« Bill Cara's Community Chat, Mon., May 12, 2008, 9:06am ET | Main | Bill Cara's Community Chat, Tues., May 13, 2008, 8:23am ET »

May 13, 2008

Daily Report for Tue, May 13, 2008

Markets Re-cap

Risk aversion, supported by crude oil prices that dropped -$1.73/bbl on the session, led to a gain of between +1 and +2-percent in US equity prices on Monday.

The DJIA (+130.4 +1.01% to 12876.3), S&P 500 (+15.3 +1.09% to 1403.58), NASDAQ Composite (+43 +1.73% to 2488.5) and the Russell 2000 small cap index (+13.5 +1.84% to 732.6) were all very strong.

The leading sectors were Basic Materials (XLB +2.1%) and Consumer Discretionary (XLY +2.1%) whereas the Energy sector (XLE -0.6%) both held the market in check and gave it some fuel.

In the industry groups, the Retailers ($RLX +2.7%) were very strong – 1-800-HELP in the form of “tax” rebates will do that. The REITS ($DJR) and Broker-Dealers ($XBD) each gained +2.5%.

Many of the Retailers had gains above +4%: Pacific Sunwear (PSS +17.3%), AnnTaylor (ANN +16.1%), Hot Topic (HOTT +7.4%), Bebe (BEBE +6.2%), Tween Brands (TWB +6.0%), The Limited (LTD +4.7%), Best Buy (BBY +4.2%) Bed, Bath & Beyond (BBBY +4.1%) and Ethan Allen (ETH +4.0%).

Among the Cara 100 stocks, Canada’s Research In Motion (RIMM +6.9%) and EnCana (ECA +6.7%) were strongest, while VIP (-3.1%) and YHOO (-2.6%) were down on the day.

On the earnings front, Japan's top telecommunications company Nippon Telegraph and Telephone (NTT) reported its FY 2007 group net profit surged +32%. France's #2 bank, Societe Generale SA was a different story. It had a -23% decline in Q1 profits to $1.7 billion. This bank is still blaming a $7.18 billion trading loss to an individual “rogue” trader. (Cara 100) Wal-Mart has just reported a +6.9% profit increase, earning $3.02 billion ($0.76/share vs analyst expectations of $0.75) vs $2.83 billion ($0.68/sh). Overall revenue was $95.30 billion compared to $86.41 billion for the prior year.

On the deals front, (Cara 100) Aussie-based Westpac Banking Corp (WBK) has made a $17.6 billion all-share bid for smaller rival St George Bank in a merger that would create Australia's biggest bank by market value. Also, Hewlett-Packard (HPQ) confirmed it is in talks to buy Electronic Data Systems (EDS).

On the economics front, the Chinese money supply grew at the Y/Y rate of +17% in April. The Greek Import Price Index grew +7.9% Y/Y in March, quicker than the +0.3% growth experienced in the previous year.

The US long bond ($USB was flat at $117.25. There was a pop of +6.1% in the T-Bill yield to 1.750.

Crude Oil ($WTIC) dropped -$1.73/bbl to 124.23. The June futures earlier today were down at 123.60.

$GOLD lost -$0.90/oz to 884.90 and like the other precious metals is marginally softer in the spot market this morning as the $USD has gained some moderate strength. But nothing remarkable.

Asia-Pacific equity markets were mixed overnight. Hong Kong (+1.95% to 25553) and Japan Nikkei (+1.53% to 13953.7) were quite strong, but Australia, Shanghai, and India were down. In trading at mid-session in Europe, the losses at 7:30am ET were minor and also a little better than 90 minutes earlier.

The June Dow 30 futures are down about -40 to 12824.


Comments & Outlook

With the continuing need by bankers to recapitalize their balance sheets, and the need for governments around the old world to replace or at least maintain needed infrastructure, the capital markets will be squeezed out unless the major central banks continue to print money.

The current capital flows are supporting high commodity prices, which is a drag on economic growth, everywhere, but particularly in the old world economies like the US.

I suspect this process to continue for at least the next several years, meaning that the average consumer in the US will struggle on, house poor and disappointed to be missing the American dream.

