The Red Roadmasterâ€™s US Market Re-cap + Stock Talk
July 7, 2009
The DJIA rose + the S&P 500 came alive late in the session Monday on a move into defensive stocks, the move I discussed in yesterday's Red Roadmaster Market Report, and the NAS, heavily weighted in tech issues, slipped on the sector rotation.
Recap of the US Stock Market Action July 6, 2009 The DJIA added 44.13 pts (0.53%) closing at 8,324.87, the S&P 500 tacked on 2.30 pts (0.26%) to close at 898.72, and the NAS shed 9.12 pts (0.51%) to end the session at 1,787.40. The S&P 500 has rallied 40% from a 12 year closing low reached on March 9, 2009, and retraced 7.2% to 32.8 percent amid the expectation that the correction would top 10% + in here. American Express Co topped the DJIA list of biggest percentage gainers on the day Monday, climbing 5.6% to US$23.52 on the Stifel Nicolaus up-grade. Y 2009 Q-2 earnings season begins on Wednesday, and data compiled by Thomson Reuters shows about a 36% decline in S&P 500 earnings from a year ago, roughly the same result as Q-1. August Crude Oil futures touched a 5 week low, down US$2.68, or 4%, to settle at US$64.05 bbl on Monday. Volume and Breadth: Trading volume was moderate on the NYSE, with only about 1.14B/shrs changing hands, well below last year's estimated daily average of 1.49B/shrs, and on the NAS about 2.00B/shr traded, again below last year's daily average of 2.28B/shrs. Decliners outnumbered advancers on the NYSE by a ratio of 3 to 2, while on the NAS about eight stocks fell for every five that gained.
Stocks to Watch today Apple, Inc. (AAPL), American Express Company (AXP), Bank of America (BAC), Kraft Foods Inc. (KFT), PepsiCo, Inc. (PEP), and Wells Fargo & Company (WFC).
Apple, Inc. (AAPL) Up-date 34 July 7, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at Apple, Inc (APPL), the creator of the iPhone and other wonderful stuff, from a Technical POV. The overall indications, after Monday’s (July 6, 2009) market action, are Neutral; in the near term Neutral, mid-term Neutral, and long term Neutral. Recent Candle Stick analysis is Very Bullish.
**Chart by: http://www.stockta.com
Latest News: How I Spent My Summer: Hacking Into iPhones With Friends http://online.wsj.com/article/SB124692204445002607.html?ru=yahoo#mod=yahoo_hs
Monday’s Market Action Close 138.61
There is a DOJI on July 6 and six Gaps open up between Mar 11 and May 27, 2009 at 89.17/130.91, the near term resistance is at 145.31, support at 136.06, and the 50 day exponential moving average is 130.91. This is Apple, Inc. (AAPL): Apple, the world’s computer/gadget innovator has caused a revolution in personal computing and digital media distribution. The company's desktop and laptop computers feature its OS X operating system, they include its Mac mini, iMac, and MacBook for the consumer and education markets, and powerful Mac Pro and MacBook Pro for high end consumers and professionals involved in design and publishing. Apple posted a huge success with its iPod digital music players, and iTunes, its online music store. Other Apple products: iPhone mobile phones, Xserve, servers, Airport, wireless networking equipment, plus publishing and multimedia software. Apple’s FileMaker sub provides database software. Apple, Inc. ranks #103 in the Fortune 500 Companies List. The Competitive Landscape Computer product demand is directly tied to consumer and business income. The profitability of individual computer companies depends on purchasing and production efficiencies, and on technological expertise. Large companies have economies of scale in purchasing and production. Small companies can compete successfully by specializing in certain products or by developing superior technology. The industry is capital-intensive and highly automated: annual revenue per employee is about US$500,000. The output of US computer manufacturing is forecast to grow at an annual compounded rate of 4.7 % between 2008 and 2013. Apple, Inc. (HQ) Steven P. (Steve) Jobs, CEO and Director 1 Infinite Loop Cupertino, CA 95014 United States http://www.apple.com
Apple Subsidiaries Apple Computer (UK) Limited FileMaker, Inc
American Express Company (AXP) Up-date 4 July 6, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at American Express Company (AXP), one of the World’s largest travel agencies, from a Technical POV. The overall indications, after Tuesday’s (June 2, 2009) market action, are Neutral: in the near term Neutral, mid-term Neutral, and long term Bullish. Recent Candle Stick analysis is Very Bullish.
