Thursday, July 07, 2005

Morning Update

"Violence is the last refuge of the incompetent." - Isaac Asimov

Morning News of Note:
  • London Explosions: Terror Attacks in London Kill 2, Injure Many on Subways, Buses U.K.'s Blair Calls Attacks 'Barbaric' Near simultaneous explosions rocked the London subway and three double-decker buses at the morning rush hour Thursday, police and news reports said, killing two and injuring at least nine people and prompting officials to shut down the entire underground transport network. British Prime Minister Tony Blair said in a short speech from Gleneagles, Scotland, that there has been a series of terrorist attacks in London and that it was clear the attacks were designed to coincide with the opening of the G-8 summit. (Full Story) WSJ
  • HD: Home Depot Plans Gas-Mart Format In Four-Store Test Home Depot Inc. will test convenience stores located in the parking lots of four of its Nashville, Tenn., stores this year and could expand the pilot to other markets. The Atlanta-based home-improvement retailer plans to test convenience stores with gasoline stations starting in December, spokeswoman Paula Smith said. The stores will have items typically found in convenience stores, such as milk and soda, and prepackaged items for breakfast, lunch and dinner, she said. Some of the locations will have car washes. (Full Story) WSJ
  • BBY HMT: Consumers Ask, Why Worry? THAT WALL OF WORRY INVESTORS love to climb is built on fears about high gasoline prices and a housing bubble. But consumer confidence is quietly improving, and some stocks that benefit from it may have more room to run. The Standard & Poor's 500 index has lost more than 2% since early March. Yet the Conference Board's consumer confidence index rose in June to a three-year high that beat economists' expectations. And the University of Michigan, which also measured strong June consumer confidence numbers, expects real consumer spending to rise by 3% in the second half of 2005. (Full Story) BARRONS
  • Energy: Saudi energy officials warned that OPEC wont be able to meet projected western oil demand in 10-15yrs; said they believe there is a 4.5m bbl/day gap bet global demand in 2020 and what Saudis can provide -- FT
  • US Economy: MNST June employment index 136 vs 134 in May; strong demand in construction industry and arts and entertainment; shortage of drivers cont to drive sharp uptick in demand from truckers

Market Comments: The markets opened down considerably this morning, on the heels of the attacks in London. What was different about these attacks is that they didn't target any type of financial institution or district. As such, I think the disruption to the market will be limited. Often we look back on events like this as presenting good buying opportunities in the market. (This is not meant to imply that I don't feel for those that were hurt by this horrendous act-- I do. But this site is devoted to our money lives)

If the headlines weren't dominated by the explosions in London today, I think the media would be talking about those comments out of Sauid Arabia acknowledging the imbalance between long-term oil demand and the potential supply. I believe this is going to be a multi-year theme, that will keep energy stocks in a secular bull market.

long MNST


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