What tends to happen during challenging times like this is that people try to recover the easy way, through lotteries, gambling, stealing, and day-trading. That’s not a desirable or satisfactory retirement plan, but some people will do what they feel they must do.

I’ll leave you with a final thought, which is that most Americans will not admit (i) that as owners of capital they will have to accept lower returns, (ii) they are chattels of the debt system, and (iii) their country has generally disappointed them. I believe there will be an outpouring of emotion come the November elections, where people vote for ‘change’.

Translating that discussion to the capital markets, I see a difficult time in the bond markets for several years, and a flowing of capital from large cap companies into smaller, less seasoned companies with younger and more aggressive management.

Yesterday, the Russell 2000 small cap index (+1.84%) and the relatively smaller company-based, more youthful NASDAQ Composite (+1.73%) were head and shoulders the better performers than the DJIA (+1.01%) and S&P 500 (+1.09%). On the good days in the market, when traders will be reaching to make back some lost ground, perhaps too quickly, I foresee more of the same.

If you are going to try to be a player then during difficult market conditions, don’t ignore the risks that lie just below the surface.


Links & Charts


International Economics Review

US Economic Calendar.



Knobias Cara100 Tables

 Portfolio GAINERS
SYMB LAST CHG %C VOL
RIMM 141.970 +9.200 +6.9 33.8M
ECA 91.730 +5.800 +6.7 10.1M
VCP 32.200 +1.380 +4.5 658.4K
BBBY 33.510 +1.320 +4.1 4.1M
PDA 58.020 +2.140 +3.8 274.8K
NTES 24.140 +0.890 +3.8 1.3M
NUE 81.340 +2.930 +3.7 4.1M
TS 55.180 +1.830 +3.4 1.5M
GGB 44.960 +1.490 +3.4 2.4M
ABV 76.500 +2.400 +3.2 1.3M
WHR 74.770 +2.340 +3.2 1.1M
ERTS 54.270 +1.660 +3.2 5.7M
COST 73.680 +2.240 +3.1 3.5M
HBC 86.680 +2.610 +3.1 1.5M
JCP 44.230 +1.320 +3.1 2.6M
AMAT 19.870 +0.580 +3 20M
WFMI 33.750 +0.970 +3 4.7M
BBD 23.330 +0.640 +2.8 8.2M
KSS 49.070 +1.330 +2.8 4.4M
LEH 44.720 +1.180 +2.7 13.8M
RIO 40.580 +1.000 +2.5 16.4M
CCL 40.720 +1.000 +2.5 2.2M
GRMN 43.120 +1.040 +2.5 2.5M
TEF 88.890 +2.140 +2.5 373.7K
MICC 119.190 +2.850 +2.4 470.1K

 Portfolio LOSERS
SYMB LAST CHG %C VOL
VIP 32.550 -1.030 -3.1 2.7M
YHOO 25.260 -0.670 -2.6 41.3M
ATVI 30.900 -0.740 -2.3 8.4M
ABX 38.800 -0.590 -1.5 6.7M
TGP 28.170 -0.320 -1.1 97.4K
MBT 76.100 -0.830 -1.1 861.9K
IBN 42.220 -0.260 -0.6 2.7M
CCJ 40.010 -0.230 -0.6 1.9M
TCK 47.790 -0.240 -0.5 647.5K
BMY 21.630 -0.080 -0.4 20.6M
CEO 180.360 -0.620 -0.3 310.4K
CHL 83.250 -0.270 -0.3 1.5M
NOK 28.600 -0.070 -0.2 17.5M
DNA 68.370 -0.160 -0.2 2M
GG 39.440 -0.030 -0.1 4.3M
PTR 140.450 -0.060 -0 928K
CVX 97.360 -0.030 -0 9.4M

 Portfolio 52-Wk HIGHS
SYMB DAY HIGH LAST CHG %CHG VOL
RIMM 143.080 141.970 +9.200 +6.93 33.76M
ECA 93.650 91.730 +5.800 +6.75 10.08M
NTES 24.200 24.140 +0.890 +3.83 1.30M
GGB 45.150 44.960 +1.490 +3.43 2.40M
PBR 66.250 65.700 +1.100 +1.70 13.67M
SU 127.800 126.900 +2.050 +1.64 3.18M
BHP 88.270 88.270 +0.350 +0.40 3.85M

 Portfolio 52-Wk LOWS
SYMB DAY LOW LAST CHG %CHG VOL
NONE FOUND.

