Week Ahead: Bear Market Wake Up Call
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By The Greek - Economy & Markets:
The old bear market gets a wake up call this week, as a slew of key reports seem poised to offer more of the unprecedented sort of data we've now gotten use to. The bear apparently started his hibernation early, following heavy holiday feasting. The market has been on a little bit of a roll of late, especially benefiting from light volume and hopeful money flows over the last and first trading days of 2008-09. We might have been enthused about momentum building, with heavy stores of capital sitting idle, if not for the outbreak of war in the Middle East and a slew of dangerous economic reports targeting this coming week. So, it looks like the bear is due for a rude awakening, and I for one, won't be around to bear the grump's wrath.
The Week Ahead
Arguably the busiest week of the economic monthly calendar kicks off the year's first full trading week with a bang. The period brings monthly Motor Vehicle Sales, the release of important FOMC meeting minutes, Chain Store Sales and all the month's important employment data. Yes, it will be quite a week, and one that likely offers plenty of reason for the festive stock market to rethink things a bit. Thus, if the market holds its ground through this harsh environment, benefiting from capital distribution, look to that as a good sign for more of the same in January.
Monday
Washington will steal the limelight most of Monday, as Barack Obama, who is now in DC, plans to meet with Congressional bosses to discuss legislative agendas, including Obama's well-publicized economic stimulus package. Of course, events in Gaza make a presidential press briefing highly likely for George Bush as well, as Nicholas Sarkozy, Tony Blair and a Russian delegate head to the Middle East to attempt a rescue. Up on the Hill, the Inspector General of the SEC will face the firing line, as a House subcommittee questions him about how Bernie Madoff's ponzi scam got past him.
Auto makers are set to report monthly Motor Vehicle Sales for the month of December on Monday. This report comes just as major auto suppliers are shortening their work weeks and planning plant holidays to save money. Visteon (NYSE: VC) announced last week that it would layoff 2,000 employees, and on Monday it begins a new four-day work week. Vehicle sales data from GM (NYSE: GM), Ford (NYSE: F), Toyota (NYSE: TM) and Honda (NYSE: HMC), among others, will be reported intermittently throughout the day, so you have to keep checking in (we haven't noted the trend here for hour of individual reporting). Aggregate December sales are seen running at an annual pace of 7.4 million, after sinking to 7.6 million in November.
"The Greek" shared a few brews with a couple Ford lug nuts this weekend; needless to say, they were a little stressed out. We had a good couple of hours of debate about government aid and old times. Recall I've been for the aid, but also demanding of the UAW. Let's just say, there were no awkward quiet moments. Thanks for the beers boys and sincere best wishes.
November's Construction Spending Report is due at 10:00 a.m. Bloomberg's consensus of economists forecasts a 1.3% decline in monthly spending, compared against October's drop of 1.2%. KB Home (NYSE: KBH) reports earnings on Friday, which could prove more of a market moving event than this well-anticipated poor data point. Monday's earnings schedule is a quiet one, with news emanating from The Mosaic Company (NYSE: MOS), Piedmont Natural Gas (NYSE: PNY) and Dynatronics (Nasdaq: DYNT).
Macworld kicks off its week without the usual keynote speech from Apple's Steve Jobs (Nasdaq: AAPL). It seems plainly clear that Jobs is not in good health, but the stock still has some ground to give if that news ever actually reaches the wire. We hope it doesn't though of course.
Merrill Lynch (NYSE: BAC, NYSE: MER) and Credit Suisse (NYSE: CS) have scheduled conference calls with clients and interested parties to discuss the reinsurance renewals pricing outlook.
Tuesday
Last week, the ICSC Weekly Same-Store Sales data indicated sales fell off a cliff on a year-to-year basis. We're not looking for improvement any time soon; in fact, we're looking for retail bankruptcies to bloody the pages of financial press in the weeks ahead. Look for this week's ICSC data in the pre-market (7:45). Redbook's less useful survey is due around 8:55 as well, and has tracked ICSC when we've checked.
November's Factory Orders are due at 10:00 a.m. Bloomberg's consensus forecasts a 2.5% monthly decline, coming off of a 5.1% drop in October. As we fall deeper into recession, spending falls off and manufacturers and service providers alike consolidate operations. Last week's ISM Index sank to 32.4, its lowest point since 1980. New orders, especially, were hit hard in the December reading, so you can expect factory orders to deteriorate from here.
