MorningUpdate - Options Trading Email
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MORNING UPDATE: PriceWatch Alerts for AMD, MOGN, HDI, CY, LUV, C,
ASML, BAC, X, CNCT, NOK, AAPL, QLGC, CNET and FITB.
Jul 15 - 8:30 AM EST - Before the open... PriceWatch Alerts for
AMD, MOGN, HDI, CY, LUV, C, ASML, BAC, X, CNCT, NOK, AAPL, QLGC,
CNET and FITB, Market Overview, Put/Call Alert, FuturesWatch,
Today's Economic Calendar, Expected Earnings Reports, and the
Quote Of The Day.
QUOTE OF THE DAY -----------------------------------------------
"It was an outstanding quarter, our highest third quarter revenue
in eight years."
-- Steve Jobs, CEO, Apple Computer Inc.
PriceWatch Alerts - HIGH RETURN COVERED CALL OPTIONS -----------
-- Advanced Micro Devices Inc. (NYSE: AMD)
Last Price 13.74 - AUG 13.00 CALL OPTION@ $1.40 -> 5.3 % Return
assigned*
-- MGI Pharma Inc. (Nasdaq: MOGN)
Last Price 28.11 - AUG 25.00 CALL OPTION@ $4.10 -> 4.1 % Return
assigned*
-- Harley-Davidson Inc. (NYSE: HDI)
Last Price 62.95 - NOV 60.00 CALL OPTION@ $5.30 -> 4.1 % Return
assigned*
-- Cypress Semiconductor Corp. (NYSE: CY)
Last Price 10.97 - AUG 10.00 CALL OPTION@ $1.35 -> 4 % Return
assigned*
-- Southwest Airlines Co. (NYSE: LUV)
Last Price 15.06 - AUG 15.00 CALL OPTION@ $0.65 -> 4.1 % Return
assigned*
-- Citigroup Inc. (NYSE: C)
Last Price 45.10 - DEC 45.00 CALL OPTION@ $2.40 -> 5.4 % Return
assigned*
-- ASM Lithography Holding N.V. (Nasdaq: ASML)
Last Price 14.85 - AUG 15.00 CALL OPTION@ $0.75 -> 6.4 % Return
assigned*
-- BankAmerica Corp. (NYSE: BAC)
Last Price 84.30 - NOV 85.00 CALL OPTION@ $2.80 -> 4.3 % Return
assigned*
-- U.S. Steel Group (NYSE: X)
Last Price 36.73 - OCT 35.00 CALL OPTION@ $4.20 -> 7.6 % Return
assigned*
-- Connetics Corp. (Nasdaq: CNCT)
Last Price 23.58 - OCT 22.50 CALL OPTION@ $2.45 -> 6.5 % Return
assigned*
-- Nokia Corp. ADR (NYSE: NOK)
Last Price 14.24 - JAN 12.50 CALL OPTION@ $2.45 -> 6 % Return
assigned*
-- Apple Computer Inc. (Nasdaq: AAPL)
Last Price 29.58 - JUL 30.00 CALL OPTION@ $0.95 -> 4.8 % Return
assigned*
-- QLogic Corp. (Nasdaq: QLGC)
Last Price 24.50 - AUG 22.50 CALL OPTION@ $2.90 -> 4.2 % Return
assigned*
-- CNET Networks, Inc. (Nasdaq: CNET)
Last Price 9.50 - OCT 7.50 CALL OPTION@ $2.30 -> 4.2 % Return
assigned*
-- Fifth Third Bancorp (Nasdaq: FITB)
Last Price 53.98 - NOV 55.00 CALL OPTION@ $1.80 -> 5.4 % Return
assigned*
*For more details on covered calls and how you can use them to
enhance your portfolio performance go to
http://www.poweropt.com/cchelp.asp
MARKET OVERVIEW------------------------------------------------
Overseas markets are mostly under water as just four of the 15
markets that we track are currently positive. The cumulative
average return on the collective stands at a minus 0.695 percent
skewed lower by the 6.20 percent drubbing in the Finland HEX
Stock Index. Nokia reported disappointing second quarter numbers
and offered an even more distressing third quarter outlook. At
last look, the shares were lower by some 14.6 percent. The
European Union Commission has trimmed its forecast for euro-zone
growth in the third quarter of 2004, emphasizing the fragility of
the currency area's economic recovery. The EU's executive body
said that it expects a 0.3-0.7 percent quarter-on-quarter growth
of the 12 economies in the currency area during the three months
from July to September. That marks a slight revision downward
from its earlier forecast of growth between 0.4 percent and 0.8
percent on the quarter, and is the same as its estimate for
growth in the second quarter.
