Thursday, March 8, 2007

Morning Market Comment

After more plus signs in Asian markets, along with a dip in the Yen, it's coming up roses for the bulls with firm S&P futures.

On the economic front, U.S. initial jobless claims fell 10,000 to 328,000, though the link points out that the 4-week moving average continued to scoot higher.

Upside S&P 500 targets: 38% Fibonacci retracement (I had a typo yesterday and I think wrote 50%), but 38.2% retracement is at 1406, and 50% at 1417.... no doubt resistance gets tough the further the bulls try to push it towards the 50% line. My preferred way of playing a continued upside rebound is S&P futures. An 11 point rise in futures is nice to behold, but the bulls had better hope they haven't already shot their whole wad this morning especially given the sloppy close yesterday and the lighter than usual volume seen on upward moves the last few sessions.

As pretty much every economist expected, the European Central Bank lifted its key interest rate a quarter point to 3.75%. Of greater importance is the news conference and just how hawkish or dovish ECB prez Trichet will sound (more later). Euro futures down 35 points; Yen futures are down 53 points.

Retailers have been posting their Feburary sales. It has been a mixed bag with Wal Mart continuing to show signs of struggle. Among same store sales results...

  • Wal Mart (WMT) same store sales up a weak ,9%; analysts were looking for 1.5%. WMT sees a 1% to 2% same store sales rise in March.
  • Target (TGT) up 5.7%
  • K Mart (SHLD)
  • Gap (GPS) down 4%
  • Costco (COST) sales up 4%, earnings in line at 66-cents.
  • JC Penney (JCP) up 1.6%
  • Nordstrom (JWN) up 9.1%
  • Abercrombie and Filch... errr Fitch (ANF) same store sales down 6%
  • American Eagle (AEOS) up 14%
  • How does Sharper Image (SHRP) survive? Feb comps down 24%; analysts were expecting a 16% drop.
Following consent to the FDIC's cease and desist, and the warning from Freemont (FMT) that a sale of assets may not be completed, the stock is down 10% this morning.

Among notable analyst comments this morning

  • Goldman downgraded Equity Residential (EQR) to Sell with a $50 target.
  • Goldman downgraded Archstone Smith Trust to Neutral w/$60 target.
  • Goldman upgraded Taubman to Buy from Neutral w/$66 target.
  • Goldman upgraded Kimco Realty to Buy from Neutral w/56 target.
  • Wachovia downgraded Equity Residential (EQR) and Colonial Properties (CLP) to Underperform
  • Wachovia upgraded Avalon Bay (AVB) and Essex Property Trust (ESS) upgraded to Outperform.
  • Ford (F) gets an upgrade to Neutral from Underperform with an $8 target from Credit Suisse. FBCO says F may exceed analyst expectations.

Layoffs coming at Dell? That's what BusinessWeek is reporting.

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