.3 3M +226
TCK 32.510 +4.6 2.3M +80
BDK 69.980 -0.4 2.4M +72
GFI 15.150 -9.3 13.8M +68
JNJ 62.460 -1.7 23.7M +64
NOK 35.080 -3.8 31.3M +57
BC 17.100 -0.4 3M +57
BMY 22.970 -1.6 31.1M +52
DB 111.430 -4.3 1.3M +42
CHL 75.570 -2.9 4.7M +37
TT 44.300 -0.5 6.2M +28
UTX 72.750 +0.3 7.9M +26
MBT 85.210 -1.6 2.1M +26
VIP 33.180 -3 5.2M +22
GS 191.370 -3.8 14M +22
ABB 24.250 -1.2 8.5M +20
IBN 62.260 +5.4 3.6M +20
SU 89.370 -0.5 3.7M +19
CSCO 24.200 -3.6 79.1M +18
CCJ 34.670 -0.8 3.2M +18
DELL 20.060 -4.9 41.7M +16
CCL 41.410 -3.3 5.4M +13
IMO 48.850 +0.9 397.7K +13
ADBE 34.840 +0.6 9.2M +13
SNDK 25.620 -4.2 11M +12

 Analysts UPGRADES
SYMB ANALYST OLD   NEW BEFORE   AFTER
ABB HSBC --- --- Neutral Overweight
NOK Davenport --- --- Neutral Buy
• PREVIOUS SESSION
SLW Salman Partners --- --- Buy Top Pick
GRMN Oppenheimer --- 77.00 Sector Perform Outperform
STO Smith Barney --- --- Hold Buy
BMY Goldman Sachs --- --- Sell Neutral

 Analysts DOWNGRADES
SYMB ANALYST OLD   NEW BEFORE   AFTER
NONE FOUND.
• PREVIOUS SESSION
GOOG Stanford Group --- --- Buy Hold


Cara 100 Daily RSI-7 Charts


At least one RSI value >70:
rsi
TickerLastRSI-7MRSI-7WRSI-7DZone
ABX52.1782.1971.8668.88Sell alert (trig. 8 days ago [on 2008-01-15 at $50.25, +3.82% chg], after a 8 day DZ)
IBN62.2682.0551.7445.06Sell alert (trig. 8 days ago [on 2008-01-15 at $66.03, -5.71% chg], after a 3 day DZ)
SLW16.4876.9854.7151.29
PBR104.6275.4855.2853.88
GG37.8674.1063.0063.01Sell alert (trig. 8 days ago [on 2008-01-15 at $36.60, +3.44% chg], after a 1 day DZ)
BC17.1012.6039.7771.61Buy alert (trig. 5 days ago [on 2008-01-18 at $15.09, +13.32% chg], after a 3 day AZ)

At least one RSI value <30:
rsi
TickerLastRSI-7MRSI-7WRSI-7DZone
BC17.1012.6039.7771.61Buy alert (trig. 5 days ago [on 2008-01-18 at $15.09, +13.32% chg], after a 3 day AZ)
KSS41.8415.8631.3651.08Buy alert (trig. 7 days ago [on 2008-01-16 at $39.57, +5.74% chg], after a 9 day AZ)
SBUX19.6617.0532.5851.35
UBS41.6219.1423.9441.26Buy alert (trig. 4 days ago [on 2008-01-22 at $40.56, +2.61% chg], after a 2 day AZ)
BBBY29.3620.4946.4157.71
JCP42.4821.8940.8258.82
DELL20.0622.0419.3434.14Buy alert (trig. 2 days ago [on 2008-01-24 at $21.09, -4.88% chg], after a 2 day AZ)
WAG34.2822.6133.7947.10Buy alert (trig. 7 days ago [on 2008-01-16 at $33.24, +3.13% chg], after a 2 day AZ)
SNDK25.6224.3411.3329.02Accumulation Zone (for 1 days)
HBC75.7025.1727.2840.61Buy alert (trig. 3 days ago [on 2008-01-23 at $76.62, -1.20% chg], after a 4 day AZ)
BMY22.9726.2419.4925.68Accumulation Zone (for 4 days)
TGT51.6026.2439.8950.37
DOW36.3126.8433.1549.13
BDK69.9827.9838.3858.21Buy alert (trig. 7 days ago [on 2008-01-16 at $65.99, +6.05% chg], after a 9 day AZ)
GOL18.2329.0623.9422.50Accumulation Zone (for 1 days)
TM102.0029.8336.1153.59Buy alert (trig. 3 days ago [on 2008-01-23 at $99.25, +2.77% chg], after a 1 day AZ)
PAYX33.1430.1418.9843.14Buy alert (trig. 3 days ago [on 2008-01-23 at $33.34, -0.60% chg], after a 1 day AZ)
LLTC27.4130.3422.5636.72Buy alert (trig. 3 days ago [on 2008-01-23 at $28.05, -2.28% chg], after a 2 day AZ)
DB111.4330.5621.4229.18
DIS28.6831.3322.3834.38Buy alert (trig. 3 days ago [on 2008-01-23 at $28.52, +0.56% chg], after a 2 day AZ)
BA77.0331.9020.9432.48Buy alert (trig. 2 days ago [on 2008-01-24 at $77.62, -0.76% chg], after a 1 day AZ)
GSK46.9232.8032.9114.40
CTSH26.8732.9926.3040.30Buy alert (trig. 7 days ago [on 2008-01-16 at $26.20, +2.56% chg], after a 1 day AZ)
TS37.9833.0528.6039.50
GE34.0033.8029.6337.31
CSCO24.2034.9520.5638.31
ADBE34.8435.9820.9724.64
INTC20.0036.5727.2938.62
ERTS47.2239.2625.4924.08
GRMN64.9440.7328.0137.23
ERJ40.9841.8133.2028.33
DEO78.8543.2726.4943.92
JNJ62.4646.3529.6012.30
PG65.3147.7523.5519.33
NKE56.0049.1128.7425.31
CVX81.8249.8131.9329.49
GOOG566.4051.0231.9029.23
AET52.6055.7934.7726.69
TEF85.5862.0436.1727.33
KO58.4164.4638.5827.17


International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.


