Week in Video Review - Memorial Day

Please enjoy our Memorial Day special week in video review. Besides business and world news coverage, this week's issue includes Memorial Day event coverage and videos from this year's Eurovision contest, including Greece's wonderful Kalomoira, who should have won! Also, please welcome our new sponsor, a wonderful New York fashion designer, whose banner ad is displayed below, and whose video appears within this set.


Opinions expressed within the videos may not agree with the view of "The Greek." Please see our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: DOG, AMEX: SDS, Nasdaq: QQQQ.

Premarket - Personal Income & Consumption

Personal Income & Consumption were reported for April early this morning, and the news is, well it depends on how you look at it. "The Greek" finds it an excessively negative report that also offers reason for hope.

Personal Income

Personal income was reported up 0.2%, compared to a 0.2% consensus expectation, as compiled by Bloomberg News. Personal spending also rose 0.2%, again meeting forecasts. So, on the surface we find another positive report. But, we look deeper here, and after adjusting for inflation, real income and spending were stagnant, or posted no change whatsoever.

The Real Bad News

Since real matters, the report hardly offers enthusing news. But it gets worse. The reality is that payrolls decreased across goods and service producing industries, where the core of the economy really is. Meanwhile, government wage and salary disbursements increased, offering some offset. Finally, rental income increased significantly, but rent is an expense for most Americans, not an income source. Also, income got a boost of $7.8 billion from economic stimulus checks, and that's not an ongoing source. So, as you see, organic weakness was mostly offset by synthetic and inflationary factors.

If rental income is increasing now, it's probably partly because rents may be rising as home ownership becomes more difficult. Another driver of the positive move in income was sales of assets, something we would consider most likely due to necessity in this environment, not investment gain.

As a result, we find this portion of the report excessively negative in tone. However, it shouldn't really be surprising considering the anecdotal evidence we see around us. General Motors (NYSE: GM) for instance just announced that one quarter of its workforce would be given early retirement so that the company could replace employees with new team members at half the cost. This has been a shared theme within the auto, airline and other industries (NYSE: F, NYSE: DAL), as unions make concessions in order to help preserve the ongoing operation of the companies in question.

Personal Consumption

Real spending actually declined fractionally, and that's not good. This occurred while the initial little bit of stimulus actually reached the hands of some Americans. Stimulus checks will have a much greater impact to May and June spending, and some impact to July, so perhaps the government timed the fuel injection perfectly. We've noted a recent uptick in weekly same-store sales though already. However, shoppers are certainly migrating to discount stores like Costco (Nasdaq: COST) and Wal-Mart (NYSE: WMT).

Purchases of durables and nondurables both decreased, while services spending rose. As we move forward, the factors of inflation and cost of living increase will battle with an eventual improving economy, and the victor will determine the rate of consumption growth.

Prices

The price index increased 0.2%, versus a 0.3% rise in March. Year-over-year, prices rose 2.1%, in line with expectations, and not especially concerning. Excluding food and energy, prices increased 0.1% month-to-month. Remember that prices will have risen to a greater extent in May, as oil and gasoline moved sharply higher.

Conclusion

Generally, this is not a positive report, but we can find hope in the fact that the economic stimulus seems well-timed. Americans will certainly benefit from it in the second quarter, but whether they spend or not is another question. In any event, we view it a helpful effort and good decision.

Please see our disclosure at the WallStreet Greek website. Article interests: AMEX: DIA, AMEX: SPY, AMEX: SDS, AMEX: DOG, AMEX: QLD, Nasdaq: QQQQ.

General Motors Restructures its Workforce (NYSE: GM)

Our daily stock market video review below focuses on General Motors' (NYSE: GM) workforce restructuring efforts, the World Bank's expanded food aid, and the impact of inflation concern on mortgage rates.



The opinions expressed within the videos may not necessarily agree with the view of "The Greek." Article interests: AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: SDS, AMEX: DOG, Nasdaq: QQQQ. Please see our disclosure at the Wall Street Greek website.

GDP Report Revised Higher

Today's economic reports offered some positive news that was overshadowed by oil market activity. GDP was revised higher, and despite expectations for this, it's still undeniable good news. Don't hide under your bed, but we think it's probably time to take our bad tasting medicine to avoid the inflation virus.

GDP Report for First Quarter

This morning, first quarter GDP was revised higher to a real growth rate of 0.9%, from the initially reported 0.6% rate. Bloomberg's consensus of economists was already looking for an upward adjustment (+1.0%), so the report was not a surprise. Late arriving data made forecasting a mere matter of plugging in a few new pieces to a puzzle that still needed completion.

Nevertheless, revised higher growth is a clear positive for the economy and the stock market. It's undeniable. Worrywarts will look to Q2, and say, "watch out for that!" But, the fact is that the government has taken aggressive action. So, however late and however at fault they were because of the lack of regulation and supervision in lending, which led to today's troubles, we can't ignore that there are catalysts in existence for the positive.

Greekism:
So, the longer we can survive on fumes, the more likely we are to glide into the gas station just in time to refuel.

Drivers of GDP Adjustment

The economy benefited from dollar weakness. The Fed knows what it's doing, but whether an economic fishtail results is yet to be seen. We wrote an article when we coined the term "economic fishtail"; please go back and reference it for understanding.

The trade deficit narrowed, as import growth softened on lighter general economic demand, and exports strengthened on improved price competitiveness of U.S. goods overseas. Nice tool for now, but inflation risk thrives partly as a result. We could therefore exit this economic scare only to face another, even more frightening global crisis. It's not hidden anymore though, so hopefully global forces will recognize it and act to disrupt that eventuality. Remember, never underestimate human creativity and problem solving skill. Still, I'm not sure I would want to be in the castle with Jean-Claude Trichet, when the peasant unions come looking for him in torchlit chaos at the midnight hour.

Inventory investment was revised lower. "The Greek" regards this factor as a deceptive positive. Private businesses decreased inventories by $14.4 billion in the first quarter, and the benefits of technology and just-in-time processes is ever apparent, and again a driver of our improved economic system. Inventories also decreased by $18.3 billion in the fourth quarter. This allows companies to recover faster, and possibly avoid drastic employment reduction we might have seen in years past. Sure, we have seen layoffs, but nothing like other recessionary periods. And, as long as people are employed, earning income, the economy has better chance of avoiding serious trouble.

Of course, we still remain concerned about spending, and though unrevised, consumer spending still measured at levels last seen in 2001. But, the government has addressed that issue as well, with the tax rebate stimulus.

Medicine That Tastes Bad Often Helps Just the Same

We think it's seriously and critically time to start worrying about inflation, not housing driven recession. It's inflation that poses the clear and present danger today. It's inflation that threatens to take mortgage rates higher, perhaps adding further stress to already overburdened variable rate borrowers who may have difficulty refinancing loans on homes that have dropped in value (lost collateral). But you knew that already...

It's inflation that threatens our budgets, as incomes have difficulty keeping pace with rising food and energy expenditures that are driven not by seasonal factors, but secular ones. The stock market will likely react positively to the end of rate cuts now, and even begin seeking small rate increase. It's the medicine that tastes bad, but helps anyway.

Article interests AMEX: DIA, AMEX: SPY, AMEX: QLD, Nasdaq: QQQQ, AMEX: DOG, AMEX: SDS. Please see our disclosure at the Wall Street Greek website.

Microsoft, Altria and Ford Lead Headlines

Despite Wednesday's durable goods orders report (-0.5%), weekly mortgage activity (lower) and same-store sales data from the International Council of Shopping Centers (+1.5% year-to-year), corporate news dominates the video below. The piece focuses on breaking events at Microsoft (Nasdaq: MSFT), Altria Group (NYSE: MO) and Ford (NYSE: F). Oh, and oil caught a couple eyes today as well...

Just as petroleum touched a one-week low, an old geopolitical fire was rekindled by new threats against Nigerian production. As a result, crude futures moved back above $131. In turn, gasoline moved ever closer to $4 at the pump, reaching $3.94 on the national average. Fred Mishkin's resignation from the Federal Reserve can't be a good thing either! If Batman was a darker figure without Robin, how's Bernanke going to handle Congress without his sidekick?

