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The Wall Street Greek blog is the sexy & syndicated financial securities markets publication of former Senior Equity Analyst Markos N. Kaminis. Our stock market blog reaches reputable publishers & private networks and is an unbiased, independent Wall Street research resource on the economy, stocks, gold & currency, energy & oil, real estate and more. Wall Street & Greece should be as honest, dependable and passionate as The Greek.



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Thursday, November 30, 2006

Thursday's Brew - Nov 30

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. We are publishing this issue much too early for futures activity to be of any use to you. A rumored canceled meeting between President Bush and Iraq's Maliki, due to a threat against the government, poses event risk to markets Thursday, but barring any unforeseen specific event, we would anticipate market movement to depend highly on the personal income and spending data set for release.

OVERSEAS MARKETS
Asian stocks benefited Thursday from strength seen in the revised higher Q3 GDP result in the U.S. This combined with positive comments from Ben Bernanke on the outlook for 2007, eased the concern of Asian market participants about the health of their most important export market. Today, the forecast for South Korean export growth in 2006 was raised to 15% from the 12% previously seen. The Hang Seng Index appropriately rose 1.11%, while the NIKKEI 225 edged 0.61% higher. We anticipate markets in Europe to follow suit once open.

ECONOMIC DATA & NEWS
Consumer health will once again come into focus Thursday when personal income and spending results are posted. Citigroup expects that an increase in wages and disbursements helped personal income and personal spending to rise 0.5% and 0.2%, respectively, in October. The November Chicago Purchasing Managers Index is expected to have been impacted by auto sales, but Bloomberg's consensus indicates it could rise to 54.0 from 53.5 in October. Considering recent weakness in durable goods orders, we may face another disappointment in the Chicago PMI, in our view.

COMMODITY MARKETS
The New York Society of Security Analysts meets for its alternative energy conference Thursday. Natural gas has recovered sharply from a slow start Wednesday, as we predicted, and is up approximately 1.8% in late night activity EST. We are overweight energy. In this regard, we are working on the provision of sector weighting recommendations. Currently, we have stated an underweight recommendation for the financial sector and overweight view for energy, gold and the early cyclical semiconductor industry.

However, the recent signs of poor demand for hardware could put a damper on the performance of semiconductor names and we are reducing our recommendation to marketweight. Still, we believe the best time to buy semiconductor names is when things seem bleakest. When P/E ratios appear overdone, earnings are weak, semi investors must sum up courage, as these stocks tend to move ahead of actual operating recovery. As it seems more and more likely the Fed will be able to cut rates in 2007, early cyclicals should benefit. Semiconductor stocks have already shown some strength in the past month, so we could see a near-term trough and better buying opportunity. Keep in mind that if Israel/America's pending war with Iran brings unforeseen surprises, these stocks are likely to suffer much. A well diversified portfolio incorporating beta reduction through the shorting of individual securities is recommended here.

STOCKS IN THE NEWS
Brinker International splits 3 for 2 at the close, while Lucent's merger with Alcatel is expected to close. Reporting earnings are Brown Forman Corp., Smithfield Foods Inc., HJ Heinz Co., Kellwood Co., Cheesecake Factory, H&R Block and Mcdata Corp. We hope you found good use of your "Morning Coffee" today, and we wish you a good day trading. (disclosure)


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Wednesday, November 29, 2006

Wednesday's Brew Nv 29

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stock futures across the S&P 500, NASDAQ and the recently beaten down Dow Index, are all indicating a higher open today. Revised higher GDP data for the third quarter, showing GDP growth of 2.2%, is driving the rise. However, the same data showed an increase in inventory, which could be a negative factor to GDP in the fourth quarter should demand wane below expectations of American businesses.

OVERSEAS MARKETS
Stocks across Asia climbed higher today, with the Hang Seng up 0.76%, the S&P/ASX 200 Index 1.27% higher and the NIKKEI 225 up 1.39%. Helping drive the rise, Japanese industrial production climbed to a record level, rising 1.6% in October. American Fed Chairman Ben Bernanke's comments yesterday that the U.S. economy should grow in 2007, helped boost Asian markets as well. The American market is critical to the exporting Japanese and Chinese. However, the strength of American spending on Asian goods will remain dependent on housing and other credit strains on consumers, as well as employment within the U.S.

We remain concerned about the impact of a pending war Israel, Iran, Syria, Lebanon, Palestine, Iraq and America appear to be heading toward at full steam. Recent American efforts to alter strategy within Iraq may be partly driven by plans to deploy forces on its eastern front with Iran. We believe any attack on Iran's nuclear facilities will precipitate an Iranian invasion of Iraq, where full-scale civil war will take hold. We see Iraq becoming annexed by Iran, as we anticipate alliances and surprises yet unforeseen by the Pentagon, or at least the Bush Administration, disrupting American strength in the Persian Gulf.

European and U.K. shares are also benefiting from Bernanke's comments and the revised GDP strength, as the FTSE 100 Index shows a 0.79% rise today. The Dow Jones STOXX 50 PR, measuring 50 blue chip European shares, is up 0.78% through midday.

ECONOMIC DATA & NEWS
Wednesday welcomes the revised GDP number for the third quarter, with the 2.2% posted growth surpassing the consensus expectation for a 1.8% rise and the 1.6% increase in the second quarter. Also, the Fed's Beige Book will be released, highlighting regional economic activity.

More housing data Wednesday could feed further market concern, with October new home sales scheduled for 10 AM release. Bloomberg's survey shows consensus expectations at 1.05 million, versus 1.08 million in September. Mortgage application data released last week seems to point toward a greater decrease in home sales overall.

New York Fed President Timothy Geithner will contribute to an AICPA panel on financial stability and counterparty risk management.

COMMODITY MARKETS
Crude and heating oil are climbing today, as the nation prepares for a potentially powerful cold front. Temperatures in Calgary reached a 100-year low. Natural gas is lower, however, having already benefited from weather driven catalysts. Still, if the cold front lives up to its potential, we would expect natural gas to rise higher as well. Inventory data released today for oil and tomorrow for nat gas, could throw off trends temporarily. The nearing of conflict with Iran and likely an expanded war-front in the Middle East, should drive the floor higher under oil prices longer term, in our opinion.

Gold is down slightly, after benefiting significantly in recent days from a decline in the dollar. Ben Bernanke's comments and the revised GDP data, pose threat to gold prices today. However, we believe gold will rise further as it becomes apparent America is heading for war. Perhaps telling on that front, Iran's President Mahmoud Amadinejad will release a letter to the American people today through the United Nations.

STOCKS IN THE NEWS
Marathon Oil and EOG Resources will meet with analysts Wednesday, while Tiffany & Company, Aeropostale, and Synopsys report earnings. We hope you enjoyed your "Morning Coffee" and advise you to read "The Greek's Week Ahead" for a schedule of the week's market moving events. (disclosure)

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Sunday, November 26, 2006

The Greek's Week Ahead - Nov 27

Welcome back! Hope your Thanksgiving turkey was delicious and your company pleasant. Cyber Monday brought a bit of indigestion with a sharp decline in the Dow. However, retail sales for Black Friday showed strong year over year growth. Still, Wal-Mart estimated relatively weak same-store sales expectations for the current quarter compared to its historic results. Monday's market mayhem was blamed on concerns for a weakening dollar, as gold climbed higher. The drop probably had something to do with the expansion of chaos in Iraq, and Iran's sudden interest in helping to reshape the nation.

The week ahead brings several interesting bits of economic data. On Monday, most of the activity was overseas, as Americans trickled back into their offices post the holiday. Bank of Japan Governor Fukui spoke at Osaka University and the OECD issued its economic survey of Russia.

Tuesday, important economic data takes the limelight. The consumer confidence index is expected to rise to 108 in November. Also, closely watched for signs of a spiraling housing crisis, existing-home sales are expected to decline to 6.15 million from 6.18 million in September, according to a Bloomberg News survey. October durable goods sales are slated for release at 8:30 AM, with the consensus expecting a decline of 5% from a rise of 8.3% in September.

On the Fed tour, Chairman Ben Bernanke speaks Tuesday at an event sponsored by the National Italian American Foundation. Philly Fed President Charles Plosser will discuss his view of the economic outlook, in Rochester, N.Y. Chicago Fed Head Michael Moskow will speak at a Dow Jones Index event and former Fed Chairman Alan Greenspan addresses an investor conference in New York. Also, Treasury Secretary Henry Paulson will speak to the Confederation of British Industries conference.

Overseas, President Bush will attend the NATO summit in Riga, Latvia. Also, the OECD will present its economic outlook in Paris.

Anheuser-Busch will host a regional investor presentation, while Dress Barn Inc., Chico's Inc., and Semtech Corp. report earnings Tuesday.