ISM's Nonmanufacturing Index is due for release at 10:00 a.m. EST. The consensus sees a reading of 37.0 this time around, after the measure touched 37.3 in November. Remember, measures below 50 signify contraction. You get the point...
Also at 10:00, the National Association of Realtors releases its Pending Home Sales Index. It's expected to have dropped in November, to a level of 88.0, from 88.9 reported in October. The Federal Open Market Committee is scheduled to release the minutes of its historic last meeting (December), through which it reduced the fed funds rate to an unprecedented range of 0-0.25%. Needless to say, the minutes should prove interesting reading.
Brown Harris Stevens, a Manhattan real estate brokerage house on the high end, reviews fourth quarter residential sales. Needham & Co. kicks off one of The Greek's favorite conferences on Tuesday. Needham brings hundreds of growth companies, some worth buying into, to address investors once a year. This year's event takes place at the New York Palace Hotel. I'm not sure I'll make it this time around, but I've discovered more than one new name at this event in the past and recommend a visit if you can get in.
Tuesday's light EPS schedule includes Acuity Brands (NYSE: AYI), Aehr Test Systems (Nasdaq: AEHR), AngioDynamics (Nasdaq: ANGO), Finish Line (Nasdaq: FINL), Global Payments (NYSE: GPN), Landec Corp. (Nasdaq: LNDC), Neogen (Nasdaq: NEOG), Premier Exhibitions (Nasdaq: PRXI), Resources Global Professionals (Nasdaq: RECN), Standard Microsystems (Nasdaq: SMSC), Team Inc. (Nasdaq: TISI) and Xyratex (Nasdaq: XRTX).
Wednesday
All the morning buzz will be about the two monthly employment reports set for release. ADP's Private Employment Report (8:15 ET) is an approximation tool, used by the pros to make last minute adjustments to their Labor Department report forecasts (due Friday). Challenger's Job-Cut Report (7:30) notes the month's tally of planned corporate layoffs. Both these figures have been staggering in recent months, and there's all the more reason to expect another horror show on Wednesday.
The day also brings its regular weekly reports. In the pre-market, the Mortgage Bankers Association data on application activity should note similar news to recent trend. Activity has spiced up a bit as mortgage rates have ebbed. The EIA Petroleum Status Report, at 10:35, last week noted a slight crude inventory increase of 0.5 million barrels. This came a week after a significant draw from stores. Gaza is clearly the foremost driver of energy prices at the moment, with all eyes on Arab states' reactions. An Iranian official has called on oil producers to cut shipments to Israel, and his voice has already found some support from Bahrain.
By mid-morning, all eyes will move to DC, as all living ex-Presidents join Barack Obama and George W. Bush for lunch. We're guessing this is where and when they discuss aliens, secret societies, subsurface White House chambers and the Bat-phone.
Citigroup (NYSE: C) is still holding its Entertainment, Media and Telecom Conference in Arizona, but shrimp is off the menu this year. Wednesday's earnings slate holds some important names, including Bed Bath and Beyond (Nasdaq: BBBY), Christopher & Banks (NYSE: CBK), Constellation Brands (NYSE: STZ), Family Dollar (NYSE: FDO), Monsanto (NYSE: MON), Supervalu Inc. (NYSE: SVU), Immucor (Nasdaq: BLUD), Merix (Nasdaq: MERX), Richardson Electronics (Nasdaq: RELL), Ruby Tuesday (NYSE: RT), Sonic Corp. (Nasdaq: SONC), Spectrum Control (Nasdaq: SPEC), UniFirst (NYSE: UNF) and WD-40 (Nasdaq: WDFC).
Thursday
Look eastward to the United Kingdom, where the Bank of England is widely expected to cut its key rate by 50 basis points, to 1.5%. It was not all too long ago that this rate stood at 5%.
Weekly Initial Jobless Claims, the staple pre-market report each Thursday, held steadily above the 500K level for many weeks up until last week's dip to 492K. We feel confident that had something to do with the holidays, and this week could offer similar mercy; though Bloomberg's consensus of economist grinches forecast a reading of 540K. Monster Worldwide (Nasdaq: MNST) reports on online job availability, as it releases its Monster Employment Index Thursday morning. Expect further deterioration here as well, but pressure on newspaper companies, forcing many to fold, will help give this figure a jolt once the cycle turns.