The opinions expressed within the video may not agree with the view of "The Greek." Article interests AMEX: DIA, AMEX: SPY, AMEX: DOG, AMEX: SDS, Nasdaq: QQQQ, AMEX: QLD. Please see our disclosure at the Wall Street Greek website.

Durable Goods Orders Highlights Other Issues

Durable Goods orders for April, and recent trends in order flow, indicate possible ongoing problems in retail. General economic issues are certainly to blame, but the disappearance of new home demand and reduced financing options look like the greatest catalysts.

Durable Goods Orders

Durable goods orders for the month of April decreased 0.5% from March. This compared to expectations for a greater decrease of 1.1%, according to Bloomberg data. The negative direction, however, still kept the streak of erosion alive in '08. Each month of this year has offered decline in durable goods orders, after a large rise to close out 2007.

It's logical though isn't it? The economy is in contraction (tomorrow's GDP revision will tell), and in contraction orders should decline, especially for big ticket items. Let's take a closer look at the data. New orders decreased $1.0 billion or 0.5%, and excluding transportation, fell 2.5%. Also, ex-defense, orders fell a smaller 0.3%.

Unfilled Orders Reads Ugly

Perhaps the most eye-opening portion of the report offered news that unfilled orders jumped $7.6 billion or 1.0%, to the highest level since 1992. Also disconcerting, April marked the 26th increase in unfilled orders over the last twenty-seven months. When retailers later don't need what they previously asked for, this is perhaps yet another sign of trouble for the group.

We presume there's a penalty paid by retailers when they refuse delivery of ordered goods, so for this to occur, you must have an economic benefit, while still losing money. This also likely relates to the decline of the housing industry, as new home appliance demand has all but disappeared.

We would look to this information and the fact that G.E. (NYSE: GE), the well-managed giant of American industry, is seeking to unload its appliance division, as a guide. We expect department stores like Macy's (NYSE: M), J.C. Penney (NYSE: JCP) and Sears (Nasdaq: SHLD), and other retailers of high-cost home related items, should face ongoing tough times. Same goes for appliance makers, automakers and all typically financed high cost items.

Financing Gone, Harder Sell

As financing options disappear or become less favorable or less available to many, the ability for Americans to purchase high cost items also dissipates. Remember the "new economy," well it appears it was built on a faulty foundation of unwarranted loans. Now as banks overcompensate due to capital requirements and natural human counter-reaction, a strain should weigh on the pace of economic recovery.

Keep reading "The Greek" today and every day for insights into economic data and corporate trends. See our "Topic of Debate" at the site, because we want to hear from you on regular important topics. Also don't miss our weekly market moving event planner, "The Greek's Week Ahead - Critical Oil Price Threshold Reached"Article interests AMEX: DIA, AMEX: SPY, AMEX: DOG, AMEX: SDS, AMEX: QLD, Nasdaq: QQQQ. Pease see our disclosure at the Wall Street Greek website.

Week Ahead - Critical Oil Price Threshold Reached

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

Did you feel a little twinge last week? Sure you did. Think about it. It probably felt like a noose tightening around your neck, or a fire burning the wallet in your back pocket. "The Greek" believes we finally crossed the critical oil price threshold last week, and nobody noticed. We are of course talking about the price point where energy really starts to impact economic demand.

It developed sort of like how a caged dog, one within an invisible electronic fence, feels a shock as he approaches or crosses it. Americans likely felt a similar threshold surpassed last week. It certainly was a hard one to cross, after all, it took months of price rise past the points most economists thought would do it. It seems we finally reached the critical point for oil and gasoline pricing, where individual consumers will begin to seriously consider conservation and alternative energy resources. More on that in a minute...

Last Week

Stocks moved lower throughout last week, as rising oil prices raised broader economic concern. The Dow Jones Industrials moved 3.9% lower, while the S&P 500 fell 3.5% and the Nasdaq Composite slipped 3.3%. The decline was broad reaching, as seen by the similar moves across the diverse indices.

The blame for the tough week clearly fell upon oil. Crude oil futures for July delivery started the week just under $127, and ended it at $130.51, touching a high of $135 on Thursday. Meanwhile, just ahead of the big Memorial Day weekend, one that is well known for motor vehicle traffic, gasoline prices skyrocketed as well.

June futures for gasoline started last Monday morning at $3.23 a gallon on the Mercantile Exchange, and closed Friday at $3.32. The good news is that oil and gasoline prices backed off Thursday’s highs to close the week a step lower. However, stocks found no solace in that news, since the slide likely came on profit-taking, not fundamental reasoning. However, the highs probably likewise benefited from trading momentum, so the slip was good news just the same.

Wednesday helped to fuel the most recent energy spike, as the Energy Information Administration reported a weekly draw of 5.4 million barrels of oil from storage. Meanwhile, the media had much to feed the frightened with as well. Oil executives were grilled on Capitol Hill last week by a Senate panel. The Senators highlighted the contrast of oil company profits and excessive executive compensation with the inflation burdened American public and an economy that teeters on recession. At the same time, Congress passed an insanely dangerous measure that might lead to legal suit against OPEC. Seems Congress never heard the saying about not biting the hand that feeds you.

The Good News

However, as the stock market worried about the impact of high gas and other prices, it likely also foreshadowed a price-induced conservation of energy that should decrease demand for it. In other words, a threshold looks to have been passed, where people will actually now seriously consider travel distance and other fuel expenditures in their plans. This seems to indicate that petroleum might trade in a range in the near term. You’ll want to check into the Wall Street Greek website this week, as we are preparing an in-depth petroleum market report.

The Week Ahead

The abbreviated trading week still holds a powerful concentration of economic data on the schedule.

Tuesday

Consumer Confidence for the month of May was reported Tuesday morning, falling to 57.2, versus consensus expectations for a reading of 60.0. That compares with a reading of 62.3 in April.

Also reported on Tuesday, New Home Sales for April follow Friday’s Existing Home Sales data, which while down, still beat expectations. We expected that seasonal impact and dramatically low recent levels to compare against might offer a positive surprise in this report. Sales ran at an annual pace of 522K in March, missing that month’s consensus expectation by a mile. When reported this morning, April sales ran at a pace of 526K, up slightly.

The S&P Case Shiller Index built upon the weak sales data, showing that home prices continued to moderate in March and of course in the first quarter (-14.1% from last year's period).

Tuesday kicks off the shortened week's earnings schedule, including reports from Borders Group (NYSE: BGP), Donaldson (NYSE: DCI), Jamba Juice (Nasdaq: JMBA), Vodafone Group PLC (NYSE: VOD), Bank of Montreal (NYSE: BMO), Bank of Nova Scotia (NYSE: BNS), Cogent (Nasdaq: COGT), Modine Manufacturing (NYSE: MOD), On Track Innovations (Nasdaq: OTIV), Shanda Interactive (Nasdaq: SNDA), SourceForge (Nasdaq: LNUX), StealthGas (Nasdaq: GASS), Versant (Nasdaq: VSNT) and WuXi PharmaTech (NYSE: WX).

Wednesday

Wednesday’s Durable Goods report and Thursday’s Corporate Profits seem poised to stab economic hopes in the back. Most of the preceding data on the subject of corporate profits has indicated that they've been sickly this past quarter. Let's not mince words.

Regarding durables, Bloomberg's consensus expects a monthly decrease of 1.1% for April orders. That would compare with a 0.3% decline in March. We like to remind readers that just-in-time production-to-delivery processes, supportive technology and fluid distribution channels have helped companies to manage inventories at an increasingly efficient rate. So, inventory levels might fluctuate in a volatile fashion from month to month as a result. Four consecutive months of decline, however, clearly reflect the softening domestic demand, capacity consolidation and economic weakness we've seen this year.

Minneapolis Fed-Man Gary Stern and Dallas Fed President Richard Fisher are both scheduled to address audiences on Wednesday. Barron's correctly reports that Fisher's comments might offer some interesting perspective, as he has dissented against rate cuts three times in recent history. What he has to say about inflation might prove enlightening, if he speaks openly.