Wednesday welcomes the revised GDP number for the third quarter, with a consensus expectation for a 1.8% rise versus a 1.6% increase in the second quarter. Also, the Fed's Beige Book will be released, highlighting regional economic activity.

More housing data Wednesday could feed further market concern, with October new home sales scheduled for 10 AM release. Bloomberg's survey shows consensus expectations at 1.05 million, versus 1.08 million in September. Mortgage application data released last week seems to point toward a greater decrease in home sales overall.
New York Fed President Timothy Geithner will contribute to an AICPA panel on financial stability and counterparty risk management.

Marathon Oil and EOG Resources will meet with analysts Wednesday, while Tiffany & Company, Aeropostale, and Synopsys report earnings.

Consumer health will once again come into focus Thursday when personal income and spending results are posted. Citigroup expects that an increase in wages and disbursements helped personal income and personal spending to rise 0.5% and 0.2%, respectively, in October. The November Chicago Purchasing Managers Index is expected to have been impacted by auto sales, but Bloomberg's consensus indicates it could rise to 54.0 from 53.5 in October.

The New York Society of Security Analysts meets for its alternative energy conference Thursday. Brinker International splits 3 for 2 at the close, while Lucent's merger with Alcatel is expected to close. Reporting earnings are Brown Forman Corp., Smithfield Foods Inc., HJ Heinz Co., Kellwood Co., Cheesecake Factory, H&R Block and Mcdata Corp.

Friday brings the Institute of Supply Management's November Index. Consensus sees the ISM at 51.8 versus 51.2 in October. Vehicle sales will also be released Friday, and October construction spending, which is seen by consensus falling 0.4% versus a 0.3% decline in September, will be announced.

Fed Chairman Ben Bernanke will open the International Research Forum on Monetary Policy in Washington Friday. Importantly, overseas, Mexico's presidential inauguration Friday and Venezuela's presidential election Sunday are likely to grab some spotlight, as anti-American sentiment seems to be driving political change in Latin America. We hope you find our weekly article useful to your preparation process, and look forward to publishing again Sunday evening. (disclosure)

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Wednesday, November 22, 2006

Happy Thanksgiving

Thank you for your loyal following and interest in our services. We are thankful for you, and we wish you the most pleasant holiday. Please take this opportunity to peruse our site, as our sponsors are offering wonderful holiday deals.

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Wednesday's Brew Nv 22

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Equity markets trading typically lightens significantly on the Wednesday before the holiday, barring any external stimulus. In early activity today, stocks are relatively unchanged across the Dow, S&P 500 and NASDAQ indices. With the holiday approaching, the bond market closes at 2 p.m. and CBOT trading ceases at 1 or 1:30 for all contracts except equities.

OVERSEAS MARKETS
Work overseas grinds on, as the World Economic Forum meets in Turkey from Wednesday through Friday. Stocks rose strongly across Asia today, with the Hang Seng climbing 1.28% to a record high. The NIKKEI rose 1.14% and Australia's S&P/ASX 200 Index appreciated 1.64%. Economic stimulus from Chinese growth is expected to continue to fuel the region. Within Australia, Quantas Airways Ltd. rose 15% as it was approached for takeover by Macquarie Bank Ltd. and Texas Pacific Group.

Stocks across Europe are mostly higher this morning, but in the U.K., the FTSE 100 presents anomaly, dipping 0.29% in early activity. We cannot pinpoint a specific factor for Europe's strength today, except that generally merger and acquisition activity within Europe has been strong, and continues to support pricing.

ECONOMIC DATA & NEWS
Wednesday brought the most important economic news of the week with the release of the University of Michigan's consumer sentiment index. A Bloomberg consensus of analysts poll saw a reading of 93.1 versus 92.3 last period. The actual reading was 92.1, lower than forecast but near a 15-month high. The reading seems to indicate that consumers remain relatively confident as a high employment rate and falling energy prices have helped to offset the impact of a weakening housing market.

U.S. Weekly Initial Jobless claims were reported 12,000 higher than the prior week, reaching 321,000. Economists surveyed by Bloomberg expected the figure to measure near the prior week's number. Fed view seems to be that a weakening labor market could help decrease labor cost pressure on inflation, but it's a slippery slope as economic recession might not be far off in such a scenario. We will continue to closely watch the interrelation between housing, employment, the consumer debt burden and spending.

The Mortgage Bankers Association released its seasonally adjusted index of mortgage application activity for the week ended Nov. 17. Application activity decreased 3.7% to 623.6 from the previous week's 647.5. This occurred despite a decrease in mortgage rates during the period. The index is contributed to by both refinancing and purchasing loans. The MBA's seasonally adjusted purchase index fell 2.8%, and was well below its year-ago level. Refinancing activity had been the savior of this indicator during the recent past, but perhaps that fuel is running thin now as well. This is the key reason we are recommending portfolio managers underweight the financial sector, especially lenders and mortgage brokers.

COMMODITY MARKETS
The Department of Energy reported crude-oil, gasoline and other distillates' inventories Wednesday. Crude stocks were widely anticipated to rise, while distillates were expected to fall, according to a Bloomberg News survey. Crude oil slipped slightly after the report should inventory rose more than expected and gasoline stocks rose, versus expectations for draw on inventory.

Plutonium, which climbed yesterday on speculation that a new fund might increase buying of the commodity futures, is seeing that hot air come out of its sails today. Metals are generally higher, as recent Asian demand concerns have been appeased by favorable economic data from Japan and Hong Kong, in our opinion.

STOCKS IN THE NEWS
Reporting earnings on Wednesday are Patterson Company Inc., Possis Medical, and appropriately so, turkey producer Hormel Foods Corp. Reckson Associates Realty will hold a shareholders meeting in Melville, NY Wednesday, of note because the company is the subject of a takeover bid by Carl Icahn and Macklowe Properties.

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Tuesday, November 21, 2006

Tuesday's Brew - Nov 21

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stock futures across the Dow, S&P 500 and NASDAQ indices are indicating a higher open today.

OVERSEAS MARKETS
The Hang Seng Index edged up 0.28% on strong 6.8% GDP growth in the Hong Kong market, driven by consumer spending and corporate investment. The growth exceeded expectations, and may perhaps be partially responsible for the rise in oil prices today. In Japan, the NIKKEI was relatively unchanged after the release of the most recent Bank of Japan meeting minutes. The report indicated the Bank's Board intends to raise rates steadily to cool economic growth and speculation in lending and land acquisition.

ECB President Jean-Claude Trichet said yesterday that economic growth in Europe and Japan is helping to rebalance the global economy. I'm not sure if he is speaking about a return to pre-industrial revolution times economic balance or what, but I'm sure growth in emerging markets like China and India are doing more for the "rebalancing" than is Europe and Japan. He more accurately views Japanese and European market growth as stabilizers to U.S. economic cyclicality and hyper growth from China/India. Markets across Europe were mostly moderately higher today.

The former premier of Italy, Silvio Berlusconi goes on trial in Milan on charges of false accounting, embezzlement and tax fraud related to the purchase of TV rights. Also, the dispute-settlement body of the World Trade Organization meets today in Geneva, likely amid usual protests.

ECONOMIC DATA & NEWS
The holiday week is light on economic news. However, today, Fed Governor Kevin Warsh addresses a group in New York on "market discipline and the Fed." Richmond Fed Head Jeffrey Lacker, the guy who wanted to raise rates, will speak to the Richmond Association for Business Economics. Also on Tuesday, the Treasury will announce two and five-year note sales.

COMMODITY MARKETS
Crude is rising today 0.65%, with headline media pointing toward weather disruption in Alaska, but we believe strong economic growth in Hong Kong and Japan, reinforced by recent data release, is a significant factor as well. We believe our theory is supported by the fact that Natural Gas is lower by 1.36% this morning, impacted by decline in U.S. markets. Natural gas is a more localized commodity trade, whereas oil prices are based on global demand. The divergence of the two today provides evidence that Asian economic growth may be behind the rise in oil, rather than a problem in Alaska, because such a problem, if serious, would raise demand for natural gas and pressure prices to rise.

Also impacting oil today, OPEC members are rumored to be in favor of a further production cut, but we view this as likely propaganda to impact the price of crude without action. Also, distillate inventories are expected to show a decline in supply again this week, by a Bloomberg survey of analysts.

Metals are mostly higher today, led by an increase in plutonium, which is rising on speculation that a new investment fund for the metal will make it more accessible to investors, and squeeze supply.

