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Börsipäev 18. november

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  • Rev Shark:

    Reasons We Could Move Higher
    11/18/2005 8:53 AM EST

    "Who feels no ills, should, therefore, fear them; and when fortune smiles, be doubly cautious, lest destruction come remorseless on him, and he fall unpitied.

    -- Sophocles

    The irony of a market that is acting as well as this one is that the more positive sentiment becomes, and the more confident the bulls are, the higher the chances we will pull back. When everyone is feeling very good about the market, the more likely it is that they do not have uninvested cash and the less fuel there is to keep the move going.

    The big problem with trying to time the market here is that we really don't know how much untapped buying power is left. You would think that given the big move we've already had that the bulls must be getting a little low on cash. However, we are also at that time of the year when money is contributed to retirement plans, bonuses are paid and there tends to be net inflows into the market.

    Sector rotation can also keep the move going in some areas of the market as investors rotate out of old leaders and into new leaders. This can create strong momentum in certain groups like big-cap technology while interest rate-sensitive stocks like homebuilders, energy and others lose steam.

    In addition to rising interest rates and real estate prices stalling, money may be flowing out of certain asset classes and into equities. The allocation trade out of bonds and real estate has the greatest potential to keep a move in equities going. Reallocation of assets is by far the biggest driver of new capital into the market and we really have no idea to what extent that may continue.

    I've also heard talk about renewed foreign interest in the U.S. equities markets. The U.S. has lagged many of its international counterparts recently and some are seeing relative value here. That also has the potential to provide a large pool of buying capital.

    Even with these potential pools of new capital for equities, this market is running awfully hot right now. The faster and higher we run the more likely we will see a very sharp pullback. However, this is clearly a bull market and a sharp dip is likely to be a buying opportunity and not the beginning of a major downtrend.

    After some good earnings reports we have another strong open on the way. Overseas markets on up strongly, oil is down and gold is trading up. I'm looking for gold to make another move up soon.

    Gary B. Smith:

  • UBS downgrades Nucor (NUE 64.62) to Neutral from Buy, citing the stock's 13% move in the past two months (trading near its peak) amid uncertain territory for steel pricing

    UBS upgrades the new AT&T (SBC 24.17) to Buy from Neutral and sets a $28 tgt, given the co's attractive valuation and expectations for cash flow growth beyond 2006

    Banc of America initiates NRG Energy (NRG 41.70) with a Buy and $50 tgt, as they believe significant unhedged capacity in New England and the contribution from Texas should boost cash flows, earnings and valuations

    Banc of America downgrades Activision (ATVI 16.25) to Neutral from Buy and lowers tgt to $18 from $21 on valuation

    CIBC downgrades Disney (DIS 25.99) to Underperform from Mkt Perform following weaker than expected Q4 operating results offset by higher share repurchases; they think it is premature to suggest multiple expansion.

    Morgan Stanley downgrades JP Morgan (JPM 37.93) to Equal-weight from Overweight based on valuation as well as their expectation that the catalysts needed to drive the next leg-up for the shares will not fall in place until 2H06

    Morgan upgrades Union Pacific (UNP 73.76) to Neutral from Underweight; although the co remains operationally challenged, firm doesn't see any downside catalysts and suspects that a favorable mgmt change and UNP's long-term potential will drive a continued upward drift in the stock

    Morgan Stanley downgrades Canadian Pacific (CP 40.95) to Equal Weight from Overweight, as they are concerned with the co's long-term EPS growth rate in a period of the industry's best pricing and in a year of $100 mln cost cuts

    Morgan Stanley upgrades Canadian Nationa (CNI 77.09) to Overweight from Equal Weight and $90 tgt, as they believe the co has less execution risk and is attractive on a free cash flow basis

    Lehman Brothers downgrades Gap (GPS 18.51) to Equal Weight from Overweight and a $19 tgt based on lowered guidance

    Goldman Sachs initiates the US homebuilder industry with a Cautious coverage view, as they believe that new home sales will decline 15% over the next 12-36 months driven by strained affordability in several key states and the unique inter-dynamics of supply and demand in the housing sector. Firm further believes that homebuilder stocks will trade down with new home sales activity as the historical tight correlation between the stocks and new home sales activity will persist. Firm rates LEV, RYL, TOL as Underperform; and HOV, MHO, and MTH as Outperform. Soovitan pilgu visata eelturul ka BZH-le, mis teatas aktsate tagasiostuplaanist. Pilt ei paistagi nii kurb.

    Wachovia initiates Campbell Soup (CPB 29.45) with a Market Perform, as they believe a weak European retail environment, sustained cost inflation and soup competition have created near-term volume and profitability uncertainty

  • Üks lahe lähenemine turule: the market has to pump something in order to get people to bet. These days you can bet on anything, be it stocks, bonds, real estate, currencies, commodities, football games, the weather, Paris Hilton's next sex partner, basically anything.

    The stock market is like a group of flashing signs that says play me, play me, no me! Numbers go up, numbers go down. Long, no short, Short, no long! If there was such a thing as a global pinball machine, then the human race has successfully engineered it.

    Today's credo: "I" have money, so "I" am entitled.
  • Vaatame kuidas liigub?

    AEterna Zentaris (AEZS) announces it has completed enrollment of 144 patients for a Phase II trial with ozarelix (D-63153) in benign prostatic hyperplasia, more than four months ahead of schedule. The trial is being conducted in Europe with the collaboration of Spectrum Pharmaceuticals (SPPI) and results are expected to be disclosed during the second half of 2006.

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