The weekly same store sales data reported by the International Council of Shopping Centers - UBS, gets pushed back a day this week due to the holiday. So, you can look for that very important and under followed metric on Wednesday morning this week. In case you missed it, last week's report showed a sales spike of 1.6% year-over-year. The Mortgage Bankers' Association reports on mortgage activity Wednesday morning as usual, however, we find little insight from the report still. Later, it will be interesting to follow how mortgage rates might rise with inflation, thus curtailing housing market recovery.

The EIA usually reports Petroleum Status on Wednesday, but this report is often pushed back a day during shortened weeks, and this week will be no exception. Look for oil market news on Thursday.

Wednesday's earnings schedule includes American Eagle Outfitters (NYSE: AEO), Chico's FAS (NYSE: CHS), Coldwater Creek (Nasdaq: CWTR), Dollar Tree Stores (Nasdaq: DLTR), Dress Barn (Nasdaq: DBRN), Jo-Ann Stores (NYSE: JAS), Men's Wearhouse (NYSE: MW), National Bank of Greece (NYSE: NBG), Polo Ralph Lauren (NYSE: RL), AFC Enterprises (Nasdaq: AFCE), Apollo Investment (Nasdaq: AINV), Applied Signal (Nasdaq: APSG), CBRL Group (Nasdaq: CBRL), China Nepstar Chain Drugstore (NYSE: NPD), Daktronics (Nasdaq: DAKT), Finlay Enterprises (Nasdaq: FNLY), Jinpan Int'l (AMEX: JST), RBC Bearings (Nasdaq: ROLL), Shamir Optical (Nasdaq: SHMR), Synovis Life (Nasdaq: SYNO), TIVO Inc. (Nasdaq: TIVO), Toronto Dominion Bank (NYSE: TD) and more.

Thursday

The top story on CNBC Thursday morning should be the first revision of Q1 GDP. We could see the number reported in contraction territory or close to it, from its first reporting at +0.6%. This report looks to be highly influential to market direction and even medium term market movement, as it addresses one of two key market concerns very directly. Those two key concerns are of course economic growth and inflation. Economists well-informed by other since revised and late reported economic data are actually forecasting an upward revision for GDP, to 1.0% growth for Q1.

As indicated earlier, Corporate Profits will also be reported on Thursday morning, and most data have offered indication of a dramatic decline in corporate earnings. Profits are finding pressure from both directions. The soft economic environment is impacting the top line and rising costs are squeezing margins at the same time. For this reason, economic recovery seems limited in opportunity, and stocks upward potential likewise capped.

Weekly jobless claims are due on schedule, and Bloomberg's consensus expects 370K or so new benefits filers. Last week's report showed 365K. The Help-Wanted Index is also due, but its significance has been reduced by the advent of online job search tools. We suspect there will be a second wave of job market decline in the months ahead as pressure mounts on corporate executives to preserve shareholder value.

The Energy Information Administration will report on Petroleum Status on Thursday this week. The data will of course prove an important news bit, and especially so after a draw from inventory of 5.4 million barrels last week. Natural gas will be reported upon on its regular schedule, meaning the two reports reach market simultaneously this week, offering a powerful concentration of energy data all at once. At the start of the week, energy prices were already backing off recent highs, as it becomes plainly apparent that the demand sensitive threshold has been reached.

Ben Bernanke will perhaps yodel his speech on liquidity in Switzerland on Thursday, while Tim Geithner addresses a group in New York. With food shortage and inflation in focus, the OECD and the United Nation's Food and Agriculture Organization will issue their 2008 outlook on agriculture.

Thursday's earnings schedule includes Costco (Nasdaq: COST), Dell (Nasdaq: DELL), H. J. Heinz (NYSE: HNZ), Hellenic Telecommunications (NYSE: OTE), J. Crew Group (NYSE: JCG), Joy Global (Nasdaq: JOYG), Sears Holdings (Nasdaq: SHLD), Ansoft (Nasdaq: ANST), Big Lots (NYSE: BIG), Canadian Imperial Bank (NYSE: CM), Caraco Pharmaceutical (AMEX: CPD), dELiA's (Nasdaq: DLIA), DSW Inc. (NYSE: DSW), DynCorp (NYSE: DCP), eLong (Nasdaq: LONG), Esterline Technologies (NYSE: ESL), Fred's (Nasdaq: FRED), Genesco (NYSE: GCO), Golar LNG (Nasdaq: GLNG), Gottschalks (NYSE: GOT), HEICO Corp. (NYSE: HEI), Iteris (AMEX: ITI), Man Group plc (Nasdaq: MNGPF.PK), Marvell Technology (Nasdaq: MRVL), Monro Muffler (Nasdaq: MNRO), Movado (NYSE: MOV), Netezza (NYSE: NZ), Omnivision (Nasdaq: OVTI), QAD Inc. (Nasdaq: QADI), Royal Bank of Canada (NYSE: RY), SeaChange Int'l (Nasdaq: SEAC), Shoe Carnival (Nasdaq: SCVL), Sigma Designs (Nasdaq: SIGM), Sycamore Networks (Nasdaq: SCMR), The Descartes Systems (Nasdaq: DSGX), Wind River Systems (Nasdaq: WIND) and XETA Technologies (Nasdaq: XETA).

Friday

Get ready to get busy on Friday, with a grand slam of reports due, including Personal Income & Outlays, the Chicago area manufacturing report, University of Michigan Consumer Sentiment and Farm Prices to close it out.

The closely followed and very important Personal Income & Outlays Report will be released at 8:30 a.m. Bloomberg's consensus forecasts personal income growth of 0.2% for April. Income growth is unfortunately indirectly pressured by international competition for goods and services that leads American firms to seek cost consolidation. American Axle, which settled with the UAW last week, suffered through a long strike for the sake of cost reduction, achieving a significant savings in wage rates and in pension benefit liability. The length that American Axle was willing to go is a testament to the significance of market force pressures.

The big headline on Friday will of course be personal consumption expenditures, as the market seeks to understand just how much the American consumer is actually tightening his belt. Bloomberg's surveyed economists see an increase of 0.2% for April. Lehman Brothers (NYSE: LEH) was quoted in Barron's seeing a 0.3% increase. Do not neglect the very important impact of price rise on the spending increase. The real spending change is what matters here, or that excluding inflation.

The University of Michigan/Reuters weighs in on Consumer Sentiment on Friday, and the consensus sees the May measure reaching 59.5 (same as the earlier check), compared to 62.6 in April.

Chicago area manufacturing gets a check up on Friday as well, and economists see the regional index at 48.5 in May, versus 48.3 in April. Farm prices are also on tap, marking the second chew on food inflation this week.

Treasury Secretary Paulson is scheduled to visit the Middle East to appease foreign investor concern, as Congress discusses the issue of sovereign investment. It's likely the issue came up during President Bush's visit, and so he's now sending Paulson to further quell concern.

Friday's short list of earnings reports includes China Finance Online (Nasdaq: JRJC), Graham Corp. (AMEX: GHM), Kirkland's (Nasdaq: KIRK), Lion's Gate Entertainment (NYSE: LGF), Medical Action Industries (Nasdaq: MDCI) and Tiffany & Co. (NYSE: TIF).

Please join us all week long as we comment on the stock market, commodity, currency and economic environment.

See our disclosure at the Wall Street Greek website.

Topic of Debate - Turkey

"The Greek" has had much to say about Turkey this week. See our articles, "Turkish Crimes Require Atonement" and "Greece, Turkey Relations - Massacres at Ponti, Chios and Smyrna," and tell us how you feel. Have we been too critical? What did we leave out? Should Turkey be accepted into the EU? What about the Cypriot issue? What's more important, justice or preserving a strategic alliance?

Please comment below by clicking upon the "comment" link. We want to hear from you!

Week in Review - Turkish Crimes Require Atonement

This week's video review remembers the 353,000 Pontian Greeks massacred as part of Turkey's genocide upon Greeks and Armenians early last century. May 19 is a solemn day for all Greeks and Greek/Americans, and the time should always remain a shameful one for all of mankind.

It marked a period when Greece's WWI allies sat in their harbored ships and watched while Turkish soldiers ethnically cleansed the cosmopolitan and thriving Greek city of Smyrna (now Izmir) and burned it to the ground. Only a Japanese vessel came to the aid of the Greeks who as they boarded Greek ships had their arms severed so they could not climb, had their ears sliced for the jewelry there adorned and had their families destroyed. In those times, bodies coated the sea, blood painted the streets and fire darkened our world.

