The Greek's Week Ahead - The Market Loves Me, She Loves Me Not...
The Greek's Week Ahead has been engineered to prepare you for the events that could impact your portfolio this week.
The week of Valentines Day will be marked by a rendezvous of the unloved Ben Bernanke and the Senate. However, at the meeting of the Senate Banking Committee, an all out love fest might break out as Hank Paulson, Bernanke and the Congressmen congratulate each other on their recent love-sharing actions to stir economic bliss.
Still, the week ahead offers the market a lighter load of economic data and earnings reports to absorb, and so, it will have its problems to contemplate. The market now ponders its future like Rodin’s Thinker, weighing the continuous flow of distressing economic data against the promise offered by the government’s economic expansionary actions. Ah yes, market lovers far and wide will pull apart roses this week as they call out, "she loves me, she loves me not..."
Congress passed its two-week old fiscal stimulus bill last week, after some enhancement. As a result, the size of the fiscal aid package grew to $168 billion. The Senate, while failing to get its wish regarding extension of unemployment benefits, still managed to add new payouts for veterans and senior citizens. Your check should be in the mail by some time in May, just in time for the brunt of economic hard-going, according to many economists.
Counter to CNBC’s Larry Kudlow, we believe this package offers exactly what the economy needs at the moment. During the past week, Macy’s (NYSE: M) declared it would layoff some 2,300 employees. We view this indicative of where the retail market would head without consumer spending-inducing aid. We expect retail, restaurant and other consumer sensitive industries are saturated in light of declining consumer spending. As a result, these industries will have to consolidate, in our view.
In late December, Macy’s declared it would close 9 stores. Talbot’s (NYSE: TLB) made a similar announcement recently. This past week, retailers reported their poorest aggregate chain-store sales growth for the month of January since 1970. We believe these are all early indicators of a trend we expect to grow to prevalence.
But the trouble should not end with the retail industry. A natural consequence of store closures would be a deterioration of the commercial real estate market. As vacant properties flood the marketplace, lease pricing would have to ease and new development should slow.
Fiscal stimulus offers in it the hope of maintaining consumer spending until economic recovery can kick in naturally. In other words, it seems exactly what the doctor ordered in this case.
The Week Ahead
Monday
The relatively quiet week ahead offers an appropriate start with no economic data on the slate for Monday. However, the always interesting, sometimes controversial, St. Louis Fed President William Poole is scheduled to address the National Association for Business Economics. The Japanese market is closed on Monday, while in Barcelona, the GSMA World Congress 2008 will showcase the latest and greatest of the mobile-phone industry.
General Growth Properties (NYSE: GGP), which reports on Monday offers just the kind of risk we outlined above. GGP is a real estate investment trust that operates largely in the leasing of retail space. GGP missed its mark by nine cents in its last quarterly earnings report, and analyst estimates have been on the downtrend. The stock has already lost 46% of its value over the last twelve months, but that does not mean it’s through giving up ground.
Other significant earnings reports scheduled for the day include those from Acorda Therapeutics (Nasdaq: ACOR), American Financial Group (NYSE: AFG), 99 Cents Only Stores (NYSE: NDN), Carlisle Companies (NYSE: CSL), CNA Financial (NYSE: CNA), LCA-Vision (Nasdaq: LCAV), Lincare Holdings (Nasdaq: LNCR), Qiagen N.V. (Nasdaq: QGEN), Valspar (NYSE: VAL) and more.
Tuesday
On Tuesday, The Greek will be attentively reading the weekly same-store sales report from the International Council of Shopping Centers. Last week’s data showed growth in sales of just 1.6%, well off last year’s range of 2-3%. Further deterioration is expected. San Francisco Fed President Janet Yellen, who expressed economic concern last week, will find a podium to discuss the economic outlook again this week.
The Federal Budget for January is expected to show a $21 billion surplus when it is reported at 2:00 p.m. The states of Maryland and Virginia, and the District of Columbia, will hold their presidential primaries on Tuesday. With the recent sweeping victories of Obama and Huckabee, things have started to get interesting. While Huckabee can't mathematically win the Republican race, he can still keep McCain from reaching the delegate threshold necessary to lock up the nomination.
