Overview: Yesterday, a successful debt offering by the government of Portugal momentarily put to rest growing concerns about European bank debt and triggered a decent rally in the European and U.S. stock market. The euro rallied against the dollar prompting some risk-traders to come in and extend equity positions. The Federal Reserve released its Beige Book of regional economic indicators, but there was little market moving news in that publication. The regional Federal Reserve Banks indicated consumer spending had increased over the last month, although on balance consumers remain cautious with their discretionary spending as consumer credit continues to fall. The July consumer credit data showed a $3.6 billion drop, marking a decline for 6 consecutive months and in 17 of the last 18 months. Market Recap: After a strong opening on Wednesday, the stock market consolidated some early gains late the day. Composite trading volume on the NYSE and the NASDAQ remains light for this time of year with just 2.9 billion shares traded. Market breadth on the NYSE was positive with 2082 issues posting gains while 896 issues closed lower. The bond market sold off as the yield on the 10-year Treasury note rose to 2.65%. Sector Overview: Nine of the ten market sectors advanced during Wednesday’s market rally. Only Utilities (-0.5%) closed yesterday with a loss. Financials (+1.1%), Industrials (+1.0%), and Energy (+0.9%) provided market leadership. Each of the four investment styles posted gains, led by growth stocks. Small cap growth was up 0.9%, followed by large cap growth, up 0.8%. Large cap value rose 0.7% and small cap value gained 0.4%. Wednesday’s Leading Industry Groups: Specialized Consumer Services (+2.96%), Tires & Rubber (+2.68%), Regional Banks (+2.47%), Health Care Technology (+2.47%), Internet Retail (+2.37%) Wednesday’s Lagging Industry Groups: Semiconductor Equipment (-1.68%), Data Processing & Outsourced Services (-1.57%), Photographic Products (-1.36%), Auto Parts & Equipment (-1.30%), Health Care Facilities (-1.18%) Companies in the News Today:Amazon.com Inc. (AMZN) is offering perks, including free shipping on baby items, to attract new customers to its subscription service called Amazon Mom. ARM Holdings PLC (ARMH) unveiled a new low power processor for next generation smart phones. Discovery Communications Inc. (DISCA) and toy maker Hasbro Inc. (HAS) said their new joint venture TV network The HUB will target an under-served market audience of children aged 11 or younger. The UK fined Goldman Sachs Group Inc. (GS) £17.5 million for inadequate disclosure of a U.S. probe into the firm. PetroChina Co. Ltd. (PTR) started its new 200,000 barrel per day refinery in Southern China. Companies reporting earnings above forecasts: KFY Companies reporting earnings in line with forecasts: STEI Companies reporting earnings below forecasts: PNY, SNDA Companies raising earnings or revenue guidance: None Companies reiterating earnings or revenue guidance: KFY Companies lowering earnings or revenue guidance: None Analyst Upgrades (from Thomson, Briefing.com, Marketwatch.com): CE, SSCC, TIN, TEVA, INFN, STSX, HMY, MPEL, JSAIY, WBD, FIATY Analyst Downgrades (from Thomson, Briefing.com): CGA, SUN, EXXI, VAL, MPEL, SEH, GLW, BZ, AU, ZGEN, APOL, ESI, EDMC Looking Ahead: The U.S. stock market continues to inch upward, fueled by the recent round of economic news, including today’s weekly jobs report, which, while not great, continues to slightly exceed expectations. Today’s weekly initial jobless claims number showed a nice drop to 451,000, as analysts were expecting 472,000. Another surprise this month is light trading volume, as investors appear content to sit on the sidelines waiting for better economic news or clearer signs of how the November 2nd mid-term elections will turn out. Technically, the stock market remains in its short and long-term uptrend channels. However, we continue to expect above average price volatility in this trading range atmosphere. Today’s Market Outlook: We expect a higher stock market opening this morning following a better than expected weekly jobs report. Stock futures prices are trading above fair value a half hour ahead of the opening bell. Stock prices fell overnight in most Asian markets. The Tokyo Nikkei was up 0.82%. The Hong Kong stock market rose 0.37%. The Chinese CSI 300 Index was off 1.44%. Stock prices in the European markets are higher at mid-session. The London FTSE is up 0.76%. The near-term contract of light sweet crude is trading at $74.97/barrel. Natural gas futures are trading at $3.805/mcf. Gold is trading at $1259.50/ounce. The euro is trading higher at $1.2709. The 10-year Treasury note is yielding 2.675%. The 2-year Treasury note is trading to yield 0.526%. 3-month Treasury bills are trading to yield 0.137%. The Fed Funds Target range is 0% to ¼%. Upcoming Media Appearances: Tuesday, September 21: CNBC’s Squawk on the Street - 9:30AM EDT from the floor of the NYSE
Upcoming Chief Market Strategist Office Visits and Client Event Appearances:
Sept. 9:
Travel back to Lake Oswego (AM)
Sept. 13:
Spokane, WA – Client Meetings (PM)
Sept. 14:
Coeur d’Alene, ID – Chamber of Commerce Breakfast Speech
Sept. 15:
Wenatchee, WA – Office Visit-Client Event
Sept. 16:
Kennewick, WA – Client Appreciation Event
Sept. 17:
Return to Lake Oswego (AM)
Sept. 19-23:
New York/Philadelphia-Securities Industry Institute (Wharton) Board of Trustees Meeting
Sept. 27-28:
Cheyenne, WY – Client Appreciation Events
Sept. 29-Oct. 1:
Chicago, IL – First Trust Meeting and Retail Conference
Oct. 5:
Seattle, WA – Davidson Investment Policy Summit Meeting (PM)
Oct. 6:
Burlington, WA – Office Visit/Client Meetings (AM)
Oct. 6:
Bellevue, WA – Economic Overview Presentation to Columbia Bank (PM)
Oct. 11:
Pocatello, ID – Office Visit –Client Event (PM)
Oct. 12:
Idaho Falls, ID – Office Visit & Client Event (?)
Oct. 13:
Twin Falls, ID – Rotary Club Luncheon Speech
Oct. 14:
Boise, ID – Idaho Women’s Investment Forum Speech/Client Event
Oct. 15:
Return to Lake Oswego (AM)
Oct. 18:
Great Falls, MT – Corporate Meetings (PM)
Oct. 19:
Great Falls, MT – Office Visit (AM), Helena, MT – Office Visit (noon)/Client Event