STOCKS IN THE NEWS
Reporting earnings on Tuesday are Dollar Tree Stores, Fred's, Genesco Inc., Gamestop Corp., Tech Data Corp., United Natural Foods, Brown Shoe Co., Eaton Vance Corp., Jack in The Box Inc., Mesa Air Group, Borders Group, Coldwater Creek and Payless Shoesource. Also Tuesday, Jacobs Engineering will hold an analysts' day and the lockup period on Loews' March secondary offering expires. (disclosure)

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Friday, November 17, 2006

The Greek's Week Ahead - Nov 20

"The Greek's Week Ahead" is designed to help you prepare for the market-moving events of the week so you and your portfolio are not caught off guard. Whether it helps you to prepare strategy or just raise your awareness of important factors that may move markets, we hope you find it useful.

The week of Thanksgiving is typically a light trading one, as most portfolio managers, traders and analysts hit the road early on Wednesday, if their in the office at all. Markets are closed Thursday for America's great celebration of Thanksgiving, and markets open for only an abbreviated session on Friday.

On the heals of solid CPI data, but frighteningly weak housing starts data last week, markets are likely to become less concerned with inflation risk and more worried about the potential for recession. The bond market seems to be indicating an expectation for interest rate cuts before any hike, and seems to portend a potential for economic recession. Housing starts and new permits both came in well below expectations for the month of October, and all eyes are on the consumer and his willingness to spend now. Consumer sentiment data this week and spending on Black Friday may provide some indication on how well the consumer is weathering the housing downturn.

On Monday, the leading economic indicators index is expected to show an increase of 0.2% for October, according to a Bloomberg survey of economists. The number is expected to have benefited some from the strength of the stock market during the month. Internationally, markets in Mexico and Brazil are closed for the day.

On the economic tour, Treasury Secretary Henry Paulson will speak in New York about the competitiveness of the U.S. capital markets. Dallas Fed President Richard Fisher addresses a group in Frankfurt, Germany, on the topic: "Is German Economic Decline Exaggerated or Inevitable?"

Congregating Monday, the Bank for International Settlements will hold its bi-monthly meeting in Sydney, and ECB President Jean-Claude Trichet will hold a coinciding news conference. Also, the National Association for Business Economics discusses its outlook. Finally, the Nobel Prize winner for his work on micro-lending programs for the poor, Muhammad Yunus, speaks at the National Press Club in Washington.

Reporting earnings on Monday are: Campbell Soup, Genesis Healthcare, Lowe's Company, Valspar Corp., Blue Coat Systems, Dycom Industries, Jo-Ann Stores, Nordstrom, Medtronic and Phillips-Van Heusen. Also, the lock-up period from the sale of shares of MasterCard International's IPO expires Monday.

Tuesday, Fed Governor Kevin Warsh addresses a group in New York on market discipline and the Fed. Richmond Fed Head Jeffrey Lacker, the guy who wanted to raise rates, will speak to the Richmond Association for Business Economics. Also on Tuesday, the Treasury will announce two and five-year note sales.

Overseas, the Bank of Japan will release the minutes from its October meeting. The former premier of Italy, Silvio Berlusconi goes on trial in Milan on charges of false accounting, embezzlement and tax fraud related to the purchase of TV rights. Finally, the dispute-settlement body of the World Trade Organization meets in Geneva likely amid protests as usual.

Reporting earnings on Tuesday are Dollar Tree Stores, Fred's, Genesco Inc., Gamestop Corp., Tech Data Corp., United Natural Foods, Brown Shoe Co., Eaton Vance Corp., Jack in The Box Inc., Mesa Air Group, Borders Group, Coldwater Creek and Payless Shoesource. Also Tuesday, Jacobs Engineering will hold an analysts' day and the lockup period on Loews' March secondary offering expires.

Wednesday brings the most important economic news of the week with the release of the University of Michigan's consumer sentiment index. The Bloomberg consensus of analysts poll sees a reading of 93.1 versus 92.3 last period. The Department of Energy reports crude-oil, gasoline and other distillates' inventories Wednesday. With the holiday approaching, the bond market closes at 2 p.m. and CBOT trading ceases at 1 or 1:30 for all contracts except equities. Equity markets trading typically lightens significantly on the Wednesday before the holiday, barring any external stimulus. However, work overseas grinds on, as the World Economic Forum meets in Turkey from Wednesday through Friday.

Reporting earnings on Wednesday are Patterson Company Inc., Possis Medical, and appropriately so, turkey producer Hormel Foods Corp. Reckson Associates Realty will hold a shareholders meeting in Melville, NY Wednesday, of note because the company is the subject of a takeover bid by Carl Icahn and Macklowe Properties.

Thursday welcomes the American holiday of Thanksgiving. May your turkey be yummy! U.S. markets will be closed for the feast. In Germany, the IFO business climate index will be released.

Regarding the most important topic of the day other than the condition of the turkey roast, our favorite sports blog, Monday Morning Mehta, is a great source for a preview of the day's and weekend's games.

Black Friday kicks off the holiday shopping season and many abstract measures of consumer spending on the day may drive shares, but for the most part market participants are likely to not be paying much attention to anything other than football. Equity markets are open for an abbreviated session, closing at 1:00 p.m., while the bond market wraps up at 2 p.m. and the CBOT turns the lights off at 1 or 1:30. The Nymex is closed for the day. Sunday brings an important election in South America, where a Chavez like right wing candidate stands a chance at winning a presidential runoff election in Ecuador. We hope you enjoyed "The Greek's Week Ahead" and recommend you read "Today's Morning Coffee" during the week to get your free market preview for the day. We will not publish on Thursday or Friday this week. (disclosure)

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Friday's Brew Nov - 17

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stocks across the Dow, S&P 500 and NASDAQ indices are lower this morning after the release of housing start and permit data well below expectations.

OVERSEAS MARKETS
The NIKKEI dipped 0.47%, impacted by the decline of energy and metals shares, as capital flow shifted after Core CPI results in America came in lower than anticipated. Indian indices also declined today after Pakistan tested a nuclear capable missile with reach of 1,300 miles. The Vietnamese Ho Chi Minh Stock Index climbed 2.5%, as it continues to benefit from its entry into the WTO and a positive visit from President Bush.

In Europe, shares were mostly lower Friday after the weaker than expected U.S. housing starts data. The CAC 40 Index was down about 1.3% while the FTSE 100 was slipping roughly 0.9%.

ECONOMIC DATA & NEWS
Friday finished the week's economic data parade, with the release of October Housing Starts. A Bloomberg survey of economists forecast the number of housing starts at 1.68 million annual rate, versus 1.77 million in September. Actual results measured far below consensus, currently running at an annual rate of 1.486 million, welcoming investors back to the housing collapse. Perhaps just as important, new housing permits data, which were seen by Briefing.com's survey of economists as totaling 1.625 million, versus 1.619 million in September, actually came in at a 1.535 million annual pace. This number should not be taken as a sign that growth could ensue next month, as of the many permits signed into, a good deal are likely be defaulted upon.

We foresaw this weakness in "The Greek's Week Ahead" published on Monday morning. We said then that "the tone of large U.S. home builders provides concern, and we believe the data will fall below consensus estimates, driving down housing stocks that have risen from lows." Clearly concern will return to the market that the consumer may be impacted by debt costs and decreases in the value of equity held in homes. We believe financial markets may be on the verge of crisis, due to the indiscretion of mortgage brokers and lenders who have signed a great deal of unsavvy Americans to mortgages they do not understand and cannot afford. We fully expect foreclosures and mortgage defaults to increase, as well as other consumer debt defaults. We would underweight the financial sector, and especially the shares of impacted lenders and mortgage brokers. Many banks have already shown signs of trouble, with EPS estimates and guidance being adjusted lower as they face increasing bad debt and continued competition for deposits. Washington Mutual is a good example of what we are talking about.

Cleveland Fed President Sandra Pianalto speaks today at the Fed's Universities, Innovation and Economic Growth conference.

COMMODITY MARKETS
Crude is down 0.8% today, to $55.80, after experiencing a sharp decline on Thursday. Crude made a 17-month low today, as weather in the northern third of the United States is expected to be relatively warm this winter, due to an El Nino pattern. As important, consultant Oil Movements said yesterday that November OPEC shipments will rise, indicating that members are not sticking to their agreed upon production cut. This week, we predicted OPEC would not agree to further reductions at their December meeting. However, we maintain that rising tension surrounding the Iranian issue and other geopolitical risks, as well as a seemingly Fed satisfying economy in the U.S. (with inflation coming down and economic growth continuing) is supportive of oil prices at current levels.

STOCKS IN THE NEWS
Reporting earnings on Friday are Foot Locker, Smucker JM Company, and Anntaylor Stores. (disclosure)

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Thursday, November 16, 2006

Thursday's Brew Nov 16

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Major stock indices are higher to start the day today, driven by the Core CPI data release, which showed a lower than anticipated increase. The NASDAQ may be pressured through the day by Dell's earnings delay and a warning from Applied Materials.

