Wednesday, February 22, 2006

Early Strength for Stocks

Morning News of Note:
  • SNE: Waiting for PlayStation 3 Talk of a delayed launch for the next-generation console is growing. If the rumors are true, Microsoft and its Xbox could win big. When SNE head Ken Kutaragi unveiled the first details of the PS3 in May, 2005, calling it a "supercomputer for computer entertainment," game enthusiasts rejoiced... (Full Story) Business Week
  • CSCO FFIV: Networking Lit Up Tech Earnings Season The results are in, and the rebound in telecommunications may have been the biggest bright spot for technology companies in the earnings season that's just ending. This year more technology companies are beating Wall Street's profit forecasts than usual. Two-thirds of the companies in the Standard & Poor's 500 have reported positive earnings surprises, more than the 59% average, according to Thomson Financial/First Call. And Thomson says tech companies were in line with that (Full Story) BARRONS
  • WMT: Wal-Mart Tries to Find Its Customer For all its success in the United States — and there is plenty of it — Wal-Mart Stores is still struggling to figure out its home turf, where sales growth at individual stores has sagged, its customers routinely flirt with rivals like Target for clothing and its advertising has often failed to inspire. The retailer's plans to fix the problems became clearer yesterday, when Wal-Mart executives pledged to remodel nearly half of its United States stores over the next 18 months, beef up its marketing division and expand a bold line of clothing across much of the chain (Full Story) NY Times
  • Bulls/Bears: Bulls 45.3 vs 48.9 wk ago, Bears 29.5 vs 27.2 wk ago, Correction 25.2 vs 23.4 wk ago
  • Mad Money Summary: Cramer opened his show discussing companies that "pillage the earth." He gave six picks for making money off the bull market of mineral extraction. His first pick was the Australian-based BHP Billiton (BHP), which he calls the "Mad Max of mineral stocks." His second pick was Freeport-McMoRan (FCX), the world's lowest-cost copper producer. His third pick was Rio Tonto (RTP), which he called the "metal supermarket to the world." Moving on to companies involved in mineral-extraction, Cramer's fourth pick was Manitowoc (MTW), which benefits from mineral extraction and should also benefit from the highway bill and the rebuilding of the Gulf Coast. His fifth pick was Terex (TEX), which he believes is underappreciated. The company makes heavy trucks and construction equipment. Cramer suggested buying the company on any weakness. His last pick was Caterpillar (CAT), which is a best of breed in mining equipment. Cramer said Caterpillar "quite frankly is the best, and you never need to apologize for buying the best."

Market Comments: The headline CPI figure was higher than expected, but the Core CPI was in-line with estimates (+0.2%). The market is trading higher in the first hour. I prefer markets that end strong, as opposed to open strong, but let's see if we can build on this early strength.

The Investor's Intelligence survey showed a decrease in bulls and an increase in bearish sentiment, which is a good sign from a contrarian perspective.

Oil prices are down this morning, and all of the energy stocks that led yesterday are down today. Very volatile. Financials are mostly higher, which is always a good sign. The Nasdaq continues to lag the SPX, which is a trend I would like to see change.

long WMT


At 4:58 PM, Blogger dohsinbebe said...

Buy energy on weakness if you're a buy and hold kinda investor. Energy isn't going anywhere.

At 8:16 AM, Blogger J. Kahn said...

do you mean energy prices aren't going anywhere? or energy stocks?


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