The Greek's Week Ahead has been engineered to prepare you for events that could impact your portfolio this week.
In light of the whole Imus versus Al Sharpton or Imus and the Rutgers women's basketball team issue, or pent up aggression and hidden racism that may exist beneath the surface of a good deal of Americans, whether black or white, I thought I would draw an analogy to the economy, since that's what we talk about here...
It seems every talking head views it their responsibility to take a side behind Imus or behind the view that he should be canned, as his sponsors effectively decided in the end. It's insane that racism is still such a sensitive topic, and a bit hypocritical as well. You know, sometimes its cool
, and other times it fires people up enough to get a national witch hunt going. Last night I watched a show called "I Love New York, The Reunion" and one of the characters was labeled "White Boy" by the lead character "New York." Now, "gnatty headed ho" has a ring of angry racist guy who woke up on the wrong side of the bed and had a shot of whiskey for breakfast
to it. But I don't appreciate the term white boy either
. It carries a tone of weakness, or nerdiness
, and it's definitely not positive.
I'm white by the majority's eye, but I've experienced racism
by people who view themselves perhaps whiter than me, or maybe purer, or maybe more American because my father was first generation. I even had a close friend once tell me I didn't have the right to stand to the national anthem. That incensed me. He was young, but that was a view clearly shared by his ignorant family. Still, he was a good friend and I took it upon myself to help him grow. I think he understood better when I told him how my father had volunteered to serve in Korea for the right to be an American. Though his offer was not accepted, I think that speaks for how American we are.
Then, in adulthood, I experienced an ignorant East Side white woman talk about the "dirty Greek street vendor" she would never buy a hot dog from. That woman was my boss at the time, and it happened in the office. And my first cousin sells hot dogs! And guess what, for a week, after her mother had passed away, I sold hot dogs as a street vendor to let her get some rest. And
I've worked in a diner serving "cheeseburger, hamburger Pepsi", no less. I must really be a dirty Greek
But I was not always so open-minded either you know. After the ignorant boss, I worked for a gay gentleman. I appreciated that guy as a person and an analyst, for the most part, because I saw how he felt. He felt alienated, like he couldn't trust anyone. He taught me to lose my homophobia, along with a few important business concepts I keep in my analytical toolbox still, and I'm glad I had the opportunity to work for him, because he was smart and the only boss I learned a thing about stocks from.
After him, I worked for an idiot who I once had to teach how to use a PEG ratio as a forecasting tool. Now, for most of us, that's asking a lot, but for a Director of the Health Care sector, it's pretty much expected. I mean it's first grade math for analysts, and he still doesn't get it... and you're still buying the stocks he's recommending. He didn't like me because I didn't fit into his box. I came to work a half hour after him, and he didn't like that. It didn't matter that I was still in the office when he left at 4:30, and still there late every night when he was in his little bed for his little brain.
You know what I really didn't like about him. I didn't like the endless homosexual innuendos he made about Greeks and me in my presence and the tie he drew between Greek invention and it. Somehow, he always failed to note that a good deal of the words he attempted to use properly were from Greek origin, or that the democracy he enjoyed living under was conceived in ancient Greece. I could go on and on about the contributions of Greek culture to society, but that's not what this is about. However, if you are Greek and insulted or just insulted by this guy, contact me. In any event, I think now you can understand why I want to be my own boss.
Back to the point, shall we? Humanity is driven by its primary need, survival. Humans seek to group, for survival's sake. It's that whole safety in numbers thing. So people seek out people like themselves to group with, and label the people on the other side of the river, their common enemy. Sometimes it's the river that divides, sometimes it's an ocean, and sometimes its a race or a religion. Since humanity is humanity's worst enemy, a paranoid mistrust, also born from that survival gene, keeps us from aligning with that ultimate group, the brotherhood of man.
If you don't believe me just look around. The Soviet Union divides, Europe forms a union, al Qaeda seeks to pervert a religion to unite a people. It's all about grouping and regrouping. Eventually, probably after another unfortunately horrible war to drive home the fact, men will unite behind humanity, if we survive
. We just have to think past our daily grind and our present enemy to experience the epiphany toward that end. God help us make it that far...
My point here is, nothing is black and white. It's a gray world, said nicely by one of my favorite bands, "Live." Economists, strategists and analysts are also survivalists, and they also seek to draw lines and choose sides. Their divisions don't spawn wars though, and that's great because there would be an awful lot of them, despite the whole herd mentality deal. So, every expert has to know what direction the economy is heading in, after all, they are paid to do so. And so, you see, Imus versus Sharpton is the same as recession versus recovery, in a really perverted way that it might take the influence of drugs to understand.
Here's a deeper theory. The domestic economy is stressed by housing weakness and manufacturing sector slippage, but global demand and opportunity are feeding revenue growth for large American multinationals. The question is, how much stress can the American consumer and economy handle before the international support gives.