OVERSEAS MARKETS
The NIKKEI dipped 0.49% while the Hang Seng edged higher 0.32% Thursday. The Bank of Japan ended its two-day meeting leaving interest rates unchanged. Japanese banking shares led the market lower, as Shinsei Bank Ltd. lowered its forecast. In Hong Kong, the market rose on the mild industrial expansion report, which gave participants hope that the government would not apply restrictive monetary policy.

The European Central Bank will convene today, but is not expected to issue a rate decision. Benefiting from the release of favorable American CPI data, stocks across Europe are higher today. The FTSE 100 index leads area markets, up 0.32% so far today.

ECONOMIC DATA & NEWS
Thursday threatened to ring the economic warning bells again with the release of the Consumer Price Index, but instead is likely to ring in a celebration today. Economists surveyed by Briefing.com saw the index decreasing 0.3%, but expected a rise of 0.2% for the Core CPI measure (Bloomberg's survey saw a 0.3% rise). The actual Core CPI rise of 0.1% was welcomed good news, possibly indicating that the Fed has gotten it right and inflation is coming under control. This is perhaps the most important news of the month and could spark another leg of rally heading into the holiday season.

October Industrial Production is also on the schedule Thursday, with expectations for a 0.2% rise, according to Briefing.com (Bloomberg's survey sees a 0.3% rise). October Capacity Utilization is seen at 82% by both polls, compared to 81.9% last period. Finally, the November Philly Fed Survey is seen measuring between 5.0 to 5.5.

Fed Governors Randall Kroszner and William Poole will address the Cato Institute conference on Fed Policy in the Face of Crises, while Fed Governor Susan Bies speaks at an EU/U.S. banking forum in Washington D.C. One more talking head of note takes the podium Thursday, Financial Accounting Standards Board Chairman Robert Herz will address the Financial Executives International Conference in New York.

COMMODITY MARKETS
Crude oil and distillates are rising today, as the Department of Energy data released yesterday showed supplies of distillate fuels, including heating oil and diesel, fell 3.57 million barrels last week. Gasoline supplies declined 3.78 million barrels to 200.3 million. As we pointed out recently, refinery maintenance season has ended, and distillate inventories are likely to increase in our view, while crude inventory is likely to decrease. The opposite of this widely held view surprised markets yesterday and continues to drive oil higher today. There remains concern that OPEC could again cut production as a result of its December meeting, but we do not expect so. However, we continue to expect tensions surrounding the Iranian nuclear issue to maintain a floor for crude near $60, with significant upside potential if tensions rise.

Gold is higher today roughly 0.7%, while copper is down fractionally. Seasonal demand during the holidays adds support for gold, while it continues to have safe-haven appeal as Mid-East unrest persists.

STOCKS IN THE NEWS
Dell Computer (DELL) delayed its third-quarter earnings report and stated federal regulators had begun a formal investigation into the company. The quarterly report, previously scheduled for today, is expected to be released later in the month. Though the company stated the delay was unrelated to the SEC probe, the release was especially concerning. The company stated it was unaware of the focus of the SEC investigation. DELL shares were down 3.7% this morning.

Applied Materials (AMAT) reported quarterly EPS of $0.30, a penny below estimates compiled by Thomson Financial. AMAT also warned fiscal 2007 would start slow due to flat-panel display softness.

Reporting Earnings on Thursday, Hewlett-Packard, Starbucks, Sears Holdings, Gap, Autodesk, Williams-Sonoma, Hillenbrand Industries, Barnes & Noble, Helmerich & Payne, Claire's Stores and Big Lots. (See the disclosure at Wall Street Greek)

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Wednesday, November 15, 2006

Wednesday's Brew Nv 15

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stock futures across the Dow, S&P 500 and NASDAQ indices are down across the board this morning ahead of tomorrow's important CPI data. U.S. Airways added some energy to the day, announcing an $8 billion bid for Delta Air Lines.

OVERSEAS MARKETS
While the NIKKEI reacted lower after Tuesday's sharp rise on strong GDP growth, the Hang Seng climbed 1.14% as Chinese industrial production rose less than expected, easing concerns the government might restrict lending.

Stocks are up across major indices in Europe, Africa and the Middle East so far today, driven by signals from U.S. Fed officials that rates are likely to remain unchanged. The FTSE 100 Index is up 0.32% in early activity, while the OMX Stockholm 30 is 1% higher.

ECONOMIC DATA & NEWS
Wednesday brings important data, most important likely being internationally sourced. The release of three economic indicators on China by the Milken Institute have the potential to impact markets, and include data on the renminbi, Chinese IPOs and debt.

In the U.K., the Bank of England released its report on inflation. The BOE sees inflation slowing ahead of schedule, and anticipates it could ease to a rate of 2% by mid-2007. However, ahead of the decrease, it sees inflation rising into the end of this year to 2.7% or so. The forecast is predicated on the view that the cost of imports and energy will ease further this year.

GEOPOLITICAL SCENE & COMMODITY MARKETS
Likely grabbing media attention today, ex-CIA director James Woolsey will speak at an American Foreign Policy Council confab on "Understanding the Iranian Threat." Crude is up 0.5% in early trading, as Iran is back in the spotlight. President Bush met with Israeli leaders earlier this week and is speaking this morning with Vladimir Putin. Mahmoud Amadinejad announced yesterday that his country is near completing the nuclear cycle and is a nuclear state.

Threatening Rhetoric from Israel portends an air assault on Iran's facilities if the international community fails to resolve the issue with diplomacy. Iran responded, announcing it would not wait a single second before countering any attack on its sovereign territory. Crude is not currently pricing in the probability of an Israeli intervention on Iran, or the counter attack likely from Iran and its agents across the world. It seems apparent that President Bush is intent on addressing the Iranian issue before he leaves office, thus placing a one-year time line on the issue, as any military effort is not likely to occur later than that in our view. Metals, including gold, are down in early trading today.

STOCKS IN THE NEWS
Wal-Mart executives will address the Morgan Stanley Consumer & Retail Conference in New York. Reporting earnings Wednesday are: Tyco International, Applied Materials, Network Appliance, Limited Brands Inc., Petsmart Inc. and UGI Corp. (See the disclosure at Wall Street Greek.)

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Tuesday, November 14, 2006

Tuesday's Brew Nov 14

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stocks are higher today on positive PPI and retail sales data, but the Fed meeting minutes to be released later today have the potential to spoil the appetite of investors.

OVERSEAS MARKETS
The NIKKEI 225 rocketed higher 1.67% Tuesday, on a reassuring government report showing GDP growth was higher than expected. Asia's largest economy grew 2% in the third quarter, a full percentage point more than the median expectation of economists surveyed by Bloomberg. Japanese stocks had been wavering of late, on the heels of North Korea instability and other economic reports that seemed to show the economy weakening. Tomorrow, the Bank of Japan will begin a two-day meeting, concluding Thursday with its decision on interest rates.

European stocks were down earlier this AM, but have turned for the better on better than expected Core PPI results in America. European stocks were down early on the release of economic growth data for the European region, which showed growth of 0.5% for the third quarter. Also, investor confidence in Germany was measured at its lowest level since 1993.

ECONOMIC DATA & NEWS
Tuesday starts the week's economic data roll with the October Producer Price Index release. Economists polled by Briefing.com expected PPI to show a 0.4% drop, and PPI actually fell 1.6%, better than expected. The drop is significantly impacted by lower energy prices, but Core PPI, which excludes volatile food and energy prices, was expected to rise 0.1% and it fell 0.9%, a result much better than expectations. This should add some lift to markets today, but the pending releases of further economic data are keeping markets cautious after an early pop.

A second barometer of economic strength, October's retail sales data was released this morning. It was seen decreasing by 0.4%, according to Bloomberg, and the actual result showed a decrease of 0.2%. However, September's numbers were revised lower, showing a decrease of 0.8%. Most important, purchases in October excluding gasoline rose 0.4%. Decreasing retail sales would have be concerning, as the consumer has been a stalwart of the American economy over the years. Sales results may yet be impacted by wallet constraint due to rising consumer debt and debt expenses as credit card providers squeeze already money tight mortgage holders. Also, and not to be ignored, the retail environment may be saturated, and due for some capacity reduction. However, the sales results do not portend a bad consumer environment, in our view. Economists may remain concerned that potentially higher energy prices may once again squeeze consumers at a time when their mortgages are already squeezing them. Still, unemployment remains low, supportive to the economy, and today's data was positive, in our opinion.

A third piece of important data will reach the market Tuesday. The minutes of the October meeting of the Federal Reserve have the ability to drive markets, as its content is closely screened to provide reading for future Fed action and concerns. Tuesday also brings September Business Inventories, seen by Bloomberg rising 0.5%, versus a 0.6% rise in August.

