U.S. Equity Market Cheat Sheet (October 11, 2011)

Monday, October 10th, 2011

U.S. Equity Market Cheat Sheet (October 11, 2011)

The domestic stock market as measured by the S&P 500 Index was higher this week by 2.12 percent. The figure below shows the performance of each sector in the index for the week. Eight sectors increased and two declined. The best-performing sector for the week was materials, which increased 6.21 percent. Other top-three sectors were consumer discretion and energy. Telecom services was the worst performer, down 1.36 percent. Other bottom-three performers were utilities and financials.

Within the materials sector, the best-performing stock was Monsanto, up 18.14 percent. Other top-five performers were Freeport-McMoRan Copper & Gold, Dow Chemical, Cliffs Natural Resources, and CF Industries Holdings.

Strengths

• The fertilizers & agricultural chemicals group was the best-performing group for the week, gaining 13 percent, led by its largest member, Monsanto. The firm reported fourth quarter earnings and revenue above consensus estimates. Also, a major brokerage firm upgraded the stock from neutral to overweight.
• The oil & gas refining & marketing group outperformed, up 13 percent. All four of the group members (Valero Energy, Marathon Petroleum, Sunoco, and Tesoro) rose.

• The diversified metals & mining group rose 11 percent on strength in the group’s largest member, Freeport-McMoRan Copper & Gold. The price of copper increased for the week.

Weaknesses

• Three of the real estate investment trust (REIT) groups (diversified REITs, office REITs, and industrial REITs) were among the ten worst-performing groups, down between 3 percent and 6 percent. Investors likely were expressing concern that the recovery in commercial real estate might be imperiled by potential softness in the global economy.

• The airlines group underperformed, losing 4 percent, led by its single member, Southwest Airlines. Airlines in general sold off on Monday on rumors that American Airlines was facing a possible bankruptcy.
• The diversified support service group lost 4 percent on weakness in its largest member, Iron Mountain. One brokerage firm downgraded the stock to neutral from outperform, and another brokerage firm lowered its target price on Iron Mountain.

Opportunities

• There may be an opportunity for gain in merger & acquisition transactions in 2011. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• A mid-cycle slowdown in the domestic economy would be negative for stocks.
• An escalation in concerns over sovereign debt obligations in Europe would be negative for stocks.

Tags: Agricultural Chemicals, American Airlines, Brokerage Firm, Cf Industries, Cf Industries Holdings, Chemicals Group, Domestic Stock Market, Dow Chemical, Estate Investment Trust, Fourth Quarter Earnings, Freeport Mcmoran, Freeport Mcmoran Copper, Gold, Materials Sector, Mining Group, Performing Group, Price Of Copper, Real Estate Investment, Real Estate Investment Trust, Southwest Airlines, Valero Energy
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U.S. Equity Market Cheat Sheet (August 15, 2011)

Monday, August 15th, 2011

U.S. Equity Market Cheat Sheet (August 15, 2011)

The domestic stock market was volatile this week with the S&P 500 Index losing 1.72 percent. The figure below shows the performance of each sector in the index for the week. One sector managed a small increase, and the other nine sectors declined. The best-performing sector for the week was materials which increased 0.23 percent. Other top-three sectors were healthcare and technology. Financials was the worst performer, down 5 percent. Other bottom-three performers were energy and telecom services.

Within the materials sector, the best-performing stock was CF Industries Holdings, which rose 14.69 percent. Other top-five performers were Newmont Mining, Monsanto, Sigma-Aldrich, and Praxair.

Strengths

• The fertilizers & agricultural chemicals group was the best-performing group for the week, up 6 percent, led by CF Industries Holdings. The U.S. Department of Agriculture lowered its U.S. corn and soybean production forecasts sharply this week. This news was supportive of agricultural product prices and fertilizer equities.
• Three of the top-ten outperforming groups were real estate investment trusts (REITs). Residential, retail, and office REITs rose between 3 percent and 6 percent. At least two brokerage firms published reports pointing out that the spread between the dividend yield on REITs and the yield on the 10-year U.S. Treasury note is above the historical average spread, implying that REITs are attractive.
• The broadcasting group outperformed, gaining 5 percent. All three of the group members (CBS, Discovery Communications, and Scripps Networks Interactive) reported earnings the prior week which exceeded the consensus analysts’ estimates.

