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.

Retail Sales Sag, but God Bless Ex-Auto

Today's highly anticipated retail sales report offered quite a mix of color. Sales fell 0.2%, as you might have expected, but excluding autos, sales actually rose 0.5%.

April Retail Sales

We've been dreaming about this report over the past two weeks, which probably says something about the quality of life over here at Greek HQ. The report itself offered no letdown from the hype, as it portrayed a bifurcated world. As expected, given recent news from General Motors (NYSE: GM) regarding its plans to cut production further to better match soft market demand, auto sales weighed on the retail figure.

The graphs to the right depict the horror of the automobile industry in a fashion that Terror Film Festival founder "Claw" might enjoy best. That bar shaded in light gray to the right offers the pain of the auto industry via embarrassing public display.

But wait a second, the auto industry is suppose to be on the road to recovery is it not? Ford (NYSE: F) just got a great vote of support in Barron's, and management did not disappoint when America's greatest family run business, as The Greek's favorite cousin and dedicated employee of Ford likes to say, reported earnings.

The cheer was not supposedly limited to Ford either. Remember that breakthrough deal GM signed with the UAW... The company's efforts to cut pension and other employee costs are helping GM also improve its profit (they use to say "cost" over there) structure. Heck, things are well enough at Toyota Motors (NYSE: TM), that the company was recently emboldened to raise prices in the U.S. "So what gives then Greek," you must be thinking.

Hey, let's face it. Credit is tight and Americans are broke! Nobody is lending, and you could not afford it if they were. These legends of manufacturing are saving bucks on the cost end, but sales are not recovering yet. $600 from Uncle Sam might help The Greek make his rent this month, but it's not going to reach far enough for that Maserati I've been dreaming of (hint, hint... super wealthy Greek fans). Heck, it won't even get me a good bicycle in New York City, the showcase of the world. This place is just starting to see real estate values decline (inside Manhattan proper anyway). But it's no better for my fans outside this town either. So, while the auto companies and the stocks benefit from management actions to create value, the most important driver of earnings and value creation, sales, are not so hot.

God Bless Ex-Auto

Meanwhile, in the world "ex-auto" everything is hunker dory? Growth of 0.5% does not a celebration inspire, and the market is kind of drab today partly as a result. I like this term though, "ex-auto." I think the next time someone asks me how I'm doing, I'm going to respond, "well, I'm suicidal, but ex-auto, life's peachy!" Or, "clouds and rain color my day, but for the "core" Greek, rainbows and sunshine light my way!" Thank God for "core," "ex," data mining and the birth/death rate component of the government's employment data. Heck, if not for these things, and the media's coverage of economic cheerleading by Hank Paulson, Ben Bernanke and President Bush, you all might be as negative as the Europeans... Instead, look at you, all excited about buying a plasma TV with your government payout! God bless "ex auto."

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

Stock Market Review: Technology Stocks in the News

Be sure to see this week's edition of "The Greek's Week Ahead" directly below this article, or through the text link offered here.

Monday's news flow was somewhat light on the schedule, but offered unscheduled surprise. Please find all of Monday's highlights within the video below. Summarizing, Hewlett-Packard (NYSE: HPQ) will acquire EDS (NYSE: EDS), and Wal-Mart (NYSE: WMT) posted strong results, while warning on its outlook. Research in Motion (Nasdaq: RIMM) offered a new and improved smart phone, and the market recovered much of Friday's losses. Oil fell $2 as geopolitical tensions aged, and the dollar strengthened.

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

The Greek's Week Ahead - Theme Week

Our Wall Street week ahead article has been engineered to serve as a reference you can look back upon all week long to keep ahead of the economic and corporate news flow.

After last week's geopolitical news flow domination, this week offers several individual themes for each specific day. The President's week, however, will be geared toward preparing the Middle East for the near-term therapy he likely has in mind for Iran. He'll be sure to mix that into the conversation with his Israeli counterpart in between the fireworks and the champagne, as Israel celebrates its 60 year anniversary. Five decades have passed, and not a peaceful day among them it seems.

A Choice This Time. But Which One is Really Correct?

Between John McCain and apparently Barak Obama, it looks like Americans might have a distinct choice to make about Middle Eastern policy. But, is there really a choice, because we suspect the scenario playing itself out will not allow much free play between potential presidential actions. Also, McCain's experience with war, and his wisdom, might actually lead him to make the better-advised decisions. Anyway, we expect GW and Israel to make the important Iranian decision for the incoming president, so it's a non-factor.

Guess what, The Greek, now an Independent with Republican leanings, is actually bending toward McCain, despite our concern that he may have war in his genes at this point. Obama may promise change, but we remain concerned with the risk related to not dealing with Iran now. Change for a peaceful future is a great ideology, but Iran is too far progressed for us to bank on its changing its present direction.

In an ironic twist, it turns out McCain is actually less ballistic than Hillary Clinton. Jest we may, but we completely agree with Hillary's position on Iran. The threat of annihilation is not taken seriously in Iran, and it plainly exists. So, if we would do it, we need them to know we would. That might just prevent the next 9/11, which could be a thousand times worse than the wake up call of nearly seven years ago.

The market continues to wrestle with whether the worst is really over in the financial sector, or if the flow of financial reports exposing further asset write-downs and continued share dilution signal a need to discount stocks further. Last week's news from AIG (NYSE: AIG) and Fannie Mae (NYSE: FNM) raised some doubt, but let's look forward to the week ahead.

The Week Ahead

What happens to stocks this week will likely have as much to do with how geopolitical issues develop as it will with economic data flow. However, there are three key economic reports that could still have an impact.

Monday - Theme-less

A dearth of economic data greets investors on Monday. Lending to the abyss of information, markets in Hong Kong, South Korea and parts of Europe, including France and Germany, will be closed due to religious holidays.

The earnings schedule offers news from Sprint Nextel (NYSE: S), Fluor (NYSE: FLR), MBIA (NYSE: MBI), Cousins Properties (NYSE: CUZ), Tetra Tech (NYSE: TTI), InVentiv Health (Nasdaq: VTIV), PMI Group (NYSE: PMI), 4Kids Entertainment (NYSE: KDE), A.C. Moore Arts & Crafts (Nasdaq: ACMR), Akorn (Nasdaq: AKRX), Answers Corp. (Nasdaq: ANSW), ActivIdentity (Nasdaq: ACTI), American Technology Corp. (Nasdaq: ATCO), Ark Restaurants (Nasdaq: ARKR), Arqule (Nasdaq: ARQL), Artes Medical (Nasdaq: ARTE), Bally Technologies (NYSE: BYI), Basin Water (Nasdaq: BWTR), Building Materials Holding (NYSE: BLG), Calpine (NYSE: CPN), Carmike Cinemas (Nasdaq: CKEK), Century Casinos (Nasdaq: CNTY), Charter (Nasdaq: CHTR), Clearwire (Nasdaq: CLWR), Coeur d'Alene Mines (NYSE: CDE), Cogent (Nasdaq: COGT), Doral Financial (NYSE: DRL), Dynex Capital (NYSE: DX), Emmis Communications (Nasdaq: EMMS), Energy Solutions (NYSE: ES), GeoResources (Nasdaq: GEOI), Hecla Mining (NYSE: HL), Holly (NYSE: HOC), HSBC Finance (NYSE: HTB), IMAX (Nasdaq: IMAX), Imperial Sugar (Nasdaq: IPSU), IndyMac Bancorp (NYSE: IMB), JA Solar (Nasdaq: JASO), Kenexa (Nasdaq: KNXA), Knology (Nasdaq: KNOL), LDK Solar (NYSE: LDK), McDermott Int'l (NYSE: MDR), Medarex (Nasdaq: MEDX), Miller Industries (NYSE: MLR), MTR Gaming (Nasdaq: MNTG), MIVA Inc. (Nasdaq: MIVA), Nanogen (Nasdaq: NGEN), Nelnet (NYSE: NNI), Neurobiological Technologies (Nasdaq: NTII), Orleans Homebuilders (AMEX: OHB), PetMed Express (Nasdaq: PETS), Petrobras (NYSE: PBR), Radian Group (NYSE: RDN), Sirius Satellite (Nasdaq: SIRI), Standard Pacific (NYSE: SPF), Stifel Financial (NYSE: SF), Tercica (Nasdaq: TRCA), Valspar (NYSE: VAL) and XMSatellite Radio (Nasdaq: XMSR).

Tuesday - Consumer Spending (Retail)

Tuesday's theme is certainly consumer spending, with a focus on retail. As usual, the International Council of Shopping Centers starts the day off with its weekly same-store sales report. Remember, last week surprised us with its further improvement that we speculated was likely weather related since the week-to-week change was far different than the year-over-year improvement. Looking back, year-over-year growth of 2.3% compared to a week-to-week decline of 0.2%. Therefore, we would expect this week's year-to-year change to prove more cohesive with recent strife in the space.

Well, at 8:30 our speculation will no longer be necessary, as April's aggregate retail sales are reported. Bloomberg's consensus of economists forecasts a month-to-month decrease of 0.1%, and a 0.3% increase when excluding autos. In March, sales including autos increased 0.2%, rising 0.1% without.