A lot of data to digest before the start of the regular session
of trade. At 8:30 a.m., an indication of potential inflation,
the June Producer Price Index is expected to have risen by a
reasonably tame 0.1 percent on the heels of last month's 0.8
percent jump. The Core Index, less food and energy is also
expected to have moderated a bit, posting a rise of 0.2 percent
versus May's 0.3 percent rise. Initial Jobless Claims for the
week ending July 10 are seen rising by 35,000, just about wiping
out the prior week's surprise 39,000 decline. The July Empire
State Manufacturing Index is the first key indicator on the
health of the manufacturing sector, somewhat previewing the
Chicago report which hints at the National Institute of Supply
Managers report. Anyway, back to the business at hand. The New
York report is expected to slip a bit to 27.50 versus the 30.2
reading of June. At 9:15 a.m., June Industrial Production is
expected to have ticked higher by 0.1 percent, paling in
comparison to May's 1.1 percent advance. In the companion
report, June Capacity Utilization is seen a bit lax at 77.7 on
the heels of last month's 77.8 percent of use.
DYNAMIC MARKET OPPORTUNITIES-------------------------------------
Intel's second quarter earnings results on Tuesday night resulted
in a market hangover Wednesday morning. As expected, Intel drove
the market, and although its numbers matched expectations,
investors latched on to its pessimistic profit outlook, where
gross margins were cut by 2%. With excess inventory and many
lower-priced products, Morgan Stanley and Prudential swiftly
downgraded Intel, sending the stock tumbling over 10.5%. June's
retail numbers helped further the skid, with the Commerce
Department reporting sales slid 1.1% - the biggest decline in 16
months. Capping off the potent bearish mix...oil prices that
again breached $41 per barrel. But Caesar's Entertainment soared
15% after casino giant Harrah's Entertainment made a takeover
bid. After the MGM/Mandalay Bay merger last month, this deal
would create the biggest gambling company in the world. Harrah's
would run 54 casinos worth $8.8 billion in revenue. Additionally,
Harrah's could benefit from Pennsylvania's newly passed bill,
which allows room for up to 61,000 slot machines. Buyout
speculation on Wall Street quoted prices between $17-23. However,
the merger could face tough anti-trust laws in Las Vegas and
Atlantic City, where officials may say the merger would give
Harrah's an illegal monopoly on the casino market. But with the
American Gaming Association recently stating Americans make three
times as many trips to casinos than to ballparks, and over 53
million Americans spending around $27 billion on gambling in
2003, this is a flourishing market. Taipan's Red Zone team
recommended Caesar's Entertainment to investors on June 25,
giving them a 9% gain so far - with the potential of more to
come.
PUT/CALL ALERT -------------------------------------------------
Equity option activity on the CBOE yesterday had 533,493 put
contracts trade compared to 700,593 call contracts. The
resultant 0.761 single-session put/call ratio has actually
allowed the 21-day moving average to drop down to 0.692. The
CBOE Market Volatility Index, SPX implied (VIX - 13.76) fell 4.84
percent (OEX implied, VXO - 15.02, down 4.21 percent). The
Nasdaq-100 Trust Volatility Index (QQV - 21.51) gained 0.66
percent and the CBOE Nasdaq Market Volatility Index (VXN - 21.64)
jumped 1.03 percent.
FUTURES WATCH --------------------------------------------------
The futures markets are just a bit lower this morning after
yesterday short covering rally ended with the markets selling off
late in the session and lower on the day. It looks as if this
bearish sentiment will be with us for at least another week or
two as earnings reports seem to be mixed with no real strong
bullish surprises along the way. The S&P's should remain under
pressure unless they trade back above the 111300 level and the
NASDAQ trades above the 142500 level. There will be a report on
the Philadelphia Fed Index due out at 11:00 CDT.
TODAY'S ECONOMIC CALENDAR ---------------------------------------
8:30 a.m.: June Producer Price Index (PPI last plus 0.8 percent).
8:30 a.m.: June Producer Price Core Index, less food and energy
(last plus 0.3 percent).
8:30 a.m.: Initial Jobless Claims for the week ending July 10
(last minus 39,000).