Tuesday’s earnings schedule includes news from Applied Materials (Nasdaq: AMAT), Buffalo Wild Wings (Nasdaq: BWLD), Cephalon (Nasdaq: CEPH), Coca-Cola Enterprises (NYSE: CCE), Credit Suisse (NYSE: CS), Delphi Financial Group (NYSE: DFG), Expeditors Int'l (Nasdaq: EXPD), Nordic American Tanker (NYSE: NAT), Sanofi-Aventis (NYSE: SNY), Stifel Financial (NYSE: SF), World Wrestling Entertainment (NYSE: WWE), XTO Energy (NYSE: XTO) and more.
Wednesday
On Wednesday morning, retail sales for the month of January could get ugly. December’s sales fell 0.4%, and all anecdotal evidence from the individual retailers seems to indicate January could prove worse. Economists surveyed by Bloomberg News are expecting a sales decline of 0.3% from December’s level. December business inventories are also on tap for Wednesday release, and given the fact that wholesale inventories rose, we expect the same on the business level. Economists expect inventories increased 0.4% month-to-month.
With temperatures plunging in the Northeast, oil and natural gas prices are expected to get a boost. However, this week’s inventory figures found in Wednesday’s EIA Petroleum Status Report and Thursday’s Natural Gas Report will measure last week’s status. It’ll be next week’s results that carry the impact of the cold blast.
Wednesday’s earnings reports include the likes of Chinese Internet play Baidu (Nasdaq: BIDU), Dean Foods (NYSE: DF), Genzyme (Nasdaq: GENZ), Juventus Football Club (Milan: JUVE.MI), Playboy Enterprises (NYSE: PLA), Rio Tinto (NYSE: RTP), DirectTV Group (NYSE: DTV) and Total SA (NYSE: TOT). Others reporting on the day are: Advance America, Cash Advance Centers (NYSE: AEA), Agrium (NYSE: AGU), Allscripts (Nasdaq: MDRX), Amkor Technology (Nasdaq: AMKR), Cabot Oil & Gas (NYSE: COG), DaVita (NYSE: DVA), Network Appliance (Nasdaq: NTAP), NICE Systems (Nasdaq: NICE), Photronics (Nasdaq: PLAB), Vonage Holdings (NYSE: VG), Vulcan Materials (NYSE: VMC) and more.
Thursday
On Valentine’s Day, there may not be much love to give for the newly unemployed or the chiefs of monetary and fiscal policy. For starters, Thursday offers the closely watched Weekly Initial Jobless Claims Report. After two weeks of relatively high measures, including the reading of 356K last week, all eyes will be on this barometer of economic well-being. The consensus is looking for a measure of 343K this time around.
Federal Reserve Chairman Ben Bernanke is scheduled to make his (what use to be) semi-annual Humphrey-Hawkins testimony before the Senate Banking Committee. Hank Paulson will join Mr. Bernanke on the Hill as they discuss the economy and American financial markets.
Economists will also pay close attention to the International Trade Report, and the direction of the trade deficit in the month of December. A narrowing deficit is a bad sign these days, as it would be indicative of declining U.S. demand for foreign goods. Implied here is that demand for overall goods is on the downtrend in the States due to economic weakness. The deficit measured $63.1 billion in November, and economists are expecting it to have narrowed in December to $61.6 billion.
Thursday’s earnings schedule includes Coca-Cola Hellenic Bottling (NYSE: CCH), Comcast (Nasdaq: CMCSA), Daimler AG (NYSE: DAI), EnCana Corp. (NYSE: ECA) and Marriott Int’l (NYSE: MAR). Also look for news from Air France-KLM (Paris: AF.PA), Ameren (NYSE: AEE), CAE, Inc. (NYSE: CGT), Cavalier Homes (NYSE: CAV), Cognex (Nasdaq: CGNX), FMC Technologies (NYSE: FTI), NetSuite (NYSE: N), Patterson-UTI Energy (Nasdaq: PTEN), UBS (NYSE: UBS), Visteon (NYSE: VC) and more.