Weaknesses

• The education services group underperformed, losing 10 percent, led down by Devry. The for-profit educational firm warned that new student enrollment is lagging due to the economy, new government regulations regarding higher education, and an industry-wide reversion toward historical levels of enrollment after several years of exceptional enrollment growth.
• Several financial-related groups (regional banks, investment banking & brokerage, thrifts & mortgage finance, real estate services, and other diversified financial services) underperformed, falling from 8 percent to 11 percent.
• The construction materials group lost 10 percent, led down by its single member, Vulcan Materials. A major brokerage firm reiterated its “sell” rating on the stock, citing macro concerns and the uncertain impact of government spending on infrastructure continuing to weigh heavily on the stock.

Opportunities

• There may be an opportunity for gain in merger and acquisition (M&A) transactions in 2011. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• A mid-cycle slowdown in the domestic economy would be negative for stocks.
• An escalation in concerns over sovereign debt obligations in Europe would be negative for stocks.

Tags: Agricultural Chemicals, Agricultural Product Prices, Brokerage Firms, Cf Industries, Cf Industries Holdings, Chemicals Group, Consensus Analysts, Discovery Communications, Dividend Yield, Domestic Stock Market, Educational Firm, Infrastructure, Materials Sector, Newmont Mining, Real Estate Investment, Real Estate Investment Trusts, Scripps Networks, Sigma Aldrich, Soybean Production, Treasury Note, U S Treasury
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U.S. Equity Market Cheat Sheet (June 20, 2011)

Saturday, June 18th, 2011

U.S. Equity Market Cheat Sheet (June 20, 2011)

The figure below shows the performance of each sector in the S&P 500 Index for the week. Seven sectors gained and three declined. The best-performing sector for the week was consumer staples which increased 1.20 percent. Other top-three sectors were industrials and utilities. Materials was the worst performer, down 1.96 percent. Other bottom-three performers were energy and technology.

Within the consumer staples sector, the best-performing stock was Lorillard, which rose 11.51 percent. Other top-five performers were Tyson Foods, Walgreen, Colgate-Palmolive, and Brown-Forman.

Strengths

• The healthcare facilities group was the best-performing group for the week, up 8 percent, led by its single member, Tenet Healthcare.
• The retail computer & electronics group outperformed, rising 6 percent on strength in member Best Buy. The retailer reported first quarter earnings and revenue above the consensus estimates.
• The apparel & accessory group outperformed, up 4 percent. Group member VF Corp. agreed to buy Timberland for about $2 billion in cash in an effort to add scale to its outdoor clothing offerings.

Weaknesses

• The metal & glass containers group was the worst performer, losing 6 percent, led down by member Owens-Illinois. The manufacturer of glass containers announced that it expects second quarter earnings to be lower than originally forecast because of disappointing demand and supply chain problems.
• The fertilizer & agricultural chemicals group fell 6 percent with both group members (Monsanto and CF Industries Holdings) declining. The Senate voted for ending the ethanol subsidy. The vote was to amend an economic development bill which may not pass.
• The coal & consumable fuel group underperformed, down 5 percent. All three members of the group sold off with the weakness probably related to the decline in the price of crude oil during the week.

Opportunities

• There may be an opportunity for gain in merger & acquisition transactions in 2011. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• The end of quantitative easing currently scheduled by the Federal Reserve for the end of June might result in a weaker economy.
• The nuclear disaster in Japan creates uncertainty, which is not good for stock prices.