8:30 a.m.: July Empire State Manufacturing Index (last 30.2).
8:30 a.m.: May Business Inventories (last plus 0.5 percent).
9:15 a.m.: June Industrial Production (last plus 1.1 percent).
9:15 a.m.: June Capacity Utilization (last 77.8 percent).
10:00 a.m.: DJ-BTM Business Barometer for the week ending July 3
(last minus 0.3 percent).
12:00 p.m.: July Philadelphia Fed Business Index (last 28.9).
2:00 p.m.: June Treasury Budget (last $62.47 billion).
4:30 p.m.: Money Supply for the week ending July 10.
8:00 p.m.: Fed Governor Bies speaks on banking conditions,
relations at a financial executives' dinner in Chicago.
EARNINGS EXPECTED TODAY (w/current estimates) ------------------
Amcore Financial (AMFI) 2Q 0.42
AptarGroup (ATR) 2Q 0.62
BRE Properties (BRE) 2Q 0.57
Barnes Group (B) 2Q 0.51
Carlisle Cos. (CSL) 2Q 1.08
Charlotte Russe Hold (CHIC) 3Q 0.19
Citigroup Inc. (C) 2Q 0.97
Citizens Banking (CBCF) 2Q 0.42
Columbia Bancorp (CBMD) 2Q 0.43
Comerica Inc. (CMA) 2Q 0.93
Compass Bancshares (CBSS) 2Q 0.7
Concord Commun (CCRD) 2Q 0.03
Cypress Semi (CY) 2Q 0.23
DigitalNet Hldgs (DNET) 2Q 0.31
Dow Jones & Co. (DJ) 2Q 0.38
E.W. Scripps Co. (SSP) 2Q 0.98
Eaton Corp. (ETN) 2Q 1.02
Equitable Res (EQT) 2Q 0.6
Fairchild Semi (FCS) 2Q 0.23
Fifth Third Bancorp (FITB) 2Q 0.79
FileNET Corp. (FILE) 2Q 0.04
FirstMerit Corp. (FMER) 2Q 0.36
Flagstar Bancorp (FBC) 2Q 0.66
Genuine Parts (GPC) 2Q 0.57
Hibernia Corp. (HIB) 2Q 0.45
Intl Business Machines (IBM) 2Q 1.12
Independent Bank (INDB) 2Q 0.45
Intermagnetics Genl (IMGC) 4Q 0.33
Iona Technologies (IONA) 2Q -0.01
Landstar System Inc. (LSTR) 2Q 0.52
Lexar Media Inc. (LEXR) 2Q -0.19
Lone Star Tech (LSS) 2Q 0.99
Marriott Intl (MAR) 2Q 0.61
McClatchy A (MNI) 2Q 0.88
Midland Co. (MLAN) 2Q 0.35
Natl Commerce Fincl (NCF) 2Q 0.45
Natl Penn Bancshares (NPBC) 2Q 0.47
Netflix Inc. (NFLX) 2Q 0.13
Nokia Corp. (NOK) 2Q 0.18
Old Dominion Freight (ODFL) 2Q 0.4
PMC-Sierra (PMCS) 2Q 0.07
PPG Industries (PPG) 2Q 1.08
Peabody Energy Corp. (BTU) 2Q 0.48
People's Bank (PBCT) 2Q 0.25
PepsiCo Inc. (PEP) 2Q 0.61
Polaris Ind. (PII) 2Q 0.52
Reliance Steel & Alu (RS) 2Q 1.54
Resources Corp. (RECN) 4Q 0.31
Rowan Cos. (RDC) 2Q -0.03
SCS Transportation (SCST) 2Q 0.36
SEI Investments (SEIC) 2Q 0.36
Sandy Spring Bancorp (SASR) 2Q 0.51
Shaw Group (SGR) 3Q 0.17
Smith (A.O.) (AOS) 2Q 0.51
Southwest Airlines (LUV) 2Q 0.16
Stryker Corp. (SYK) 2Q 0.34
TCF Financial (TCB) 2Q 0.88
Tribune Co. (TRB) 2Q 0.61
USA Education (SLM) 2Q 0.52
Umpqua Holdings (UMPQ) 2Q 0.32
United Health Group (UNH) 2Q 0.92
Valley Natl Bancorp (VLY) 2Q 0.38
Wachovia Corp. (WB) 2Q 0.96
Washington Trust (WASH) 2Q 0.38
Webster Financial (WBS) 2Q 0.91
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