The Red Roadmasterâ€™s US Market Re-cap + Stock Talk â„˘
October 30, 2009
Date Line: Hong Kong (SAR) China
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A better-than-expected Q-3 GDP reading sent the US stock market North snapping a 4 day losing streak.
Re-cap of the US Stock Market Action for the session ending 29 October 2009 All 10 S&P 500 sectors close higher on strong market day. The S&P 500 is up 57.6% from its 12year closing low of March 9, 2009, but the benchmark S&P 500 is off 2.9% from its post-March peak reached on October 19, 2009.
The CBOE Volatility Index .VIX, Wall Street's most closely watched gauge of investor fear, slid 11.3%, its biggest one-day percentage drop in eight months.
Note: As the World begins recovering from the worst financial crisis in 70 yrs, an odd couple of winners have emerged: Stocks and Gold. So far this year, the DJIA, a bet on economic recovery, is up 14%. Gold futures, a bet on calamity, are up 19%. The reason: Low interest rates and heavy government stimulus have poured cheap money into financial markets, helping both the economy and stocks
The DJIA gained 199.89 pts, or 2.05%, to close at 9,962.58, the S&P 500 rallied 23.48 pts, or 2.25% to close at 1,066.11, flirting with 1,100 and marking its biggest 1 day percentage gain in 3 months, and the leading NAS tallied up a + 37.94 pts, or 1.84%, to end the session at 2,097.55. The Big/Broad gains came on the news that Q-3 GDP surged to an annualized growth rate of 3.5%, the expected number was 3.2% after contracting 0.7% in Q-2. A positive tone among traders and a sharp drop by the US$ helped drive commodity prices North too, resulting in a 2.1% gain for the CRB Commodity Index. Financial issues lead the charge: the sector rose 4.3%, which is its best single-session percentage gain in three months. Life and health insurers (+7.6%) and multiline insurers (+6.7%).
Materials issues also did well on the day: the sector climbed 3.2% as broader market support and commodities and basic materials prices were propped up by a sinking US$, which lost 0.6% against a basket of major foreign currencies in its 1st down session in seven sessions. In turn Traders pushed Crude Oil prices up 3.1% to US$79.89 bbl, which helped the energy sector to a + 2.4% gainer. Dow component Procter & Gamble (covered in Stock Talk yesterday) posted a positive earnings surprise, as did Colgate-Palmolive. Investors, who only yesterday were charging into many defensive-oriented issues, abandoned them today in favor of riskier holdings, and so Treasuries came under pressure too. That took the benchmark 10-yr T-Note down some 20 ticks, which lifted its yield back toward 3.5%. Treasuries caught additional attention as results from a US$31B auction of 7 yr Treasuries drew a slightly stronger than expected bidto-cover ratio of 2.65. Advancing Sectors: Financials (+4.3%), Materials (+3.2%), Consumer Discretionary (+2.7%), Energy (+2.4%), Industrials (+2.0%), Tech (+1.9%), Consumer Staples (+1.8%), Health Care (+1.0%), Utilities (+0.9%), Telecom (+0.6%) Declining Sectors: (None) Volume and Breadth: Trade was moderate on the NYSE, with about 1.46B/shrs changing hands, below last year's estimated daily average of 1.49B/shrs, and on the NAS about 2.34B/shrs traded, above last year's daily average of 2.28B/shr. Advancers beat decliners by a ratio of nearly 5 to 1 on the NYSE, and on the NAS, more than two stocks rose for every one that fell. Hot Topic: IBM to Give Employees 100% Coverage of Primary Care International Business Machines Corp., the World’s largest computer-services company, will provide US employees with 100% coverage for primary care, a policy designed to curb health expenses. Beginning Y 2010, employees will no longer have to pay deductibles for visits to in-network doctors such as internists, general practitioners and pediatricians, Armonk, New York-based IBM said today in a statement. The company said it is one of the 1st US employers to adopt such a policy. The decision is aimed at encouraging employees to visit the doctor more often, so illnesses are treated before they become serious. IBM said the policy will cover about 80 percent of its 115,000 U.S. employees The other 20% belong to health maintenance organizations. “We believe in giving people incentives to get health care early and often,” said Marianne DeFazio, director of health- care benefits and strategy at IBM. “When people have no barriers to getting primary care, you catch things early and you prevent things.” IBM said it has invested US$79M in nutrition and exercise programs between 2004 and 2007, saving more than twice that amount in health-care costs. DeFazio declined to say how much the move would cost IBM in the near term. More prevention will eventually cut health cost inflation, she said. “We believe more efficient and individualized care will result in better outcomes and lower costs for everyone,” she said. ---Paul A. Ebeling, Jnr. www.livetradingnews.com Stocks to Watch Today Abercrombie and Fitch (ANF), Duke Energy Corp. (DUK), Fluor Corporation (FLR) and 99 Cent Only Stores (NDN).