We as Americans cannot on one day say to Iran, we do not appease nor bargain with terrorists and oppressors, and on the next day appease Turkey because they are a NATO ally. Turkey to this day avoids recognition of the genocide, even brazenly denies them, most likely because of the compensation it would be condemned by law to pay the people whose lives were ruined. The Armenian and Greek genocides remain a forgotten holocaust, even in America, as our country recently put aside recognition of the horror in order to preserve alliance.

What alliance?! Your Wall Street Greek asks, what alliance? When America asked Turkey for flyover rights to bomb Iraq, Turkey denied us. When the U.S. asked Turkey for the use of land passage in that same assault, Turkey denied us. Turkey remains one of the most anti-American nations in this world if you take survey of the people in the streets. We demand that Turkey recognize its sins, before it attain atonement.

The horror of the period has been described by witnesses from Europe and the United States as a scourge on the history of mankind. Hitler himself, when embarking upon his own evil ethnic cleansing of the Jewish people, referred his generals to the Turkish crimes, and how history had forgotten them. Holocaust is a Greek word, meaning total consumption by fire. We are sorry to say that Turkey has more than one to atone for. Yet another holocaust the Turks should repent for is that perpetrated by the Ottomans against Greeks on the islands of Chios, Mytilini (Lesvos) and Psara in 1822.

I say, only when Turkey acknowledges human regret for its actions, and shows sign that it is ready to enter civilization, only then should it be allowed entry. I'm very sorry if I have hurt the feelings of my own Turkish friends and readers, but I ask, are you sorry for destroying my ancestors? Have you apologized for it, or do you consider it a military victory? People who lived on land for centuries were systematically displaced from it.

This was a period when the devil took control of an entire nation, and had his way with it. The crimes were so barbaric they are indescribable, and you are warned that the photographs and images within the videos do not attempt to make them more digestible (so view at your own risk). They are what they are, horrible crimes against humanity that must be acknowledged and atoned for.

Just as Germany is embarrassed by the Nazis, so should Turkey be embarrassed by its barbaric actions of the not so distant past. Men still live who witnessed those atrocities. This is a crime of our times, not ancient ages. And this is certainly not something for Turks to be proud of. It's definitely not one Greeks, Armenians nor Georgians will ever forget. The souls of our ancestors demand that.


As always, the opinions expressed in the videos may not agree with the view of "The Greek." Please see our disclosure at the Wall Street Greek website. Interests AMEX: DIA, AMEX: SPY, AMEX: QLD, NYSE: NBG, NYSE: OTE, Nasdaq: QQQQ, AMEX: SDS, AMEX: DOG.

Are Ethanol and Biofuels to Blame for Inflation?

Are biofuels getting a bad rap? Is ethanol an important driver behind food inflation? Despite the industry lobby view, "The Greek" says yes, corn-based ethanol certainly is. This video from the Wall Street Journal's MarketWatch covers the issue.


The opinions expressed within the video may not agree with the view of "The Greek." Please see our disclosure at the Wall Street Greek website. Article interests Nasdaq: PEIX, NYSE: VSE, AMEX: DIA, AMEX: DOG, AMEX: SPY, AMEX: SDS, AMEX: QLD, Nasdaq: QQQQ.

Oil Industry Faces Congress

Please see this important video about rising oil and gasoline prices, including Congressional interview of oil industry corporate executives. We are currently preparing a detailed report regarding the oil market that you will find on the site shortly.

The opinions expressed within the video do not necessarily agree with the view of "The Greek." Please see our disclosure at the Wall Street Greek website. Article interests AMEX: DOG, AMEX: SPY, AMEX: SDS, AMEX: DIA, Nasdaq: QQQQ, AMEX: QLD, ExxonMobil (NYSE: XOM), United Airlines (Nasdaq: UAUA), Continental Airlines (NYSE: CAL), Halliburton (NYSE: HAL).

Crop Hunger Walk Donations Taken Through May

Thank you for your support of us in the Crop Hunger Walk. We walked with some dear friends and new acquaintances who proved to be equally wonderful. In the photograph here, you see from left to right: John Paterakis, Sophia Huling, Seraphim Huling, Roger Nicholas Webster, Marilyn Lester, Markos Kaminis, Vivian A., Emmanuel D., Karen Kalkines and photographer Daniel Padovano.

We wanted to let you know that it's not too late to donate to help feed the hungriest of the world. The walk is over, but donations are welcome through May.

Donate by Mail:

Some of you asked about mailing checks rather than using a credit card over the Internet. If you would like to donate in this manner, please make your checks payable to "Church World Service / Crop." The address to mail those donations to is listed below:

Church World Service
P.O. Box 968
Elkhart, IN 46515

Please let me know via email (wallstreetgreek @ gmail . com) if you make a donation by check. That way, I can make notation of it on the team page. Not that it really matters, but I guess you could note that it is a donation made in sponsorship of our group, the Archdiocesan Cathedral of the Holy Trinity, and our walk in New York City.

You may also still donate through my page on the Crop Walk website.

I want to thank all donors, participants and our organizer, John, again. This was such a pleasant group that the walk concluded far too soon for me. Please consider contributing to this very worthy cause.

Any transactions are between Church World Service and individual donors. We are not directly involved in the process, nor liable for any complications or difficulties that may result in individual transactions. All future communications regarding donations should be directed to the charity. Please also see our disclosure at the Wall Street Greek website.

Holding Skeptics to the Same Standard

Below, you'll see two comments that date back to around April 22, 2008. The exact article they were attached to can be found here. A permabear called me out, so to speak. Interpret what he said how you like, but I believe I've been proven correct since that comment just one month ago (and since my call to buy on March 10th).

I'm on record every single day, but skeptic comments like these can get lost in the shuffle. The other day, in our article entitled, "Wall Street Week Ahead - Kaminis Called Market Bottom," I reminded skeptics that they had called me an "Armageddon analyst" when their portfolios were rich and while I was warning of housing, financial sector, economic and stock market downturn. Then, this year, when we turned to positive on stocks, emails and comments like this started to surface.

My goal in republishing this comment is to illustrate to you the emotions of greed and fear. I'm sure if I searched long enough, I would find a similar comment criticising me last year when I was recommending investors preserve capital. Keep a level head and don't fall in love with your book.

April 22, 2008

2 Comments

Anonymous said...

Dude... stop trying to call a bottom. And stop this nonsense of resiliency. You used to be very legit, now you sound like another run of the mill analyst with some "interests" in mind, be keep client relationships, win business or what have you. Anyway, ever since your personal investment vision got in the way, I lost total interst in this page. See ya later Greek, hopefully you'll stop being just another analyst.

9:57 AM

MK said...

One of the faults we often make in society is in our generation of assumptions regarding the purposes and interests of others. We cannot possibly really know what others think and plan. When we act based on our own opinion, we are just as likely to act wrongly as we are to act correctly.

Be sure that I do not write one single word based on any other purpose but the truth. You talk about my "personal investment vision," and I'm not quite sure what you mean. If you think I am pushing a market opinion based on personal investment, you are greatly erred in your view of my character. Also, it would be nice if I was that powerful or that widely ready that I could move the market.

If you mean my business objectives, I hope you do not think I should give up the pursuit of happiness and financial well-being to serve the greater good... I'm not the Mother Teresa of financial advice. I do hope to survive only, and to help others with the excess. So far through this effort, I've made great sacrifice, and this work continues to reach you at great cost to me.

My purpose is to be a true independent voice, and one that can offer high quality, valuable ideas. I tell it like it is, and most permabulls did not want to hear it last summer, and now permabears don't want to hear it.

So, will I find any friends being the voice of reason? That's not my goal either. In the end, hopefully you will see that I was a stable voice while the herd ran in panic, just as I was the stable voice when the herd was full of greed.

Is catastrophe possible? Certainly, because our society is overlevered, but I believe we need another catalyst to get there, and you do not forecast that catalyst. I warn of it though.

I'll continue to do my best, and I hope you keep reading. I'm just sharing my opinion. If you only consider me "legit" when you agree with me, then you are looking for "yesmen" and I'm not one of those either. God bless, and no hard feelings. I'll do my best for you.