Last week, individual retailers noted chain store sales, and "the cheaper the better" theme played on. Discounters like Wal-Mart (NYSE: WMT), Costco (Nasdaq: COST) and TJX Cos. (NYSE: TJX) continued to outperform department stores and mall-based retailers like JC Penney (NYSE: JCP), Nordstrom (NYSE: JWN), The Limited (NYSE: LTD) and The Gap (NYSE: GPS).

We hope you noted that "The Greek" beat the much more famous and well-paid Bob Dole on The Gap call. When Bob recommended GPS recently on CNBC, we came out critical of the pick. Seems to us Bob's wife must be shopping at an extraordinary location atypical of GPS' overall game.

Import and Export Prices are set for 8:30 a.m. release, with consensus expectations looking for an April increase in import prices of 1.7%. Energy pricing always plays a big role here, and we see no exception this time around, or the next for that matter.

March Business Inventories are scheduled for 10:00, with expectations for a 0.5% increase. That's slightly less than in recent months, but remember, it's not inventories in isolation that matter, but inventories-to-sales. Wholesale inventories were reported last week, and they decreased 0.1%, which was good to see.

Presidential primaries run off in West Virginia and Nebraska. Finally, Fed men Ben Bernanke and Richard Fisher are scheduled to find microphone's on Tuesday, and that's always fun!

Tuesday's earnings include Wal-Mart (NYSE: WMT), Applied Materials (Nasdaq: AMAT), Cameco (NYSE: CCJ), Canadian Solar (Nasdaq: CSIQ), Electronic Arts (Nasdaq: ERTS), Toll Brothers (NYSE: TOL), Fossil (Nasdaq: FOSL), Hill-Rom Holdings (NYSE: HRC), Liz Claiborne (NYSE: LIZ), American Apparel (NYSE: APP), American Science & Engineering (Nasdaq: ASEI), Dish Network (Nasdaq: DISH), Echostar (Nasdaq: SATS), Employers Holdings (NYSE: EIG), Fortress Int'l Group (Nasdaq: FIGI), GigaMedia (Nasdaq: GIGM), Given Imaging (Nasdaq: GIVN), Gushan Environmental Energy (NYSE: GU), Hana Biosciences (Nasdaq: HANB), Helen of Troy (Nasdaq: HELE), Hitachi Limited (NYSE: HIT), Icahn Enterprises (NYSE: IEP), KEMET (NYSE: KEM), Kubota (NYSE: KUB), Nissan Motors (Nasdaq: NSANY), Opnet Technologies (Nasdaq: OPNT), Palatin Technologies (AMEX: PTN), Pan American Silver (Nasdaq: PAAS), Paragon Technologies (AMEX: PTG), Park-Ohio Holdings (Nasdaq: PKOH), Photronics (Nasdaq: PLAB), Repsol YPF (NYSE: REP), Rubio's Restaurants (Nasdaq: RUBO), Russ Berrie (NYSE: RUS), SatCon Technology (Nasdaq: SATC), SenoRx (Nasdaq: SENO), Singapore Airlines (Nasdaq: SINGF.PK), Societe Generale (Paris: GLE.PA), StatoilHydro (NYSE: STO), Supreme Industries (NYSE: STS), TJX Cos. (NYSE: TJX), US Shipping Partners (NYSE: USS), Vector Group (NYSE: VGR), Verasun (NYSE: VSE) and Whole Foods Market (Nasdaq: WFMI).

Wednesday - Inflation

Wednesday's theme is "inflation" with important consumer price and oil information on tap. The Consumer Price Index (CPI) for the month of April is expected to show prices increased 0.3% on the headline, month-to-month, and 0.2% on Core CPI, or after subtracting out food and energy price change (delusional CPI might be more like it). This month's forecast perfectly matches last month's actual change, and I guess lack of deterioration is a good thing?.. Bernanke keeps telling us prices will moderate though.

EIA Petroleum Status is on tap for 10:30 release, and last week noted a build of 5.7 million barrels of oil inventory. What's more important this week is if Hezbollah backs off in Lebanon, if The Wall Street Journal report on Hugo Chavez's aid to Colombian rebels proves poorly researched, and if Iran decides to build wind farms instead of nuclear plants...

The Mortgage Bankers' Association is also on the slate as usual for Wednesday. Overseas, President Bush meets with his Israeli counterpart in Jerusalem, marking the 60th anniversary of the nation's founding.

Wednesday's earnings schedule includes Deere (NYSE: DE), Freddie Mac (NYSE: FRE), Agilent Technologies (NYSE: A), Macy's (NYSE: M), Jack-In-The-Box (NYSE: JBX), Acxiom (Nasdaq: ACXM), Akorn Int'l (NYSE: ATV), Amtech (Nasdaq: ASYS), ArcelorMittal (NYSE: MT), Audiovoxx (Nasdaq: VOXX), Brocade Communications (Nasdaq: BRCD), CAE (NYSE: CGT), China Digital TV (NYSE: STV), CGGVeritas (NYSE: CGV), Compugen (Nasdaq: CGEN), Comstock Homebuilding (Nasdaq: CHGI), Dana Holding (NYSE: DAN), Diana Shipping (NYSE: DSX), Double Hull Tankers (NYSE: DHT), Intelli-Check (NYSE: IDN), Interleukin Genetics (NYSE: ILI), Media Sciences Int'l (Nasdaq: MSII), Memory Pharmaceuticals (Nasdaq: MEMY), NICE Systems (Nasdaq: NICE), O'Charley's (Nasdaq: CHUX), Pioneer Behavioral Health (NYSE: PHC), Protection One (Nasdaq: PONE), ReneSola (NYSE: SOL), Salary.com (Nasdaq: SLRY), Sina (Nasdaq: SINA), Sony (NYSE: SNE), Spartan Stores (Nasdaq: SPTN), Stanley (NYSE: SXE), Steak n' Shake (NYSE: SNS), Synta Pharma (Nasdaq: SNTA), Teekay Shipping (NYSE: TK), Taseko Mines (AMEX: TGB), Telefonica (NYSE: TEF) and Vivendi (Paris: VIV.PA).

Thursday - Manufacturing

Thursday's theme is as clear cut as the two days preceding it, the state of manufacturing. Three separate reports will offer plenty of insight into how the guys who make things are doing. Leading off, the New York Federal Reserve will post its Empire State Manufacturing Survey for May at 8:30. The take on New York area manufacturing looks to show a state of limbo, with Bloomberg's consensus seeing a measure of 0.0, versus +0.6 last month.

In what looks to be a real treat, Industrial Production and the Philly Fed will follow that report up all before you've had your second cup of coffee (I know some of you will be on the third!). Consensus expectations for Philly area manufacturing see a reading of -20.0, compared to last month's -24.9. It's kind of sad really, the clarity in the fact that these expectations are most dependent upon the prior month result, rather than any solid gauge. Of course, the past is often the best forecaster of the near-term future, but I'm very sure from experience, that human weakness is at play here as well, and that's disappointing.

April Industrial Production is set for 9:15 reporting. Production is forecast to decrease 0.3%, compared to an increase of 0.3% in March. Capacity utilization is seen deteriorating to 80.1%, from 80.5%. The direction makes sense, but the intensity might be off; or could international demand for U.S. goods be enough to offset domestic softness in both durables and nondurables. The gauntlet has been tossed.

The auto industry has not been shy about posting cutbacks in production and noting its relevance to current demand. We've seen such moves from General Motors (NYSE: GM), and Ford (NYSE: F) is rumored to be considering putting its old Mercury line to bed. We say, good riddance! Companies should not fall in love with product lines, just as investors should not fall in love with stocks.

Thursday proves to be a busy day, with the regular Initial Weekly Jobless Claims Report also set for the early AM. This one almost religiously sees forecasts matched with prior week results, and almost always proves significantly off that estimate. Economists are looking for new benefits claims to have numbered 370,000 this week; that compares to 365K last week.

Treasury International Capital is also due before the market open. Foreign demand for long-term U.S. securities increased last month to $72.5 billion. The EIA reports on Natural Gas storage at its usual 10:30 a.m. time, just a week after Goldman Sachs (NYSE: GS) added it to its list of energy spikes to fear in the future. Finally, in the afternoon, the National Association of Home Builders will release its Housing Market Index. As you might imagine, this has not offered a party atmosphere of late, and measured 20 at last reading, and through most of this year. Chairman Bernanke will also appear in Chicago, to discuss banking and credit market turmoil. Have some wine with that buffet of information.