Abercrombie and Fitch (ANF) Up-date 2
Last Look: June 4, 2009
October 30, 2009 Paul A. Ebeling, Jnr. Analyst Today let’s look at Abercrombie and Fitch (ANF), specialty retailer of casual sportswear apparel for men, women, and kids, from a Technical POV. The overall analysis after Thursday’s (October 29, 2009) market action is Bullish; in the near term Neutral, mid-term Bullish, and long term Very Bullish. The recent Candle Stick analysis is: Neutral
**Chart by: http://www.stockta.com
Latest News: A Retailer Fit For Any Portfolio http://stocks.investopedia.com/stock-analysis/2009/A-Retailer-Fit-For-Any-Portfolio-VFC-ANF-M-SKSJWN-COLM1029.aspx?partner=YahooSA
Thursday’s Market Action: Close 34.23
There is a Bearish Engulfing Candle on October 23 and one Gap open up on October 7, 2009 at 31.62/32.13, the near term resistance is 37.60, support at 34.16, and the 50 day (EMA) exponential moving average is 33.43. This is Abercrombie and Fitch (ANF): This is clothing company that offers knit and woven shirts, graphic t-shirts, fleece, jeans and woven pants, shorts, sweaters, and outerwear, as well as personal care products and accessories under the Abercrombie & Fitch, Abercrombie, Hollister, and RUEHL brands. Competitive Landscape Demand for many specialty retail goods is driven by gains in consumer income. Large competitors can offer lower prices because they buy in quantity. Small retailers can compete with large ones by offering different merchandise or providing a higher level of service. Despite the presence of some large chains, specialty retail markets are highly fragmented. Barnes & Noble, for example, with over 900 stores, is the largest US bookseller but has a market share of only about 15%. Specialty Retail Industry Forecast US personal consumption expenditures for specialty retail items, like toys, dolls, games, cameras, film, film processing, guns, ammunition, sporting equipment, boats, and aircraft, are forecast to grow at an annual compounded rate of 5.1% between 2008 and 2013.
Abercrombie and Fitch (HQ) Chairman, President and CEO Michael S. Jeffries Abercrombie & Fitch Co. 6301 Fitch Path New Albany, OH 43054 Phone: 614-283-6500 Fax: 614-577-6710
Duke Energy Corp. (DUK) Up-date 1
Last Look: February 12, 2009
October 30, 2009 Paul A. Ebeling, Jnr. Analyst Dear Reader, Today, letâ€™s look at Duke Energy Corp. (DUK), the huge southern USA power generation company, from a Technical POV. The overall indications, after Thursdayâ€™s (October 29, 2009) market action, are Bullish: in the near term Bullish, mid-term Very Bullish and long term Bullish. The recent Candle Stick analysis is: Neutral.
**Chart by: http://www.stockta.com
Latest News: Business events scheduled for the coming week http://finance.yahoo.com/news/Business-events-scheduled-for-apf-3302724243.html?x=0&.v=1
Thursday’s Market Action
There is two Gaps open up on September 4, 2009 at 15.32/15.34; the near term resistance is 16.19, support at 15.96, and the 50 day (EMA) exponential moving average is 15.67. This is Duke Energy Corp. (DUK): The company operates as an energy company in the Americas. The company’s US Franchised Electric and Gas segment generates, transmits, distributes, and sells electricity in central and western North Carolina, western South Carolina, southwestern Ohio, central and southern Indiana, and northern Kentucky; and transports and sells natural gas in southwestern Ohio and northern Kentucky. Its Commercial Power segment offers on-site energy solutions and utility services. This segment owns, operates, and manages non-regulated merchant power plants; and engages in the wholesale marketing and procurement of electric power, fuel, and emission allowances related to plants. It also develops and implements customized energy solutions. The company’s International Energy segment operates and manages power generation facilities and engages in the sale and marketing of electric power and natural gas. This segment serves retail distributors, electric utilities, independent power producers, marketers, and industrial/commercial companies. The company supplies electric service to approximately 3.9 million customers; and provides domestic regulated transmission and distribution services for natural gas to approximately 500,000 customers in southwestern Ohio and northern Kentucky. It has approximately 36,000 megawatts of electric generating capacity in the Midwest and the Carolinas, as well as approximately 4,000 megawatts of electric generation in Latin America. Duke Energy, through its interest in Crescent Resources LLC, develops and manages commercial, residential, and multi-family real estate projects; and manages land holdings in the United States. The company also develops and manages fiber optic systems for wireless, local, and long-distance communications companies, Internet service providers, and other businesses and organizations in the Carolinas.
