MV Weather Report: Winds Blow S&P to 1000?
Rain or shine, we review the day's biggest stock stories.
Bank of America was added to the Goldman Sachs conviction buy list, Goldman said the upgrade was because of another solid quarter from the mortgage and capital markets. It also gave Bank of America a $15 price target based on earnings. This upgrade lifted the whole banking sector, and names like JPMorgan (JPM) and Wells Fargo (WFC) had strong days as well.
Here was the real shocker of the day: Lowe's reported better-than-expected earnings. The company reported EPS of $0.32 vs. $0.25 consensus estimates and raised full year guidance. It should be noted that Lowe's beat EPS thanks to cost-cutting not better-then-expected sales. What stuck out to investors was company CEO Robert Niblock said that housing turnover shows sings of a bottom in certain markets.
It's hard to ignore the positive signs in the economy: Everywhere I look, something is better than expected. As I stated last week, we got the pull back we were looking for.
What happens now? Should you load up for a run to 950 - or even 1000? Minyan James Kostohryz filled Buzz readers in with his plan today:
"I believe that from now on, we are mainly going to be experiencing a slow and steady build upward which, in after 2-4 weeks, will morph into a melt up. Initial target: 1,100 on the S&P by July. I believe most of my stocks (or the stocks underlying my calls) will be up more than 50% by July.
"Thus, I believe that I will have committed to a 100% long core position by the end of this week -- potentially by tomorrow."
Tomorrow is Turnaround Tuesday; if you believe Kostohryz, the market may give you a chance to get in. Before the bell, we'll see Building Permits and Housing Starts.
Minyanville's Jack Lavery made some predictions in his newsletter:
"From a pace of 572,000 starts annualized in February, and 510,000 in March, we believe starts will be relatively flat in April, remaining at or near March's level. Both single-family and multi-family permits declined in March, not boding well for April starts. Also, a significant year-over-year (YoY) decline is in prospect as overall starts in April 2008 were 1.004 million. A month to month decline is clearly possible, given the non-sustained 70% jump in multi-family starts in February. There is a problem with single family as well. It is currently taking a record 10.2 months from completion to sale of new homes. Permits look flat with March at 513,000 annualized, down from the 564,000 pace of February. The consensus of forecasters is probably a good proxy for market expectations. The consensus looks for a rise in starts to 523,000 annualized, and a rise in permits to 530,000 annualized. If we are right, the consensus and the market would be disappointed, especially if starts and permits fall."
All right, Minyans - have a great night!
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