American corporate executives are faced with a dilemma. Standard & Poor's has been providing an aggregate forecast for single digit earnings growth for a couple of quarters now, but American firms just won't die. This quarter, the estimates are down to around 3.5% or so, which seems just crazy to me. Even if GDP slips to 2% growth in Q1, there's still global strength, as seen by the IMF, to support earnings. Even so, if earnings keep softening, bottom line minded managers are going to increasingly consider reducing workforce. I think we are already seeing the beginnings of this in the financial sector, and Citigroup (C) was just the latest company to announce a cut last week. It's going to be a gradual thing of course, but with an exponential growth rate. Maybe we'll start to see regional banks or large U.S. banks join the ranks of corporate cutters HSBC and Citigroup soon. Disappointing earnings reports provide the right kind of cover for such moves and we'll get some important reports this week from the likes of Wachovia (WB), Washington Mutual (WM), Wells Fargo (WFC), Bank of New York (BK), Bank of America (BAC) and US Bancorp (USB).
Rising gasoline and food prices are no easy swallow, and persistent inflation and solid employment only portend higher rates and more difficult mortgage payments for home owners/consumers. The service sector is our weight bearing wall here. We can't lose that. All we need now is a geopolitical catalyst to send emerging markets careening. Iran fits the bill. Let's zoom in a little and look at the week ahead.This week...
With an early first look last week, most expect the March retail sales report to provide pleasant news on Monday
. Bloomberg's poll shows expectations for a 0.9% rise in sales, ex-autos, and 0.6% increase if you include them. I would call it an ailing segment if Toyota wasn't doing so well, but...
The 8:30 report of the Empire State Manufacturing Index is seen reaching a measure of 10.0, according to Bloomberg. Last month's expectations were gravely disappointed when the index measured 1.9, versus expectations for a reading of 16. Domestic manufacturing is weak and the market knows it, so a poor reading shouldn't move the market dramatically lower, in my view. The business inventories report at 10:00 is likely to be an important driver for the market, as an improved inventory to sales ratio would satisfy bulls. Inventories are seen rising 0.3% month to month.
In the early afternoon, the National Association of Home Builders provides its Housing Market Index. The consensus view expects a reading of 35 on the figure. In any event, the insiders have not proven prescient, but it looks like they have finally all swallowed the reality pill, so maybe it will be worth a look. Dallas Fed President Richard Fisher will have a microphone and an audience on Monday, so keep your ears attuned.
A.G. Edwards kicks off its Media & Entertainment Conference in Vegas, while Citigroup (C), Wachovia (WB) and Eli Lilly (LLY) start off the earnings calendar.
A slew of economic reports will get us started on Tuesday.
At 8:30, the Consumer Price Index release will garner all attention for signs of that nasty inflation nuisance. Bloomberg's consensus sees a rise of 0.6% on the headline figure and 0.2% on the core number. Need we repeat that the Fed is closely watching inflation? If this figure is heavy and Q1 GDP shows better than expected growth later this month, the market is likely in for a long summer. That said, Tuesday's news has the potential to turn that resilient bullish sentiment negative on its own
if the figure exceeds the consensus estimate. Also an 8:30 news breaker, March housing starts hit the wire with a consensus view for 1.49 million. This could help to confirm the early reports of a weak spring selling season.
While you are still swallowing the CPI and housing news, 9:15 brings March Industrial Production and Capacity Utilization, with consensus expectations for no change in production and utilization of 81.9%, compared to 82% in February.
Tuesday's Fed tour features New York Fed Chief Timothy Geithner at a dollar/euro conference. On this last day for tax filing, expect earnings reports from Johnson & Johnson (JNJ), IBM, Wells Fargo WFC), U.S. Bancorp (USB), Yahoo! (YHOO), Washington Mutual (WM), EMC and Intel Corporation (INTC).Wednesday's
busy earnings calendar includes Motorola, JP Morgan Chase, Abbott Labs, United Technologies, Kraft Foods, Ebay, Allstate, Gilead Sciences, and the Bank of New York. CIBC's energy conference kicks off in Toronto on Wednesday, and the large IPO of MetroPCS Communications is planned.
Wednesday's oil & distillates inventory report may show further capacity usage at refineries eating into crude stocks, verifying the driver for higher oil prices of late.
morning, initial weekly jobless claims are expected to decline to 320,000. The Philly Fed Survey follows New York's report, with expectations set for an index measure of 1.0, after only reaching 0.2 last month and disappointing consensus views for 5.0. Most will be eagerly anticipating the U.S. Conference Board report of March Leading Indicators at 10:00 a.m. Bloomberg's consensus sees growth of 0.2%, after a decrease of 0.5% last month.
On Thursday, look for earnings reports from Bank of America, Altria Group, Google, Merck & Co., Merrill Lynch, Wyeth, UnitedHealth
Group, American Express, Schering-Plough, Baxter International, Capital One Financial, and Union Pacific Corp.
Behemoth earnings reporters on Friday
include Schlumberger, McDonald's, Caterpillar, and Honeywell International. Hank Paulson could stir up trade concerns when he discusses China in a Washington assembly. Also, Fed Governor Frederic Mishkin will speak about the topic of U.S. and global economies.To receive "The Greek's Week Ahead" and our daily reports via email, click here and provide us with your email address. We respect your privacy and will never share your information with any third party.
Labels: Week Ahead