Markos

Greece, Turkey Relations - Massacres at Ponti, Chios and Smyrna

I received a comment from a Turkish author, and I would like to invite him to republish that note below this article, so that a debate might ensue here. I do have something to say regarding your discussion sir, so please let's open an intelligent debate.

I am passionate in my love for Greece and America, but you should also be aware of a few bits of trivia about "The Greek." While the majority of my non-American readers are Greek, I also have a few Turkish/American readers and even one Turkish friend in Constantinople who I often debate with, and enjoy a beer, ouzo or raki with as well. When a close relative of mine denied me a room in New York about ten years ago, it was my Turkish friend who offered me, a Greek, a place to sleep. There's a life lesson in that.

I agree with the theme of your note, which was let's move forward and look to peace, but you held a very one-sided Turkish viewpoint. Despite the memory of the horrible massacre that occurred in Ponti, the complete destruction of a community of 350,000 Greeks who resided along the coast of the Black Sea in what is today Northern Turkey, I can also look forward. This is the Greek nature in fact; our religion dictates it.

Let me note finally that this is not a website about Greece, and it is not in the business of spreading anti-Turkish sentiment. But, its founder is a Greek/American with deep ancestral injury served upon by the Ottoman Empire and Turkey. Please republish your comment. My heartfelt sympathies to those remembering the massacres at Ponti, Chios (Xios) and Smyrna where "The Greek" himself traces his roots back to (Anatolia and Hios).

Let me take this opportunity to recommend an interesting documentary of personal accounts of the massacres. I was recently offered a gift copy of "The Greek Holocaust," produced by Pavlos Kapetanopoulos. If you would like to purchase a copy, call him at 1-888-899-3576, and tell him Markos Kaminis, the Wall Street Greek, sent you. Pavlos would like to add to his film, and you may also discuss helping him to do that. He's specifically looking for survivors of the events to interview, and for funding.

One of my favorite Greek/American readers, who I enjoy hearing from often, sent me a movie entitled "America, America" by Elias Kazan. It's also a must see wonderful story about the period, and about Greek/American and Armenian/American immigration from Asia Minor. Thank you.

Article interests Nasdaq: XTKFX, NYSE: NBG, AMEX: SPY, AMEX: DOG, Nasdaq: QQQQ. See our disclosure at Wall Street Greek.

Daily Market Review - Iran Should be Trembling

Fannie Mae (NYSE: FNM) and Home Depot (NYSE: HD) were in the news on Tuesday with further depressing data, and we focused on the PPI report here at "The Greek." The movement in oil, however, is most noteworthy and we're extremely confident that momentum is inspired here by smart money. That smart money probably includes a good deal of Saudi Arabians and a few people at Goldman Sachs (NYSE: GS) after Goldman raised its price target and President Bush visited the Middle East. The telegraphing is clear to me, and Iran should be trembling.


Please see our disclosure at the Wall Street Greek website. Interests AMEX: DIA, AMEX: SPY, AMEX: SDS, AMEX: DOG, AMEX: QLD, Nasdaq: QQQQ.

Producer Price Index (PPI) - A Hottish Core

Visit our FRONT PAGE to see current PPI data and analysis. Today's reporting of the April Producer Price Index (PPI) offered a reading with a hottish core.

Producer Price Index (PPI) - April

A rare event by recent standards, April's PPI mimicked the CPI data, as it was impacted favorably by energy prices that declined in April. We need not remind you that oil prices have since, shall we say corrected... We have a well-overdue energy report to write for you, promised last week. Expect that article later this week my friends. The past couple weeks have offered much data and information to digest in the energy market, so we'll try to make some sense of it for you, and energy pricing behavior.

Headline PPI increased 0.2%, month-to-month in April, short of economists' expectations for a rise of 0.4%. Core PPI, excluding food and energy, increased 0.4%, contrasting perfectly with headline as it exceeded expectations for a 0.2% increase. Expressing our feeling in song, "feeling hot hot hot!"

The core PPI increase was greatly driven by higher priced crude goods, which rose 3.2% from March. Intermediate goods prices rose 0.9%. So, what do we see here then? We see pressure building in the system because finished goods prices rose less. Of course, in periods of economic growth, some fat is built up into the system, and that gets quickly worked off. However, that's gone now. What follows if conditions worsen, is further capacity consolidation, workforce reduction, and/or price rise to the next level, if it will so bear it. In other words, if the market can handle price increase, it will take it, and if it cannot, then some businesses will shrink or cease operating, while more competitive players survive.

Some of the main factors behind the finished goods price rise were light motor trucks (+1.3%), passenger cars and commercial furniture. That's not going to change in the near future either, since Toyota Motors (NYSE: TM) just recently announced a price increase. Some of the year-over-year change is likely due to General Motors (NYSE: GM) and Ford (NYSE: F) moving away from past fleet sales to rental firms and large organizations. Still, the month-to-month increase clearly reflects pass through of higher materials costs. The index for crude non-food materials rose 7.9% in April, driven by increases in iron and steel scrap (+32.2%). Intermediate goods price rise was driven by increase in metals and chemicals, including construction materials. That clearly reflects emerging market demand.

Food & Energy

Food was less of a driver this past month, as various factors offset each other, and others held somewhat steady. Big movers included wheat price decline (-23.1%) that was partly offset by an increase in hogs (+10.5%). Foods pricing was unchanged on the whole.

So with temporary benefit from energy and no change in food, one might get complacent and forget the secular changes in effect in both markets. Still, we are relatively certain that smart money is behind the rise in oil prices, and for geopolitical reason. Otherwise, it's very hard to explain the current momentous run.

The market did not digest this pre-market news well, as it started lower from the get-go. It did not help that oil prices surpassed $129 this morning. So, despite the positively interpreted CPI report last week, the market sees future trouble within today's news.

Please see our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SPY, AMEX: DOG, AMEX: SDS, AMEX: QLD, Nasdaq: QQQQ.

Leading Indicators Headline the Day

Please find Monday's money minute below. Leading economic indicators headlined the day.



Please see our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: DOG, AMEX: SDS, AMEX: QLD.

Wall Street Week Ahead - Kaminis Called Stock Market Bottom

As Wall Street rallies in stealth for some, your Wall Street Greek reminds you that Markos Kaminis predicted on March 10 (the stock market's bottom) that it was time to "buy the news."

Wall Street rallied into the close on Friday, and turned in another positive week. The Dow Jones Industrials closed 1.9% higher through the five-day period, while the S&P 500 moved up 2.7% and the Nasdaq Composite climbed 3.4%. The Nasdaq is up 17% from its low of March 10.

Might the end truly be here for the bears? In this reactionary, counter-reactionary world, I have found criticism from both bulls and bears over the course of the last twelve months. So-called "experts" and novices alike have jumped down my throat via email and commentary to my articles at the site when I prognosticated correctly ahead of the game and against the herd on both occasions. Did you know that I once again called another economic forecast to the very day. See this article published on March 10, 2008, the exact day the market bottomed. Wall Street Greek predicted the very bottom of the stock market in 2008. If you've been reading, you know this is just another correct call in a series of prescient economic forecasts we've made.

Remember, it was "The Greek" who began warning of this economic downturn as early as the winter of 2006. Then it was I again who forecast stock market recovery early this year, despite my expectations for ongoing economic softness. So, with all the headless chickens running around investing in stocks, I have to wonder why then investors find it logical that the even-keeled Warren Buffet and Peter Lynch are the greatest of all time?

The key to successful long-term investing is in not letting emotions dictate your money flow, which is much harder said than done. Heck, equity mutual funds were still reporting outflows of capital as recently as the week before last. Meanwhile, stocks have been on the rise since March 10th. I bet you are surprised by that news, because during that span you've very likely been moving your money out stocks. It's a stealth rally if you are Main Street news centric, but for those of us well-versed in market phenomenon, we saw this coming. Plenty of capital is still on the sidelines, so as the herd gets on board, there should be plenty of opportunity still for latecomers. Even so, let's not rule out further market reconsideration, since GDP will be revised next week. Finally, our most important forecast yet: we view an Iran event as probable over the next few months, and that's not going to lead to peaceful times for investors, or anyone for that matter.