Friday
Friday offers the busiest day of the week, beginning with the Empire State Manufacturing Survey at 8:30 EST. This measure of New York area manufacturing activity has weakened over recent months and measured 9.0 for January. While the Midwest has held out, excluding Detroit, the Northeast has shown marked decline in the manufacturing sector. Economists are looking for a reading of 5.75 for February.
Import prices for January will be reported Friday, and the market will be looking at the figure excluding the impact of energy price volatility to get a better idea of where inflation stands. Foreign demand for long-term U.S. securities is gauged through the Treasury International Capital Report, due out at 9:00 AM Friday. There is concern that the weakening dollar trend could scare capital away from some U.S. investments. Thus far, what has actually occurred is that bargain pricing has attracted new capital to U.S. investments. Cash rich, diversification hungry sovereign wealth funds in Asia and the Middle East have aggressively taken important stakes in American companies like Citigroup (NYSE: C) for instance.
Industrial production will be measured on Friday as well, but what should garner a good deal of the market’s attention is the preliminary consumer sentiment reading by the University of Michigan. Considering the importance of consumer health in an economy dependant on consumer spending, this figure holds much importance. In a prelude to this report, last week’s RBC Cash Index, which also measures sentiment, fell to its lowest level since the Index’s inception. Bloomberg’s survey of economists expects the Michigan survey to measure 77.0, which is relatively weak.
Fed Governor Fred Mishkin is scheduled to speak and the Bank of Japan will make its latest policy decision regarding its target rate. Economists expect the BOJ to keep rates steady. The U.S. Bond Market closes at 2 p.m. Friday, in advance of Monday's President's Day celebration.
Friday’s earnings schedule includes Abercrombie & Fitch (NYSE: ANF), Hormel Foods (NYSE: HRL), Radian Group (NYSE: RDN), Barnes Group (NYSE: B), Diana Shipping (NYSE: DSX), J.M. Smucker (NYSE: SJM), SCANA (NYSE: SCG) and more.
Help us grow our grass roots effort by clicking the small envelope at the bottom of this article and sending notice to your friends about the Wall Street Greek value add. Receive Wall Street Greek FREE via email by subscribing here. (disclosure)
The week of Valentines Day will be marked by a rendezvous of the unloved Ben Bernanke and the Senate. However, at the meeting of the Senate Banking Committee, an all out love fest might break out as Hank Paulson, Bernanke and the Congressmen congratulate each other on their recent love-sharing actions to stir economic bliss.
Still, the week ahead offers the market a lighter load of economic data and earnings reports to absorb, and so, it will have its problems to contemplate. The market now ponders its future like Rodin’s Thinker, weighing the continuous flow of distressing economic data against the promise offered by the government’s economic expansionary actions. Ah yes, market lovers far and wide will pull apart roses this week as they call out, "she loves me, she loves me not..."
Congress passed its two-week old fiscal stimulus bill last week, after some enhancement. As a result, the size of the fiscal aid package grew to $168 billion. The Senate, while failing to get its wish regarding extension of unemployment benefits, still managed to add new payouts for veterans and senior citizens. Your check should be in the mail by some time in May, just in time for the brunt of economic hard-going, according to many economists.
Counter to CNBC’s Larry Kudlow, we believe this package offers exactly what the economy needs at the moment. During the past week, Macy’s (NYSE: M) declared it would layoff some 2,300 employees. We view this indicative of where the retail market would head without consumer spending-inducing aid. We expect retail, restaurant and other consumer sensitive industries are saturated in light of declining consumer spending. As a result, these industries will have to consolidate, in our view.
In late December, Macy’s declared it would close 9 stores. Talbot’s (NYSE: TLB) made a similar announcement recently. This past week, retailers reported their poorest aggregate chain-store sales growth for the month of January since 1970. We believe these are all early indicators of a trend we expect to grow to prevalence.
But the trouble should not end with the retail industry. A natural consequence of store closures would be a deterioration of the commercial real estate market. As vacant properties flood the marketplace, lease pricing would have to ease and new development should slow.
Fiscal stimulus offers in it the hope of maintaining consumer spending until economic recovery can kick in naturally. In other words, it seems exactly what the doctor ordered in this case.