Thursday's earnings include Hewlett-Packard (NYSE: HPQ), Kohls (NYSE: KSS), JC Penney (NYSE: JCP), Autodesk (Nasdaq: ADSK), Nordstrom (NYSE: JWN), BMC Software (NYSE: BMC), Urban Outfitters (Nasdaq: URBN), Advance auto Parts (NYSE: AAP), Compuware (Nasdaq: CPWR), Mentor Corp. (NYSE: MNT), Arctic Cat (Nasdaq: ACAT), Blockbuster (NYSE: BBI), China Precision Steel (Nasdaq: CPSL), FreeSeas (Nasdaq: FREE), Gilat Satellite (Nasdaq: GILT), Irvine Sensors (Nasdaq: IRSN), Modtech Holdings (Nasdaq: MODT), National Grid (NYSE: NGG), Noah Education (NYSE: NED), Perceptron (Nasdaq: PRCP), Prestige Brands (NYSE: PBH), Quantum (NYSE: QTM), The Blackstone Group (NYSE: BX), UT Starcom (Nasdaq: UTSI), Yingli Green Energy (NYSE: YGE) and more.

Friday - Housing

After taking a breath following a busy Thursday, Friday offers a couple key data points. Housing is the theme for Friday. Treasury Secretary Paulson is scheduled to talk to few Congressmen on the topic in Washington. Recall, there's a bill working its way through Congress that the president has threatened to veto. Meanwhile, economists expect housing starts moderated even further, to a pace of 940,000 in April, from 947K in March.

The University of Michigan will update its Consumer Sentiment Index for May, and economists are looking for a still drab 62.5 measure. April sentiment was a robust 63.2 (that's sarcasm, we do that here on occasion).

While President Bush closes out his Middle Eastern themed week, some 60 government leaders have a nice weekend planned in Peru. We're looking forward to a possible round 2 between the royals of Spain and Hugo Chavez, or perhaps, a steel cage match between Chavez and the head of Colombia. You know they make unique bow ties over there...

Friday's earnings include Abercrombie & Fitch (NYSE: ANF), Fairpoint Communications (NYSE: FRP), Multi-Color Corp. (Nasdaq: LABL) and Pinnacle Gas Resources (Nasdaq: PINN). Please find our market commentary all week long at the site.

Please see our disclosure at the Wall Street Greek website.

Week in Video Review: May 5 - 11

It was quite a week, including two holidays, MBCW and Mother's Day. The week in video is not short on interesting events either, with a new president taking position in Moscow, the ECB and IMF renewing the fear of inflation, and intensifying geopolitical tensions that took oil prices $10 higher. If you cannot see the video where you are, please visit the Wall Street Greek website.



As always, the views expressed within the videos may not agree with the opinion of "The Greek."

Please see our disclosure at the Wall Street Greek website. Article interests (AMEX: SPY, AMEX: DIA, AMEX: SDS, AMEX: QLD, AMEX: DOG, Nasdaq: QQQQ, NYSE: XOM, NYSE: GE, NYSE: AIG, NYSE: GS).

Geopolitical Factors Drive Markets - Iran Event Nears

Geopolitical issues dominated the news flow last week, driving the stock market down approximately 2% and oil prices up roughly $10.

First, Let's Note the Inflation Factor

Like the Beastie Boys use to say, "It's the new style," new style concern that is, as inflation takes the baton from recession. The European Central Bank (ECB), Bank of England (BOE) and International Monetary Fund (IMF) all pounded that fear down the market’s throat this past week again. That led to an early end to the nascent dollar rally, as The Greek forecast it would just one week earlier. The dollar actually closed the week (EURUSD: 1.55) about where it started it, but ended the period losing some of its earlier gains.

The Geopolitical Factor

Among the catalysts behind the move in the markets, one that certainly had something to do with the double-digit rise in oil prices and decline in stocks, was intensified geopolitical tensions. Stocks sold off on the week, with the Dow Jones Industrials declining 2.4%, the S&P 500 falling 1.8% and the NASDAQ Composite drifting 1.3%.

The market started falling even before the central bank decisions and fear-inducing press conferences. Geopolitical issues and petroleum and gasoline price rise were very likely catalysts behind the market’s dismay. What started during the prior week, with Turkish air raids on Kurdish rebels, and the resulting Kurdish threats of retaliation against American forces in Iraq, continued this past week with new catalysts.

Geopolitical tensions seemed to spread and intensify all week long. The Supreme Leader of Iran announced that his country would not back down to international pressures, and would continue forward with its nuclear program. That same day, a U.S. general declared that America was incapable of engaging Iran now, with fires to put out in both Iraq and Afghanistan.

As if that was not enough, Nigerian petroleum production and distribution came under further stress, as rebels attacked infrastructure in the major petroleum-producing nation. By the end of the week, attention had turned to Venezuela, as The Wall Street Journal reported that it had evidence implicating President Hugo Chavez of actively assisting Colombian rebels.

Meanwhile, a very interesting event is taking place in Lebanon, where Hezbollah has taken over parts of Beirut. The timing of this Hezbollah offensive is very suspect, as perhaps Iran's allys in Lebanon seek to solidify a front for the foreseen conflict ahead.

At the same time, the tiny Republic of Georgia declares that war with Russia is a very real possibility. If I may go out on a tangent for a moment, The Greek very much expects Russia to use the chaos and scrutiny that may result from U.S. involvement against Iran to advantage in its political arguments with Georgia. I fully expect the borders of Abkhazia and Ossetia to end up dominated by Russian troops, and the BTC pipeline to be left in ruins before Russia is finished with this story.

Oil Price Move is Counter to Inventory and Dollar Trend

Take note, there seems to be a clear underlying driver behind last week's oil price movement that is counter to supply trend. After all, petroleum inventories increased sharply again this past week, rising by 5.7 million barrels. Meanwhile, just weeks after Israel staged a nationwide drill more intense than any in its history, Wall Street Greek hears of a closed-door Federal Advisory Committee meeting of the U.S. Nuclear Command and Control System Comprehensive Review Advisory Committee scheduled for early June.

Yes, we mean to insinuate that the bombing of Iran may not be very far off, and may be playing a role behind the rise in oil prices. Goldman Sachs (NYSE: GS), an investment bank often in the know, this week reported expectations for an oil price spike to $200 in the next year or two, and a natural gas price spike as well. These happen to be views The Greek concurs with, due solely to our expectation for a messy confrontation with Iran that could hold some surprising repercussions for the world. So, along with Goldman, some very "smart money" might be behind the counter moves in oil and stocks.

We would not be surprised to discover significant builds across sovereignties in the know. China, of course, is actively growing its own strategic oil reserve. The timing of the events in Israel, the U.S. and Lebanon, escalating Russian pressure on Georgia, and the counter trend move in oil prices and inventory build, while at the same time the dollar had hardly budged by week's end, all point to something else.

Israel Will Do the Initial Bombing

Israel will not allow a volatile, threatening and unpredictable neighbor to gain nuclear weapons capability, or it will at least do everything in its power to prevent that. And, Israel is also not likely to wait for a change on Pennsylvania Avenue to act, because that change could significantly alter the position of its ally in the United States. It at least increases uncertainty, and that uncertainty can be overcome by Israel's acting sooner rather than later. Our timeline is somewhere between the middle of June and end of September. For those who may still view this kind of writing as alarmist, or even delusional, I suggest you wake up from your placid dream state and realize your new reality.

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

Food Inflation, Ethanol Stocks and the Future

Nearly a year ago we authored an article discussing the secular change in food and energy prices and their likely impact on inflation across the board. We suggested headline CPI was more realistic than the Federal Reserve even understood. We insisted that food and energy price rise would lead to embedded inflation, and rise in the Core CPI.

There were two interesting articles published over the past couple days that add chapters to the inflation saga that is still in the midst of development. The IMF warned yesterday that global inflation was in fact a problem. An organization loaded with representatives who make a lot more money than me, the IMF, brilliantly reported that inflation had reemerged and that the drivers appeared to be "fundamental" in nature. Sound familiar? Yeah, you read that at The Greek last summer, when we said the drivers of food price rise were not seasonal, but secular in nature (a.k.a. IMF's fundamental), and should not be discounted as temporary noise that would weed itself out.

First, I have to acknowledge that I'm not an IMF press release junkie, and so can't be sure of what they were saying last summer. Also, they're definitely reporting on something that is of current importance, so kudos for that. But, imagine how much more productive warnings from institutions like the IMF might have been last year. Rather than reporting the news, why don't we shape it... Hey fellas, I'm available for consultation services if you want to know what's going to happen six months from now!

But let's not be one of those "I told you so" kind of newsletters. Let's look ahead now. First, let's take a closer look at what the IMF had to say, and analyze that (I am as frustrated as De Niro with the pistol and the pillow; it's about time someone who gets paid to know these things woke up right!?).

A Look at the IMF Warning

It's just a regurgitation of my article basically, pointing to growth in the emerging world and developing economies, and how that is driving increased demand for basic commodities, and food and energy. In fact, the IMF notes that emerging and developed economies as a group have accounted for 95% of the growth in demand for oil since 2003.

What the IMF neglected to point out is that the industrialization of China, India and the like have also impacted domestic food supply in the developing world. Farmers are increasingly being wooed away from the fields by the promise of greater opportunities in the big cities that are modernizing at breakneck pace. Factory opportunities are also luring labor away from the fields and patties.