Individual retailers will provide their chain store sales results for December mostly on Thursday of this week. As the carnage is noted, so should the guillotines be prepared for staff, unfortunately. Several retailers also note earnings this week, and most of those reports are scheduled for Wednesday. You can expect those specific reporters to also provide their December sales data on the same day.
The regular Natural Gas Report is due at 10:35 from the EIA. At 3:00 p.m., November Consumer Credit is expected to have fallen by $0.5 Billion. In October, credit declined by $3.6 billion. Believe it or not, consumer credit kept expanding surprisingly deep into this recession.
The Consumer Electronics Show is on in Las Vegas, and while many of us can no longer afford new gadgets, we'll still find them interesting to inspect, just as financial media will find them cool to cover. The earnings week finds its busiest day on Thursday, with news from Chevron (NYSE: CVX), Adams Express (NYSE: ADX), Allscripts (Nasdaq: MDRX), Apollo Group (Nasdaq: APOL), DemandTec (Nasdaq: DMAN), FCStone Group (Nasdaq: FCSX), Great Atlantic & Pacific Tea (NYSE: GAP), Healthways (Nasdaq: HWAY), Helen of Troy (Nasdaq: HELE), IHS, Inc. (NYSE: IHS), Lawson Software (Nasdaq: LWSN), Matrix Service (Nasdaq: MTRX), MSC Industrial Direct (NYSE: MSM), Nu Horizons Electronic (Nasdaq: NUHC), Penford (Nasdaq: PENX), PriceSmart (Nasdaq: PSMT), Robbins & Myers (NYSE: RBN), RPM Int'l (NYSE: RPM), Saba Software (Nasdaq: SABA), Schnitzer Steel Industries (Nasdaq: SCHN) and Synnex Corp. (NYSE: SNX).
Friday
Unemployment is expected to break 7.0% when the Labor Department releases its data for December. The jobless rate hit 6.7% in November, and has been steadily rising. We expect it to break 7% cleanly, based on the regular flow of newly jobless we've seen. Nonfarm Payrolls are expected to have decreased by a net of 500K jobs in December, after losing 533K in November. Average hourly earnings are still forecast to increase 0.2%, while the average workweek sticks at 33.5 hours. This report has the potential of scaring the market back into its Fall panic, or perhaps panicked fall.
The Wholesale Trade Report for November is due at 10:00 a.m. Inventories are seen declining by 0.7%, after a 1.1% drop in October. Finally, look for the United Nations to publish its "World Economic Situation and Prospects" report on Friday.
BMW is expected to report its December sales a little later than the rest of its peers. Europeans are, after all, rarely in a hurry. They even entered recession late! Look for earnings news from KB Home (NYSE: KBH), AZZ Inc. (NYSE: AZZ), Northfield Labs (Nasdaq: NFLD) and Greenbrier Cos. (NYSE: GBX).
Please see our disclosures at the Wall Street Greek website and author bio pages found there. Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK.
By The Greek - Economy & Markets:The old bear market gets a wake up call this week, as a slew of key reports seem poised to offer more of the unprecedented sort of data we've now gotten use to. The bear apparently started his hibernation early, following heavy holiday feasting. The market has been on a little bit of a roll of late, especially benefiting from light volume and hopeful money flows over the last and first trading days of 2008-09. We might have been enthused about momentum building, with heavy stores of capital sitting idle, if not for the outbreak of war in the Middle East and a slew of dangerous economic reports targeting this coming week. So, it looks like the bear is due for a rude awakening, and I for one, won't be around to bear the grump's wrath.
The Week Ahead
Arguably the busiest week of the economic monthly calendar kicks off the year's first full trading week with a bang. The period brings monthly Motor Vehicle Sales, the release of important FOMC meeting minutes, Chain Store Sales and all the month's important employment data. Yes, it will be quite a week, and one that likely offers plenty of reason for the festive stock market to rethink things a bit. Thus, if the market holds its ground through this harsh environment, benefiting from capital distribution, look to that as a good sign for more of the same in January.
Monday
Washington will steal the limelight most of Monday, as Barack Obama, who is now in DC, plans to meet with Congressional bosses to discuss legislative agendas, including Obama's well-publicized economic stimulus package. Of course, events in Gaza make a presidential press briefing highly likely for George Bush as well, as Nicholas Sarkozy, Tony Blair and a Russian delegate head to the Middle East to attempt a rescue. Up on the Hill, the Inspector General of the SEC will face the firing line, as a House subcommittee questions him about how Bernie Madoff's ponzi scam got past him.