The Week Ahead
Monday
The relatively quiet week ahead offers an appropriate start with no economic data on the slate for Monday. However, the always interesting, sometimes controversial, St. Louis Fed President William Poole is scheduled to address the National Association for Business Economics. The Japanese market is closed on Monday, while in Barcelona, the GSMA World Congress 2008 will showcase the latest and greatest of the mobile-phone industry.
General Growth Properties (NYSE: GGP), which reports on Monday offers just the kind of risk we outlined above. GGP is a real estate investment trust that operates largely in the leasing of retail space. GGP missed its mark by nine cents in its last quarterly earnings report, and analyst estimates have been on the downtrend. The stock has already lost 46% of its value over the last twelve months, but that does not mean it’s through giving up ground.
Other significant earnings reports scheduled for the day include those from Acorda Therapeutics (Nasdaq: ACOR), American Financial Group (NYSE: AFG), 99 Cents Only Stores (NYSE: NDN), Carlisle Companies (NYSE: CSL), CNA Financial (NYSE: CNA), LCA-Vision (Nasdaq: LCAV), Lincare Holdings (Nasdaq: LNCR), Qiagen N.V. (Nasdaq: QGEN), Valspar (NYSE: VAL) and more.
Tuesday
On Tuesday, The Greek will be attentively reading the weekly same-store sales report from the International Council of Shopping Centers. Last week’s data showed growth in sales of just 1.6%, well off last year’s range of 2-3%. Further deterioration is expected. San Francisco Fed President Janet Yellen, who expressed economic concern last week, will find a podium to discuss the economic outlook again this week.
The Federal Budget for January is expected to show a $21 billion surplus when it is reported at 2:00 p.m. The states of Maryland and Virginia, and the District of Columbia, will hold their presidential primaries on Tuesday. With the recent sweeping victories of Obama and Huckabee, things have started to get interesting. While Huckabee can't mathematically win the Republican race, he can still keep McCain from reaching the delegate threshold necessary to lock up the nomination.
Tuesday’s earnings schedule includes news from Applied Materials (Nasdaq: AMAT), Buffalo Wild Wings (Nasdaq: BWLD), Cephalon (Nasdaq: CEPH), Coca-Cola Enterprises (NYSE: CCE), Credit Suisse (NYSE: CS), Delphi Financial Group (NYSE: DFG), Expeditors Int'l (Nasdaq: EXPD), Nordic American Tanker (NYSE: NAT), Sanofi-Aventis (NYSE: SNY), Stifel Financial (NYSE: SF), World Wrestling Entertainment (NYSE: WWE), XTO Energy (NYSE: XTO) and more.
Wednesday
On Wednesday morning, retail sales for the month of January could get ugly. December’s sales fell 0.4%, and all anecdotal evidence from the individual retailers seems to indicate January could prove worse. Economists surveyed by Bloomberg News are expecting a sales decline of 0.3% from December’s level. December business inventories are also on tap for Wednesday release, and given the fact that wholesale inventories rose, we expect the same on the business level. Economists expect inventories increased 0.4% month-to-month.
With temperatures plunging in the Northeast, oil and natural gas prices are expected to get a boost. However, this week’s inventory figures found in Wednesday’s EIA Petroleum Status Report and Thursday’s Natural Gas Report will measure last week’s status. It’ll be next week’s results that carry the impact of the cold blast.
Wednesday’s earnings reports include the likes of Chinese Internet play Baidu (Nasdaq: BIDU), Dean Foods (NYSE: DF), Genzyme (Nasdaq: GENZ), Juventus Football Club (Milan: JUVE.MI), Playboy Enterprises (NYSE: PLA), Rio Tinto (NYSE: RTP), DirectTV Group (NYSE: DTV) and Total SA (NYSE: TOT). Others reporting on the day are: Advance America, Cash Advance Centers (NYSE: AEA), Agrium (NYSE: AGU), Allscripts (Nasdaq: MDRX), Amkor Technology (Nasdaq: AMKR), Cabot Oil & Gas (NYSE: COG), DaVita (NYSE: DVA), Network Appliance (Nasdaq: NTAP), NICE Systems (Nasdaq: NICE), Photronics (Nasdaq: PLAB), Vonage Holdings (NYSE: VG), Vulcan Materials (NYSE: VMC) and more.
