Its Thursday May 11, 2006, and as the street anticipated the Fed has raised the benchmark interest rate to 5% but the question that looms is what is going to happen in June. Though the Fed has hinted at a slow down aka a pause in interest rate hikes, we will not get a better idea until June. Chances are that the Fed has flipped the autopilot button off and will take that pause for a spell. But now that the Fed Factor is out of the way its time for companies to trade on their own merits.
Metals Mania is on fire, Gold is in the $700 range and continues to touch new highs on its way to $800, but as we have stated and continue to state on Wall Street to Main Street, do not forget about the other metals like Silver which is on its way to $20, Copper making new highs, Platinum, Palladium, Aluminum, Titanium which Airbus is stocking up on for production of their new aircrafts to satisfy the China contract that they have in place and other contracts that may come out of China and India, Aluminum and Zinc. I would put the periodic table of elements here but that would take all day.
Now Oil is not lacking in the upward movement as the tension in Iran is placing Crude Oil on a roller coast ride as it bumps up to over $72 a barrel on its way to $80.
Now on the topic of oil and natural gas, word is floating around that China is in a race to secure oil and natural gas for their country and may be looking at Florida for drilling opportunities. The area in question is the Gulf of Mexico south of Pensacola, Florida. This is also an area that Cuba is interested in, Cuba is limited with technology but have some cash in the till, they have aligned with companies in China, Spain and Canada. The world is just getting smaller and the U.S. should not underestimate any nation.
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Political Front
Israel said that it is willing to release part of the $50 million that it collects each month in Palestinian customs fees and taxes to help fund humanitarian relief programs for the region.
According to reports Russian President Vladimir Putin has pledged cash bonuses to Russian women who give birth to two or more children, this is an effort to reverse what he says is the gravest problem facing contemporary Russia: a declining population. While China some years back had to stop the growth of the population, Russia is looking to beef it up. I wonder if well se a surge in Viagra sales in 2006.
The U.S. Treasury Department has once again rejected claims by US manufacturers yesterday and concluded that China is not manipulating the value of its currency to gain an unfair trade advantage. China is still looking to boost their Gold bullion reserves, which makes this very interesting.
Movers and Shakers
Some major movers in yesterdays trading session included Barret Bill Corp (NYSE: BBG) which traded up $5.74 to close at $36.60, Maidenform Brands (NYSE: MFB) which traded up $1.29 to close at $12.70, Navistar International (NYSE: NAV) which traded up $2.68 to close at $27.99, RTI International Metals (NYS: RTI) which traded up $7.23 to close at $77.65, Sunrise Senior Living (NYSE: SRZ) which traded up $3.06 to close at $35.41, Hansen Natural (NASDAQ: HANS) which surged again trading up $24.82 to close at $201.06, keep a close eye on National Beverage (AMEX: FIZ) as we see this as the next Hansen situation, Baidu.com (NASDAQ: BIDU) which traded up $$22.60 to close at $83.97 on its way to $100 so look for more upward movement this week, Iris International (NASDAQ: IRIS) which traded up $2.49 to close at $13.43 and Ecollege.com (NASDAQ: ECLG) which traded up $2.62 to close at $25.22, this is a booming business which we will touch on next week.
Analyst Upgrades/Downgrades
Recent Analyst upgrades include Broadcom Corp (NASDAQ: BRCM) which was upgraded to an Above Average from a Average by Carris & Co, Parlux Fragrances (NASDAQ: PARL) which was upgraded to a Strong Buy from a Buy by Wedbush Morgan, The Cheesecake Factory (NASDAQ: CAKE) which was upgraded to a Buy from a Hold by AG Edwards and Symantec Corp (NASDAQ: SYMC) which was upgraded to an Outperfrom by Cowen & Co.
Recent Analyst downgrades include Daktronics (NASDAQ: DAKT) which was downgraded to a Hold from a Buy by Needham & Co, Darden Restaurants (NYSE: DRI) which was downgraded to an Underperform from a Hold by Jefferies & Co, and Rae Systems (AMEX: RAE) was downgraded to a Market Perform from a Market Outperform by JMP Securities.