Other interesting bits of information that seem set to take a back seat to the economic releases of the day, still hold the potential to headline the news. Ford Motor is expected to file its delayed 10-Q with the SEC on Tuesday. The delay was attributed to accounting error and restatement. One might read into Ford's recent change of CEO as portending a certain depth of bad news within the release. Thus, Ford's release and its conference call at 10 AM could move markets.

St. Louis Fed Chief William Poole will address the Chartered Financial Analysts Society in Wilmington, Delaware. The New York Society of Securities Analysts will holds its banking conference Tuesday. Finally, not to be ignored, internationally, India and Pakistan will resume their peace talks.

COMMODITY MARKETS
Metals prices are mostly bouncing higher today after Monday's collapse. Today's news from Japanese and American markets implies continued demand for raw materials, alleviating the pressure that came on yesterday's supply data showing inventory growth in the copper market.

Crude oil prices are stable today, as the market digests data, but we expect crude to rise in the near term. If economic health is okay in Japan and inflation tamed in America, and Iran facing threats from Israel, oil seems destined to go higher, in our view.

STOCKS IN THE NEWS
Reporting earnings Tuesday, Wal-Mart, Home Depot, Target, Staples, Agilent Technologies, TJX Companies, Analog Devices, American Eagle, DR Horton, Abercrombie & Fitch, Ross Stores and Saks Incorporated. Home Depot (HD) reported quarterly EPS of $0.73, versus analyst expectations for $0.75. HD blamed the weakening housing market and a calm hurricane season for its results. The company also lowered its guidance for the rest of this year. HD is down approximately 1.2% in early trading. Wal-Mart reported EPS of $0.62 before a one-time gain, compared to consensus expectations of $0.59, as compiled by Thomson Financial. However, WMT tightened and reduced its EPS guidance range for the full year. Despite that news, WMT shares are up 2.5%, as the retailer is seen as a serious competitor on price this holiday season. We hope you enjoyed "Today's Morning Coffee" and wish you a good day trading. (See Wall Street Greek for our disclosure.)

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Friday, November 10, 2006

The Greek's Week Ahead - Nov 13

"The Greek's Week Ahead" is designed to help you prepare for the market-moving events of the week so you and your portfolio are not caught off guard. Whether it helps you to prepare strategy or just raise your awareness of important factors that may move markets, we hope you find it useful. A slew of economic data, including the highly anticipated inflationary metrics, PPI and CPI, meet the market this week. Also, the minutes from the most recent Fed meeting will be released, and they typically contain a cautionary tone. Also, significant retail sales data hits the newswires this week, as well as corporate earnings reports from several key retail and technology companies.

Monday brings little outside of concern for the economic data to follow later in the week. Lighting a fire of concern for retailers, Wal-Mart announced broad reaching holiday price cuts on Monday that may prove damaging to a variety of retail competitors.

U.S. Commerce Secretary Carlos Gutierrez is leading a delegation to China. Also possibly impacting Asian markets, Australia's Reserve Bank will report on its monetary policy. The S&P/ASX 200 Index closed 0.34% lower Monday and the NIKKEI slipped 0.56%. In Japan, banks continue to lead shares lower on recently weak economic data.

In the U.K., the FTSE 100 Index was down approximately 0.28% into the afternoon Monday, driven by weakness in metals and mining shares as metals prices including aluminum, nickel, zinc, copper, silver and gold were all falling Monday. Concern for global economic growth has begun to impact commodity concerns across the board. Last week, expectations were reduced for Chinese crude oil demand through 2007. Now with concerning news out of Japan, the world's second largest economy, commodities are starting to pay attention. Today, copper inventory monitored by the London Metals Exchange gained 2.1%, reaching the highest level since April 2004. Concerns are rising that 2007 could bring an inventory glut.

Markets in the U.S. rose Monday across the Dow, S&P 500 and NASDAQ indices. U.S. markets are gearing up for the key economic data beginning Tuesday. Tyson Foods releases fourth quarter earnings on a quiet day for releases generally.

Tuesday starts the economic data roll, as the October Producer Price Index is expected by economists polled by Briefing.com to show a 0.4% drop. The drop is significantly impacted by lower energy prices, but Core PPI, which excludes volatile food and energy prices, is expected to rise 0.1%. A second barometer of economic strength, October's retail sales data will be released, and is seen decreasing by 0.4%, according to Bloomberg. Decreasing retail sales is concerning, as the consumer has been a stalwart of the American economy over the years. Decreasing sales results may be indicative of wallet constraint due to rising consumer debt and debt expenses as credit card providers squeeze already money tight mortgage holders. Also, and not to be ignored, the retail environment may be saturated, and due for some capacity reduction.
Finally, a third piece of important data will reach the market Tuesday. The minutes of the October meeting of the Federal Reserve have the ability to drive markets, as its content is closely screened to provide reading for future Fed action and concerns. Tuesday also brings September Business Inventories, seen by Bloomberg rising 0.5%, versus a 0.6% rise in August.

Other interesting bits of information that seem set to take a back seat to the economic releases of the day, still hold the potential to headline the news. Ford Motor is expected to file its delayed 10-Q with the SEC on Tuesday. The delay was attributed to accounting error and restatement. One might read into Ford's recent change of CEO as portending a certain depth of bad news within the release. Thus, Ford's release and its conference call at 10 AM could move markets.

St. Louis Fed Chief William Poole will address the Chartered Financial Analysts Society in Wilmington, Delaware. The New York Society of Securities Analysts will holds its banking conference Tuesday. Finally, not to be ignored, internationally, India and Pakistan will resume their peace talks.

Reporting earnings Tuesday, look for Wal-Mart, Home Depot, Target, Staples, Agilent Technologies, TJX Companies, Analog Devices, American Eagle, DR Horton, Abercrombie & Fitch, Ross Stores and Saks Incorporated.

Wednesday brings important data, most important likely being internationally sourced. The release of three economic indicators on China by the Milken Institute have the potential to impact markets, and include data on the renminbi, Chinese IPOs and debt. In the U.K., the Bank of England will release its report on inflation. Finally, likely grabbing some attention by the likes of CNN, ex-CIA director James Woolsey will speak at an American Foreign Policy Council confab on "Understanding the Iranian Threat."

Wal-Mart executives will address the Morgan Stanley Consumer & Retail Conference in New York. Reporting earnings Wednesday are: Tyco International, Applied Materials, Network Appliance, Limited Brands Inc., Petsmart Inc. and UGI Corp.

Thursday rings the economic warning bells again with the release of the Consumer Price Index. Economists surveyed by Briefing.com see the index decreasing 0.3%, but they see a rise of 0.2% for the Core CPI measure (Bloomberg's survey sees a 0.3% rise). October Industrial Production is also on the schedule Thursday, with expectations for a 0.2% rise, according to Briefing.com (Bloomberg's survey sees a 0.3% rise). October Capacity Utilization is seen at 82% by both polls, compared to 81.9% last period. Finally, the November Philly Fed Survey is seen measuring between 5.0 to 5.5.

Overseas, the Bank of Japan ends its two-day meeting, and will issue its decision on interest rates. The European Central Bank will convene as well, but is not expected to issue a rate decision.

Fed Governors Randall Kroszner and William Poole will address the Cato Institute conference on Fed Policy in the Face of Crises, while Fed Governor Susan Bies speaks at an EU/U.S. banking forum in Washington D.C. One more talking head of note takes the podium Thursday, Financial Accounting Standards Board Chairman Robert Herz will address the Financial Executives International Conference in New York.

Reporting Earnings on Thursday, Hewlett-Packard, Dell, Starbucks, Sears Holdings, Gap, Autodesk, Williams-Sonoma, Hillenbrand Industries, Barnes & Noble, Helmerich & Payne, Claire's Stores and Big Lots.

Friday finishes the data parade, with the release of October Housing Starts, seen by a Bloomberg survey of economists at 1.68 million, versus 1.77 million in September. Perhaps just as important, new housing permits data will be announced, and is seen by Briefing.com's survey of economists as totaling 1.625 million, versus 1.619 million in September. The tone of large U.S. home builders provides concern, and we believe the data will fall below consensus estimates, driving down housing stocks that have risen from lows. Cleveland Fed President Sandra Pianalto speaks at the Fed's Universities, Innovation and Economic Growth conference. Reporting earnings on Friday are Foot Locker, Smucker JM Company, and Anntaylor Stores.

We hope you enjoyed "The Greek's Week Ahead," and remind you to look for "Today's Morning Coffee" from Tuesday through Friday for a closer look at what will move markets each day. See Wall Street Greek home page for our disclosure.

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Friday's Brew (Nov 10)

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Futures across the Dow, S&P 500 and NASDAQ indices are all indicating a slightly higher open. However, we believe yesterday's move lower, driven by concern about the Democratic impact on corporate economics, was the beginning of a trend that could continue to drive gold higher in the near term while impacting stocks negatively. Still, slipping oil prices portend to protect stocks some today.