Tags: Accessory Group, Agricultural Chemicals, Best Buy, Cf Industries, Cf Industries Holdings, Chemicals Group, Colgate Palmolive, Consumer Staples, Crude Oil, Ethanol Subsidy, Facilities Group, Fuel Group, Glass Containers, Owens Illinois, Performing Group, Price Of Crude Oil, Retail Computer, Second Quarter Earnings, Tenet Healthcare, Tyson Foods, Vf Corp
Posted in Markets, Oil and Gas | Comments Off

U.S. Equity Market Cheat Sheet (May 30, 2011)

Sunday, May 29th, 2011

U.S. Equity Market Cheat Sheet (May 30, 2011)

The figure below shows the performance of each sector in the S&P 500 index for the week. Three sectors gained, and seven sectors declined. The best-performing sector for the week was materials which rose 2.07 percent. Other top-three sectors were energy and telecom services. Utilities were the worst performer, down 1.65 percent. Other bottom-three performers were healthcare and consumer staples.

Within the materials sector the best-performing stock was CF Industries Holdings which rose 11.6 percent. Other top-five performers were AK Steel Holding, Freeport-McMoRan Copper & Gold, Monsanto, and Newmont Mining.

Strengths

• The diversified metals & mining group was the best-performing group for the week, up 7 percent, led by its single member, Freeport-McMoRan Copper & Gold. The prices of copper and gold were both up for the week.
• The fertilizer & agricultural chemicals group outperformed, up 6 percent, driven by strength in both of its members (Monsanto and CF Industries Holdings). Corn prices are up from their May low. A major brokerage firm upgraded CF Industries from “Neutral” to “Overweight,” citing its valuation, solid cash low characteristics, strong crop prices, and a favorable outlook for agricultural fundamentals in the year ahead.
• The specialty stores group outperformed, rising 5 percent. Tiffany & Company advanced sharply after reporting quarterly earnings and revenue above the consensus estimates. The firm also raised its earnings guidance for the full year.

Weaknesses

• The healthcare services group was the worst performer, down 4 percent, led by Medco Health Solutions. Pharmacy benefits manager Medco said that, after this year, it will lose its contract to handle mail order and specialty drug benefits for the Federal Employees Health Benefits Program, a program that provides it with about $3 billion a year in revenue.
• The airlines group underperformed, losing 4 percent on weakness in the stock of its single member, Southwest Airlines. High winds and hail affected the air traffic pattern in Dallas this week. Southwest said it expected to cancel or delay an undetermined number of flights as it checks eight aircraft for damage.
• The electronic equipment & instruments group fell 3 percent on weakness in its single member, FLIR Systems. The company said it will pay two former executives $39 million to settle claims over the firm’s use of infrared technology obtained through a past acquisition.

Opportunities

• There may be an opportunity for gain in merger & acquisition (M&A) transactions in 2011. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable time frame, it could be a threat to stock prices.
• The end of quantitative easing currently scheduled by the Federal Reserve for the end of June might result in a weaker economy.
• The nuclear disaster in Japan creates uncertainly, which is not good for stock prices.

Tags: Agricultural Chemicals, Ak Steel Holding, Amp Company, Cf Industries, Cf Industries Holdings, Chemicals Group, Consumer Staples, Corn Prices, Favorable Outlook, Federal Employees Health, Federal Employees Health Benefits, Federal Employees Health Benefits Program, Freeport Mcmoran, Freeport Mcmoran Copper, Health Benefits Program, Healthcare Services Group, Mail Order, Medco Health, Medco Health Solutions, Newmont Mining
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U.S. Equity Market Cheat Sheet (May 23, 2011)

Sunday, May 22nd, 2011

U.S. Equity Market Cheat Sheet (May 23, 2011)

The figure below shows the performance of each sector in the S&P 500 Index for the week. Four sectors gained and six sectors declined. The best-performing sector for the week was energy which rose 0.85 percent. The other top sectors were consumer staples and utilities. Technology was the worst performer, down 1.52 percent. The other bottom performers were industrials and consumer discretion.

Within the energy sector, the best-performing stock was Newfield Exploration Co. which rose 6.89 percent. Other top performers were El Paso Corp., Range Resources Corp., Southwestern Energy Co., and QEP Resources Inc.