Developments in Crop Planting and Yields

The development of corn based ethanol certainly seems ill-timed now, and will serve as another point of criticism of the Bush Administration as the history books record it. While its worked in Brazil, they didn't damage food pricing at the cost of insuring energy. In the meantime, the wild ride in ethanol stocks has ended up killing a lot of capital. Pacific Ethanol's (Nasdaq: PEIX) 52-week price range is $3 to $16, with the current price at $3 and change.

I find the developments in agriculture an interesting study. Initially, every farmer and his mother rushed to plant corn and join ethanol partnerships. Then corn prices skyrocketed and farmers rushed to plant more corn at the cost of other crop acreage, thus raising the prices of agricultural crops and then proteins across the board. Now, in typical human reactionary pattern, farmers are rushing to plant wheat and soybeans, taking corn crop acreage away. Guess what's happening as a result. Corn crop yield and inventory are expected to see significant decline (analysts surveyed by Thomson Financial see a 47% decrease in corn stocks in 2009 (Aug.)), and corn prices have risen again. In the meantime, the other crops have posted price decline. Where's this all taking us!!!

Ethanol Stocks Might Find New Life (if they can survive)

If recent patterns hold true, corn planting seems sure to increase again, so if oil prices stick high, margins might widen for the ethanol producers in the future. While The Greek believes it's still too early to start counting on that profit opportunity, the key names in the field to place on your radar screens include Verasun Energy (NYSE: VSE), Archer Daniels Midland (NYSE: ADM) and Pacific Ethanol (Nasdaq: PEIX). These stocks are up today, as the market likely reflects an overdone trade in corn, with the news due this afternoon from the USDA.

But, corn based ethanol is definitely not the answer to our energy needs and goal for such independence. Just as important, the pinch on American consumers must be mitigated. And don't forget, The Greek lives on potatoes (and your kind patronage of our advertising sponsors), so all this planting of wheat, soybeans and corn is increasing even my minimal survival costs! I'm coining that new term, "survival costs," as I expect it to replace "cost of living" relatively soon in the nation's general lexicon.

The second part to this article will focus on energy, and The Greek's fix for the problem.

Please visit our Wall Street Greek website to see our disclosure and other work. Article also interests: (AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: DOG, AMEX: SDS, AMEX: QLD)

Daily Market Wrap - Virtual Pizza

Please find Thursday's stock market wrap up below. The video, provided by the Associated Press, misses what we viewed as the most important news driver of the day, the ECB decision. Be sure to see our article on the event here.



The opinions expressed within the videos may not agree with the view of "The Greek."

Please see our disclaimer at the Wall Street Greek website. Article interests (Nasdaq: PZZA, AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: DOG, Nasdaq: QQQQ).

ECB Rate Decision and Dollar/Euro Repercussions

Today's decisions of the European Central Bank (ECB) and the Bank of England both followed plan, with no interest rate action across the board.

ECB Rate Decision and Discussion

The ECB decided to keep euro- zone area key interest rates steady, while highlighting its interest in keeping high inflation from embedding itself into the system. European bankers continue to forecast economic growth through 2008, albeit moderating. So, with inflation above 3.0% (3.3% in April), the group remains highly unlikely to cut interest rates, judging by today's statements.

Raising rates now would also be difficult, first and foremost, because of recent European economic softness. There's another reason the man on the street is more familiar with, and that's the sudden euro strength that is driving significant European instability due to inefficiencies in adjustment. The availability of cheaper U.S. goods through fluid distribution channels is causing difficulty to European producers. At the same time, European importers of U.S. goods benefit. Tourism also stands to be impacted significantly in Europe this year, as American travelers consider other options where there dollar perhaps reaches farther. Asian and European tourists are also more likely to visit the United States this year to buy the U.S. on the cheap.

It seems relatively clear to us that the ECB would like to raise rates, and will probably do so once economic activity stabilizes; and very likely once the U.S. Fed begins raising interest rates. With food and energy prices sticking high, powerful unions in Europe look to cause havoc as they seek more adequate wages for their members. The outcries across Europe, and especially in Greece where the ECB meeting took place, are deafening. Jean-Claude Trichet seems to be living within a pipe dream regarding his hopes that wage inflation will not ensue simply because he's asked member states not to allow it to. The unions in Europe do not play games, or abide by the law for that matter, when it comes to survival.

Trichet hopes to avoid inflation embedding itself into the system through rising wages and from still rigid facets of the Union that continue to allow the existence of some national monopolies with too much pricing power. At the same time, he admits energy and food prices could stick high for an extended period. Thus, his pipe dream looks to quickly develop into a nightmare.

Dollar Repercussions

Dollar enthusiasts would have preferred Trichet not mention inflation, because the simple mention of it reinforces the likelihood of future rate increases in Europe, which are damaging to dollar relative value. The recent dollar bounce was predicated on economic data flow from Europe that pointed to deteriorating euro- zone economic conditions. This week, a report on euro area retail sales showed contraction of 1.6% over the trailing 12 months through March. Americans were enjoying the likelihood of Europe joining them in the dumps, but Trichet's comments that he still sees Europe growing in '08, and that inflation is his main concern, undermined the party atmosphere.

We here at The Greek believe Trichet may have a harder job than Bernanke, considering the lengths European unions might go to in order to gain parity with rising cost of living expenditures. The European economy may hold out only as long as Trichet can keep his job under the political pressure that is likely to result and test the stability of the EU. Cutting interest rates will seem an easy way out of many problems to the politicians, and Trichet's intellectual superiority and emotional restraint may be pushed aside by panic inspired brute force. For these reasons, we see the dollar somewhat mired in a range for now, with more likelihood to strengthen than to weaken. Currency investors are also more likely to focus on internal U.S. economic developments now, as it perhaps determines the dollar's own near-term destiny.

Please see our disclosure at the Wall Street Greek website. Article should interest readers of (AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: DOG, AMEX: SDS, AMEX: QLD).

Daily Stock Market News Video Review

See your daily stock market news video review below.



Please find our disclosure at the Wall Street Greek website. (For AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ)

Resurrecting Retail Stocks

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

In case you missed it, the retail industry has been undergoing resurrection since March, and with tax rebate checks on the way, we might be ready to film the first episode of "Shoppers Gone Wild." Anyway, we think retail stocks might get a boost in the near-term. Even so, recently positive data may be more weather related than due to the anticipation of receipt of government stimulus. Note, we also recommend using any broad sector rise as opportunity to sell the weakest names in the group when momentum teeters.

International Council of Shopping Centers - Weekly Same-Store Sales Data

Anticipation of tax rebate checks looks to have possibly given life to the retail sector. Over the past couple weeks, we've seen the ICSC-UBS Weekly Same-Store Sales data emerge from the murky depths it had only just plunged into. Indeed, the report had only recently dipped into contraction territory when April 15 came to pass, but since then, growth has resurfaced and in force. Today's same-store sales data showed 2.3% year-over-year growth. Still, the week-to-week change indicated a decrease of 0.3%. So, what's up then?

It's very possible that weather is playing a role as well, especially during the transitional period of spring in North America. Temperatures can vary 10 degrees Fahrenheit or more for any given day, when compared to the prior year, and rainfall could vary significantly as well. So, we'll have to pay more attention the the monthly report from the ICSC to get a pure read on the impact of tax rebates. Monthly data should weed out the noise from unpredictable weather patterns.

The Redbook Survey also posted a 1.4% increase year-to-year, which might offer confirmation that something is afoot, and positive for retail. Despite our view that this most recent rise is weather related, we expect a boost from the delivery of rebates, and refunds for that matter. Ah, you crazy American consumers you, still spending like the dickens are we... The check has not even arrived yet!

Reevaluate Retail Plays

While the weakest of the weak should be noting a lot more bad news in the near future, like for instance store closings, employment reduction and bankruptcies, the general tone should turn positive now. So, we would use any near-term rise in retail as opportunity to short the weakest ideas. Talbot's (NYSE: TLB) is one name we keep mentioning here, and if TLB benefits from broad industry improvement now, we would add to short positions or build them.

Retail Holders (AMEX: RTH), an ETF focused on the retail space, has already been improving since mid-March, but is still off last summer's highs. RTH is now up 3.9% year-to-date after adjusting for dividends and splits. I know what you're thinking, "you're late Greek," but just the same, better late then never. Plus, you would have tracked me down and killed me if I told you to buy retail in March.

Remember this Greekism, just because a stock has risen, does not mean it cannot rise further, and just because a stock has declined, does not protect it from further decline. Of course, everything depends on the fundamentals of valuation, demand/supply and the future viability of the company's business. Other funds and ETFs to consider include (Nasdaq: FSRPX), (Nasdaq: TIRTX), (Nasdaq: TCTRX).

Please see our disclosure at the Wall Street Greek website. Article may also interest readers of (AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: SDS, AMEX: DOG, AMEX: QLD).

News Wrap - Iran and Yahoo Feel the Heat

Well, oil started the week moving in the wrong direction, according to "The Greek's" view anyway, as expressed in "The Greek's Week Ahead - Linens 'n Nothing." Actually, we warned that the ECB is more likely to raise rates then to cut, and that a move like that would kill the recent dollar rally. That little piece we authored got a lot of coverage this weekend, so maybe blame me folks...