The Competitive Landscape Demand is driven by commercial, government, and residential needs for electrical power, which depend on population growth, economic activity, and electricity prices. Profitability is determined by government regulations and fuel costs. Large companies have an advantage in negotiating fuel contracts and being able to pass the costs of implementing government regulations directly to consumers. Small companies can compete effectively by exploiting market niches, such as offering “green power” in regulated markets. The industry is capital-intensive: average annual revenue per employee is US$642,000. Electric Power Generation Industry Forecast
The output of US electric utilities, which includes generation, is forecast to grow at an annual compounded rate of 4.7% between 2008 and 2013. Duke Energy Corp. (HQ) Exec. Chairman, Chief Exec. Officer and Pres James E. Rogers 526 South Church Street Charlotte, NC 28202-1904 United States Phone: 704-594-6200 Fax: 704-382-4964 http://www.duke-energy.com
Duke Energy Subsidiaries Crescent Resources, LLC
DCP Midstream Partners, LP Duke Energy Carolinas, LLC
Fluor Corporation (FLR) Up-date 1
Last Look: May 12, 2009
October 30, 2009 Paul A. Ebeling, Jnr. Analyst Today letâ€™s look at Fluor Corporation (FLR), a leading international design, engineering, and contracting firm, from a Technical POV. The overall indications, after Thursdayâ€™s (October 29, 2009) market action, are Very Bearish: in the near term, Bearish, mid-term Very Bearish, and long term Bearish. The recent Candle Stick analysis is:Neutral
**Chart by: http://www.stockta.com
Latest News: Today's 5-Star Movers http://www.fool.com/investing/general/2009/10/28/todays-five-star-movers.aspx
Thursdayâ€™s Market Action
There is a Bearish Engulfing Candle on October 23 and two Gaps open down between September 21 and October 28, 2009 at 55.47/47.57, the near term resistance is 47.38, support at 46.16, and the 50 day (EMA) exponential moving average is 50.58. This is Fluor Corporation (FLR): The company oversees construction projects for a large range of industrial sectors worldwide, focusing on its core strengths: engineering, procurement, construction, and maintenance. Its projects include designing and building manufacturing facilities, refineries, pharmaceutical facilities, healthcare buildings, power plants, and telecommunications and transportation infrastructure. The oil and gas sector accounts for nearly 60% of sales. Fluor also provides operations and maintenance services for its projects, as well as administrative and support services to the US government.
Industries Where Fluor Competes Construction Construction & Design Services Commercial & Heavy Construction (primary) Architectural & Engineering Services
Fluor Corporation (HQ) Alan Boeckmann BE, Exec. Chairman, Chief Exec. Officer 6700 Las Colinas Boulevard Irving, TX 75039 United States Phone: 469-398-7000 Fax: 469-398-7255 http://www.fluor.com
99 Cents Only Stores Up-date 1
Last Look: June 15,
2009 October 30, 2009 Paul A. Ebeling, Jnr. Analyst Today, let’s look at 99 Cent Only Stores (NDN), among USA’s best place to shop for dirt cheap products, from a Technical POV. The overall indications, after Thursday’s (October 29, 2009) market action, are Neutral: in the near term Bearish, mid-term Neutral, and long term Neutral. The recent Candle Stick analysis is: Neutral.
**Chart by: http://www.stockta.com
Latest News: 99¢ Only Stores® Will Sell 9 Apple iPod Nanos for Only 99.99¢ Each to Celebrate the Grand Opening of Its Newest 99¢ Only Stores® on Thursday, October 29, 2009, in Poway, California
Thursday’s Market Action
There is a Bearish Engulfing Candle on October 26, one Gap down on October 9, 2009 at 13.92/13.77. The near term resistance is 12.25, the near-term support is 11.96 and the 50 day exponential moving average is 12.99. This is 99 Cents Only Stores (NDN): is a retailer of consumable general merchandise. It operates through two segments: retail operations and wholesale distribution. The wholesale segment, Bargain Wholesale, sells primarily the same merchandise as the retail segment at prices generally below normal wholesale levels to local, regional and national distributors and exporters. The Company had no customers representing more than 10% of net sales. Substantially all of the Company's net sales were to customers located in the United States. As of March 29, 2008, the Company operated 265 retail stores with 186 in California, 46 in Texas, 22 in Arizona, and 11 in Nevada. These stores averaged approximately 21,722 gross square feet. The Company is also a wholesale distributor of various consumable products.
The Competitive Landscape Razor sharp margins can only be achieved through massive economies of scale and limited breadth and depth of product mix. Unfortunately smaller specialty retailers such as mom and pop shops just don’t have the leverage to compete on such as scale. As a result, larger specialty retailers maintain market share and grow during recessionary environments. Low fixed cost and highly limited marketing budgets afford discount specialty retailers the ability to keep price points attractive. Specialty retail stores typically spend most of their resources looking for ideal locations to expand.
99 Cents Only Stores (HQ) Chairman and Director: David Gold 4000 East Union Pacific Ave City of Commerce, CA 90023 United States Phone: 323-980-8145 Fax: 323-980-8160 www.99only.com/
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