• The Last Five Days
    Posted by on May 17th, 2006 at 2:11 pm

    Here’s the story:
    cmr.bmp
    Consumer stocks are the black line. Early cyclicals are gold, and late cyclicals are blue.
    This is not a value-versus-growth issue (growth is actually holding up a bit better). It’s a rethinking of the economy’s prospects.
    The Dow is headed for its biggest point loss since March 24, 2003 when it dropped 307 points. But the Dow was only at 8,200 then.
    Update: Dow 11,200 has just fallen to the enemy!!

  • Hold On!
    Posted by on May 17th, 2006 at 1:34 pm

    This is turning into a rout!
    I guess yesterday was just a brief rest. The Dow (^DJI) is down over 200 points today. H-P is the only Dow component that’s up. The S&P 500 (^SPX) is down 20 points (more than 1.5%).
    The Dow Oil & Gas Index (^DJUSEN) is down over 3%. (Again.) I’ll give one to the technical analysts crowd. That index did not like the number 500. The index closed at 500.50 on April 21. Then it finished at 499.27 on May 2, and 499.21 on May 10. Now, it’s at 455.
    The cyclicals are getting creamed (largely materials and energy), but the techs are holding up surprisingly well (meaning, they’re not down as much). The Nasdaq Composite (^IXIC) is off by 1.3%
    The Buy List is taking the damage well. In fact, stocks like FactSet (FDS), Sysco (SYY) and Medtronic (MDT) are trading higher. We could wind up outperfoming the market by 40 basis points today.

  • Foreign iShares Since 2003
    Posted by on May 17th, 2006 at 12:02 pm

    Foreign markets have been the place to be. Here’s how several foreign iShares have performed since the beginning of 2003:
    Brazil (EWZ)………………..433.95%
    Austria (EWO)……………..275.42%
    Mexico (EWW)……………..242.81%
    Sweden (EWD)…………….174.01%
    Australia (EWA)……………165.13%
    South Korea (EWY)……….162.61%
    Canada (EWC)………………161.36%
    Belgium (EWK)……………..151.58%
    Spain (EWP)…………………143.78%
    Germany (EWG)……………139.12%
    Italy (EWI)…………………..116.39%
    Japan (EWJ)…………………109.14%
    France (EWQ)………………107.73%
    Switzerland (EWL)…………98.81%
    Hong Kong (EWH)…………..97.52%
    U.K. (EWU)…………………….89.00%
    Netherlands (EWN)…………82.27%
    Malaysia (EWM)……………..68.05%
    Taiwan (EWT)…………………67.08%
    By comparison, the S&P 500 Spyders ETF (SPY) is up just 52.81%.

  • Gold at 26-Year High
    Posted by on May 17th, 2006 at 11:49 am

    From The Onion:
    gold.jpg

  • Three Stocks I’m Watching
    Posted by on May 17th, 2006 at 9:39 am

    Here are three stocks I’ve been watching.
    optionsXpress Holdings (OXPS) is an online broker. As the name suggests, the company specializes in options, an area not well-served by the larger online brokers.
    The company has experienced very fast growth. For the last quarter, sales were up 73% and profits jumped 84%. Still, it reported 29 cents per share which was merely inline with forecasts so the stock has pulled back some.
    The company now has about 180,000 customers. I’ve never used the service so I can’t say how good it is, but others seem to like. My fear is that the big online guys will move to squish OXPS.
    Cintas (CTAS) is one of the largest companies that no one knows. The company makes business uniforms and other pieces of flair.
    The stock did very well through the 1990’s, but this decade has been rough. The business is still doing very well, but its valuation has crumbled. The P/E ratio has plunged from about 60 at the beginning of 1999 to just 22 today.
    This isn’t a fast-growing business, but it’s a solid, well-run company that has consistently delivered earnings. For this year, Cintas said its expects earnings of $1.92 to $1.96 a share compared with $1.74 last year.
    Investors Financial Services (IFIN) is similar to SEI Investments (SEIC). The company provides asset-administration services for the financial services industry. IFIN had a bad first quarter but the company still sees profits for the year of $2.32 a share.

  • Consumer Inflation +0.6%
    Posted by on May 17th, 2006 at 9:01 am

    This morning, the CPI for April came in at +0.6%, which topped forecasts by 0.1%. The core rate was 0.3%, which was also 0.1% higher-than-expectations.
    The market is not taking this well. Gold is up strongly in what looks to be its largest jump since 9/11. Gold reached $730 an ounce last week, but had fallen back.
    Hewlett-Packard (HPQ) had a great earnings report yesterday. Profits for its second quarter jumped 51%, and earnings from the PC division rose 69%. Even AMD (AMD) got a little rise out of the report. H-P also said that it will consolidate 85 data centers into six large centers. The move should help the company save $1 billion.
    Dell (DELL) reports tomorrow after the close.

  • Happy Birthday Wall Street
    Posted by on May 17th, 2006 at 7:08 am

    On May 17, 1792, 24 brokers signed the Buttonwood Agreement:

    We the subscribers, brokers for the purchase and sale of public stock do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day on for any persons whatsoever any kind of public stock at a less rate than one-quarter percent commission on the specie value of, and that we will give preference to each other in our negotiations.

    The first shares traded were for the Royal Googloe Parchment Seeke Co. at a price of three crowns and four shillings.
    Ok, not really, but the other stuff is true.

  • President Bush’s Financial Disclosure Form
    Posted by on May 16th, 2006 at 11:24 pm

    Just as I suspected: He’s rich.
    So is the Veep.

  • Dell Below $24
    Posted by on May 16th, 2006 at 12:57 pm

    Shares of Dell (DELL) are now below $24. Including cash, Dell is going for less than $20 a share. Earnings are due out on Thursday.

  • James Surowiecki on Hedge Funds
    Posted by on May 16th, 2006 at 12:47 pm

    In the current New Yorker (hat tip: Abnormal Returns):

    In the past five years, hedge funds have become a new power on Wall Street; the number of funds has doubled, to more than eight thousand, and the assets they control have tripled, to more than a trillion dollars. In the process, they’ve also become a favorite scapegoat for bad financial news, blamed for everything from inflating the housing bubble and demolishing stock prices to jacking up the price of oil. A German politician has called hedge funds “locusts” of the global economy, while William Donaldson, the former head of the S.E.C., has warned that “disaster” looms if hedge funds aren’t regulated. The title of a recent column made the point nicely: “Instruments of Satan.”

    Ouch.