Hey, we warned about Iran again too you know, but we didn't think anybody was reading. Apparently, the Supreme Leader of Iran spends some time at The Greek though. A U.S. General might have been reading also, since he said that it would be difficult for America to engage Iran now, due to hostilities in Iraq and Afghanistan. There are more smoke and mirrors at play here than in the House of Horrors at your local carnival.

Remember, it's not the U.S. who is going to engage Iran (according to us), initially anyway, it's Israel. The good old U.S. of A. is just going to be sticking around the Persian Gulf for awhile in order to keep Iran in check after Israel makes a mess of the neatly stacked dirt piles that adorn the country. What did you expect from a Greek talking about Persia... My dear Ayatollahs, please save the fatwas for better use, and take joy in the knowledge that The Greek is already dying a more horrible death than you can imagine, death by starvation.

Here's the problem with the American plan (reminder, that includes me)... What if Iran goes ballistic (maybe literally) and acts perhaps irrationally. Remember, this is a country led by unsophisticated (in terms of military strategy) aged religious gentlemen (lexicon to avoid fatwas) who sent unarmed children to the front line against Iraq, suggesting they pick up the weapons of dead soldiers to fight with. I think it's safe to say that you can expect the unexpected when it comes to Iran. Surprise is commonplace in war too, lest we forget, and Iran has had years to prepare for what's ahead, since G.W. publicly classified the country within the "Axis of Evil." But, I'm thinking George wants to wait until after the wedding before shooting em up again.

Microsoft Cuts Yahoo's String

Microsoft (Nasdaq: MSFT) cut the string that Yahoo (Nasdaq: YHOO) was leading them along by. Of course they were!.. and today's stock drop in YHOO told you why. Jerry Yang, Yahoo!'s CEO was sickened by the possibility of selling out to his arch enemy, so he simply used the opportunity to play games with the boys in Seattle. The longer he strung MSFT along, the longer he could keep his company's stock out of the teens (less than $5 off that now), while he desperately moved to create value.

Microsoft finally figured out Yang's game, and will now allow the popular press and activist investors to turn the heat up on Jerry as YHOO's price comes under pressure. I like this Yang fellow though... He's got steel gonads (it's a blog, relax! Nobody knows what that word means anyway...) and a cool poker face. Hey Jerry, give me a ring; love to chat and I might have some solid advice too. Don't worry Jerry, it's at the usual price of a couple potatoes. Nobody likes to pay writers these days... so will work for potatoes... Heck, the Ayatollah's could probably buy me out for a five pound bag at this point. (not really, relax!)


Please see our disclosure at the Wall Street Greek website.

The Greek's Week Ahead - Linens and Nothing

This week's Chain Store sales report looks to confirm the anecdotal evidence seen at Home Depot, Linen 'n Things, Talbots and others. Also, this week's decision by the ECB might offer insight into the durability of any dollar rally.

Chain store sales should offer no surprise when they disappoint later this week, in our estimation. Linen 'n Things went bankrupt last week, and Home Depot announced the closing of some stores, offering more anecdotal evidence into the trouble ahead for retail. Some would argue that the tax rebate will help, and we agree, but we see only a one quarter benefit. The trouble is longer-term than that, especially if energy and food costs remain so troublesome for Americans, and credit so tight.

The Greek has singled out this week's ECB announcement and press conference as the most important event of the week. What the ECB does and says this week has the potential to move the dollar, commodities and stocks. Eurozone regulators are inflation manic at the moment, but they are also well aware of the competitive position of American goods in Europe, and that potential impact to European manufacturing. The consensus sees no move ahead for the ECB and the BOE, but we expect not soon after the Fed turns hawkish or neutral, the ECB will want to hike rates as well to contain inflation upward of 3%. So, dollar enthusiasts should be aware that a rally would most likely be a short-lived event (less than a year).

The market closed higher last week and for April, as stronger footing was established by a better than expected Employment Situation Report on Friday. The report indicated that 20,000 jobs were lost, which was better than the 75,000 economists expected, according to Bloomberg’s survey. Also, the unemployment rate fell to 5.0%, from 5.1% in March.

Unfortunately the unemployment rate misses the fact that most people are generally not lazy. The number of individuals working part-time for economic reasons, meaning they or their spouse probably lost their full-time job, increased by 306K in April, and it measured 849K more than a year ago. These under-employed individuals, while not considered jobless, are certainly having a tougher time making ends meet. Thus, the data offers a falsely positive indicator for the near-term economy. Even so, the growth in Q1 GDP reported earlier last week was also more enthusing to see than contraction would have been, and gave stocks even more reason to seek higher ground.

Tax rebate checks have started rolling out, and offer tax paying consumers a chance to catch their breath in the near-term. If the government’s other intense election-year actions help the economy gain traction before too long, we’ll have to offer Bush, the Dems, Paulson and Bernanke and company kudos for staving off a deeper economic downturn than would resulted otherwise.

The Week Ahead

This week contains important reports concerning the housing and retail industries, as well as noteworthy news from Europe.

Monday

A significantly lighter load of economic data is in store this week, and Monday's schedule holds just one item. At 10:00 a.m., the Institute for Supply Management reports its Non-Manufacturing Survey. While Barron's notes expectations at Lehman Brothers for an ISM service sector measure indicative of economic expansion (+50.0), Bloomberg's survey of economists has set expectations for a reading of 49.3, just below the breakeven point.

Bernanke looks to start his post FOMC meeting tour, beginning with a Columbia Business School dinner. Markets will be closed on Monday in Australia, Japan, South Korea and the U.K.

As earnings season remains hot and heavy, Monday's schedule includes Goldcorp (NYSE: GG), Pilgrim’s Pride (NYSE: PPC), Airgas (NYSE: ARG), Albany Molecular (Nasdaq: AMRI), Amtrust Financial (Nasdaq: AFSI), Anadarko Petroleum (NYSE: APC), Argo Group Int'l (Nasdaq: AGII), Assisted Living Concepts (NYSE: ALC), Banco Santander-Chile (NYSE: SAN), Boots and Coots Int'l Well Control (NYSE: WEL), Bruker (Nasdaq: BRKR), Career Education (Nasdaq: CECO), CMS Energy (NYSE: CMS), Comstock (NYSE: CRK), DIVX, Inc. (Nasdaq: DIVX), Dollar Financial (Nasdaq: DLLR), drugstore.com (Nasdaq: DSCM), Forest Oil (NYSE: FST), Gladstone Capital (Nasdaq: GLAD), Hain Celestial (Nasdaq: HAIN), Human Genome Sciences (Nasdaq: HGSI), Innophos (Nasdaq: IPHS), Kindred Healthcare (NYSE: KND), LeapFrog (NYSE: LF), LookSmart (Nasdaq: LOOK), MannKind (Nasdaq: MNKD), Marvel Entertainment (NYSE: MVL), McKesson (NYSE: MCK), Midway Games (NYSE: MWY), Nam Tai Electronics (NYSE: NTE), Nautilus (NYSE: NLS), Powerwave Technologies (Nasdaq: PWAV), Sykes Enterprises (Nasdaq: SYKE), The Principal Financial Group (NYSE: PFG), Scotts Miracle-Gro (NYSE: SMG), Tidewater (NYSE: TDW), Vulcan Materials (NYSE: VMC), Weight Watchers (NYSE: WTW) and many others.

Tuesday

On Tuesday, we advise investors pay attention to the weekly same-store sales report from the International Council of Shopping Centers – UBS. Last week’s report showed growth of 0.9%, but the week before that posted the first year-over-year decrease in our memory, as sales fell 0.7%. Just last year, sales growth was running at a pace of 2%-3%.

While the Japanese market remains closed, Australian bankers will announce their latest rate decision. The Bank of Australia is expected to keep rates steady. In the States, Kansas City Fed President Hoenig keeps the Fed post-FOMC tour rolling with his address in Colorado.

Democratic state primaries are scheduled in North Carolina and Indiana. Some would argue that it was South Carolina that set the wheels of change in motion for Barack Obama, and so perhaps it's appropriate that North Carolina can complete it; however, NC is a very different state and Bill Clinton is a very different campaign factor now. Up on Capitol Hill, the Senate Banking Committee is working on a bill to create a new regulator to watch over Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).

