Monday Morning Musings

Morning News of Note:

• VLO: Valero Says Gasoline Output Isn't Likely to Be Hurt by Blast Valero Energy Corp. was investigating damage to an oil refinery outside New Orleans after an explosion Saturday night, though a spokeswoman said it was unlikely gasoline production would be affected. No workers were injured in the blast at a diesel-processing unit at the Valero facility, which has a refining capacity of 250,000 barrels a day. (Full Story) WSJ
• HD: CEO Pay: Showdown Looms At Home Depot Sparks could fly at Home Depot Inc.'s annual meeting Thursday as Chairman and Chief Executive Bob Nardelli squares off against labor unions and shareholders incensed by his multimillion-dollar paydays. Mr. Nardelli has come under intense criticism because Home Depot shares have slid 11% since he took the helm in 2000, while shares of archrival Lowe's Cos. have nearly tripled. (Full Story) WSJ
• TIVO: TIVO TAKING TUNE FROM MAG EDITORS TiVo is partnering with several magazines, including Sports Illustrated and Star, to offer viewers virtual TV channels with content hand-picked by magazine editors. The move is another step for TiVo in its effort to offer new features in the face of competition from other digital video recorders, or DVRs, that simply allow users to record and store programming. (Full Story) NY Post
• GPS: RETAIL GIANT MULLS LAUNCHING WEB SHOE STORE The Gap Inc., which operates under the Gap, Banana Republic, Old Navy and Forth & Towne brands, is considering launching a fifth division, The Post has learned. Unlike the other four, which sell their own branded merchandise in retail stores and on the Web, the new division would exclusively be an online store selling shoes made by other companies, similar to Nordstrom.com and Zappos.com, sources said. (Full Story) NY Post
• Mad Money Summary: Cramer opened his show on Friday night discussing the drop in the markets at length. He said to this of this past week as a huge sale. He then suggested five diversified stocks that "really got killed." He said to look at Freeport-McMoRan Copper & Gold (FCX), Halliburton (HAL), JPMorgan (JPM), Tellabs (TLAB), and Boeing (BA). Cramer then recommended a natural gas play, Georgia Gulf (GGC). In the "Lightning Round," Cramer was bullish on Peabody Energy (BTU), Gymboree (GYMB), Essex Corp (KEYW), Smith & Wesson (SWB), Hain Celestial (HAIN), Whole Foods (WFMI), Disney (DIS), Lowe's (LOW), Centerpoint Energy (CNP), H&E Equipment Services (HEES), Cerner (CERN) and Starbucks (SBUX), and was bearish on United Natural Foods (UNFI), Home Depot (HD), Playboy (PLA), Sony (SNE), Burger King (BKC) and Chipotle (CMG).

Market Comments: The market is opening under severe pressure this morning, following weakness in overseas markets. The Indian stock market fell 10% overnight before being halted for trading. It pared those declines to finish down -4.2%.

Bond yields continue to decline (5.0%), but it has yet to really take hold in the equity markets. The air continues to come out of the energy and commodity stocks, and that seems to be weighing on the markets as this former area of leadership gets liquidated.

I saw some spikes in bearish sentiment last week, which when combined with this oversold market, lead me to believe that a strong bounce is imminent. I think stocks will finish higher this week, and plan to do some buying.