The Week Ahead

The coming week offers a relatively light load of economic data, but includes important information for economic forecasts.

Monday

On Monday, Leading Economic Indicators for April will provide insight into just how realistic the recession scenario is. Yes, that's right, we're not officially in a recession yet, though we expect that upon revision of first quarter GDP next week, there's a chance we'll see the economy contracted. Remember though, we need two quarters of contraction for an official "recession" label. Bloomberg's consensus of economists is looking for April Leading Indicators to have fallen 0.1% (rose 0.1% in March) despite the stock market's rise through the period. We remind you again, in case you missed it, market action is a leading economic indicator.

Internationally, markets in Canada, India, Malaysia, Singapore and Thailand will be closed on Monday. Earnings season continues here in the states, driven greatly by the reporting of retailers for their first quarter ended in April. Monday's schedule includes Lowe's (NYSE: LOW), Campbell Soup (NYSE: CPB), DryShips (Nasdaq: DRYS), Echelon (Nasdaq: ELON), Excel Maritime (NYSE: EXM), Arotech (Nasdaq: ARTX), BMP Sunstone (Nasdaq: BJGP), China GrenTech (Nasdaq: GRRF), China Techfaith Wireless (Nasdaq: CNTF), Elron Electronics (Nasdaq: ELRN), Hastings Entertainment (Nasdaq: HAST), Longtop Financial Technologies (NYSE: LFT), Loral Space & Communications (Nasdaq: LORL), Optibase (Nasdaq: OBAS), Pacific Ethanol (Nasdaq: PEIX), Perfect World (Nasdaq: PWRD), Raven Industries (Nasdaq: RAVN), Streamline Health Solutions (Nasdaq: STRM), The9 Limited (Nasdaq: NCTY) and a few more.

Tuesday

On Tuesday, State Street's Investor Confidence reading will be reported for May (April's was 72.8). This measure is rather current, since it is tallied on the second Tuesday of each month. Also, it's important to note that it measures the level of actual risk in investment portfolios. Indications are that there remain significant levels of cash within portfolios. Barron's reported that funds equal to 26% of total stock market value currently reside in cash alternatives, marking the greatest such level since 2003.

We very well may see an uptick in investor confidence, but consumer sentiment, which was reported on Friday by Reuters/University of Michigan, indicated consumers feel as bad now as they did in the early eighties. Remember though, sentiment is a lagging indicator, so that when consumers and investors think things are most dire, the economy/market is usually already in recovery. Guess what, we are already in recovery. The perhaps early cyclical heavy Nasdaq is doing especially well, up some 17% since March 10.

The Producer Price Index will also reach the wires on Tuesday, but this inflation gauge is likely to offer little interest to the market ahead of the report. Investors have already been primed by last week's moderate consumer price metric. We noted on the Wall Street Greek website this past Wednesday that CPI benefited from petroleum price back up that we already know reversed itself in May. At the same time, oil services pricing increased, as did food inflation. Thus, we found little reason to cheer the data, despite the market's positive interpretation. PPI is still worth paying attention to though, as producer prices continue to eventually find their way to your wallet. Bloomberg's consensus is looking for April's measure to have risen by 0.4% over March. Core PPI, excluding food and energy, is seen 0.2% higher. These barometers were up 1.1% and 0.2%, respectively, in March.

Of course, the weekly ICSC-UBS Same Store Sales Report is due before the market open on Tuesday. Remember, last week we estimated that the sharp rise in sales was probably a weather influenced figure, and we forecast a return to weak sales would likely result last week. We were right. Sales were only up 0.5% year-over-year last week, and fell 1.0% from the week before.

Fed Vice Chairman Donald Kohn, a man not afraid to speak his mind, will address a group in New Orleans; the topic, the economic outlook. The Japanese Central Bank has an important decision to make Tuesday, and is seen holding rates steady at 0.5%. In the increasingly controversial Democratic Party contest, Obama and Hillary slug it out in Kentucky and Oregon.

While markets will be closed in India and Indonesia, Tuesday's U.S. earnings schedule includes news from Analog Devices (NYSE: ADI), Hewlett-Packard (NYSE: HPQ), Home Depot (NYSE: HD), Medtronic (NYSE: MDT), Saks Inc. (NYSE: SKS), Target (NYSE: TGT), Astro-Med (Nasdaq: ALOT), AutoZone (NYSE: AZO), China Sunergy (Nasdaq: CSUN), Dr. Reddy's Laboratories (NYSE: RDY), DRS Technologies (NYSE: DRS), Dycom (NYSE: DY), Elbit Systems (Nasdaq: ESLT), Imperial Tobacco (NYSE: ITY), Intuit (Nasdaq: INTU), Metalink (Nasdaq: MTLK), MF Global (NYSE: MF), Mitsubishi UFJ Financial (NYSE: MTU), Mobile Telesystems (NYSE: MBT), NeoMagic (Nasdaq: NMGC), Neonode (Nasdaq: NEON), Palm Harbor Homes (Nasdaq: PHHM), Phillips-Van Heusen (NYSE: PVH), Quest Resource (Nasdaq: QRCP), Red Robin Gourmet Burgers (Nasdaq: RRGB), Staples (Nasdaq: SPLS), Tower Semiconductor (Nasdaq: TSEM), United Natural Foods (Nasdaq: UNFI), Virtusa (Nasdaq: VRTU), WidePoint (AMEX: WYY) and a few more.

Wednesday

The Federal Open Market Committee April meeting minutes will be released on Wednesday, and the notes always offer economists material to debate with in regards to what the Fed will do next. As a result, it moves stocks, so pay attention to that on Wednesday afternoon at our website.

Look for the weekly reports from the Mortgage Bankers Association (Mortgage Activity) and the Energy Information Administration (Petroleum Status). Oil jumped back into record territory last week, driven again by geopolitical concerns and a perceived negative news report from Saudi Arabia. The Arabs were viewed as in defiance of President Bush when they said they would increase oil output if demand called for it. This was interpreted as a denial to Bush's request for more oil now. However, The Greek interprets it this way, they will boost output when the war starts with Iran. That's actually good news, in a bad scenario.

Fed Governor Kevin Warsh grabs a microphone in Washington, as he addresses the use of the fed-funds rate tool in times of economic need. While we're on DC, a Senate committee will interview oil company executives on the price situation. House of Representatives committees will be busy studying sovereign wealth funds and sub-prime mortgage concerns.

While the Chilean market is shut, Wednesday's earnings reports here include BJ's Wholesale Club (NYSE: BJ), Limited Brands (NYSE: LTD), Napster (Nasdaq: NAPS), NetEase.com (Nasdaq: NTES), Ross Stores (Nasdaq: ROSS), Salesforce.com (NYSE: CRM), Tsakos Energy Navigation (NYSE: TNP), Tween Brands (NYSE: TWB), 8X8, Inc. (Nasdaq: EGHT), Abiomed (Nasdaq: ABMD), Brady Corp. (NYSE: BRC), Bristow Group (NYSE: BRS), Brown Shoe Co. (NYSE: BWS), CDC Corp. (Nasdaq: CHINA), Charming Shoppes (Nasdaq: CHRS), Citi Trends (Nasdaq: CTRN), Computer Sciences (NYSE: CSC), Cost Plus (Nasdaq: CPWM), Eaton Vance (NYSE: EV), Gladstone Investment (Nasdaq: GAIN), Gymboree (Nasdaq: GYMB), Hot Topic (Nasdaq: HOTT), Jackson Hewitt Tax Service (NYSE: JTX), Long's Drug Stores (NYSE: LDG), NetApp (Nasdaq: NTAP), Nordson (Nasdaq: NDSN), Perry Ellis Int'l (Nasdaq: PERY), PetSmart (Nasdaq: PETM), Retalix (Nasdaq: RTLX), Rosetta Genomics (Nasdaq: ROSG), Semtech (Nasdaq: SMTC), Solarfun Power Holdings (Nasdaq: SOLF), Synopsys (Nasdaq: SNPS), Talbots (NYSE: TLB), Westell Technologies (Nasdaq: WSTL), Zarlink Semiconductor (NYSE: ZL) and more.