 Portfolio VOLUME
SYMB LAST %C VOL %ADSV
ECA 91.730 +6.7 10.1M +245
NKE 65.340 +0.7 8.4M +177
ERTS 54.270 +3.2 5.7M +112
RIMM 141.970 +6.9 33.8M +103
TT 46.530 +0.9 3.6M +98
ATVI 30.900 -2.3 8.4M +92
WFMI 33.750 +3 4.7M +88
ABV 76.500 +3.2 1.3M +69
BMY 21.630 -0.4 20.6M +62
VCP 32.200 +4.5 658.4K +43
PDA 58.020 +3.8 274.8K +41
NTES 24.140 +3.8 1.3M +39
GFI 13.880 +0.8 7M +30
CTSH 30.170 +1.5 6.4M +23
HBC 86.680 +3.1 1.5M +18
TEF 88.890 +2.5 373.7K +11

 Analysts UPGRADES
SYMB ANALYST OLD   NEW BEFORE   AFTER
ECA Blackmont --- --- Hold Buy
ECA Raymond James --- --- Outperform Strong Buy
• PREVIOUS SESSION
MFC Scotia Cap --- --- Sector Perform Sector Outperform
MFC CIBC --- --- Sector Perform Outperform
ATVI SG Cowen --- --- Neutral Outperform
ATVI Gabelli --- --- Hold Buy
ATVI Kaufman Bro 27.50 34.00 Hold Buy

 Analysts DOWNGRADES
SYMB ANALYST OLD   NEW BEFORE   AFTER
PDA UBS Securities --- --- Buy Neutral
• PREVIOUS SESSION
HBC Morgan Stanley --- --- Equal-weight Underweight


Cara 100 Daily RSI-7 Charts


At least one RSI value >70:
rsi
TickerLastRSI-7MRSI-7WRSI-7DZone
GGB44.9688.2579.8279.32Distribution Zone (for 3 days)
SYT60.9087.4960.3057.78
ECA91.7386.3374.9280.55Distribution Zone (for 1 days)
PBR65.7082.8569.0769.47
ATVI30.9081.5283.2680.13Distribution Zone (for 2 days)
RIMM141.9781.1377.8878.71Distribution Zone (for 1 days)
RIO40.5879.8170.3561.76
WMT58.0279.8083.1664.96
NUE81.3477.9279.0466.06Sell alert (trig. 2 days ago [on 2008-05-09 at $78.41, +3.74% chg], after a 1 day DZ)
SU126.9075.8575.3978.98Distribution Zone (for 3 days)
TT46.5374.2168.3960.16
BHP88.2773.7777.0266.30
CHRW64.9272.9471.2958.81Sell alert (trig. 4 days ago [on 2008-05-07 at $63.79, +1.77% chg], after a 4 day DZ)
PDA58.0271.8768.3465.97Sell alert (trig. 5 days ago [on 2008-05-06 at $57.80, +0.38% chg], after a 2 day DZ)
ABB31.4471.4777.4772.70Distribution Zone (for 1 days)
ABV76.5070.6351.6052.64
STO38.4870.0285.1570.51Distribution Zone (for 1 days)
COST73.6869.5875.0174.03Sell alert (trig. 4 days ago [on 2008-05-07 at $72.08, +2.22% chg], after a 5 day DZ)
NTES24.1469.0974.4376.79
CVX97.3668.3579.8168.23
LLTC36.5066.8278.5472.29
TOT84.3062.0572.6662.79
QCOM44.6362.0172.2363.05
DIS34.7761.9571.9976.94
IBKR32.9959.4062.5973.24
DOW41.7757.4072.2678.56
HBC86.6856.0471.1956.24
ERTS54.2756.0066.3076.96
ADBE40.4454.5170.9769.27
CCJ40.0150.7161.2777.09

