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Oil is getting unpredictable, time to sell or stay away from tech stocks.
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I was right on the oil price for January 2007.However the recent rebound suprised me too. It is hard to believe that in one day we had 3 percent increase on the price of the oil. The supply demand chain shows downturn trend however I believe international relations will have a big impact on oil price.Iran might become a key factor for deciding on oil price.
Oil prices jumped 3 percent on Friday, holding above the key $50 a barrel level, as temperatures fell in the U.S. Northeast, boosting fuel demand in the world's top heating fuel market.
U.S. crude settled up $1.51 at $51.99 a barrel, after falling $1.76, or 3.4 percent, to $50.48 on Thursday. London Brent gained $1.69 to $53.44.
After a government report showed a rise of 6.8 million barrels in U.S. crude stocks on Thursday, U.S. crude fell below $50 for the first time since May 2005, hitting $49.90, before recovering slightly in late trade.
Friday's recovery was helped by colder weather in the United States after exceptionally mild weather in the Northeast in early January sapped demand for heating fuel. Natural gas and heating oil futures also gained. But many analysts predicted the $50 mark would not hold for long.
.The bears should now be firmly back in charge. We would not, therefore, be surprised to see rallies sold into more aggressively here, and the series of lower lows will gradually take us below the $50 level.It has been a wild ride lower thus far and the bottom still seems elusive.
According to technical analysts, who predict future price direction from studying charts, said that, if there were a convincing break below $50, the next key level would be around $44.50 -- a 50 percent retracement of the rally from the December 1998 low of $10.35 to last July's record.
Some commentators have said a concentration of "put," or sell, options around the $50 and $45 level could trigger deep selling.
Countering that, producers, who have been relying on a rising market to protect their revenues, have started to buy oil futures to hedge their output and investment projects against further price declines. Other analysts say the $50 barrier may be more formidable than it appears at first sight.
Tech stocks are too expensive
I was right in my prediction of stock market in recent weeks.However now I find some tech stocks too expensive to buy.I believe that there are many over valued stocks in the market and their sales results won’t reach to the expectations. My suggestion is to keep a low profile and stay on hold for this week. I expect Fed to keep the rates steady this month.
We might get some disappointing earning results in tech industry whick might affect Nasdaq and Dow Jones.
US stocks fell this week after profit reports from Intel Corp. and International Business Machines Corp. prompted concern that analysts' forecasts for earnings at computer-related companies are too high.
The Nasdaq Composite Index dropped the most in a month after Apple Inc., the maker of iPod music players and Macintosh computers, forecast profit and sales for this quarter that missed analysts' estimates. Government inflation reports that may prevent the Federal Reserve from lowering interest rates contributed to the market's decline.
Analysts expect technology companies to notch the best profit growth this year among the Standard & Poor's 500 Index's 10 main industry groups. Shares of computer-related companies had been the year's best performers before this week on optimism that earnings will grow more than twice as fast as the S&P 500.
The Nasdaq, which gets more than two-fifths of its market value from computer-related companies, dropped 2.1 percent to 2451.31, the sharpest decline since the week ended Dec. 22. The S&P 500 slipped less than 0.1 percent to 1430.50.
Stocks rallied last year after the Fed in August halted a two-year campaign of higher interest rates. Technology shares paced the second-half advance and helped push the Nasdaq to a six-year high last week.
Intel
Intel, the world's biggest computer-chip maker, dropped 5.9 percent to $20.82 for the sharpest decline in the Dow industrials. The company, whose results are viewed as an indicator of demand for computers and related components, said its gross margin, or the share of sales left after manufacturing costs, will narrow to about 50 percent this year, missing analysts' estimates and extending a slide started in 2006.
IBM slumped 3.2 percent to $96.17. The largest computer- services company said fourth-quarter sales of hardware rose 4.3 percent from a year earlier, less than the increase predicted by analysts.
Analysts project earnings at computer-related companies will increase by 20 percent on average, up from 8 percent last year, according to Thomson Financial. The figure for 2007 is more than double the 8.9 percent expansion estimated for the S&P 500.
Apple
Apple's forecast added to concerns earnings estimates are too high. The company said second-quarter sales, which typically fall after the holidays, will be as much as to $4.9 billion, shy of the $5.23 billion average analyst estimate compiled by Bloomberg. Apple predicted a profit of as much as 56 cents a share, compared with estimates for 60 cents. The shares dropped 6.5 percent to $88.50.
An S&P 500 measure of technology shares plunged 3.4 percent for the sharpest decline among 10 industry groups. Before this week, the gauge had climbed 25 percent since the Fed left borrowing costs unchanged in August. That was the best performance among the main S&P 500 sub-indexes.
Fed policy makers, who last month said inflation remains the ``predominant concern,'' echoed that view on Jan. 17. In its regional survey, the central bank cited a moderate pace of inflation with labor markets ``tightening'' in most of its 12 districts in December.
Among other inflation reports this week, the Labor Department said its producer price index gained 0.9 percent last month, exceeding the 0.5 percent rise that economists expected. So-called core wholesale prices that exclude energy and food rose 0.2 percent after climbing 1.3 percent the previous month.
`Too much inflation'
The consumer price index rose 0.5 percent in December, the first increase in four months. Economists surveyed by Bloomberg expected a 0.4 percent gain.
``The bias is still toward too much inflation,'' said Tim Hartzell, who helps oversee $2 billion as chief investment officer at Kanaly Trust Co. in Houston. ``What'll be frustrating to the market is that core prices will stay high longer than everybody thinks they will. That'll keep the Fed from doing anything as far as lowering rates.'' |
| Tarih
: 22.01.2007 |
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© 2006 Mert TOKER All Rights Reserved. |
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