**Chart by: http://www.stockta.com
Latest News: American Express, Up 5.6%, Leads DJIA http://online.wsj.com/article/SB124692050891702537.html?ru=yahoo#mod=yahoo_hs
Mondayâ€™s Market Action Close 23.32
There is a Bullish Engulfing Candle on July 6, and two Gaps open up between Apr 9 and 24, 2009 at 16.08/22.63 and the near term resistance is 25.67, support at 23.33, and the 50 day (EMA) exponential moving average is 23.24. This is American Express Company (AXP): The Company is one of the world's largest travel agencies, but it is better known for its charge cards and revolving credit cards. And yes, the company still issues traveler's checks and publishes such magazines as Food & Wine and Travel & Leisure through its American Express Publishing unit. Its travel agency operations have more than 2,200 locations worldwide and its Travelers Cheque Group is the world's largest issuer of traveler's checks (it also issues gift cards). But the company's charge and credit cards are its bread and butter; American Express has more than 92 million cards in circulation worldwide. Competitive Landscape Demand is driven by consumer income and demographics. The profitability of individual companies depends on the correct assessment of repayment likelihood and effective collections activities. Large companies have an advantage in using computers to serve large portfolios of mortgage and credit card loans, and also have access to cheaper sources of funds, but small companies can compete effectively in the cash lending or sales finance segments, where personal contact is more important. Consumer Finance Industry Forecast The output of US credit cards and finance companies, which includes consumer finance, is forecast to grow at an annual compounded rate of 1% between 2008 and 2013. Data Sourced: December 2008 American Express Company (HQ) Chairman, Chief Exec. Officer: Kenneth I. Chenault World Financial Center 200 Vesey Street New York, NY 10285 United States Phone: 212-640-2000 Fax: 212-619-9230
Bank of America (BAC) Up-date 53
July 7, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at Bank of America (BAC), the USA’s big brand bank, from a Technical POV. The overall indications, after Monday’s (July 6, 2009) market action are, Neutral, in the near term Neutral, mid-term Neutral, and long term Bullish,. The recent candlestick analysis is Neutral
**Chart by: http://www.stockta.com
Latest News: BofA Promotes Key Executives http://online.wsj.com/article/SB124693214777703715.html?ru=yahoo#mod=yahoo_hs
Monday Market Action Close 12.15
There is one Gap open down at July 6, 2009 at 12.62/15.69, the near term resistance is 12.77, support at 11.92, and the 50 day (EMA) exponential moving average is 11.57. This is Bank of America (BAC): This Company has operations in 32 states, the District of Colombia and 44 foreign countries. In the US it has more than 6,000 retail banking centers and 18,500 ATMâ€™s. Two key areas of business for this company are Global Consumer and Small Business Banking. Global Corporate and Investment Banking provide comprehensive financial solutions to their institutional clients. Global Wealth and Investment Management offers banking and investment services to more than 3 million individual and institutional customers World Wide. Recent Major developments have afforded the opportunity to purchase various marquee businesses such as Countrywide Financial, LaSalle Bank, U.S. Trust Corp, MBNA, and FleetBoston. Acquiring of these businesses will provide BAC a strong presence in their mutually respective core markets. Competitive Landscape Leveraged loans, collateralized debt obligations and subprime-related assets will continue to be a source of uncertainty for the entire sector. Government intervention has played a role in strengthening bank balance sheets and consumer confidence. The government recently released a framework for the purchase of the aforementioned toxic assets. The industry is heavily tied to the extension of credit to credit worthy consumers. As deterioration in consumer based businesses continues in the US coupled with tighter lending standards, banks will find it difficult to identify lucrative investment opportunities. Bank of America (HQ) Chairman and Chief Director: Walter E Massey 100 North Tryon St. 18th Fl Charlotte, NC 28255 United States Phone: 704-386-5681 Fax: 704-356-6699 http://www.BankofAmerica.com
Kraft Foods Inc. (KFT) Up-date 1
July 7, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at Kraft Foods Inc. (KFT), the USA’s # 1 food company and #2 in the world (behind Nestlé), from a Technical POV. The overall indications, after Monday’s (July 6, 2009) market action is Bullish; in the near term Neutral, mid-term Very Bullish, and long term Bullish. The recent candle stick analysis if Bullish.