Fannie Mae (NYSE: FNM) also leads earnings news on Tuesday, with other noteworthy reports expected from Churchill Downs (Nasdaq: CHDN), Cisco Systems (Nasdaq: CSCO), UBS (NYSE: UBS), American Capital Strategies (Nasdaq: ACAS), AMREIT (NYSE: AMY), Anglogold Ashanti (NYSE: AU), Aqua America (NYSE: WTR), Arch Chemicals (NYSE: ARJ), Athenahealth (Nasdaq: ATHN), Avis Budget (NYSE: CAR), Barrick Gold (NYSE: ABX), BIDZ.com (Nasdaq: BIDZ), Bio-Rad Labs (NYSE: BIO), Blue Nile (Nasdaq: NILE), Brightpoint (Nasdaq: CELL), Capital Senior Living (NYSE: CSU), CapitalSource (NYSE: CSE), Charles River Labs (NYSE: CRL), Church & Dwight (NYSE: CHD), Cimarex Energy (NYSE: XEC), Corrections Corp. (NYSE: CXW), Covidien (NYSE: COV), Cutera (Nasdaq: CUTR), D.R. Horton (NYSE: DHI), Dolan Media (NYSE: DM), Eagle Materials (NYSE: EXP), Emergency Medical Services (NYSE: EMS), Emerson Electric (NYSE: EMR), EPIX Pharmaceuticals (Nasdaq: EPIX), FTD Group (NYSE: FTD), Georgia Gulf (NYSE: GGC), Golden Star Resources (AMEX: GSS), Harman Int'l (NYSE: HAR), HCC Insurance (NYSE: HCC), Henry Schein (Nasdaq: HSIC), Hospitality Properties Trust (NYSE: HPT), IPCS, Inc. (Nasdaq: IPCS), Jack Henry (Nasdaq: JKHY), Kenneth Cole (NYSE: KCP), Kinross Gold (NYSE: KGC), Learning Tree (Nasdaq: LTRE), Legg Mason (NYSE: LM), Louisiana-Pacific (NYSE: LPX), Magna Entertainment (Nasdaq: MECA), Martin Marietta (NYSE: MLM), MGM Mirage (NYSE: MGM), Molson Coors (NYSE: TAP), Myriad Genetics (Nasdaq: MYGN), NYSE Euronext (NYSE: NYX), Papa John's (Nasdaq: PZZA), PG&E (NYSE: PCG), Pitney Bowes (NYSE: PBI), Playboy (NYSE: PLA), Precision Castparts (NYSE: PCP), Qwest Communications (NYSE: Q), RF Micro (Nasdaq: RFMD), RR Donnelley (NYSE: RRD), Ruth's Chris Steak House (Nasdaq: RUTH), Sara Lee (NYSE: SLE), Spectra Energy (NYSE: SE), Tenet Healthcare (NYSE: THC), Teva Pharma (Nasdaq: TEVA), The Pantry (Nasdaq: PTRY), The St. Joe Co. (NYSE: JOE), THQ, Inc. (Nasdaq: THQI), TLC Vision (Nasdaq: TLCV), ValueClick (Nasdaq: VCLK), Vornado Realty Trust (NYSE: VNO), World Wrestling Entertainment (NYSE: WWE) and more.

Wednesday

Wednesday offers a busy one for economic news, and some of it capable of moving the market. Before the open, the Mortgage Bankers' Association will report its weekly take on mortgage activity. This report has been sort of a nonfactor of late, because until it and other housing data indicate a housing market turn in earnest, investors are just not going to find value here. We have noted in the past that mortgage rates have started to reflect increased expectations for inflation, and so some of the anticipated impact to housing from the rate cuts (in isolation) has been offset.

At 8:30 on Wednesday, Q1 Productivity and Costs will be noted. Pay attention to late coming reports and revisions, especially those that play a role in the GDP calculation. Economists will be adjusting their forecast for GDP ahead of its reported revision this month. Nonfarm productivity is seen improving by 1.7% in Q1, after an increase of 1.9% in Q4 2007. Unit Labor Costs, the more important part of this report now due to its contribution to inflation, is seen increasing 2.6% in Q1, after an increase of 2.6% in Q4. We expect this figure to decrease in future quarters as lower cost workers replace higher paid legacy employees. This has been a staple factor in the cost reduction efforts at General Motors (NYSE: GM) and Ford (NYSE: F) and should be commonplace in Q2. Certainly the maintenance of the unemployment rate, while jobs are shed at the same time, finds logical explanation in this phenomenon.

The stock market has proven resilient to recently deteriorating housing data, and it will get another resiliency test on Wednesday when the Pending Home Sales Index is reported for March. February’s report displayed a decrease of 1.9% from January. While many economists are pointing toward another double digit decline in home values before we touch bottom, and we agree values must still adjust lower, major media has started to pick up on vulture investing opportunities in the foreclosure market. However, if the foreclosure market is getting so much attention, this says something about the still wary buyers in the general real estate market. It's hard to overspend in the foreclosure space, if you do your research and do not enter into a contract for a home loan involving a property that has other liens against it. In other words, do you homework.

Petroleum Status is on tap for its regular 10:30 reporting. Last week, a precipitous decline was offset by Turkish bombing of Kurd positions. Thus, you can expect oil to start lower again this week, but The Greek is on record warning about future ECB actions and how they might some day end this dollar rally. If the ECB raises rates, a real possibility, look for dollar enthusiasts to get a slap in the face, and commodity bears also. Still, everything depends on that ECB decision and press conference on Thursday, and the most important thing you can do on Thursday is pay attention to that news flow.

With Congress coming down on credit card companies, and rightly so, the Consumer Credit Report should get more interesting in the near future. Many of you may not be aware of credit card company roughhousing, so we'll inform. When the less fortunate get into a bind and fall behind a payment or two, the credit card companies tighten the noose around the borrower's neck, often times raising the APR on consumer credit above 30%. This places the borrower into a deeper hole he often cannot get out of, outside of settling on partial payment or declaring bankruptcy, both detrimental to credit record. And many poor folk don't even understand their options and continue to struggle month to month, paying late fees, over the limit fees and a plus 30% interest rate.

This highway robbery has to stop, and I don't care if it's in the contract or not. If you tell me you are going to rob, rape and murder me in fine print, that still does not make it okay. Consumer Credit for the month of March is indicated to rise by $6.0 billion when reported on Wednesday afternoon. February credit increased by $5.1 billion, and the rate of credit expansion looks to have decreased this year generally.

One will have to wonder if the Antichrist has ushered in the "beast" when Vladimir Putin hands over the Kremlin to Dmitry Medvedev on Wednesday. Medvedev is officially inaugurated on this day, but whether the puppeteer's strings are severed or not is another question. Markets in France will be closed on Wednesday, presumably to make sure all the nuclear energy plants are working properly as Russia prepares to hold Europe hostage for heat and electricity. In the States, a Senate subcommittee considers the Delta-Northwest merger (NYSE: DAL, NYSE: NWA).

Wednesday's earnings schedule includes Croc’s (Nasdaq: CROX), Total S.A. (NYSE: TOT), AAON (Nasdaq: AAON), Aeterna Zentaris (Nasdaq: AEZS), Allergan (NYSE: AGN), Allos Therapeutics (Nasdaq: ALTH), Bluefly (Nasdaq: BFLY), Central Garden & Pet (Nasdaq: CENT), Checkpoint Systems (NYSE: CKP), Chesapeake (NYSE: CSK), Conseco (NYSE: CNO), Cooper Tire & Rubber (NYSE: CTB), Devon Energy (NYSE: DVN), Expeditors Int'l (Nasdaq: EXPD), Foster Wheeler (Nasdaq: FWLT), Great Plains Energy (NYSE: GXP), Hansen Natural (Nasdaq: HANS), Healthsouth (NYSE: HLS), Hospira (NYSE: HSP), InterDigital (Nasdaq: IDCC), Kintera (Nasdaq: KNTA), Marsh & McLennan (NYSE: MMC), McCormick & Schmick's (Nasdaq: MSSR), Middleby (Nasdaq: MIDD), Nationwide Financial (NYSE: NFS), NCR Corp. (NYSE: NCR), Neenah Paper (NYSE: NP), Nobel Learning (Nasdaq: NLCI), ON Semiconductor (Nasdaq: ONNN), PeopleSupport (Nasdaq: PSPT), Pioneer Natural Resources (NYSE: PXD), Protective Life (NYSE: PL), Quality Distribution (Nasdaq: QLTY), ResCare (Nasdaq: RSCR), Senior Housing Properties Trust (NYSE: SNH), Service Corp. (NYSE: SCI), Speedway Motorsports (NYSE: TRK), The DirectTV Group (NYSE: DTV), Transocean (NYSE: RIG), U.S. Cellular (NYSE: USM), Yamana Gold (NYSE: AUY) and more.

Thursday

On Thursday, the Chain Store Sales Report for the month of April is likely to offer further verification for what we expect will be an ongoing deterioration of the retail sector in 2008.

Supporting anecdotal evidence has been mounting, with news last week that Home Depot (NYSE: HD) would close 15 stores. Also, Linens 'n Things filed for Chapter 11 bankruptcy protection last week, and Talbots (NYSE: TLB) doesn't look far behind. Finally, within the Employment Situation Report last Friday, it was noted that the retail trade industry shed 27,000 jobs in April. Thus, we expect April Chain Store Sales will offer good reason for market concern and keep the shares of the poorest performing retailers from participating in general market ascension.

Last week’s spring economic forecast published by the European Union, brought Europe’s inflation concerns to the fore. Anyone who watches European TV occasionally, like me, knows all about the mania in Europe concerning rising costs. Americans with travel plans across the pond are certainly working the calculator these days, and watching the likelihood of this year’s trip dwindle with each passing day, and each penny the euro strengthens against the dollar.

