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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.
Sunday, December 31, 2006
Friday, December 29, 2006
Friday's Brew - Closing Out 2006
Wake Up Call - Steve Jobs Cleared
Thursday, December 28, 2006
Thursday's Brew - Dec 28
Euphoria seems to be carrying over in the Hong Kong market, feeding on a slew of IPOs and continued benefits from exporting into the American market. We are stepping out on a limb a bit, but it's possible that the recent agreement of the U.N. Security Council on the Iranian nuclear issue, helped to ease concerns of a clash of views and needs between China and the United States. China is greatly dependent on Iranian oil, and we continue to expect it to avoid disturbing that oil flow. However, the agreement certainly appeased that concern for now. The Hang Seng rose 1.4%, surpassing 20,000 for the first time and closing at 20,001.91. However, mainland Chinese shares were mostly lower Thursday. Japan's NIKKEI 225 was relatively unchanged.
European shares are drifting slightly lower through midday trading. The DJ STOXX 50 and the FTSE 100 indices are both unchanged.
ECONOMIC DATA & ANALYSIS
Thursday continues this week's housing market review, with the release of the federal government's report on November existing home sales. We expect existing homes sales to trend worse than new homes, as we believe home builders have been able to keep new home sales slightly more lively with incentive offers. Bloomberg News' survey shows consensus expectations for 6.19 million sales, versus 6.24 in the last period.
For the whole of the year, the National Association of Realtors forecast 2006 sales to be 8.6% lower than in 2005, and the organization is currently forecasting a sales decline of 1% for 2007. My experience on Wall Street has taught me that a great majority of analysts typically underestimate rate of change, due to a fear of going out on a limb. Regarding the future of housing, much depends on economic growth, interest rates and the action of the Federal Reserve. Still, we would bet on a greater degree of decline than forecast in this case, as pricing remains too high in our view and inventory is still above six months.
The most widely anticipated bit of news today is the Labor Department's report on initial weekly jobless claims. Last week showed 315,000 new claims, which continued a trend below last year's average. The consensus view for this week was 320,000, and the actual result came in at 317,000, better than expected. So, we got a mildly positive measure that is unlikely to impact the market today, in our view.
Later, the Conference Board will release its consumer-confidence index, perhaps an indirect measure of how well holiday season sales may have gone this year. The consensus sees December consumer confidence measuring 102.0, versus 102.9 in November. Finally, the National Association of Purchasing Managers - Chicago Index for December will be reported, with a consensus view for a reading of 50.0, compared to 49.9 in November. A reading above 50 signals an expanding regional business sector, so this particular reading carries significant weight due to the level of consensus expectations seemingly riding the fence. Other recent regional data portends the possibility of a more significant GDP slowdown in the near future, but let's see how the Midwest is fairing today.
Weekly oil and distillate inventory will be reported today, one day late due to the shortened holiday week. Crude oil is up 0.5% this morning, to $60.7, as analysts widely expect inventories to have decreased due to Houston Channel shipping delays. The median view of a group of analysts surveyed by Bloomberg News shows an expectation for a crude oil decline of 2.5 million barrels.
Natural gas is rebounding sharply this morning, up 2.4% to $6.3 /MMBtu, after suffering in recent days on a mild long-term weather outlook. Gasoline is higher by nearly a percentage point as well.
Gold is higher by 0.7%, up for the third day in a row. Gold should continue to benefit from an escalating Iranian conflict. Over the long-term, gold should be a beneficiary of a weakening dollar as well, while emerging markets strengthen. Finally, as stated here in the past, gold, food commodities and water look to benefit from a global community that is forgetting lessons learned from the past. As the greatest generation passes on, humanity grows more and more likely to repeat the past and find itself in war once again.
STOCKS IN THE NEWS
At this time last year, Apple Computer was on top of the world, benefiting from its wildly popular IPod product. Today, its iconic leader, Steve Jobs, finds himself in the middle of a scandalous controversy as it is being alleged that he received 7.5 million options without Board approval. The Financial Times reported that documents may have been falsified after the fact to hide the activity. The loss of a key figure like Jobs would be catastrophic to Apple Computer shares, in our view, and possibly even disruptive to the greater technology sector. AAPL shares are 1.2% lower in early trading. There are no earnings reports scheduled for Thursday. We hope you found value in "Today's Morning Coffee" and we wish you a good day trading. (disclosure)
Wake Up Call - Dec 28
* Criminal allegations are surfacing regarding Apple Computer, as reported by The Financial Times. It is alleged that Steve Jobs received 7.5 million in options without Board approval, and that documents were falsified after the fact.
* Ethiopian backed Somali government troops have moved to the outskirts of Mogadishu, poised to overtake Islamist rebels who are reported fleeing.
* An estimated 3 million Muslims begin the Hajj pilgrimage rituals in Mecca.
* President Bush is preparing an address concerning Iraq and the new way forward. The speech was expected for the State of the Union Address, but will come sooner according to the White House press secretary.
* A second pipeline blast hits Lagos, Nigeria. The motive has not yet been determined to be for oil or for trouble, or if it was an accident, but it occurred in a extremely poverty stricken area.