Strengths

• The building products group was the best-performing group for the week, up 8 percent, led by its single member, Masco Inc.
• The fertilizer and agricultural chemicals group was the second-best performer, gaining 4 percent. The stocks of both members of the group (Monsanto Co. and CF Industries Holdings Inc.) rose.
• The consumer finance group outperformed, rising 4 percent. The April master trust credit card filings data showed that both net credit losses and delinquencies on credit cards continued to decline. The stocks of American Express Co., Capitol One Financial Corp., and Discover Financial Services Co. increased for the week.

Weaknesses

• The specialty stores group was the worst performer, down 12 percent, led down by Staples Inc. The office supply firm reported quarterly earnings below the consensus estimate and it lowered its full-year outlook.
• The retail apparel group underperformed, losing 5 percent. Group member Gap Inc. sold off sharply after significantly lowering its fiscal year 2011 profit forecast, citing cost inflation caused by surging cotton prices and increased pay for workers who make clothes in China and other parts of Asia.
• The semiconductor equipment group declined 5 percent. A major brokerage firm lowered its rating on the group from “neutral” to “cautious,” citing looming excess supply because of recent strong capital expenditures. The report downgraded KLA Tencor Corp to “sell” from “neutral” and Applied Materials Inc. to “neutral” from “buy.”

Opportunities

• There may be an opportunity for gain in merger & acquisition (M&A) transactions in 2011. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable timeframe, it could be a threat to stock prices.
• The end of quantitative easing currently scheduled by the Federal Reserve for the end of June might result in a weaker economy.
• The nuclear disaster in Japan creates uncertainty, which is not good for stock prices.

Tags: Agricultural Chemicals, American Express Co, Brokerage Firm, Cf Industries, Cf Industries Holdings, Cf Industries Holdings Inc, Chemicals Group, Consensus Estimate, Consumer Staples, Credit Losses, Discover Financial Services, Financial Services Co, Gap Inc, Monsanto Co, Newfield Exploration, Newfield Exploration Co, Range Resources Corp, Semiconductor Equipment Group, Southwestern Energy Co, Staples Inc
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U.S. Equity Market Cheat Sheet (April 11, 2011)

Sunday, April 10th, 2011

U.S. Equity Market Cheat Sheet (April 11, 2011)

The figure below shows the performance of each sector in the S&P 500 Index for the week. Three sectors increased and seven decreased. The best-performing sector for the week was consumer staples which rose 0.51 percent. Other top-three sectors were materials and healthcare. Industrials was the worst performer, down 1.44 percent. Other bottom-three performers were telecom services and consumer discretion.

Within the consumer staples sector, the best-performing stock was Dean Foods which rose 5.09 percent. Other top-five performers were Constellation Brands, Supervalu, CVS Caremark and Costco Wholesale.

Strengths

• The home furnishings retail group was the best-performing group for the week, up 10 percent, led by its single member, Bed Bath & Beyond. The firm reported quarterly earnings which handily beat the consensus forecast, and it guided earnings for the current fiscal year above the consensus forecast.
• The gold group was the second-best performer, gaining 7 percent on the strength of its single member, Newmont Mining. The price of gold increased during the week.
• The diversified metals & mining group outperformed, increasing by 4 percent. The stock of the group’s largest member, Freeport McMoRan Copper & Gold, increased as the prices of copper and gold increased.

Weaknesses

• The airlines group was the worst-performing group, losing 8 percent on weakness in the group’s single member, Southwest Airlines. Airlines sold off as the price of crude oil rose to a new 12-month high.
• The fertilizers & agricultural chemicals group underperformed, down 8 percent, led by its largest member, Monsanto. The firm reported fiscal second quarter earnings above the consensus estimate, but it reiterated its earnings forecast for the current fiscal year, a level which was below the analyst consensus.
• The motorcycle manufacturers group lost 6 percent, led down by its single member, Harley-Davidson. A major brokerage firm report estimated that Harley-brand U.S. retail sales at the dealer level decreased 6 percent year-over-year during March.