Thursday

After jobless claims were noted at 371K last week, this week's consensus view for new claims filings adds up to 370K. Also look for the weekly Natural Gas Report from the EIA at 10:30. Energy investors will want to keep a look out for the government's annual hurricane forecast, though it's been far from accurate in recent years.

Fed-man Randall Kroszner addresses a group of bankers in Florida, and Treasury Secretary Paulson participates in a panel discussion in Chicago.

Markets will be closed in Austria, Brazil, Poland and Frankfurt, Germany. Thursday's earnings reports include Aeropostale (NYSE: ARO), Air France-KLM (Paris: AF.PA), AnnTaylor Stores (NYSE: ANN), Barnes and Noble (NYSE: BKS), Dick's Sporting Goods (NYSE: DKS), Gamestop (NYSE: GME), Gap Inc. (NYSE: GPS), Hormel Foods (NYSE: HRL), The Children's Place (Nasdaq: PLCE), Alkermes (Nasdaq: ALKS), Aruba Networks (Nasdaq: ARUN), Black Box (Nasdaq: BBOX), Blue Coat Systems (Nasdaq: BCSI), Bon-Ton Stores (Nasdaq: BONT), CA, Inc. (Nasdaq: CA), ChinaEdu (Nasdaq: CEDU), Columbus McKinnon (Nasdaq: CMCO), Ditech Networks (Nasdaq: DITC), Flowers Foods (NYSE: FLO), Global Sources (Nasdaq: GSOL), Hibbett Sports (Nasdaq: HIBB), Ixys Corp. (Nasdaq: IXYS), Linktone (Nasdaq: LTON), Mentor Graphics (Nasdaq: MENT), Met-Pro (NYSE: MPR), New York & Co. (NYSE: NWY), Opnext (Nasdaq: OPXT), Pacific Sunwear (Nasdaq: PSUN), Patterson Dental (Nasdaq: PDCO), Sanderson Farms (Nasdaq: SAFM), Shiloh Industries (Nasdaq: SHLO), Ship Finance Int'l (NYSE: SFL), Stage Stores (NYSE: SSI), Stein Mart (Nasdaq: SMRT), Suntech Power (NYSE: STP), Tech Data (Nasdaq: TECD), Telvent (Nasdaq: TLVT), The Buckle (NYSE: BKE), The Cato Corp. (NYSE: CTR), Toro (NYSE: TTC), Trans World Entertainment (Nasdaq: TWMC), Verigy (Nasdaq: VRGY), Zale (NYSE: ZLC) and Zumiez (Nasdaq: ZUMZ).

Friday

On Friday, we'll see if this week's positive Housing Starts report has a solid base. Existing Home Sales for the month of April are set for release. We theorized on Friday, in our article entitled "Housing Starts See Seasonal Impact Despite Adjustment," that housing benefited from an abnormal current period that applied an irrelevant average seasonal adjustment. We were in fact the sole voice discussing this possibility, while everyone else just passed it off as an anomaly without offering solid basis. We might see the same type of positive housing news in this Friday's report, so be wary when the market starts betting on housing recovery prematurely. Bloomberg's consensus sees the annual pace of existing home sales running at 4.85 million in April, compared to 4.93 in March.

Bond markets close at 2:00 p.m. on Friday, ahead of the Memorial Day weekend holiday. The sole noteworthy earnings report we could find for Friday was Nordic American Tanker Shipping (NYSE: NAT).

Keep up with daily market happenings with us all week long.

Please see our disclosure at www.wallstreetgreek.blogspot.com. Article also interests AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: DOG, AMEX: SDS, AMEX: QLD.

Week in Video Review - May 12 - 18

Please enjoy our weekly video review, packed with important economic, geopolitical and humorous content we hope you enjoy.


As always, the opinions expressed within the videos may not agree with the view of "The Greek." Please see our disclosure at the Wall Street Greek website. Interests AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: DOG, AMEX: SDS, AMEX: QLD.

Housing Starts See Seasonal Impact, Despite Adjustment

Housing starts lifted the stock market to start the day today, but only until consumer sentiment was reported.

Economic news today was mixed, but it was the one factor that did the market in which raised it this morning, housing.

Housing Starts

April housing starts were reported ahead of forecast today, but we expect seasonality played a role, despite supposed seasonal adjustment. Here's why...

The spring season is typically the strongest selling period for the housing industry. Therefore, economic reporting of housing starts is seasonally adjusted. However, this is an imperfect science. Adjustments are made based on averages over years of study, and in real life, we exist in a world that is anything but average...

The current housing market is in fact within a dramatic decline, perhaps the greatest on record. So, rising from the depths of such dramatic decline should prove quite different than the average seasonal rise. This is a qualitative description of a mathematical relation to help you to see things outside the equation.

Typically, every spring, the housing market performs better than the winter before. There's an average seasonal boost that has been calculated, and that adjustment is applied to newly reported quarters in an attempt to relay what the real change is, excluding seasonal factors. April's starts rose 8.2% over March, but were 30.6% short of the prior April figure. Thus, you can see how we could get an irregular reading this time around. For this reason, there's an error estimation of give or take 14.5% that could apply to the month-to-month figure, but only a 6.7% margin for the year-over-year measure. So, you see, the entire improvement could be explained by error.

Therefore, hold your horses before predicting the housing market turn. We must say though that even we want to believe in it. Permits increased 4.9% over March, but were likewise off 34.3% from the prior year month. Here, the margins of error were calculated at just 1.2% and 1.4%, respectively. Still, let's wait and see how results prove out later on this year before we call a bottom.

University of Michigan Consumer Confidence

Consumer sentiment was reported very weak, at 59.5, short of the forecast for a reading of 62.5. The measure was also down from April's 63.2. However, remember that consumer sentiment is a lagging indicator. By the time Main Street thinks things are dire, the worst is usually over. In any event, the market turned lower once the news broke.

Please see our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: DOG, AMEX: SDS, Nasdaq: QQQQ.

Daily Market Recap

Please find Thursday's video review below.



Opinions expressed within the videos may not agree with "The Greek." Article interests AMEX: DIA, AMEX: SPY, AMEX: DOG, AMEX: SDS, AMEX: QLD, Nasdaq: QQQQ, Nasdaq: YHOO.

PreMarket Stock Market Report

Visit the front pages of Wall Street Greek and Market Moving News to see our current coverage of economic reports and financial markets.

Before we begin today, we want to note that we are omitting discussion of the very important Monthly Oil Market Report released by OPEC this morning, because a second article will detail the petroleum market today, and recent events within it. It's going to be an otherwise busy day, so you'll find plenty of information to keep you occupied here in the meantime.

Weekly Initial Jobless Claims

New unemployment benefits filers numbered 371K for the week ended May 10, 2008. Reported this morning at 8:30 a.m., the measure was forecast just 1,000 below the actual figure, which exceeded last week's measure of 365K. So, "playing it safe," so to speak, worked for economic forecasters this week. We outlined in our weekly market planner that economists seem to keep forecasts for this important labor market barometer near prior week result. We also noted, that while we were disappointed in this fact, sometimes the past does serve as the best predictor of the future, especially with a metric that is reported so frequently (weekly).

Generally, unemployment has held recently, after starting higher earlier this year. The government's tax rebate stimulus might also support the economy over the next few months, and further limit corporate reason for workforce reduction. However, we continue to expect the retail/restaurant space to cut some fat over the course of the year. Weaker players must be weeded out of the saturated marketplace, and we've already seen some bankruptcies, Linen n' Things being the most recent. Department stores like Macy's (NYSE: M) and JC Penney (NYSE: JCP), and mall-based apparel retailers (non-teen) seem to fit the bill for trouble. Price-minded consumers are finding their way to discount shops like Wal-Mart (NYSE: WMT). The high end has held up in specialty, but in broader reaching stores like Nordstrom (NYSE: JWN), which the super-rich would still not consider their store anyway, we've seen signs of trouble as well.

Our theory is that still high costs of living and food and energy inflation, as well as credit unavailability, will continue to pinch consumer spending this year. So, we expect restaurant/retail to layoff a good amount of employees before it's all said and done. Mind you, this does not bode well for commercial real estate either.