At least one RSI value <30:
rsi
TickerLastRSI-7MRSI-7WRSI-7DZone
SBUX16.0413.6635.5039.75
UBS31.6027.9038.2032.71
BC16.5029.1348.4452.41
GRMN43.1233.2727.9946.51Buy alert (trig. 8 days ago [on 2008-05-01 at $43.12, +0.00% chg], after a 1 day AZ)
PG65.3546.7033.4126.33
KO56.4049.1529.6318.83


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 14: 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
AA 41.61 2.57 6.58% 12.79% 16.42% 22.63% 15.17% 24.25% 16.00% 9.41%
DIS 34.77 0.47 1.37% 4.45% 7.22% 15.75% 9.20% 8.55% 8.59% -3.60%
MSFT 29.99 0.60 2.04% 3.13% 3.45% 6.88% -14.85% 5.82% -10.16% -2.91%
IBM 125.24 1.18 0.95% 2.63% 2.92% 6.79% 19.63% 17.56% 23.45% 18.17%
WMT 58.02 0.84 1.47% 1.84% 1.17% 5.20% 23.71% 15.46% 33.93% 21.43%
CVX 97.36 -0.03 -0.03% 1.82% 5.25% 9.03% 4.17% 20.02% 14.18% 21.64%
INTC 23.64 0.27 1.16% 1.68% 4.10% 14.26% -6.75% 13.11% -6.52% 6.10%
MRK 39.62 0.63 1.62% 1.64% -4.39% -4.30% -30.94% -14.85% -29.24% -23.81%
CAT 83.82 2.06 2.52% 1.29% 0.95% 10.96% 18.67% 19.74% 20.43% 11.94%
MMM 77.67 1.35 1.77% 0.15% 0.70% -0.75% -6.09% -1.81% -1.96% -9.21%
MCD 60.87 1.63 2.75% 0.00% 2.15% 9.60% 4.77% 7.98% 3.98% 20.18%
UTX 74.57 1.44 1.97% -0.07% 2.09% 6.54% -0.85% 2.40% 0.87% 9.04%
DD 49.58 1.14 2.35% -0.24% 0.81% 1.60% 13.35% 5.22% 5.92% -1.67%
XOM 89.19 0.37 0.42% -0.36% -3.53% -0.57% -4.62% 5.70% 5.50% 9.80%
AXP 49.95 0.99 2.02% -0.93% 4.30% 16.92% -2.14% 10.80% -10.95% -20.68%
BA 84.80 0.74 0.88% -1.30% -0.21% 9.82% -2.10% 1.48% -8.68% -9.21%
JPM 47.24 0.67 1.44% -1.58% -0.21% 13.83% 12.02% 9.07% 11.44% -9.42%
JNJ 66.71 0.16 0.24% -1.75% -0.91% 1.48% 1.21% 5.94% 0.60% 7.13%
T 39.11 0.52 1.35% -1.86% 2.11% 5.13% -4.61% 4.27% 1.19% -1.21%
PG 65.35 0.14 0.21% -1.95% -1.30% -6.80% -9.63% -2.70% -7.66% 6.00%
VZ 38.06 0.15 0.40% -2.16% 0.29% 7.70% -11.92% 1.33% -11.07% -7.96%
GE 32.40 0.13 0.40% -2.35% -2.32% 2.05% -11.86% -5.73% -15.29% -12.36%
HD 28.64 0.66 2.36% -2.49% -3.67% 2.62% 9.69% 0.92% 0.63% -26.30%
PFE 19.91 0.12 0.61% -2.97% -1.58% -3.16% -13.09% -12.21% -13.51% -26.37%
HPQ 46.65 -2.48 -5.05% -3.38% -1.98% 1.81% -6.35% 8.79% -1.88% 3.11%
KO 56.40 0.25 0.45% -3.39% -4.37% -7.54% -7.68% -5.87% -5.78% 7.04%
BAC 37.44 0.79 2.16% -3.93% -1.94% 5.23% -7.69% -12.56% -14.87% -26.52%
GM 20.76 0.47 2.32% -7.16% -5.38% 9.26% -14.95% -21.95% -32.58% -29.53%
C 23.64 0.01 0.04% -8.19% -11.82% 5.02% -18.26% -9.81% -29.58% -55.49%
AIG 38.37 -1.91 -4.74% -19.03% -18.43% -11.37% -31.85% -16.84% -32.42% -47.13%

You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM

Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (