Turkey Turkey Everywhere, and Not a Bite to Eat

By "The Greek" - Economy & Markets

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Thanksgiving is on the horizon, and that bird we all savor is everywhere to be found. The cluck is flying private jets to Capitol Hill, where at the same time he's begging for $25 billion. He's closing down his hedge fund in the Citi, while pecking off rumors to stave off his stock's slide deep into single digits. The Yahoo is being forced out of the roost after turning down a deal worth three times the current value of his shares. The bald eagle is packing his things into a box after falling from the nest. He's being roasted in Congress after flying the coop to start a jail term. The lame duck is migrating south to Texas, just as hunting season was set to open on him. Still, perhaps the worst turkey of the flock of gobblers is actually the bird buying stocks in the middle of a flu outbreak. So, in this group of turkeys, who is the biggest cluck then?

Well, there certainly are enough turkeys to feed the vengeance of the newly poor. Congress has wised up though, after being taken for a wild goose chase that cost American tax payers $700 billion. As a result, the CEOs of the big three automakers were sent home to piece together that silly old thing we use to need to raise money, a business plan. Nancy Pelosi and Chris Dodd told the stooges "no plan, no help from the man!" Without the votes to pass an auto bailout, and with Congress' experience from the Economic Stabilization debacle, the group is now mindful of the damage it can do to the psyche of the citizenry by failing to pass a perceived critical bill when it comes up for vote.

Last Week

Last week cost corporate America a few heads, which makes sense since headless chickens are no rarity to bear markets or otherwise difficult times. Yahoo's (Nasdaq: YHOO) CEO and co-founder, Jerry Yang, was forced to leave by the company's board and at the insistence of shareholders of a $10 stock that could have had $33 from Microsoft (Nasdaq: MSFT) some time back. Even so, couldn't the same be said for stocks across the spectrum? I still think Yang is getting a bad wrap, because with a little work here and there Yahoo seems to me a fixer-upper worth investment.

Up in George Town, where I had the pleasure to visit briefly last week, Hank Paulson found out who his inevitable replacement would be. One has to wonder if that quiet Ben Bernanke put in a word or two for his New York Fed chum Timothy Geithner. One also has to wonder how long until the villagers across this nation, including Detroit, come with torches in hand for the purpose of lighting up DC and old New York. Never has such intense global distaste been focused on such a tight pressure point. Better get that "change" fellow in here quick before structural support gives way!

The Week Ahead

The week ahead is a shortened one due to the holiday. The endless stream of bad news and resulting carnage has become repetitive, and dare I say boring, at this point. I guess we really do grow numb to war. However, there are a couple reports that stand out this week.

Monday

One less thing to worry about, Japanese markets will be closed on Monday. However, the SEC is scheduled to meet with international regulators to discuss policy on short selling, unregulated products, credit rating agencies and accounting rules. You know, the usual suspects. Accounting rules are in focus this week as Citigroup (NYSE: C) looks to face related fair-value accounting pressure as its stock drops.

Existing Home Sales picked up in September, but with the reverse wealth effect in play like never before, look for October sales to backtrack toward the year's lows on Monday. The economists' consensus is looking for the annual pace of sales to have run at 5.0 million in October, versus 5.18 million in September. Finally, the Chicago Fed is scheduled to release its National Activity Index for October.

The earnings slate highlights news from Analog Devices (NYSE: ADI), Campbell Soup (NYSE: CPB), Star Bulk Carriers (Nasdaq: SBLK), CBRL Group (Nasdaq: CBRL), Citi Trends (Nasdaq: CTRN), Donaldson (NYSE: DCI), Dycom (NYSE: DY), Gilat Satellite (Nasdaq: GILT), Hewlett-Packard (NYSE: HPQ) and Skillsoft (Nasdaq: SKIL).

Tuesday

Tuesday's brings the second reporting of third quarter GDP. Since it will be the first revision of the economic metric, it has a greater chance of being significant. The Advanced GDP Report (the first) showed the economy contracted just 0.3% in Q3. We think you can expect that contraction to deteriorate with this revision. Economists are expecting the report to show a decline of 0.5%. Corporate Profits, the GDP sidekick report, is likely to offer similar deterioration.

The ICSC posted the first weekly same-store sales data decline in memory last week, and this week's reporting seems likely to worsen. See the link for more details on retail sales.

The Conference Board's Confidence metric is one of those boring old bad news bearers we mentioned earlier. Bloomberg's consensus sees the November figure matching the dramatic low set in October, at 38.0. Considering the degree of decline that occurred in October, this metric might actually edge slightly higher to compensate for last months overreaction (alleged here anyway).

Accounting regulators will meet to discuss topics related to the financial crisis, like fair-value accounting. How ironic could the term fair-value accounting be as it helps sink the nations largest financial institutions. We're sure they consider it unfair... The Organization for Economic Co-operation and Development (OECD) will offer its economic outlook on Tuesday. Mentioned here last, but likely the first news of the day, the S&P Case Shiller Home Price Index is due, and it's expected to show further pricing deterioration as the negative feedback loop sets real estate back.

The day's EPS news highlights American Eagle Outfitters (NYSE: AEO), D.R. Horton (NYSE: DHI), Hillenbrand (NYSE: HI), Allied Healthcare (Nasdaq: AHCI), Bank of Montreal (NYSE: BMO), Borders (NYSE: BGP), Brown Shoe (NYSE: BWS), Charming Shoppes (Nasdaq: CHRS), Chico's (NYSE: CHS), Coldwater Creek (Nasdaq: CWTR), Daktronics (Nasdaq: DAKT), Dollar Tree Stores (Nasdaq: DLTR), DSW, Inc. (NYSE: DSW), Eaton Vance (NYSE: EV), Genesco (NYSE: GCO), Hillenbrand (NYSE: HI), Hormel Foods (NYSE: HRL), J. Crew (NYSE: JCG), Warner Music (NYSE: WMG) and Zale (NYSE: ZLC).

Wednesday

Most of the week's economic color is expected to arrive on Wednesday, as the day is jam-packed with reports. Some important news is due out of Europe first thing. The European Commission plans to offer an EU tailored stimulus plan. The stability added to the world's second most important region might in turn offer stability for global markets. At the same time, the ECB President is set to address the press. We'll be watching.

Personal Income and Outlays are due for October, and spending looks to be nonexistent. Economists expect spending to be recorded down 0.9% for October, with income up 0.1%. Durable Goods Orders should be likewise missing, seen down 2.6% in October.

Weekly Jobless Claims have quickly overtaken our fear threshold of 500K, hitting 542K last week, the second sequential drastic jobs loss. Economists expect this week's reading to show 537,000 new jobless claimants.

Recent NAHB data points toward a horrible New Home Sales number as well. The economists consensus is in fact anticipating the annual pace of sales to have run at 450K in October, down from 464K in September. The University of Michigan's final reading of Consumer Sentiment for November is expected to sit at 57.9, versus 57.6 at last check.

Both of the regular EIA energy reports will reach the wire on Wednesday this week, due to the holiday, but news that OPEC is preparing an adequate production cut to match demand loss estimates has oil looking stable to start the week.

Because of the holiday, U.S. fixed income markets will close at 2 p.m. On the equity end, look for earnings news from Deere & Co. (NYSE: DE), Hellenic Telecommunications (NYSE: OTE), National Bank of Greece (NYSE: NBG), Tiffany & Co. (NYSE: TIF), Fred's (Nasdaq: FRED) and Wegener (Nasdaq: WGNR).

Thursday

Thursday, open your belts, take a deep breath, have a glass of wine and forget the past year. Remember what you have, not what you've lost. Give thanks for the important things.

Still, while U.S. markets are closed, we must stay aware of global happenings. The Bank of Japan is scheduled to release the minutes of its October 31st meeting. It was that Halloween meeting through which the BOJ eerily cut rates for the first time in seven years. We may also give thanks to the Swiss National Bank on Thursday, as its president discusses his recent surprise rate cut.

Friday

On Friday, look for more regional manufacturing contraction from Chicago to match last week's Philadelphia report. Economists are looking for a measure of 36.5 for November, down from 37.8 in October. Remember, a reading below 50.0 signals economic contraction...so below 40 signifies what then, economic catastrophe? The Farm Prices Report is due on Friday also, at 3:00 p.m.

It's Black Friday, and you can expect the market to be fooled. Retail activity should be hot this Friday, as bargain seekers are indigenous to hard times. Unfortunately, investors and media will likely mistaken this heavy foot traffic for a good sign, and temporarily aid retail industry shares.

For some silly reason, the stock market is open for a few hours on Friday, closing at 1 p.m. The bond market shuts at 2 p.m. One fine day, exchange operators will realize nobody ever shows up, and all that is accomplished by opening is indigestion for the few poor lugs that do. Look for EPS reports from Ship Finance Int’l (NYSE: SFL), Texas Industries (NYSE: TXI), Frontline (NYSE: FRO) and Tanzanian Royalty Exploration (AMEX: TRE).

Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD and AMEX: SDK. Please see our disclosures at the Wall Street Greek website and author bio pages found there.