Thursday
On Valentine’s Day, there may not be much love to give for the newly unemployed or the chiefs of monetary and fiscal policy. For starters, Thursday offers the closely watched Weekly Initial Jobless Claims Report. After two weeks of relatively high measures, including the reading of 356K last week, all eyes will be on this barometer of economic well-being. The consensus is looking for a measure of 343K this time around.
Federal Reserve Chairman Ben Bernanke is scheduled to make his (what use to be) semi-annual Humphrey-Hawkins testimony before the Senate Banking Committee. Hank Paulson will join Mr. Bernanke on the Hill as they discuss the economy and American financial markets.
Economists will also pay close attention to the International Trade Report, and the direction of the trade deficit in the month of December. A narrowing deficit is a bad sign these days, as it would be indicative of declining U.S. demand for foreign goods. Implied here is that demand for overall goods is on the downtrend in the States due to economic weakness. The deficit measured $63.1 billion in November, and economists are expecting it to have narrowed in December to $61.6 billion.
Thursday’s earnings schedule includes Coca-Cola Hellenic Bottling (NYSE: CCH), Comcast (Nasdaq: CMCSA), Daimler AG (NYSE: DAI), EnCana Corp. (NYSE: ECA) and Marriott Int’l (NYSE: MAR). Also look for news from Air France-KLM (Paris: AF.PA), Ameren (NYSE: AEE), CAE, Inc. (NYSE: CGT), Cavalier Homes (NYSE: CAV), Cognex (Nasdaq: CGNX), FMC Technologies (NYSE: FTI), NetSuite (NYSE: N), Patterson-UTI Energy (Nasdaq: PTEN), UBS (NYSE: UBS), Visteon (NYSE: VC) and more.
Friday
Friday offers the busiest day of the week, beginning with the Empire State Manufacturing Survey at 8:30 EST. This measure of New York area manufacturing activity has weakened over recent months and measured 9.0 for January. While the Midwest has held out, excluding Detroit, the Northeast has shown marked decline in the manufacturing sector. Economists are looking for a reading of 5.75 for February.
Import prices for January will be reported Friday, and the market will be looking at the figure excluding the impact of energy price volatility to get a better idea of where inflation stands. Foreign demand for long-term U.S. securities is gauged through the Treasury International Capital Report, due out at 9:00 AM Friday. There is concern that the weakening dollar trend could scare capital away from some U.S. investments. Thus far, what has actually occurred is that bargain pricing has attracted new capital to U.S. investments. Cash rich, diversification hungry sovereign wealth funds in Asia and the Middle East have aggressively taken important stakes in American companies like Citigroup (NYSE: C) for instance.
Industrial production will be measured on Friday as well, but what should garner a good deal of the market’s attention is the preliminary consumer sentiment reading by the University of Michigan. Considering the importance of consumer health in an economy dependant on consumer spending, this figure holds much importance. In a prelude to this report, last week’s RBC Cash Index, which also measures sentiment, fell to its lowest level since the Index’s inception. Bloomberg’s survey of economists expects the Michigan survey to measure 77.0, which is relatively weak.
Fed Governor Fred Mishkin is scheduled to speak and the Bank of Japan will make its latest policy decision regarding its target rate. Economists expect the BOJ to keep rates steady. The U.S. Bond Market closes at 2 p.m. Friday, in advance of Monday's President's Day celebration.
Friday’s earnings schedule includes Abercrombie & Fitch (NYSE: ANF), Hormel Foods (NYSE: HRL), Radian Group (NYSE: RDN), Barnes Group (NYSE: B), Diana Shipping (NYSE: DSX), J.M. Smucker (NYSE: SJM), SCANA (NYSE: SCG) and more.
Help us grow our grass roots effort by clicking the small envelope at the bottom of this article and sending notice to your friends about the Wall Street Greek value add. Receive Wall Street Greek FREE via email by subscribing here. (disclosure)
Labels: Week Ahead
posted by The Greek | 2:15 AM
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