OVERSEAS MARKETS
Stocks were down in both Japan and Hong Kong today, with the NIKKEI down 0.53% and the Hang Seng slipping 0.33%. In Japan, a government report showed machinery orders fell unexpectedly and signaled that economic growth may be slowing. China announced yesterday that it would diversify its capital reserves away from dollars. While diversification is a good risk reduction tool, the decision concerned investors who viewed it as a political signal on the heels of some Congressional threats of import tariffs for Chinese goods. Mark this down as the first impact of Democratic Congressional control.

Stocks across Europe were also lower this morning, with not much to look forward to in American markets and after the Bank of England's rate increase earlier in the week. The FTSE 100 was relatively unchanged today, while the OMX Stockholm 30 Index led all markets lower, falling 0.66%.

French economic growth slowed dramatically in the third quarter. The news may reduce the likelihood that the European Central Bank will continue raising interest rates next year. The CAC 40 Index was relatively unchanged today.

ECONOMIC DATA & NEWS
Friday brings the quiet before the storm of economic data set for release next week. The most significant news today may come from Fed Chairman Ben Bernanke, as he speaks at a conference in Frankfurt.

COMMODITY MARKETS
While the dollar suffered on China's announcement to diversify reserves, gold rocketed higher as speculators assumed China would be a buyer of the commodity. Gold is giving back ground today on early profit taking, down approximately 0.64%.

Natural gas shot higher yesterday on an unexpected level of draw down of gas in storage. Crude oil is down today as the International Energy Agency reduced its projection for world oil demand this year by 80,000 barrels a day. The IEA attributed the adjustment to lower gasoline demand than previously forecast for China. The agency also reduced its consumption expectations for 2007, and this news is seen putting downward on oil prices today.

STOCKS IN THE NEWS
Disney is down 2.6% in pre-market activity, despite posting strong quarterly results. It raised market concerns, as it told investors it would be spending heavily in new theme park attractions. Analysts are concerned that the spectacular success the company had in 2006 will make earnings comparables difficult to surpass in a business largely dependent on the success of the next film.

While stocks look to be pressured by Democratic impact within Congress, today they will likely receive a bit of protection from the oil demand news. As oil weakens, energy costs to corporations stand to decrease as do expenses of consumers, who may then spend more freely. We hope you enjoyed "Today's Morning Coffee" and wish you a good day trading. Look for your weekly market-moving event planner, "The Greek's Week Ahead", available Sunday evening. (disclosure)

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Thursday, November 09, 2006

Thursday's Brew (Nov 9)

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Cisco Systems' solid earnings report has NASDAQ futures indicating higher this morning, but Dow and S&P 500 futures indicate a lower open today following yesterday's rise.

Indeed, we believe the market will wake up with a hangover today after yesterday's going away party for Donald Rumsfeld. The market will open its eyes to the harsh reality that the Democrats control Congress. It will take more than two aspirin to subdue the pounding headache, as victorious Dems find microphones and audiences across the country, and announce "drug reform!" and "budget reform!", implying higher taxes. When they start proclaiming "Corporate reform! Down with big oil!", investors will begin to see clearer the environmental change in store for the stock market.

OVERSEAS MARKETS
The Bank of England raised the key repurchase rate to 5%, a five-year high. Bankers blamed strong economic growth, and warned that it could drive inflation above the Bank's target. Stocks are mixed in Europe, though mostly down. The FTSE 100 Index is down 0.28% in morning trading, driven by GlaxoSmithKline Plc and other drugmakers with sales sensitivity to the endangered U.S. market, following Democrat victory in the American elections. The OMX Stockholm 30 Index leads all markets across the pond, rising 0.47% so far today.

While the NIKKEI slipped fractionally Thursday, the Hang Seng Index climbed 0.75%. In Japan, a central bank report showed lending had declined for a third straight month, and bank stocks led market decliners as a group. In China, data showed the trade surplus increased to a record $23.8 billion in October, compared to $15.3 billion in September. Exports soared 29.6%, and this is expected to draw further criticism from Europe and the U.S. about the unfair trade environment that exists in China and Chinese violations of copyright laws and protectionism. Of course, this noise will fall on deaf Chinese ears, as China remains a critical partner to manufacturing across the world and offers great potential as an export market.

However, our own analysis indicates that Europe will increasingly turn to emerging markets within Ex-Soviet Republics in deep Eastern Europe for a competitive option to Chinese manufacturing costs. The World Bank recently ranked the Republic of Georgia as the fastest improving emerging market. Clearly, the Ex-Soviet states still hold much risk, as Russia seems to be regressing to old habits and pressuring rising democracies seeking to improve ties to the U.S. In Georgia for instance, Russia has ruled mineral water and wine from Georgia, imported for years, below health quality standards. As a result, it has closed Georgia's most important export market for the products. At the same time, indications are that Russian owned Gazprom will double the price of natural gas it sells into Georgia this winter. Georgia, the Ukraine, Armenia and others are increasingly working together to support their separation from their old rulers.

ECONOMIC DATA & ANALYSIS
Economic news will likely decide the day today, with a couple key indicators scheduled for release. Weekly jobless claims for the week of November 4 is expected to decline to roughly 315,000. Also, the University of Michigan is scheduled to make its November reading of the consumer sentiment index, and economists expect a reading of 93.0, little changed from October.

The September International Trade data will be released today, and economists see a large decline to a deficit of $66.0 billion from the all-time high of $69.9 billion measured in August. Also, the Bureau of Labor Statistics will release its import-price index. Expectations are for a 1% decrease in import prices in October, versus a 2.1% decrease in September.

Former Fed Chairman, Alan Greenspan, will speak at the AMR Research conference in Boston. At the White House, the second U.S.-EU Economic Ministerial will take place. Also on Thursday, President Bush will meet with Mexico's president-elect, Felipe Calderon.

COMMODITY MARKET NEWS
Sugar and corn continue to benefit from demand for ethanol stressing production capacity. Sugar leads all commodity futures today, up approximately 3.3% today. Nickel and aluminum lead all commodities on the downside, down approximately 4% and 3%, respectively. However, other metals are showing strength today, including copper, which is up 1% on speculation of production disruption impact to the supply/demand equation. Gold is also stronger by about 1% today, driven by inflation concerns, and long-term jewelry demand from markets like India. Gold continues to find support from geopolitical risk as well, with world and dollar stability fragile and perhaps one large terror event away from collapse.

Crude oil rose yesterday and is up roughly 1% today as distillate inventories declined 2.68 million barrels last week. Crude oil inventory continued to build 435,000 barrels last week, and currently stands 11% ahead of average levels. However, refinery maintenance season is over, and markets are anticipating stockpiles to begin to be pressured by winter demand for heating oil. However, a heat wave is sweeping the nation, as temperatures are above 100 degrees in Los Angeles and approaching 70 in New York today. Longer term, oil pricing could benefit from a Democratically controlled Congress. If the Democrats can put forth an electable presidential candidate, environmental concerns could limit certain U.S. production plans, constraining supply. With President Bush in office for the next two years, environmentalist lobbies should continue to prove weak.

STOCKS IN THE NEWS
Reporting earnings on Thursday, King Pharma, Viacom, J.C. Penney, Nvidia Corp., TXU Corp. Valor Communications, American International Group, Disney, and Kohls Corp. Cisco Systems (CSCO) leads all newsmakers today, posting sales growth of 25% and reporting fiscal Q1 profit before special items of $1.9 billion, or 31 cents per share, versus $1.6 billion, or 25 cents per share a year ago. CSCO's results exceeded consensus analyst expectations for 29 cents per share, according to Thomson Financial Network. Also boosting the shares, UBS analyst Nikos Theodosopoulos upgraded Cisco to "Buy" from "Neutral". We hope you enjoyed "Today's Morning Coffee" and wish you a good day trading. (disclosure)

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Wednesday, November 08, 2006

Wednesday's Brew (Nov 8)

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stock futures are down sharply in early activity, as the market is likely to have difficulty digesting Democratic wins in both the House and Senate. The Senate results appear set to drag out, as two close battles remain unsettled. Wall Street had not counted on Democratic wins in both houses of Congress, but you heard it here yesterday. This is likely the catalyst to take markets another leg lower, though anything short of total control for the Democrats is not enough to influence the administration meaningfully. With the Dems controlling both houses, President Bush will have to make some concessions in order to avoid being a lame duck leader for the rest of his term.

OVERSEAS MARKETS
The NIKKEI dropped over 1%, the Hang Seng fell 0.68% and the S&P/ASX 200 shed 0.59%, as concern for U.S. markets post the potential shift of power toward the Democrats pressured shares globally. In Australia, economists expected and received an interest rate increase, and many markets in Asia were trading at or near record territory heading into the American elections, allowing slack for retracing.

