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Have You Heard?

May 02, 2011 8:50 AM ET
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David Moenning's Blog
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Portfolio Strategy, ETF investing, Long/Short Equity

Seeking Alpha Analyst Since 2009

David Moenning is founder and Chief Investment Officer at Heritage Capital Research, a Registered Investment Advisor. Heritage is an independent, privately owned, investment management firm located in the Denver area. Mr. Moenning has more than 33 years of portfolio management experience and focuses on a risk-managed approach to capital markets via modernized portfolio development and dynamic adaptation to ever-changing macro environments. Most recently Chief Investment Officer for a $1.3 billion RIA firm.

Daily State of the Markets 
Monday Morning - May 2, 2011

Good morning. While perhaps not on the same magnitude as word that either of the Kennedy's or MLK had been shot, or that man had actually set foot on the moon, the news that Osama bin Laden had been killed at the hands of the U.S. military will likely cause one to remember where they were when they got the news. I, for one, was just taking my seat on a Frontier Airlines flight which would soon be bound for San Diego, where NAAIM's (National Association of Active Investment Managers) national meeting is being held.

As I buckled in, I got a text message from my daughter on my nifty new HTC Thunderbolt (and for the record, 4G and the bigger screen were the deciding factors in that purchase) that read, "Have you heard?" Given that my youngest is a senior in high school and only has something like nine days of school left, my assumption was that my daughter was texting to tell me something about the dog or that her latest concert adventure was finally planned. So, imagine my surprise when the next text I received read, "Osama bin Laden is dead."

To be sure, this caused me to snap to attention. Instead of a sleepy flight heading west into the dark of night, the airplane was soon buzzing. Soon, the words, "have you heard?" could be heard up and down the aisle. And given that Frontier still has those little T.V. screens on the seat in front of you, it wasn't long before everybody on the plane figured out how to tune in to NBC, CBS, or CNN.

To my surprise, there was no whooping it up, no fist pumping, or chants of "U-S-A!" No, given that the enormity of the 9/11 tragedy is likely still with each and every American, this plane full of people kept pretty quiet - although plenty of passengers were none too happy that the flight attendant, who obviously had not heard, continued to yammer on about the beverage choices, the snacks available, and the fact that Frontier only accepts credit and debit cards while the President was giving the nation work of bin Laden's demise.

As any true market geek would, I immediately tapped my stock market app on the phone and pulled up the latest quote of the emini S&P futures. And sure, enough, the traders who were working late on a Sunday evening were celebrating. However, given that silver was also down about 10%, I'm not completely sure the "Have you heard" rally is going to last too terribly long.

We need to remember that the bottom line in the stock market is, well, the bottom line. And given that (a) Wall Street is a cold-hearted place and (b) stocks have been moving in a straight up fashion on the tails of strong earnings, decent economic data, and a renewed plunge in the dollar, it is important to note that stocks have become overbought and are due for at least some sort of a pullback in the near future. Therefore, while the news that public enemy #1 is no longer a threat is certainly good, I'm going to keep my emotions in check and continue to watch the action as objectively as possible. After all, you never know when the next "have you heard?" is going to crop up.

Turning to this morning... Most of the overseas markets that were open overnight advanced on the bin Laden news. However, the S&P futures are off their highs at this point.

On the Economic front... We don't have any economic data to reveiw before the bell this morning, but we will get reports on Construction Spending and ISM at 10:00 am.

Thought for the day: Try not to let success go to your head or defeat into your heart...

Pre-Game Indicators

Here are the Pre-Market indicators we review each morning before the opening bell...


  • Major Foreign Markets:
    • Australia: -0.06%
    • Shanghai: +0.87%
    • Hong Kong: Closed
    • Japan: +1.57%
    • France: -0.36%
    • Germany: +0.78%
    • London: Closed

  • Crude Oil Futures: -$1.42 (May contract) to $112.51
  • Gold: -$3.80 to $1552.60
  • Dollar: lower against the Yen and Euro, higher vs. Pound.
  • 10-Year Bond Yield: Currently trading at 3.312%
  • Stocks Futures Ahead of Open in U.S. (relative to fair value):
    • S&P 500: +6.84
    • Dow Jones Industrial Average: +69
    • NASDAQ Composite: +16.37


Wall Street Research Summary


  • Sanmina-SCI (SANM) - Argus
  • EMC (EMC) - BAC/ML
  • Netflix (NFLX) - Citi
  • Curtiss-Wright (CW) - Deutsche Bank
  • Alcoa (AA) - Goldman Sachs
  • Zebra Technologies (ZBRA) - JPMorgan
  • Range Resources (RRC) - Stephens



  • VFC Corp (VFC) - Citi
  • Lubrizol (LZ) - Jefferies
  • Whole Foods (WFMI) - Jefferies
  • Applied Materials (AMAT) - JPMorgan
  • ResMed (RMD) - Morgan Stanley
  • Host Hotels (HST) - UBS


    Today's Earnings Before The Bell



    DISH Network DISH $1.22* $0.67
    Humana HUM $1.86 $1.86
    Loews L $0.92 $0.91

    * Report includes items that make comparisons to the consensus estimate questionable

    Long positions in stocks mentioned: none

    For more "top stock" portfolios and research, visit TopStockPortfolios.com


    The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

    Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

    The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

    The information contained in this report is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

    Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

    Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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