Opportunities

• There may be an opportunity for gain in merger & acquisition (M&A) transactions in 2011. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable timeframe, it could be a threat to stock prices.
• Quantitative easing currently being implemented by the Federal Reserve might result in unintended consequences.
• The nuclear disaster in Japan creates uncertainly, which is not good for stock prices.

Tags: Agricultural Chemicals, Analyst Consensus, Chemicals Group, Consensus Estimate, Constellation Brands, Consumer Staples, Costco Wholesale, Dean Foods, Freeport Mcmoran, Freeport Mcmoran Copper, Gold, Gold Group, Manufacturers Group, Mining Group, Motorcycle Manufacturers, Newmont Mining, oil, Performing Group, Price Of Crude Oil, Quarterly Earnings, Second Quarter Earnings, Southwest Airlines
Posted in Energy & Natural Resources, Gold, Markets, Oil and Gas | Comments Off

U.S. Equity Market Diary (October 18, 2010)

Saturday, October 16th, 2010

U.S. Equity Market Diary (October 18, 2010)

The figure shows the performance of each sector in the S&P 500 Index for the week. Eight sectors gained and two declined. The best-performing sector was technology, up 3.9 percent. Other better-performing sectors included consumer staples and energy. The three worst-performing sectors were financials, industrials and telecom services.

Within the technology sector the best-performing stock was Western Digital Corp., up 10 percent. Other top-performers were Apple, EMC, Dell and Lexmark International.

Strengths

• The fertilizer & agricultural chemicals group was the best-performing group for the week, gaining 11 percent. Both stocks in the group—CF Industries Holdings and Monsanto—have appreciated following the U.S. Department of Agriculture’s cut in the corn yield forecast last Friday.
• The internet software & services group outperformed, up 10 percent. Google led the group after reporting third quarter earnings substantially above the analyst consensus estimate. Following the earnings report several analysts raised their price targets for the stock.
• The distributors group outperformed, rising 6 percent, led by its single member, Genuine Parts Co. The distributor of automotive and industrial replacement parts reported third quarter earnings and revenue above the consensus estimate.

Weaknesses

• The education services group was the worst-performing group, down 24 percent. The for-profit education company Apollo Group withdrew its prior preliminary business outlook for fiscal 2011 due to continued low enrollment figures for the University of Phoenix. These comments led to wide-spread declines in the stocks of other for-profit education companies.
• The home entertainment software group (Electronic Arts) underperformed, losing 10 percent. The U.S. sales of video-game hardware, software and accessories fell 8 percent in September from the same time period a year earlier.
• Three bank-related groups (other diversified financial services, diversified banks and regional banks) were among the 10 groups with the largest declines. This weakness among banks appeared to be related to concern over mortgage buybacks. Additionally, there has been concern over the slowdown/halt of mortgage foreclosures by banks.

Opportunities

• There may be an opportunity for gain in M&A (merger & acquisition) transactions in 2010. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable time frame, it could be a threat to stock prices.
• As governments around the world begin to wind down the monetary and fiscal stimulus programs put in place during the economic crisis, it will likely present a headwind for stocks.

Tags: Agricultural Chemicals, Amp Services, Analyst Consensus, Apollo Group, Cf Industries, Cf Industries Holdings, Chemicals Group, Consensus Estimate, Consumer Staples, Education Services Group, Genuine Parts Co, Google, Home Entertainment Software, International Strengths, Lexmark International, Market Diary, Same Time Period, University Of Phoenix, Video Game Hardware, Western Digital Corp
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U.S. Equity Market Diary (October 11, 2010)

Sunday, October 10th, 2010

U.S. Equity Market Diary (October 11, 2010)

The figure below shows the performance of each sector in the S&P 500 Index for the week. Nine sectors gained and one declined. The best-performing sector was materials, up 3.2 percent. Other better-performing sectors included industrials and energy. The three worst-performing sectors were telecom services, utilities, and consumer staples.