**Chart by: http://www.stockta.com
Latest News: Defensive Stocks Lift DJIA and S&P http://online.wsj.com/article/SB124687776343500083.html?ru=yahoo#mod=yahoo_hs Monday’s Market Action Close 26.44
+ .48 Volume 11,421,900/shrs
There is a Bullish Engulfing Candle on July 6 and two Gaps open up between May 5 and May 6, 2009 at 23.50/25.14, the near term resistance is 27.23, support at 25.92, and the 50 day (EMA) exponential moving average is 25.32. This is Kraft Foods Inc. (KFT): The Company manufactures and markets packaged food products and grocery products worldwide. The company offers snacks, including cookies, crackers, salted snacks, and chocolate confectionary; beverages, including coffee, packaged juice drinks, and powdered beverages; cheese, including natural, process, and cream cheeses; and grocery, including spoonable and pourable dressings, condiments, and desserts. It also offers convenient meals, including primarily frozen pizza, packaged dinners, lunch combinations, and processed meats. Kraft Foods markets its products under various brand names, primarily including Kraft cheeses, dinners and dressings; Oscar Mayer meats; Philadelphia cream cheese; Maxwell House and Jacobs coffee; Nabisco cookies and crackers and its Oreo cookie brand; Milka chocolates; and LU biscuits. It sells its products to supermarket chains, wholesalers, super centers, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores, and other retail food outlets. Competitive Landscape Demand is related to eating trends and to the changing structure of the grocery industry. Profitability for individual companies is determined by efficiency of operations. Large companies have scale advantages in procurement, production, and distribution. Small companies can compete by offering specialty goods or superior local distribution services. Despite high automation, the low value of the product produces a fairly modest US$150,000 in annual revenue per employee for commercial bakers. Bakeries Industry Forecast The output for US bakery and pasta products is forecast to grow at an annual compounded rate of 2 % between 2008 and 2013. Data Sourced: December 2008 Kraft Foods Inc. (HQ) Chairman and Chief Exec. Officer: Irene B. Rosenfeld Three Lakes Drive Northfield, IL 60093 United States Phone: 847-646-2000 Fax: 847-646-6005 http://www.kraft.com
Kraft Foods Subsidiaries Boca Foods Company
PepsiCo, Inc. (PEP) Up-date 3
July 7, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at PepsiCo, Inc. (PEP), the World's #2 carbonated soft drink maker, from a Technical POV. The overall indications, after Monday’s (July 6, 2009) market action is Bullish, in the near term Bullish, mid-term Bullish, and long term Bullish. Recent Candle Stick analysis is Neutral.