Empire State Manufacturing Survey

The New York regional barometer of manufacturing was also reported this morning at 8:30. The General Business Conditions Index, the metric you see headlining at major media, was reported at a negative 3.2, versus consensus forecast for a reading in limbo, at 0.0. While this offers indication of slight manufacturing deterioration in May, it still marked improvement from the reading of -22.2 in March. The figure was just slightly off the 0.6 measure in April. We do not expect the market to react harshly to this mild result, as economic expectations have a low bar to hurdle at this point, despite the forecast for this month's NY figure.

The details of the Empire State report offered some reason for concern. Participants were asked about the prices paid for inputs, and responded that prices had increased 8.7% on average over the past twelve months. Respondents expected prices to continue to rise 6.8% in the coming twelve months. Here's what should concern you most. While manufacturer's selling prices had not risen much over the past 12 months (+2.9%), executives expected to raise prices by a higher level in the coming 12 months (4.1%) in order to offset their input price pressure.

So, while manufacturers shipments had decreased, they were not cutting prices to move goods, often a positive consequence of competition, and instead were raising prices due to inflation in their component and raw materials costs. Margins are being squeezed at these firms, and this explains manufacturers' contribution to the layoff count to date. If the economy were not to recover this year, you could expect more consolidation; even so, we doubt the bottom has been met yet in manufacturing. The Philly Fed Survey is up next today, at 10:00 a.m., and consensus expectations are set much lower for Philly area business conditions. Economists are looking for a reading of -20.0.

Treasury International Capital (March)

Net foreign purchases of long-term U.S. securities measured $80.2 billion in March, marking an increase from $77.9 billion in February. Roughly 60% of foreign investment came from official institutions and 40% from private investors. The figure has increased through each month of this year, but was lower over the trailing 12-months, when compared to the 12 months prior. As the dollar strengthens, or, should it continue to strengthen, we would expect demand to increase.

The momentum trade is over in the dollar, as currency investors now look to hedge bets and reverse them, looking to dollar appreciation. The problem is, the ECB becomes more likely to raise rates with each passing month, in our view. Much depends on the wherewithal of the European economy, and the commitment of Union members to the will of the whole. But, once the ECB starts raising rates, you can expect reconsideration of dollar/euro value (looking for dollar weakness again).

Industrial Production & Capacity Utilization

Here's where the real bad news originated today. Both production and capacity utilization disappointed for the month of April. Production fell 0.7%, versus expectations for a 0.3% drop. Capacity utilization fell to 79.7%, versus expectations for 80.1%. Lower capacity utilization and production means increased likelihood of consolidation and workforce reduction. This is bad news considering the measures missed forecasts. They are therefore likely to lead economists to reduce more general economic forecasts, and phone calls to equity strategists will not be enthusiastic this morning either. This compounds the impact of the regional manufacturing data. If the market declines today, this is the fundamental reason for it, though it may not be the real driver. Even so, we do not expect a significant impact as this result is still an arms length from employment figures and corporate news that would more likely move the market.

Economic Data On Tap

Check in to our "Market Moving News" section to catch the releases of the EIA Natural Gas Report at 10:30 and the Housing Market Index at 1:00 p.m.

Corporate News

Barclay's (NYSE: BCS) hit the news wires early today with its earnings news and another write-down of $1.94 billion, but the company did not announce any new financing plans. However, that seems like just a matter of time.

Carl Icahn is launching a proxy battle to elect some favorable members to the board of Yahoo! (Nasdaq: YHOO). By doing so, he'll put the fate of Yahoo into the hands of its shareholders, and out of the hands of Jerry Yang and the management team. So, you may yet get your $30+ a share, if you vote Icahn's way. We, here at "The Greek," would actually vote against Icahn. We see far too much value creation opportunity at Yahoo! to sell out at the offered price now. While the combined Microsoft (Nasdaq: MSFT), Yahoo! will still find that value, it will drive less of an impact to the giant that is Microsoft. We view the deal better for MSFT than YHOO shareholders as a result.

Please see our disclosure at the Wall Street Greek website. Article also interests: AMEX: SPY, AMEX: DIA, AMEX: DOG, AMEX: SDS, AMEX: QLD, Nasdaq: QQQQ.

Money Minute Market Wrap

Enjoy the daily video market wrap up below.



Views expressed within the video may not agree with the opinion of "The Greek." Article interests AMEX: DIA, AMEX: SDS, AMEX: QLD, AMEX: SPY, AMEX: DOG, Nasdaq: QQQQ.

Economic Data Analysis - Chew on This!

Glue in your dentures tightly, because there's a plateful of economic analysis to chew on today. Between today and yesterday, we absorbed the newest inflation measure, two retail reports, a spot of housing news mixed with mortgage and foreclosure data, an updated energy outlook and weekly inventory, business inventories and import and export prices. Chew on that morsel before you choke on it! We are not schooled in the Heimlich Maneuver here at "The Greek." This article focuses on the big inflation report.

Consumer Price Index (CPI)

The market is rising today on what, on the surface of things, looks like a positive development for inflation. However, the published headline numbers alone do not tell the whole story. Simply looking at the result, would be like passing a great impressionist's painting from three feet away. You really need to back up, take a close look, blink and look again, to understand and make good use of the data. So, let us do that for you.

The headline CPI increased 0.2% in April, while the core figure (ex-food and energy) rose 0.1%. Both results were a tenth of a point below consensus expectations, undeniable good news. Still, Core CPI looked good on the surface, but let's take a step back and look closer at the components. Energy was relatively unchanged, but behind that apparent stagnation were volatile factors that simply moved counter to one another. This created the illusion of stability.

The energy index advanced 1.9% in March, but was relatively unchanged in April. Here's why... In April, petroleum pricing actually backed off, and we know things have changed dramatically for the worse again in May, so we take little solace from this data. Still, while petroleum based energy declined 1.6%, the energy services index saw price rise of 2.5%. This means that inflation is trickling through the system on the energy end of things. We see this happening plain and evidently in gasoline pricing, and with news that some refiners are scaling back capacity. Gasoline refiners, like Valero (NYSE: VLO), Tesoro (NYSE: TSO), Sunoco (NYSE: SUN), Hess (NYSE: HES) and others have been losing money making your cars run, so they've taken to scaling back capacity, thus forcing the competitive marketplace to allow price increase. So, next month, when petroleum prices come in higher in the CPI data, and services continue to rise as well, inflation might also present a more frightening picture for those only passing within three feet of it.

Inflation was clearly evident on the food end of the CPI table. The food index component of the index increased 0.9% in April. The index for food at home (vs. restaurant dining) rose 1.5%, reflecting increase across all major grocery store groups. So, agricultural born inflation continues to more readily pass through to consumers, which makes perfect sense. Food is a need item, a commodity driven resource, and is mostly dominated by large processors who can pass price rise through easily to retail, who of course will pass it on to consumers. Margins are tight when it comes to plain foods, where differentiation is hard to come by. Price increase will therefore be passed forward quickly and efficiently.

So, we say, hold your horses on the good-bye party the market is throwing for inflation. Its demise is greatly overstated.

See our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SDS, AMEX: SPY, AMEX: DOG, AMEX: QLD, Nasdaq: QQQQ.

Stock Market Recap: No Chance in Iran... I Mean Hell

Stocks sagged, but the tech-heavy Nasdaq benefited from company specific news. Yahoo! (Nasdaq: YHOO) may find pressure to accept Microsoft's acquisition bid from none other than Carl Icahn. This is just what Microsoft (Nasdaq: MSFT) and yours truly expected when the software giant recognized Yahoo!'s stall tactics, and backed away from its offer. Another deal was in the news again today as well. Hewlett-Packard's (NYSE: HPQ) acquisition of EDS (NYSE: EDS) has been judged too rich by the market, and HPQ is off 10% in two days as it suffers the penalty.

Congress voted against the president, and against America's best interest in my book, by passing legislation to stop the president's filling of the strategic oil reserve until oil prices fall to a threshold level. This bill has no chance in Iran, I mean hell, of passing through the Oval Office, so why even bother...



If you do not see the video above this text, we encourage you to visit the website via the text link below. As always, the opinions expressed within the video may not agree with the view of "The Greek." Please see our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: DOG, AMEX: SDS, Nasdaq: QQQQ.