Within the materials sector the best-performing stock was CF Industries Holdings Inc., up 16 percent. Other top-five performers were Dow Chemical Co., Freeport-McMoRan Copper & Gold Inc., Monsanto Co. and Alcoa Inc.

Strengths

• The automobile manufacturing group was the best-performing group, rising 11 percent, led by its single member, Ford Motor Co. Moody’s raised Ford’s credit rating two notches to Ba2, saying the company is well positioned to continue generating strong earnings and cash flow through 2011 and to further strengthen its balance sheet.
• The motorcycle manufacturer group was the second-best performing group, up 11 percent, led by its single member, Harley-Davidson Inc. A brokerage firm reiterated its “outperform” rating and raised its price target for the stock, citing an encouraging September sales report.
• The fertilizer & agricultural chemicals group outperformed, gaining 8 percent on the strength of CF Industries Holdings Inc. The firm’s stock rose after the U.S. government cut a corn crop forecast and Reuters reported that Rio Tinto Plc is interested in bolt-on acquisitions in a range of sectors, including potash.

Weaknesses

• The consumer finance group was the worst-performing group, down 5 percent, led by American Express Co. The Justice Department filed a civil antitrust lawsuit against the company challenging rules the company has in place that prevent merchants from offering consumers discounts, rewards and information about card costs.
• The diversified support service group underperformed, losing 4 percent, led down by Iron Mountain Inc. The information management company forecast weaker-than-expected 2011 results, citing continued soft core service activity levels.
• The wireless telecom services group underperformed, losing 3 percent, led by Sprint Nextel Corp. The Florida State Attorney General said his office reached a settlement agreement with Sprint regarding billing for third-party charges on consumers’ cell phone bills.

Opportunities

• There may be an opportunity for gain in M&A (merger & acquisition) transactions in 2010. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable time frame, it could be a threat to stock prices.
• As governments around the world begin to wind down the monetary and fiscal stimulus programs put in place during the economic crisis, it will likely present a headwind for stocks.

Tags: Agricultural Chemicals, Alcoa Inc, American Express Co, Automobile Manufacturing, Cf Industries, Cf Industries Holdings, Cf Industries Holdings Inc, Chemicals Group, Consumer Staples, Corn Crop, Dow Chemical Co, Ford Motor Co, Freeport Mcmoran, Freeport Mcmoran Copper, Harley Davidson Inc, Market Diary, Monsanto Co, Motorcycle Manufacturer, Price Target, Rio Tinto Plc
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U.S. Equity Market Diary (October 4, 2010)

Saturday, October 2nd, 2010

US Equity Market Diary (October 4, 2010)

The figure below shows the performance of each sector in the S&P 500 Index for the week. Three sectors gained and seven declined. The best-performing sector was energy, up 2.5 percent. Other better-performing sectors included telecom services and utilities. The three worst-performing sectors were financials, technology and consumer discretion.

Within the energy sector the best-performing stock was EQT Corp, up 8 percent. Other top-five performers were Cabot Oil & Gas Corp., Diamond Offshore Drilling Inc., Baker Hughes Inc. and Occidental Petroleum Corp.

Strengths

• The healthcare facilities group was the best-performing group, up 7 percent, led by its single member, Tenet Healthcare Corp. An article in The Washington Post maintained that the trend of consolidation in the hospital industry results in higher healthcare prices and other benefits for hospitals.
• The retail drug group outperformed, rising 6 percent. Walgreen Co. reported quarterly earnings above the consensus estimate. The company’s gross profit margin increased year-over-year. Pharmacy margins benefited from new generic drug introductions. General merchandise margins increased due to pricing, promotions and improved efficiencies.
• The airlines group gained 5 percent on the strength of its single member, Southwest Airlines Co. The company announced that it has entered into a definitive agreement to acquire all of the outstanding common stock of AirTran Holdings, Inc., the parent company of AirTran Airways.