Shares across the U.K. and Europe have followed suit to start the day, as shares of firms with sensitivity to U.S. markets are leading the drive downward. Among early losers today are GlaxoSmithKline Plc, as pharmaceuticals appear especially susceptible to earnings impact should the Dems push for lower prescription drug pricing.

ECONOMIC DATA & NEWS
The U.S. economic calendar is rather muted today. As previously noted, Australia's Reserve Bank impacted Asian stocks as it ended its meeting and issued its decision to raise interest rates.

Back home, SEC Chairman Christopher Cox and other market notables will headline the SIFMA meeting in Florida. The New York Society of Securities Analysts holds its energy conference today as well.

COMMODITY MARKETS
Natural gas leads all commodities, rebounding after a sharp fall yesterday. Nat gas is up approximately 1.68% today. After its sharp rise yesterday, ethanol demand beneficiary, sugar is down about 1.45% today. However, confounding consensus, corn is up roughly 1.28% today. Corn is benefiting specifically from speculation that the government may reduce the nation's crop forecast due to July weather damage.

Crude oil is up fractionally, as traders speculate heating oil supplies declined last week due to the cold spell that swept much of the country. The U.S. Energy Department will announce inventory levels at its regular time today, 10:30 EST. Analysts surveyed by Bloomberg News expect distillate supplies, including heating oil and diesel fuel, likely fell 800,000 barrels last week.

STOCKS NEWS
Reporting earnings Wednesday, look for Cisco Systems Inc., Federated Department Stores, Barr Pharmaceuticals, Dynegy, Hospira, Interpublic Group, PG&E Corp., and BMC Software Inc.

Sirius Satellite Radio (SIRI) posted a narrower than expected third quarter loss, reporting a loss of $0.12, versus analysts' consensus for a $0.14 miss. SIRI's results came on a strong rise in subscriptions, and the company reaffirmed its full-year outlook. SIRI shares were up 3.7% in pre-market trading. Drugmaker, Merck & Co. (MRK), indicated in an SEC filing that it may face $5.58 billion in tax liability related to disputes over accounting for past transactions. Shares of MRK are down 2.5% in early activity.

While big pharma should be pressured by the Democrats' rise to power, there are some firms that may benefit within the health care space. Genetic engineering firms that have suffered from conservative restraint, may rise as that restraint is potentially removed. We hope you enjoyed your "Morning Coffee" and wish you a good day trading. Be sure to read "The Greek's Week Ahead" for your market-moving event planner for the week. (disclosure)

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Tuesday, November 07, 2006

Tuesday's Brew (Nov 7)

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stock futures were higher in pre-market activity, but a comparison to fair value, which predicts the direction of equities at the open, points to the S&P 500 opening slightly higher while the Nasdaq looks set to open a bit lower. Tuesday marks election day, and is likely to monopolize the news media and top traders' concerns. One-third of the Senate seats and 435 House positions will be in play.

OVERSEAS MARKET NEWS
Markets in Asia were mostly noneventful today, outside of Australia, where the S&P/ASX 200 Index rose 0.87%. Australia's indices benefited from anticipation of a favorable rate decision on Wednesday from Australia's Reserve Bank.

Stocks were up across Europe this morning. The Euro Stoxx 50, measuring stocks across the 12 member nations, was up 0.4% just past midday Tuesday. The rise in Europe is generally being attributed to the strength in corporate earnings and to takeover activity.

ECONOMIC DATA & NEWS
Heading the economic news front, consumer credit for September is expected by economists surveyed by Bloomberg to increase by $6 billion, after showing $5 billion growth in August. The question we have been juggling with for years is just how far extended can the American consumer get before he goes bust. The rise of interest rates has certainly begun to strain the consumer, and housing defaults and foreclosures are on the rise, but still not at a concerning level.

However, today Toll Brothers (TOL) added more fuel to the fire, with its outlook on housing. TOL's fiscal Q4 revenues fell 10%, and the home builder further reduced its forecast for the number of homes it expects to construct in its FY 07. Chairman & CEO Robert Toll's comments were telling, as he said, "We continue to look for signs that a recovery is imminent but can't yet say that one is in sight.''

Chicago Fed Chief Moskow's comments fell on deaf ears yesterday, as he indicated that interest rates may yet be raised. We view this as a sign that the recent trend lower for stocks has lost some technical strength, and would need further catalyst to head decisively lower in the near-term. Cleveland Fed head, Sandra Pianalto offset Moskow's comments, stating "I expect the economy to weather the recent challenges in the housing market.''

In our opinion, the economic fuel that has driven shares lower recently is running out of steam. However, today's election results could start the trend down another level should the Democrats score victories and take control of Congress. However, anything short of that, we anticipate will help solidify ground under current market levels near term.

COMMODITY MARKET ACTIVITY & NEWS
Gold is down fractionally this morning, as sugar leads all commodities, up nearly 4%. On the downside, natural gas is slipping approximately 2.5% today. Crude is unchanged, despite a rebel seizure of a pumping station in Nigeria yesterday. One-fifth of U.S. oil imports are sourced from Nigeria, and the current situation has affected 50,000 barrels a day of production. Refinery maintenance season has ended, and capacity usage is rising, so we expect oil inventory growth to weaken while gasoline inventory should strengthen. This should help the consumer, as gas prices should benefit, barring any significant crude interruption.

STOCKS
Reporting earnings on Tuesday, Dean Foods, Emerson Electric, RR Donnelley & Sons, International Game Technologies, Sara Lee Corp., Tenet Healthcare, and Watson Pharma Inc. The big story today is Toll Brothers and Beazer Homes, both reporting that the housing slump continues, in our opinion. The general tone for stocks today, in our view, is negative, and we expect much of yesterday's gain to be given back today. We hope you enjoyed your "Morning Coffee" and we wish you a good day trading. Read our weekly market-moving event planner at "The Greek's Week Ahead." (disclosure)


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Friday, November 03, 2006

The Greek's Week Ahead - Nov 6

"The Greek's Week Ahead" is designed to help you prepare for the market moving events of the week so you and your portfolio are not caught off guard. Whether it helps you to prepare strategy or just raise your awareness of important factors that may move markets, we hope you find it useful.

Last week saw the market retrace ground, as the Dow, S&P 500 and NASDAQ indices all slipped near 1%. The Dow fell below the closely watched 12,000 mark. Economic data headlined the week, raising concern about the slowing economy combined with inflation worries.

The markets seem to want to rebound this week, if stock futures on Monday morning are any indication, but the question remains, how sustainable is any rally and have we reached a near-term bottom after six days of decline in the Dow. Geopolitical instability may have something to say about that this week, as Saddam Hussein was sentenced to death by hanging. Rallies of support are expected across anti-American communities, while ironically, our counterparts in Iran celebrate.

Palestine seems to be near unity, with Hamas and Fatah having created the semblance of a plan to form a unity government. A deal is expected to be consummated later this week with a Mahmoud Abbas trip to Gaza. A few factors in the deal, including the softening of Hamas' stance against the recognition of Israel are not likely to go over well within the generally militant group, and Abbas' visit may not prove to be the key to peace, but the window to civil war. We have concern that certain third-party interests may take initiative, and the representative of peace in Abbas may be downed in fury as a result.

A busy week indeed, and I haven't even touched on the American elections. Democrats threaten to take over Congress on Tuesday, as discontent with the Republican Party's foreign affair efforts may show itself in the election results. Perhaps two years away from a Democratic President and Democratically controlled Congress, the investing community is concerned its tax breaks and tax friendly investing environment could be challenged. Concern also exists that America could abandon Iraq and the Middle East, possibly allowing Iran to develop into a nuclear state and taking the world a step closer to extreme instability. Yes, we do not believe a rally can sustain itself much this week, if even through Monday. Tuesday's results may prove the most important market driver this week, but even a partial victory for Republicans should dim market concern.

On Monday, while Russian markets close for "Unity Day," American markets will be openly concerned about fragmentation, as the Republican control of Congress is threatened. Markets in Columbia and Venezuela will also be closed Monday for All Saints Day.

While generally tense due to the elections and recent economic data, there should not be much market-moving news Monday. Four Federal Reserve presidents are scheduled to speak, and attention will be on them due to recently weak economic data. Comments will be scrutinized carefully, as the market tries to read the level of concern of the Fed, and what action it might take. Chicago Fed head Moskow will address the economic outlook over breakfast. Moskow is already reported to have stated Monday that the Fed may need to raise interest rates further to curb inflation. A keen eye should be reserved for Cleveland President Pianalto, who will address monetary policy Monday. Overseas, the EU Commission will release its autumn economic forecasts for its 25 member nations. In Toronto, The World Hedge Funds summit kicks off.

