CAVEAT EMPTOR – BUYER BEWARE! This week brings retail reports….more on that later!
Monday’s Round-up!
Dow: 12,876,31 – up 130.43 points (+1.02)
S&P 500: 1,403.58 – up 15.30 points (+1.10%)
Nasdaq: 2488.50 – up 43.00 points (+1.76%)
Russell 2000: 733.23 – up 9.90 points (+1.83%)
The overall markets shrugged off a number of negative headlines today including
- High Oil Prices
- A huge earthquake in China
- A loss from Sprint Nextel (S)
- Plus a warning from Fedex (FDX) last Friday evening
Fedex was as low as $87.59 but managed to finish positive by days’ end, rising to $90.50 (+ $0.13).
Despite relatively low volume and concerns over today’s action being a short-covering rally, the strength in the markets remained throughout the day. This will be a very busy week with economic data and earnings reports, so we will soon find out if the strength will be maintained.
Earnings Reports
Tuesday: Wal-Mart (WMT), Applied Materials (AMAT), Whole Foods (WFMI).
Wednesday: Arcelor Mittal (MT), Diana Shipping (DSX), Deere (DE), Freddie Mac (FRE), Macy’s (M), Sony (SNE), Ctrip.com (CTRP), Jack In The Box (JBX), Agilent (A), PetsMart (PETM).
Thursday: Blackstone (BX), Blockbuster (BBI), Urban Outfitters (URBN), Focus Media (FMCN), Hewlett-Packard (HPQ), Kohl’s (KSS), Nordstrom (JWN), Salesforce.com (CRM), Thornburg Mortgage (TMA), JC Penney (JCP).
Friday: Abercrombie & Fitch (ANF).
In techland, Research In Motion (RIMM) announced it would launch the new Blackberry Bold later this summer. This device is expected to lightly compete with Apple‘s iPhone. RIMM’s shares gapped higher at the market open and rose throughout the day. RIMM finished higher by $9.20 today, rising to a new 52-week high of $141.97 (+6.93%).
The new Blackberry BOLD is expected to have much improved screen resolution compared to the Curve model, dual band Wi-Fi and GPS capabilities (look out Garmin!). AT&T will be the exclusive supplier since its network is the only nationwide one compatible with the new Bold handset. Analysts expect to sell 200,000 to 400,000 handsets.
Apple (AAPL) also rose by $4.71 to finish at $188.16 (+2.57%). Both Apple and Research In Motion continue to stay above their respective 5-day EMAs. Apple is starting to look a little toppy but the bulls still remain in control of this high-flyin’ stock.
In other positive news today, there were more reports that the iPhone had sold out in online stores inside the US and the UK. So, the ‘lack of demand’ story today is one we can gloss past…
The S&P 500 held a critical support level today, its 20-day EMA, and also regained its 5-day EMA (albeit barely). For now, the up trend that was created with the latest March low is still intact. The 1,400 to 1,420 area remains overhead resistance.
Today, the Dow crept back above its 20-day EMA and is peeking over its 5-day EMA. Again, the up trend that developed since late March is still intact. Volume was on the light side and is a bit worrisome.
The RIMM and AAPL Composite, oops—the Nasdaq, roared higher today and reclaimed its 5-day EMA. The 2,500 level continues to provide resistance for now.
While today was a great day to be a bull, the rest of the week offers lots of opportunities for the bears to exert influence. Tuesday at 8:30am EDT, we will receive the Retail Sales report. Briefing.com is expecting 0.50%, while analysts’ consensus has the number arriving at 0.20%. The discrepancy is evidence of the ‘guesswork’ in the mainstream media. Wal-Mart also reports Tuesday. Many expect WMT to beat their estimates and even raise guidance as the consumer continues to be strapped for cash and hence frequent discount stores like Walmart. Finally, we rounded out our last two week’s of bearish trades with a bullish position this week, so whichever way the market goes, we should be in good shape!