Here is the latest session data for the London stock exchange FTSE.


Here is the latest session data for the German DAX.


Here is the latest session data for the French CAC 40.


Here is the latest session data for the Milan Italy stock exchange MIBTEL.


Here is the latest session data for the Swiss market index.


Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.


Here is the latest chart for the Japanese Nikkei 225 index.


Here is the latest chart for the Singapore index .


Here is the latest chart for the Shanghai Composite index .


Here is the latest chart for the Hong Kong Hang Seng index .


Here is the latest chart for the India BSE 30 index .

Here is the latest chart for the Australian All Ordinaries index .


US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table: Dow 30 List

Sorted by 1-Week Price Performance
Symbol Close 1Day
Change
1Day
%Change
1W
%Change
2W
%Change
4W
%Change
YTD
%Change
3M
%Change
6M
%Change
12M
%Change
GM 25.79 0.17 0.66% 12.92% 8.91% -2.75% 5.65% -31.57% -23.54% -22.18%
JPM 43.64 -1.32 -2.94% 8.99% 5.59% -2.89% 3.49% -5.23% -3.60% -13.09%
HD 28.53 -1.03 -3.48% 8.69% 12.86% 5.71% 9.27% -7.07% -25.00% -28.84%
UTX 72.75 0.19 0.26% 6.84% 0.50% -6.52% -3.27% -3.92% -3.25% 9.88%
C 26.64 -0.69 -2.52% 6.73% -5.23% -12.51% -7.88% -35.39% -45.86% -50.60%
AA 30.69 -0.12 -0.39% 6.60% -2.39% -17.96% -15.06% -20.06% -24.98% -2.48%
AXP 45.44 -1.67 -3.54% 6.49% -7.11% -14.10% -10.97% -23.96% -26.39% -21.34%
CAT 65.93 0.68 1.04% 5.54% -2.20% -10.53% -6.65% -11.70% -18.10% 10.57%
HON 58.25 2.05 3.65% 4.82% 0.74% -5.70% -2.75% -1.49% -4.32% 31.79%
DD 44.72 -0.73 -1.61% 4.49% -1.24% -0.78% 2.24% -7.49% -9.09% -9.95%
MCD 54.10 0.10 0.19% 4.08% -7.00% -9.65% -6.88% -6.84% 6.16% 25.81%
INTC 20.00 -0.69 -3.33% 3.47% -11.27% -27.14% -21.10% -22.75% -18.37% -2.91%
IBM 104.52 -2.39 -2.24% 3.38% 4.60% -6.31% -0.16% -7.35% -11.50% 7.19%
GE 34.00 -0.65 -1.88% 2.38% -5.35% -9.45% -7.51% -15.34% -15.88% -6.44%
HPQ 43.74 -1.15 -2.56% 1.72% -3.53% -17.11% -12.19% -14.89% -7.99% 4.87%
WMT 48.09 -0.82 -1.68% 1.28% -0.64% -0.60% 2.54% 9.59% 0.46% -0.12%
MMM 75.51 -0.22 -0.29% 0.73% -5.86% -12.27% -8.71% -12.29% -15.74% -4.43%
XOM 83.94 -2.06 -2.40% 0.04% -8.42% -11.47% -10.23% -8.33% -9.54% 14.17%
DIS 28.68 -0.55 -1.88% -0.31% -6.49% -12.61% -9.92% -16.75% -17.89% -17.92%
MSFT 32.94 -0.31 -0.93% -0.51% -4.05% -10.02% -6.47% 2.97% 7.26% 8.14%
PFE 22.61 -0.44 -1.91% -1.52% -6.10% -2.54% -1.31% -6.92% -8.76% -14.23%
AIG 53.22 -1.82 -3.31% -1.93% -7.94% -10.58% -5.47% -13.87% -21.92% -22.75%
BA 77.03 -0.59 -0.76% -3.13% -6.47% -14.41% -11.07% -19.76% -28.16% -10.60%
MO 73.95 -0.94 -1.26% -3.71% -6.18% -4.57% -1.31% 2.34% 8.99% 12.16%
PG 65.31 -0.84 -1.27% -4.05% -9.89% -11.79% -9.68% -8.47% 3.70% 0.60%
T 35.26 -0.49 -1.37% -5.47% -10.51% -16.64% -14.00% -14.00% -12.94% -4.16%
KO 58.41 -1.47 -2.45% -5.85% -10.91% -7.30% -4.39% -4.71% 8.07% 21.84%
VZ 37.76 -0.47 -1.23% -7.70% -13.10% -16.27% -12.61% -15.92% -12.63% 0.69%
JNJ 62.46 -1.05 -1.65% -7.92% -8.03% -7.55%