Weaknesses

• The fertilizer & agricultural chemicals group was the worst-performer, down 11 percent, led by Monsanto Co. The world’s largest seed company fell amid concerns that its new corn seeds are not performing as well as expected.
• The food distributor group lost 5 percent. The stock of its single-member, Sysco Corp., was downgraded from “Buy” to “Hold” by a major brokerage firm, saying that the competitive front remains intense, and that this could offset top-line momentum and limit margin expansion.
• The retail internet group underperformed, losing 4 percent, led down by Amazon.com Inc. A brokerage house analyst cut his rating on the stock from “Buy” to “Hold” on a valuation basis.

Opportunities

• There may be an opportunity for gain in M&A (merger & acquisition) transactions in 2010. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable time frame, it could be a threat to stock prices.
• As governments around the world begin to wind down the monetary and fiscal stimulus programs put in place during the economic crisis, it will likely present a headwind for stocks.

Tags: Airtran Airways, Airtran Holdings, Airtran Holdings Inc, Baker Hughes Inc, Cabot Oil, Chemicals Group, Consensus Estimate, Corn Seeds, Diamond Offshore Drilling, Diamond Offshore Drilling Inc, Gross Profit Margin, Market Diary, Monsanto Co, Occidental Petroleum Corp, Offshore Drilling Inc, oil, Southwest Airlines, Southwest Airlines Co, Sysco Corp, Tenet Healthcare Corp, Walgreen Co
Posted in Energy & Natural Resources, Markets, Oil and Gas | Comments Off

U.S. Equity Markets Diary (September 7, 2010)

Saturday, September 4th, 2010

U.S. Equity Market Diary (September 7, 2010)

The figure below shows the performance of each sector in the S&P 500 Index for the week. All ten sectors gained. The best-performing sector was financials, up 5.7 percent. Other better-performing sectors included consumer discretion and industrials. The three worst-performing sectors were utilities, telecom services and healthcare.

Within the financials sector, the best-performing stock was Hartford Financial Services Group Inc., up 10 percent. Other top-five performers in the sector were Principal Financial Group Inc., Unum Group, Apartment Investment & Management Co. and E-Trade Financial Corp.

Strengths

• The diversified metals & mining group was the best-performing group for the week, up 10 percent. The group was led by its largest member, Freeport-McMoRan Copper & Gold, as the prices of copper and gold increased during the week.
• The real estate services group outperformed, rising 9 percent on the strength of its single member, CB Richard Ellis Group. The large commercial real estate broker and leasing agent is benefiting from a rebound in commercial real estate activity.
• The Internet retail group advanced 8 percent. The group’s largest member, Priceline.com, gained 5 percent, and its second-largest member, Amazon.com, rose 10 percent.

Weaknesses

• The distiller & vintners group was the worst-performing group, down 3 percent. The group was led down by Brown-Forman Corp. which reported quarterly earnings below the consensus estimate.
• The fertilizers & agricultural chemicals group underperformed, declined 2 percent, led down by Monsanto Co. On Friday, a press report stated that the Arkansas Attorney General’s office is launching an inquiry into the marketing practices of Monsanto and its Roundup Ready 2 Yield soybean trait.
• The special consumer services group underperformed, losing 2 percent. Led down by its single member, H&R Block Inc. The company reported a loss from continuing operations in its first fiscal quarter that was slightly less than it reported for the same period last year, and slightly less than the analyst consensus loss estimate.

Opportunities

• There may be an opportunity for gain in M&A (merger & acquisition) transactions in 2010. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable time frame, it could threaten stock prices.
• As governments around the world begin to wind down monetary and fiscal stimulus programs put in place during the economic crisis, it will likely present a headwind for stocks.

Tags: Arkansas Attorney General, Brown Forman Corp, Cb Richard Ellis, Chemicals Group, Commercial Real Estate Broker, E Trade Financial, E Trade Financial Corp, Estate Services Group, Financial Group Inc, Financial Services Group, Financial Services Group Inc, Freeport Mcmoran, Freeport Mcmoran Copper, Gold, Hartford Financial, Hartford Financial Services, Hartford Financial Services Group, Hartford Financial Services Group Inc, Monsanto Co, Principal Financial Group, Principal Financial Group Inc
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