Reporting earnings on Monday, El Paso Corp., Affiliated Computer, AES Corp., Anadarko Petroleum, Altera Corp., and Fluor Corp. Also, the American Stock Exchange will launch its pilot trading platform, "Auction and Electronic Market Integration."

Tuesday marks election day, and is likely to monopolize the news media and top traders' concerns. One-third of the Senate seats and 435 House positions will be in play.

Heading the economic news front, consumer credit for September is expected by economists surveyed by Bloomberg to increase by $6 billion, after showing $5 billion growth in August. The question we have been juggling with for years is just how far extended can the American consumer get before he goes bust. The rise of interest rates has certainly begun to strain the consumer, and housing defaults and foreclosures are on the rise, but still not at a concerning level.

Reporting earnings on Tuesday, Dean Foods, Emerson Electric, RR Donnelley & Sons, International Game Technologies, Sara Lee Corp., Tenet Healthcare, and Watson Pharma Inc.

On Wednesday, the market will digest the election results and decide on its impact to stocks. We think it would take Democrat victories in both the House and the Senate, for markets to turn decidedly lower. Otherwise, we anticipate a non-impact.

Also on Wednesday, SEC Chairman Christopher Cox and other market notables will headline the SIFMA meeting in Florida. The New York Society of Securities Analysts holds its energy conference on Wednesday. Overseas, Australia's Reserve Bank may impact Asian stocks as it ends its meeting and issues its decision on interest rates.

Reporting earnings Wednesday, look for Cisco Systems Inc., Federated Department Stores, Barr Pharmaceuticals, Dynegy, Hospira, Interpublic Group, PG&E Corp., and BMC Software Inc.

Economic news will decide the day on Thursday, with a couple key indicators scheduled for release. Weekly jobless claims for the week of November 4 is expected to decline to roughly 315,000. The University of Michigan is scheduled to release its consumer sentiment index for November, and economists expect a reading of 93.0, little changed from October. The September International Trade data will be released, and economists see a large decline to a deficit of $66.0 billion from the all-time high of $69.9 billion measured in August. The Bureau of Labor Statistics will release its import-price index. Expectations are for a 1% decrease in import prices in October, versus a 2.1% decrease in September. Something worth being aware of, former Fed Chairman, Alan Greenspan, will speak at the AMR Research conference in Boston.

Overseas, the Bank of England will announce its decision on interest rates. At the White House, the second U.S.-EU Economic Ministerial will take place. Also on Thursday, President Bush will meet with Mexico's president-elect, Felipe Calderon.

Reporting earnings on Thursday, King Pharma, Viacom, J.C. Penney, Nvidia Corp., TXU Corp. Valor Communications, American International Group, Disney, and Kohls Corp.

Friday looks like a quiet day, with earnings season mostly over and the elections a thing of the past. The most significant news of the day may come from Fed Chairman Ben Bernanke, as he speaks at a conference in Frankfurt.

We hope you enjoyed your weekly planner. Check back in with us daily to get your "Morning Coffee," everything you need to start your trading day. (disclosure)

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Friday's Brew (Nov 3)

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stock futures are confused this morning, and indicators point to a mixed open. The 8:30 AM EST October employment report release showed lower than expected job additions, but its impact was offset by sharp revisions higher to the August and September numbers and healthy unemployment data.

The Dow Jones industrial average has declined five days in a row, and the jobs report seemed critical to the trend today, but now looks only moderately positive to markets. Economists surveyed by Bloomberg expected an increase of 125,000 jobs. The economy actually added 92,000 jobs in October, at least until that number is revised significantly higher or lower next month...

OVERSEAS MARKETS
The Japanese market is closed today for a national holiday. In Hong Kong, the Hang Seng Index is up fractionally into record territory. Financial and technology sectors are leading the way today in Asia, driven by earnings reports. Indices in Australia and India are also breaking into record territory today.

In London, the FTSE 100 is down ever so slightly this a.m., while markets in Amsterdam and Switzerland are doing best today, up about a half a percent each. The European Central Bank spooked markets yesterday when it signaled it might continue raising rates.

ECONOMIC DATA & NEWS
The unemployment rate for October came in below the 4.6% anticipated and seen in September, measuring 4.4%. Unemployment increased within construction and manufacturing, as America's housing and auto sectors cut capacity.

October non-farm payroll, which was expected to grow by 125,000 jobs, actually increased by 92,000, but sharp revisions higher to the August and September numbers left traders confused. Also today, the Institute for Supply Management will release its non-manufacturing index, a better barometer of the health of the service sector driven American economy than manufacturing numbers.

COMMODITY MARKETS & DATA
Geopolitical concerns come to the forefront today, with Iran testing long range missiles during exercises in the Persian Gulf, just days after the U.S. finished exercises of its own there. Russia and China are opposing the kind of sanctions imposed on North Korea. The two Asian empires hope to keep sanctions focused on Iran's uranium enrichment program and heavy water reactor. Meanwhile, Russia says it will follow through with December delivery of anti-aircraft missile systems to Iran. Crude oil is up $0.47 to $58.35 in early trading.
Gold is seeing some profit-taking today, down about $0.80, while natural gas leads all commodities today, up approximately 3%.

STOCK NEWS
Reporting earnings on Friday are Duke Energy and Medco Health Solutions. Whole Foods (WFMI) is down roughly 21% in pre-market trading, after forecasting same-store sales growth of 6-8% for fiscal year '07, below the double-digit levels investors have gotten use to. Prudential upgraded Electronic Arts (ERTS) to neutral from underweight, after ERTS posted quarterly EPS of $0.07, compared to analysts' expectations for $0.02. ERTS shares were up roughly 9% in pre-market trading. We hope you enjoyed "Today's Morning Coffee" and wish you a good day trading. See the disclosure at Wall Street Greek.

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Thursday, November 02, 2006

Thursday's Brew (Nov 2)

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stock futures across the Dow, S&P 500 and NASDAQ Indices had indicated a higher open at around 8 AM, as America's major retailers prepare to release same-store sales data. The information is a clear barometer for overall consumer spending. However, WalMart, the nation's largest retailer, reported less than encouraging results, with its same-store sales rising just 0.5%, the lowest rate of growth since August 2004. Adding to the slew of weak economic data of late, U.S. productivity data and jobless claims both came in worse than anticipated, and futures are now decidedly lower. WalMart shares were down roughly 1.5% in pre-market activity. Today looks like it could start off like a bloodfest folks.

OVERSEAS MARKETS
While the NIKKEI dipped fractionally, the Hang Seng Index soared Thursday 1.42%, as we speculate poor U.S. manufacturing data led investors to imply market share gain in China. Besides that likely scenario, politically, China is making sense these days. Even in its disagreement concerning sanctions on Iran, its foreign ministry communicates logically. Russia is another story... Selling anti-aircraft missiles to Iran ahead of a possible air action on Iran's nuclear facilities by Israel and/or the U.S. is indeed suspect.

France's CAC 40 Index seems to be the only decisive mover over the pond today, down roughly 0.79%. The FTSE and DAX are fractional movers in either direction thus far today, but we suspect all European markets will follow the well-networked U.S. market lower today on the recent slew of poor economic data and today's weak retail spending data.

COMMODITY MARKET NEWS
Gold is down thus far today, on profit taking, as it has run recently and sits now at $618 per troy ounce. Corn and wheat are leading the charge higher today, both up over 1%. Crude is down 1%, on the strength of yesterday's inventory data, showing levels of crude 12% above their five-year average for the week.

ECONOMIC DATA & NEWS
Labor costs rose 3.8% and were up 5.3% in the 12 months though September, the biggest gain since 1982. Employee productivity was basically unchanged. The rise in labor costs poses threat to the U.S. economy and Fed outlook on inflation. If labor costs are rising, there is pressure driving inflation higher, a scenario the Fed was not expecting. A Fed hike seems more likely, as does recession, after today's news.

Thursday, Challenger, Gray & Christmas, the global outplacement consultancy, releases its monthly report on planned job cuts announced in October. September cuts climbed 54%. Americans filing first-time claims for unemployment rose to a three-month high last week, according to the Labor Department. Initial jobless claims rose 18,000 to 327,000, the highest since early July. Wall Street was looking for 310,000 claims. While the level posted is still representative of a healthy job market, the direction of change should be concerning to markets.

STOCKS
Reporting earnings on Thursday are Qualcomm, CVS Corp., Transocean Inc., Caremark Rx Inc., CBS Corp., Becton Dickinson, Electronic Arts, and International Paper. Over 60% of U.S. retailers have posted lower than expected monthly same-store sales this morning, and are pressuring stocks overall. We hope you found "Today's Morning Coffee" useful, and wish you a good day trading. See the disclosure at the Wall Street Greek site.

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