This week, the ECB might put its money where its mouth is, and God forbid, raise European interest rates as it battles the inflation enemy. The ECB and Bank of England will announce their respective rate decisions on Thursday morning. A rate increase would almost surely prove damaging to the dollar, but it's not generally expected.

The regular reporting of Weekly Initial Jobless Claims is due for 8:30 release. Bloomberg's consensus of economists forecasts a level of 370K claims this time around, after the measure rated at 380K last week. March Wholesale Trade is due for mid-AM report, and inventories rose 1.1% in February (+0.8% in Jan.) on the wholesale level. The ratio of inventory to sales is more important, and there's been an uptick in the trend recently, indicating the impact of recession or fear of it in product flow and purchases. The long-term trend, however, shows great efficiency gain from improved global distribution, technology and just-in-time production.

The weekly Natural Gas Report is on tap for its usual 10:30 notation. In the pending war with Iran, natural gas will be our energy resource of choice. We have nice stores of coal-bed methane in the Colorado Rockies, and plenty of gas in Canada. Coal of course is an important resource in North America as well, if you're forecasting the possibility of serious competition for control of Middle Eastern energy resources. Hey, this is not so far fetched, so fetch your one eyebrow back from that raised position. India is reportedly considering similar protectionist measures to China regarding rice, and so it's becoming plainly obvious that the free market extends only as far as free availability of commodities. Then, we're sorry to say, protectionism and maybe even war become real possibilities...

Thursday's earnings include American International Group (NYSE: AIG), Coca-Cola Hellenic Bottling (NYSE: CCH), Priceline.com (Nasdaq: PCLN), Activision (Nasdaq: ATVI), Adaptec (Nasdaq: ADPT), Agnico-Eagle Mines (NYSE: AEM), Akeena Solar (Nasdaq: AKNS), Barr Pharma (NYSE: BRL), Brooks Automation (Nasdaq: BRKS), Cablevision (NYSE: CVC), Celgene (Nasdaq: CELG), Deutsche Telekom (NYSE: DT), Dot Hill Systems (Nasdaq: HILL), El Paso (NYSE: EP), Electro Scientific (Nasdaq: ESIO), First Marblehead (NYSE: FMD), Gartner (NYSE: IT), Global Cash Access (NYSE: GCA), Heely's (Nasdaq: HLYS), Internet Capital Group (Nasdaq: ICGE), King Pharma (NYSE: KG), Koppers (NYSE: KOP), Leap Wireless (Nasdaq: LEAP), Lifetime Brands (Nasdaq: LCUT), Live Nation (NYSE: LYV), Mirant (NYSE: MIR), Nationwide Health Properties (NYSE: NHP), Pediatrix Medical (NYSE: PDX), Plug Power (Nasdaq: PLUG), Public Storage (NYSE: PSA), R.H. Donnelley (NYSE: RHD), Ralcorp (NYSE: RAH), Real Networks (Nasdaq: RNWK), Scientific Games (Nasdaq: SGMS), Six Flags (NYSE: SIX), Steinway Musical (NYSE: LVB), Sunrise Senior Living (NYSE: SRZ), Superior Well Services (Nasdaq: SWSI), The NASDAQ OMX Group (Nasdaq: NDAQ), Toyota (NYSE: TM), Trump Entertainment (Nasdaq: TRMP), U.S. Physical Therapy (Nasdaq: USPH), Unilever NV (NYSE: UN), Verisign (Nasdaq: VRSN), Vestas Wind Systems (VWS.CO), Vonage (NYSE: VG), Watson Wyatt (NYSE: WW) and more.

Friday

Friday offers two reports, including the International Trade data for starters. The deficit is expected to narrow to $60.8 billion in March. "What about China!", we hear you screaming. Remember, there are important dynamic factors at play now offsetting the global production factor. First of all, with global development comes international demand for U.S. branded goods. If you've ever been to Eastern Europe, you know they'll pay $100+ for a pair of lousy old Levi's. Anything American sells way above value, and they seek "made in America" tags even more intently then super-patriotic types do here.

Besides this, of course the decline in the dollar has helped American exporters, and manufacturing is getting a well-publicized boost from it all. Finally, never forget there are two factors to this equation, and when America nears recession, demand for overall goods and services declines, and so import demand wanes. In a report last week, we saw imports and exports both rose recently, but exports exceeded import growth near three-fold.

After April ended five consecutive months of stock market decline, expect the RBC Cash Index to begin to show the signs of confidence building. Sure, sure, the little guy is still hoarding cash, but we bet the investments he's buying now include some names he would not have touched months ago. Heck, I bet even SIVs have made some courageous folks some money lately, considering the government's willingness to hold risk.

Friday's earnings schedule includes Allianz S.E. (NYSE: AZ), Beacon Roofing (Nasdaq: BECN), Clear Channel Communications (NYSE: CCU), Cornell (NYSE: CRN), Gold Fields Ltd. (NYSE: GFI), Huntsman (NYSE: HUN), National Dentex (Nasdaq: NADX), Petrobras Energia (NYSE: PZE), Rosetta Resources (Nasdaq: ROSE), Sotheby's (NYSE: BID), Southern Union (NYSE: SUG), Westar Energy (NYSE: WR), Windstream Communications (NYSE: WIN) and a few others.

Please find our daily market commentary and our disclosure at Wall Street Greek.

Week in Video Review - Markos Birthday Celebration Week Begins

Wall Street Greek celebrates its founder's birthday, and the beginning of "Markos Birthday Celebration Week" (MBCW). MBCW is a seven-day period within which all of Markos' friends treat him to meals, drinks and plain old good times (you're hereby notified - appointments available at wallstreetgreek @ gmail.com). While MBCW is not widely celebrated across the nation (yet), it is a notorious event within a group of friends Markos places into awkward position each year due to his unwarranted and perhaps unwelcome expectations for "freebies" (I like steak). We note, this past week was also a period inclusive of May Day and World Press Freedom Day. Please enjoy the videos, and if you cannot see them where you are, visit the Wall Street Greek website.

The opinions expressed within the videos may not agree with the view of "The Greek."

Please help Wall Street Greek to feed the hungry, as we walk in Sunday's Crop Hunger Walk. Please click through to the charity's own secure donation page, where you can contribute. Please show that Wall Street Greek readers care about those less fortunate. Whatever you can give is welcome.

DCF Valuation Improves Naive Value and Growth Investment Strategies

By Tim Poulus

There are a number of investment strategies out there, but do they make any sense? I think there is a pretty clear answer to that question, but you may not like it.

Let's look at value and growth strategies in particular. Investopedia defines value investing as "The strategy of selecting stocks that trade for less than their intrinsic values." Growth investing is defined as "A strategy whereby an investor seeks out stocks with what they deem good growth potential. In most cases, a growth stock is defined as a company whose earnings are expected to grow at an above-average rate compared to its industry or the overall market." Generally, going by these investment strategies implies doing some form of quantitative analysis. A number or ratio, such as P/E, is calculated and then is statistically checked for any correlation with stock (out)performance.

From a DCF point of view (calculating the value of a stock by adding the present values of all future cash flows) this obviously is total nonsense. Everybody is on the hunt for undervalued assets. That is the whole point of investing, isn't it? And focusing on growth only is just as silly. High growth, combined with a low return on new invested capital (RONIC), is a sure way to value destruction. In other words, high growth only makes sense when combined with a high RONIC.

How do these two views match? Quantitative analysis seems to work; just ask your mutual fund provider. And yet, DCF analysis is just about the only sound strategy (apart from similar strategies such as dividend discount modelling) to do a real valuation job. I believe the answer is in the statistics. I believe this is a very fundamental issue and it explains why there are so many strategies (Dogs of the Dow, etc.), and only one true valuation tool (DCF modeling).

If you have the time and the knowledge, do a DCF model of each individual company you are interested in. This will tell you on an individual basis if a company is undervalued. If you don't have the time and the knowledge, go by statistics and pick out a quantitative strategy that you like.

If you like growth stocks for example, you will be able to select a group of high-growth companies. You need to invest in a pretty large group, because in this analysis you may overlook a company or two that has a very low RONIC and therefore destroys value (which in due time will negatively influence the share performance). If your group is large enough, and assuming there is a positive correlation between growth and performance (which is hard to establish), this will be a winning strategy.

To round off, you may ask: why are all these fund managers so keen on quantitative analysis? They get paid very handsomely and they are trained professionals, so why not do some decent DCF modelling? And if you are an institutional investor, you may ask: why am I outsourcing the investment management process to a manager who is simply doing quantitative analysis? I could easily hire a few "quants" myself and replicate that strategy (and in the process save myself a few hundred basis points).

To that question, I unfortunately do not have the answer.

Please see our disclosure at Wall Street Greek. Article interests (Nasdaq: FDVLX, Nasdaq: LMVTX, Nasdaq: HWLIX, PCX: IWN, AMEX: CLM, Nasdaq: TRMCX, Nasdaq: ACSCX, Nasdaq: FDGRX, Nasdaq: PRGFX, Nasdaq: USCGX, Nasdaq: CVGRX, Nasdaq: VASGX, AMEX: DIA, AMEX: SDS, Nasdaq: QQQQ, AMEX: QLD, AMEX: SPY, AMEX: DOG).