**Chart by: http://www.stockta.com
Latest News: Pepsi, Bottler Put $1 Billion Into Russia As U.S. Sags http://online.wsj.com/article/SB124687777880900033.html?ru=yahoo#mod=yahoo_hs
Monday’s Market Action Close 57.13
There are no Gaps open up or down on the Chart, the near term resistance is NIL, support at 56.08 and the 50 day (EMA) exponential moving average is 53.00. This is PepsiCo, Inc. (PEP):The PepsiCo vs. KO challenge never ends for the world's #2 carbonated soft-drink maker. Its soft drinks include Pepsi, Mountain Dew, and Slice. Cola is not the company's only beverage: Pepsi sells Tropicana orange juice brands, Gatorade sports drink, and Aquafina water. The company also owns Frito-Lay, the world's #1 snack maker with offerings such as corn chips (Doritos, Fritos) and potato chips (Lay's, Ruffles). Its Quaker Foods division offers breakfast cereals (Life), pasta (Pasta Roni), rice (Rice-A-Roni), and side dishes (Near East). A true global giant, Pepsi's products are available in some 200 countries. The Competitive Landscape Demand for non-alcoholic beverages is driven by consumer tastes and demographics. The profitability of individual companies depends on effective marketing. Large manufacturers have economies of scale in production and distribution, with average annual revenue per production worker close to US$1MM. Small companies can compete by producing new products, catering to local tastes, or selling at lower prices. Beverage Manufacture and Bottling Industry Forecast The output of US soft drinks and ice manufacturing is forecast to grow at an annual compounded rate of 4.9% between 2008 and 2013. PepsiCo, Inc. (HQ) Chairman and CEO Indra K. Nooyi 700 Anderson Hill Rd. Purchase, NY 10577-1444 United States ( Phone: 914-253-2000 Fax: 914-253-2070 http://www.pepsico.com
PepsiCo Subsidiaries Frito-Lay North America The Gatorade Company Naked Juice Company
Wells Fargo & Company (WFC) Up-date 24 July 7, 2009
Paul A. Ebeling, Jr. Analyst Today let’s look at Wells Fargo & Company (WFC), the Western USA banking Giant, from a Technical POV. The overall indications, after Monday’s (June 8, 2009) market action, are Neutral: in the near term Neutral, mid-term Neutral, and long term Neutral. The recent Candle Stick analysis is Neutral.
**Chart by: http://www.stockta.com
Latest News: Wells Fargo to expand securities business http://finance.yahoo.com/news/Wells-Fargo-to-expand-rb-1368568264.html?x=0&.v=1 Monday’s Market Action Close 23.10
There is a Bearish Harami on June 30 and a Gap open up on Apr 9, 2009 at 15.17/17.42, the near term resistance is 23.95, support at 22.46, and the 50 day (EMA) exponential moving average is 23.19
This is Wells Fargo & Company (WFC): Wells Fargo & Company, through its subsidiaries, operates as a financial services company in the United States. It operates in three segments: Community Banking, Wholesale Banking, and Wells Fargo Financial. Community Banking segment offers deposit products, including checking accounts, savings deposits, market rate accounts, retirement accounts, time deposits, and debit cards; and loan products comprising lines of credit, equity lines and loans, equipment and transportation loans, education loans, residential mortgage loans, and credit cards. This segment also provides receivables and inventory financing, equipment leases, real estate financing, small business financing, venture capital financing, cash management, payroll services, retirement plans, health savings accounts, merchant payment processing, and securities brokerage. Wholesale Banking segment provides a range of commercial, corporate, and real estate banking products and services, including commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, mezzanine financing, high-yield debt, international trade facilities, foreign exchange services, treasury management, investment management, institutional fixed income sales, interest rate, commodity and equity risk management, online products, insurance, investment banking, and mortgage brokerage services. Wells Fargo Financial segment comprises consumer finance operations that make direct consumer and real estate loans to individuals and purchase sales finance contracts from retail merchants; and auto finance operations, which purchase sales finance contracts directly from auto dealers and make loans secured by autos. This segment also provides credit cards and lease, and other commercial financing services. As of December 31, 2007, the company operated 5,964 branches and 6,900 ATMs. Wells Fargo & Company was founded in 1852 and is headquartered in San Francisco, California. Competitive Landscape Demand for banking services is closely tied to economic activity and the level of interest rates. The profitability of individual banks depends on marketing skills, efficient operations, and good risk management. Large economies of scale exist in some segments of the industry, which has encouraged industry consolidation. Smaller banks can compete successfully in segments where customer service or knowledge of the local market is more important. The industry is capital-intensive and highly automated: annual revenue per employee is close to US$300,000. Banks and Credit Unions Industry Forecast The output of US banks and credit unions is forecast to grow at an annual compounded rate of 5.1% between 2008 and 2013. Wells Fargo & Company (HQ) Chairman Richard M. Kovacevich 420 Montgomery Street San Francisco, CA 94104 United States Phone: 866-249-3302 Fax: 651-450-4033 http://www.wellsfargo.com
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