Analyst Coverage Initiations include Akami Technologies (NASDAQ: AKAM) was initiated with a Peer Perform rating by Thomas Weisel Partners, Cobiz (NASDAQ: COBZ) was initiated with a Strong Buy rating by Raymond James and a $24 price target, Zions Bancorporation (NASDAQ: ZION) was initiated with a Market Perfrom rating by Raymond James and Ventiv Health (NASDAQ: VTIV) was initiated with a Buy rating and a $37 price target by Banc of America Securities.
Tid Bits
Google (NASDAQ: GOOG) is looking to keep Yahoo (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT) from gaining ground as the company puts more focus on their core strength, Search. They are enhancing the searching capability of Google, which should thwart any rally from Yahoo and MSN as Google continues to take more search market share.
McDonalds (NYSE: MCD) to looking to get Hip as they are going to overhaul over 30,000 of their locations around the world. Discarding the hard plastic seating and replacing it with premium coffee, comfy seats and Wi-Fi Access. So if you havent figured it out yet they are going after the Starbucks (NASDAQ: SBUX) market and offering all the pizzazz to go along with it. The only question that does come out is will this change have an impact on their current customer base. Only time will tell.
Archer Daniels (NYSE: ADM) is planning to meet the demand of the Ethanol boom as they are looking to build a new dry-mill ethanol plant in Cedar Rapids, Iowa, that will allow the company to produce an additional 275 million gallons of the corn-based fuel each year. The professional car racing industry is taking notice as for the first time Ethanol fuel is being used in an Indy 500 car. The Indy Racing Leagues IndyCar Series has partnered with the ethanol industry to become the fuel supplier beginning with the 2006 season, including the Indianapolis 500. The Ethanol industry will sponsor the racing team that will feature Rookie Paul Dana as the driver, the car will be fielded by 1996 Indy 500 Champion Hemelgarn Racing.
Urban Outfitters (NASDAQ: URBN) reported earnings yesterday and their Net income declined to $20.3 million, or 12 cents per share, from $27.4 million, or 16 cents per share, for the same period a year ago. Revenue grew 17 percent to $270 million from $231.3 million last year. The average analyst estimate was 15 cents a share. This was not one of our Furious Five companies that were featured on Wall Street to Main Street. We see American Eagle Outfitters (NASDAQ: AEOS) as being a better play in this sector, above Pacific Sunwear of California aka Pac Sun (NASDAQ: PSUN) and The Gap (NYSE: GPS). Pac Sun is scheduled to report earnings today but even if they beat the estimate, which may not happen, American Eagle is a better play. In certain strip malls that we visited the Pac Sun store was replaced with an American Eagle Outfitter store, as we mentioned on WSMS. Other companies that should be looked at include True Religion Apparel (NASDAQ: TRLG), G-III Apparel (NASDAQ: GIII), Under Armour Apparel (NASDAQ: UARM) and Crocs, Inc (NASDAQ: CROX), all featured on Wall Street to Main Streets Furious Five..
In the Spotlight
In a special Investors Corner Segment late yesterday we featured a company that we see being the next Hansen Natural Corp (NASDAQ: HANS). If you have followed Hansen you would know that in a 12 month time frame the stock went from the $30 range to where it closed yesterday at $201.06 and moving, now that is a Monster jump. Now for those that missed our views and outlook on National Beverage Corp (AMEX: FIZ) here it is once again.
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FURIOUS FIVE
This is the Fourth of our Furious Five companies that we see excelling in their industry in 2006. The fourth addition to this weeks Furious Five is Intervest Bancshares Corp (NASDAQ: IBCA) it trades on the Nasdaq under the symbol IBCA.
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We cannot stress enough that investors need to do their due diligence, call the companies, get the information, consult with your investment advisor and if you do not have one consider getting one. Put the same time into investigating these companies as you do when you go to purchase a new television, its only for your protection. When it comes to thinly traded securities stagger your orders or put a limit order in to avoid a run up.
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Louis Victor is the host of the syndicated radio show and financial newsletter "Wall Street to Main Street" which is featured on the NAMC Newswire Radio. He has been involved in the financial industry for over two decades, on the retail and investment banking ends. He is also well versed in the advertising and marketing industries, which has given him insight into market trends and unqiue companies that may be under the radar.