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The First Bank of Snook, No Joke

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

It's no joke, The First Bank of Snook really exists and really entered into agreement with the Federal Reserve today. However, we would be completely remiss NOT to make some kind of fun of this...

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Okay, so the big joke is clearly on humanity this year. It looks like God pulled the biggest April Fool's joke in history by moving April Fool's Day to May. The Federal Reserve executed an agreement with the First Bank of Snook!?! Come on, are you kidding me? And GDP grew?!? And the unemployment rate fell?!? That's enough big guy in the sky, you've taken this joke way too far.

The Employment Situation

The economy lost 20,000 jobs in April, far less than the 75,000 economists were looking for, according to Bloomberg's survey. CNBC's Leisman put the right label to the report, calling it the tale of two economies. Goods producing businesses, or the people who make things in construction and manufacturing continued to see drastic job loss, while the service sector continued adding to employment.

Construction lost 61K jobs, while manufacturing saw attrition of 46K, mostly in durable goods manufacturing. That's not a surprise for anyone following the auto industry, or even simply reading through General Motors' (NYSE: GM) quarterly report. Motor vehicles and parts lost 17K jobs during the month, and more are to be expected according to GM. A total of 326,000 jobs have been lost in manufacturing this year.

On the services side, professional and technical services employment increased by 27,000 jobs. I guess the practice of bankruptcy law is doing well these days. Health care added another 37K this past month. Well, besides the clear demographic driver, people experience a lot of stress when finances get tight and stress is a significant cause of illness. Okay, so we can't measure that directly, but we're just saying...

The only surprise we found in the report was the increase in food services, up 18K during the month. Retail trade lost 27,000, as we expected, but we're also looking for the saturated restaurant sector to lose some weight this year. Therefore, we view this number as an anomaly. Retail should also see some significant consolidation, and the early cuts have continued. This week, Home Depot (NYSE: HD) announced it would close some stores. You can expect a lot more of that this year in the retail industry, along with some bankruptcies. As a result, we were shocked to see Bob Dole recommend the purchase of The Gap (NYSE: GPS) yesterday on CNBC. Poor performers should be the first to go, and things are not looking so hot at GPS or Talbots (NYSE: TLB), despite the reported turnaround at The Gap.

The Under-Employed (God bless them)

The number of people working part-time for economic reasons, meaning they or their spouse probably lost their full-time job, increased by 306K in April. At 5.2 million part-timers, this level exceeds April 2007 by 849K. While considered employed by the government, these hard-working and striving people are still having a hard time making ends meet. This helps to mislead the economic read of the report, since if these people were a little lazy they would still be counted as unemployed. They're counted as employed, when in fact they are under-employed. They are not likely to consume as they would when fully employed, and this should stress overall GDP growth. The level of increase over last year is significant and should not be overlooked.

Another 1.4 million individuals who are not receiving unemployment checks anymore are considered "marginally attached to the workforce." Of this group, about 412K would probably like a job, but have not looked over the past month. The other million is not working due to school or family responsibilities. This number is not what matters, but the difference in this compared to the same level last year, and we do not see that information. Comment to the article if you have it please. Whatever it is, it does not look significant though.

Even so, the unemployment rate at 5.0%, compared to the 5.2% that was forecast by economists and the 5.1% recorded in March, is not necessarily good news to bank on. However, it's at least something to hold on to. With the tax rebate checks, along with tax refunds, going out now, the consumer might catch a breath here over the next month. Whether it will be enough air to last her until the economy finds longer-lasting fuel is yet to be seen. We have to give credit to the federal government though, because even while they were late in realizing the extent of housing troubles and the ability of the bubble burst to impact the broader market (which should have been plainly obvious), they have reacted in typically reactionary fashion aggressively. Now, many would argue that the Fed has gone too far, and we see the point in that as well. See our Steven Ferguson's article from this past week, Uncle Ben's Rice.

We hope our analysis has helped you avoid being snookered by the reported headlines. We have taken some harsh criticism lately for our turn to bullish for stocks. It seems some shorts have fallen in love with their books, and some herd types have gotten lost in the pack. We'll continue to be forward looking and to shed light on the market for you. Remember, the market is a leading indicator, and the federal government has taken aggressive action in this election year. So, no matter how bad things might have gotten otherwise, we cannot ignore the changes that have taken place in the dynamic marketplace. So, while we are looking for economic recession, we're not ignoring the market's already discounting of that, and it's attempt at pricing economic conditions that should exist six months from now.

God willing, we could be okay this year in the market. But, the pending conflict with Iran, the interests of China and Russia in the energy rich region, and the repercussions that might result from a likely well-schooled (from Iraq example) and well-prepared Iran could still shock our country this year into severe economic strife. If that happens though, you'll be concerned about more important things than this.

Please see our disclosure at Wall Street Greek. Article interests (AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: QLD, AMEX: SDS, AMEX: DOG, NYSE: HD, NYSE: GM, NYSE: GPS, NYSE: TLB).

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American Tourism, Employment Benefits from Weak Dollar

Foreign tourism boosts employment in the accommodation and leisure sector, thanks to a weak dollar. And don't miss our juicy Iran commentary either.

Employment Data Unfolds

Weekly Initial Jobless Claims came in higher than expected at 380K, but right around the recent range. The four-week moving average stands at 363,750, but the 35,000 claims increase this week over last was not enough to offset the even higher figures of the two weeks before. Are things improving?... not likely.

Home Depot (NYSE: HD) today announced it would close 15 stores and the Challenger Job-Cut Report posted a 19-month high. The report of planned layoffs reached 90,015 in April, up 68% from March. Things are getting worse folks, so buckle down. The insured unemployment rate increased to 2.3%, from 2.2% the week before. Tomorrow, the Labor Department will offer the overall unemployment rate, and Bloomberg's consensus of economists anticipates the rate will increase to 5.2%, from 5.1% last month.

Some contrasting data was offered by the Monster Employment Index, a measure of online job posting supply. The barometer improved to 174 in April from 167 in March. The new measure was still below last year's figure at the same time, which reached 186, and according to Monster Worldwide (Nasdaq: MNST), it benefited from seasonal hiring in the accommodation and food services industry. Also, despite media highlighting of big financial industry layoffs, the overall market is steadying according to Monster. The information from Challenger, Gray and Christmas disagrees, reporting that one in every four job cuts came from the financial sector in April.

Greek Wisdom

The Greek sees one possible and very logical explanation for the coinciding rise in financial sector job cuts and in financial sector job listings, and this is why you read Wall Street Greek. As you know, companies reduce cost by firing progressed employees and replacing them with young blood at much lower salary. There's probably a good deal of this going on now.

The figure also benefited from job demand in Texas and Florida, where were sure the energy industry and hospitality and leisure sector helped drive growth. Disney (NYSE: DIS), is probably going to benefit as much from increased tourism from overseas as it is hurt by decreased domestic affordability. Tourism in Europe is likely to decrease this year due to inflation and the rising cost of the euro, while American destinations see a rise in foreign visitors.

Personal Income and Outlays

Income rose 0.3% in March, in line with expectations, and consumption increased 0.4%, ahead of expectations. Great news?! No, sorry again. You see, the reason spending and income increased was due to inflation. Real PCE expenditures rose just 0.1%, while income decreased fractionally. Now it makes complete sense doesn't it.

ISM Manufacturing

April manufacturing was okay according to the popular press, despite contracting, which we remind you is a tell-tale symptom of recession. The April figure came in at 48.6, but because it was ahead of economists' forecasts for 48.0, all is well.... Let's celebrate. I'll make a celebratory feast for the two of us. We'll have potatoes and some tap water, but not just any tap water mind you. It'll be New York City tap water, with all the fringe benefits.

Oil Collapse

Oh me oh my! Oil is falling, oil is falling! It's all the way down to $111 a barrel. Soon we'll be driving our SUVs again! There seems to be some controversy about the strategic oil reserve. The Democrats have been aggressively pushing President Bush on the subject. Bush, however, is avoiding it, whispering, "shhh, Iran will hear you, you fool." You see, Israel is preparing to bomb Iran in the very near future, and with the bunker busting bombs we sold them a few years ago. Thus, we'll need all that strategic oil for the repercussions. Iran, my friends who may still be living in dream land and pretending the topic does not exist, will likely lash out at its neighbors, of which we remind you consists of a group including Kuwait, Iraq and Saudi Arabia. We're going to need all that oil once the Saudi energy logistics are destroyed by Iranian scud missiles and the Kuwaiti fields are afire. And, we'll also need it to annihilate the Iranian armed forces as a result. So, maybe don't be so quick to sell-off Exxon Mobil (NYSE: XOM), or perhaps energy firms with operations outside of the Middle East, like Encana (NYSE: ECA).

Please see our disclosure at the Wall Street Greek website. Article interests readers of (AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: SDS, AMEX: DOG, Nasdaq: QQQQ, NYSE: XOM, NYSE: SUN, NYSE: HD, Nasdaq: MNST, NYSE: DIS)