Tuesday, March 14, 2006

More Early Strength

Morning News of Note:
  • SBUX: STARBUCKS FRAPPS UP BANANAS Banana is the new flavor for Starbucks this summer. The coffee giant will offer a banana version of its blended Frappuccino drink throughout its North American cafés, a compnay spokesman told The Post. The flavor is similar to a line launched this month in New Zealand and Australia and inspired by the "flavors of the tropics," the company said. The drink is expected to hit U.S. stores in May. (Full Story) NY Post
  • GOOG: Google, U.S. Set For Court Face-Off Over Search Data Justice Department lawyers will press their case against Google Inc. today by arguing in federal court that consumer privacy won't be violated by the release of millions of company search records. The attorneys have alleged in court papers that none of the search queries and Web addresses they seek will be used to identify users of Google's Internet-search service. (Full Story) WSJ
  • AAPL: France Weighs Law Forcing iTunes Access Beyond Apple's iPod France is pushing through a law that would force Apple Computer Inc. to let consumers download songs from its iTunes online music store onto devices other than the computer maker's popular iPod player. Under a draft law expected to be voted on in parliament Thursday, consumers would be able to legally use software that converts digital content into any format. (Full Story) WSJ
  • US Oil: OPEC aims to keep US Oil price range of upper $50s, lower $60s-Reuters, citing the OPEC President.
  • Mad Money Summary: Cramer opened his show by saying that he is obsessed with fiber optical communications. With carriers like Verizon (VZ) and AT&T (T) spending a lot of money to build fiber optic networks, the component makers should see a lot of money. One such company is Avanex (AVNX), a $2 optical stock. Then Cramer discussed the aging population, and a company that will profit by making them look younger, AngioDynamcis (ANGO). The company treats varicose veins, a business that should continue to grow at 20% a year. Cramer also recommended Education Realty Trust (EDR), a real estate investment trust (REIT) that is cheap compared with its competitors and also attractive because of its 8.3% dividend. Cramer spoke briefly with Jai Nagarkatti, president & CEO of niche company Sigma-Aldrich (SIAL), a biochemical company which he feels is well diversified. In the Lightning Round, Cramer was bullish on Amgen (AMGN), Cephalon (CEPH), Inco (N), Concur (CNQR), Yahoo! (YHOO), Sara Lee (SLE), I-Flow (IFLO), Plum Creek (PCL), Las Vegas Sands (LVS), Schering-Plough (SGP), Bear Stearns (BSC), Grey Wolf (GW), Tellabs (TLAB), and Johnson & Johnson (JNJ), and was bearish on Celgene (CELG), Sirius Satellite Radio (SIRI), Google (GOOG), Medicine Co. (MDCO), Genitope (GTOP), and Orasure (OSUR).

Market Comments: The market is again bouncing in early trading. Yesterday I mentioned I was worried about this pattern, and sure enough the market sold off into the close. We still finished modestly positive, but it was far from the sort of follow-through day we are looking for. Maybe today will finish stronger, but we are setting up for a repeat of yesterday.

The brokers are higher after a blowout earnings report from GS. Housing stocks are doing better as bond yields are down 6 pbs to 4.71%. And energy stocks are mixed, despite continued sabre-rattling from Iran warning about how they will retaliate to any sanctions.

Yesterday, Fed pres. Yellen warned about the Fed going to far in their tightening campaign. On CNBC, Bill Gross seemed to echo these sentiments. I am also worried about this, due to the lag effect of rate hikes, and can only hope the FOMC pauses sooner rather than later.



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