Links to these articles and more can be found at Wall Street Greek.
U.S. equity market futures indicate a lower open today, perhaps weighed on by the news at Apple Computer. If allegations are true and depending on who takes the fall, this looks to be the second leg of the bad news begun yesterday. AAPL rebounded yesterday before details were known. If its iconic leader, Steve Jobs, is shown to have acted illegally, Apple shares seem likely to collapse, in our view.
The market is waiting on three key economic reports today, including initial weekly jobless claims, November existing home sales and consumer confidence. See "The Greek's Week Ahead" under Thursday for more details. Good morning and good day. Look for "Today's Morning Coffee" to be published shortly. (disclosure)
Wednesday, December 27, 2006
Wednesday's Brew Dc 27
News that Chinese lender, Industrial & Commercial Bank of China Ltd., anticipated a decrease in its bad loan ratio, helped boost Chinese shares. However, the key driver of Chinese stocks on Wednesday was a story originated from state-run Xinhua News Agency. The article reported that China's top lawmaking body had begun discussing a law that could lower taxes for domestic companies. The Hang Seng Index climbed 1.5% higher Wednesday and mainland Chinese stocks were broadly higher as well. In Japan, the NIKKEI 225 inched higher 0.31%.
European shares were broadly higher Wednesday, with the DJ STOXX 50 Index up 0.73%. National benchmarks rose in all 18 western European markets except Belgium. The broad rise could be attributed to a multitude of factors. We can only speculate that post holiday euphoria related to the merger and acquisition boom in Europe, and yesterday's decline in oil prices played a role. If a sustainable oil price decline were to occur, an important factor driving inflation would be weakened. However, as we pointed out in "Your Wake Up Call," we view yesterday's oil drop as a short-term phenomenon, despite favorable weather trends.
ECONOMIC DATA & ANALYSIS
Today, we will get a better look into how the holiday shopping season went for American retailers. The International Council of Shopping Centers will post its survey of chain-store sales for the week before Christmas. The prior week's data showed sales behind schedule, but due to the extra shopping weekend just before the holiday, it's possible that retailers made up the lost ground.
Regional economic data continues to reach the market Wednesday, with the Chicago Federal Reserve's release of its Midwest manufacturing index. Also, Moody's Economy.com will publish its survey of global business confidence. At its last reading in mid-December, global business sentiment was at its lowest level since October 2003.
Wednesday is a busy day for the housing sector, with two key releases set for the day. November new home sales data will be reported at 10:00 AM, with the consensus view for 1.02 million sales, compared to 1.0 million in the last period, according to a Bloomberg News survey. Also, the Mortgage Banker's Association will report weekly mortgage applications and its weekly refinance index today.
Natural gas continues to tumble, down 2.5% today, on mild weather trends in North America. We reiterate our statement of yesterday that natural gas is increasingly a substitute for crude oil distillates. Natural gas already efficiently produces electricity at conventional generation facilities and creates heat for homes. It is making inroads into other areas, including as a key driver of fuel cell engines. In many instances, hydrogen is created for fuel cell driven engines through the input of natural gas. It is the key fuel source, and if fuel cell technology were to take hold in its current state, natural gas would be in great demand. Also, as a mostly domestically sourced energy commodity, it has critical strategic importance for America.
We believe natural gas will be less sensitive to developments overseas, but it will be positively and highly correlated to changes in the price of oil. As the price of oil rises, the demand for gas increases and thus the price of gas rises. For example, it becomes a more economically viable heating source, when compared to heating oil.
Crude declined precipitously yesterday, and is relatively unchanged this morning at approximately $61.13 per barrel. We believe a combination of warm weather trends and a perceived ineptness of Iranian retributive ability led traders to take the price down. However, as we stated in "Your Wake Up Call" and in recent issues of "Today's Morning Coffee," we do not view Iran as inept in will or in ability.
We believe Iran will make the next move in the chess match, asking IAEA inspectors to leave, or in some way limiting inspectors from access to sites. As cargo is inevitably intercepted on its way to Iranian ports, we believe Iran may move a step further, possibly withdrawing from the NPT, or Nuclear Nonproliferation Treaty. Behind the scenes, we expect Iran to maintain its disruptive positioning in Iraq, Lebanon and Palestine. Our first issue of "The Geopolitical Factor" will detail our expectations, forecasts and scenarios we view possible for the year ahead.
Gold is higher as a result of escalating tensions with Iran and due to other factors working against the dollar. The United Arab Emirates announced it is transitioning a portion of its reserves to gold from dollars. This trend, seen in China as well, is a sign of weakening expectations for the dollar. Some of this is likely due to sharp economists' understanding that in a global environment, the playing field will level, and the strong dollar should weaken against strengthening currencies of emerging nations and groups of nations. However, some of it is likely related to a growing view that America is going too far in a geopolitical sense; that it is risking its position atop the world order. Stay tuned for our detailed thoughts near the beginning of the year.
STOCKS IN THE NEWS
Apple Computer (AAPL) is down sharply in pre-market activity, falling 4.3%. Federal prosecutors are reportedly investigating stock option administration documents that are rumored to be have been falsified. There are no earnings reports scheduled for today. We hope you found value in "Today's Morning Coffee" and we wish you a good day trading. (disclosure)
Wake Up Call - Dec 27
* President Gerald R. Ford, our 38th president, passed away at 6:45 PM Tuesday evening.
* Overseas, avian influenza is raising concern in Egypt, where the family of a lethally infected individual has taken ill.
* Iraq's former dictator Saddam Hussein will be put to death in a matter of days, with debate currently focused on whether to televise the hanging or not.
Well, I guess that's the bad news, depending on how you view capital punishment! The good news is that U.S. equity futures are sharply higher across the board this morning. Traders in Asia and Europe returned from holiday in a good mood it seems, as the dollar weakened against the yen and the euro on speculation the slowing American economy might lead to a Federal Reserve rate cut sooner rather than later. Asian and European markets are broadly higher Wednesday as a result.
Yesterday's fall in the price of oil is likely helping the drive as well. However, we anticipate that despite weather patterns that are favorable for oil conservation, the Iranian conflict is only just beginning. The long-term event timing may be tricky to pinpoint, but its clear there will be a near-term acceleration of activity as Iran responds to sanctions. We anticipate Iran could ask IAEA inspectors to leave the nation as a first response. In the event of any minor intervention of ships or cargo headed for Iranian ports or major assault on Iran's nuclear facility, we anticipate Iran will withdraw from the NPT and urge its agents overseas to begin gorilla warfare activities at minimum. We shudder to think of where the high end of the disruptive range reaches, but it could include invasion of Iraq, where Iranian troops might be welcomed as liberators; invasion of Kuwait, which would put a lot of oil into the wrong hands; and attacks upon Saudi oil refineries and facilities, which could spike the price to $150+. Yes, we believe the current drop in oil is a short-term event. We will cover our geopolitical expectations and concerns in the first issue of The Geopolitical Factor, to be published soon. Stay tuned for "Today's Morning Coffee" to be released later this morning. (disclosure)
Tuesday, December 26, 2006
Tuesday's Brew - Dec 26
Wake Up Call - Dec 26
Monday, December 25, 2006
The Greek's Week Ahead - Dec 25
Labels: Week Ahead
Saturday, December 23, 2006
Did you know that we update our Headline News section daily, whether we publish or not... Each morning, we manually survey the top stories of the day and handpick articles that we view important or believe our readers will find interesting. If we believe an article holds long-term value, we move it further down the sidebar. Our sidebar also contains links to relevant business resources, weekly newsletters, geopolitical hotspots and other sites that we view interesting and helpful.
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Thank you for your interest, and we look forward to being your continuing source of strategic and critical pre-market information. Soon, we hope to provide you premium material including quality independent equity research from seasoned and skilled professionals. After eyewitnessing the negligence and violation of fiduciary responsibility that unfortunately exists on Wall Street and even within independent research firms, we seek to provide an alternative. We want to be the research department for the little guy, and help to put you on an even playing field with the professionals.
Due to the Christmas holiday, we will publish the next edition of "The Greek's Week Ahead" on Monday evening. Look for this week's first edition of "Today's Morning Coffee" on Tuesday. You will find our first copy of "The Geopolitical Factor" on the site before the turn of the year.
Have a wonderful holiday weekend. We wish you all the best.
Friday, December 22, 2006
Friday's Brew - Dec 22
Wake Up Call - Independent Equity Research
Thursday, December 21, 2006
Market Moving News for You
Wednesday, December 20, 2006
Wednesday's Brew Dec 20
A good deal of companies will report earnings on Wednesday, including Nike Inc., Fedex Corp., Paychex Inc., Bed Bath & Beyond, Jabil Circuit Inc., Carmax Inc., Biomet Inc., Family Dollar Stores, 3Com Corp. and AAR Corp. (disclosure)
Tuesday, December 19, 2006
Tuesday's Brew - Dec 19
Monday, December 18, 2006
The Greek's Week Ahead - Dec 18
Labels: Week Ahead
Friday, December 15, 2006
Friday's Brew - Dec 15
STOCKS IN THE NEWS
Thursday, December 14, 2006
Thursday's Brew - Dec 14
STOCKS IN THE NEWS
Wednesday, December 13, 2006
Wednesday's Brew Dec 13
Tuesday, December 12, 2006
Tuesday's Brew - Dec 12
At 8:30 AM EST, October international trade data was released. A survey taken by Bloomberg News showed consensus expectations for a narrowing of the gap by $1 billion, to $63.0 billion. Actual results indicated a much larger narrowing of the trade gap, to $58.9 billion. This could be viewed as a positive signal for the competitiveness of American producers, unless overall trade has declined, in which case this measure would be a concerning signal on the economy. Trade benefited from a decrease in the cost of imported oil and on 0.2% growth in American exports, which benefited a bit from a weaker dollar.
Saturday, December 09, 2006
The Greek's Week Ahead - Dec 11
Labels: Week Ahead