Auto makers are set to report monthly Motor Vehicle Sales for the month of December on Monday. This report comes just as major auto suppliers are shortening their work weeks and planning plant holidays to save money. Visteon (NYSE: VC) announced last week that it would layoff 2,000 employees, and on Monday it begins a new four-day work week. Vehicle sales data from GM (NYSE: GM), Ford (NYSE: F), Toyota (NYSE: TM) and Honda (NYSE: HMC), among others, will be reported intermittently throughout the day, so you have to keep checking in (we haven't noted the trend here for hour of individual reporting). Aggregate December sales are seen running at an annual pace of 7.4 million, after sinking to 7.6 million in November.
"The Greek" shared a few brews with a couple Ford lug nuts this weekend; needless to say, they were a little stressed out. We had a good couple of hours of debate about government aid and old times. Recall I've been for the aid, but also demanding of the UAW. Let's just say, there were no awkward quiet moments. Thanks for the beers boys and sincere best wishes.
November's Construction Spending Report is due at 10:00 a.m. Bloomberg's consensus of economists forecasts a 1.3% decline in monthly spending, compared against October's drop of 1.2%. KB Home (NYSE: KBH) reports earnings on Friday, which could prove more of a market moving event than this well-anticipated poor data point. Monday's earnings schedule is a quiet one, with news emanating from The Mosaic Company (NYSE: MOS), Piedmont Natural Gas (NYSE: PNY) and Dynatronics (Nasdaq: DYNT).
Macworld kicks off its week without the usual keynote speech from Apple's Steve Jobs (Nasdaq: AAPL). It seems plainly clear that Jobs is not in good health, but the stock still has some ground to give if that news ever actually reaches the wire. We hope it doesn't though of course.
Merrill Lynch (NYSE: BAC, NYSE: MER) and Credit Suisse (NYSE: CS) have scheduled conference calls with clients and interested parties to discuss the reinsurance renewals pricing outlook.
Tuesday
Last week, the ICSC Weekly Same-Store Sales data indicated sales fell off a cliff on a year-to-year basis. We're not looking for improvement any time soon; in fact, we're looking for retail bankruptcies to bloody the pages of financial press in the weeks ahead. Look for this week's ICSC data in the pre-market (7:45). Redbook's less useful survey is due around 8:55 as well, and has tracked ICSC when we've checked.
November's Factory Orders are due at 10:00 a.m. Bloomberg's consensus forecasts a 2.5% monthly decline, coming off of a 5.1% drop in October. As we fall deeper into recession, spending falls off and manufacturers and service providers alike consolidate operations. Last week's ISM Index sank to 32.4, its lowest point since 1980. New orders, especially, were hit hard in the December reading, so you can expect factory orders to deteriorate from here.
ISM's Nonmanufacturing Index is due for release at 10:00 a.m. EST. The consensus sees a reading of 37.0 this time around, after the measure touched 37.3 in November. Remember, measures below 50 signify contraction. You get the point...
Also at 10:00, the National Association of Realtors releases its Pending Home Sales Index. It's expected to have dropped in November, to a level of 88.0, from 88.9 reported in October. The Federal Open Market Committee is scheduled to release the minutes of its historic last meeting (December), through which it reduced the fed funds rate to an unprecedented range of 0-0.25%. Needless to say, the minutes should prove interesting reading.
Brown Harris Stevens, a Manhattan real estate brokerage house on the high end, reviews fourth quarter residential sales. Needham & Co. kicks off one of The Greek's favorite conferences on Tuesday. Needham brings hundreds of growth companies, some worth buying into, to address investors once a year. This year's event takes place at the New York Palace Hotel. I'm not sure I'll make it this time around, but I've discovered more than one new name at this event in the past and recommend a visit if you can get in.
Tuesday's light EPS schedule includes Acuity Brands (NYSE: AYI), Aehr Test Systems (Nasdaq: AEHR), AngioDynamics (Nasdaq: ANGO), Finish Line (Nasdaq: FINL), Global Payments (NYSE: GPN), Landec Corp. (Nasdaq: LNDC), Neogen (Nasdaq: NEOG), Premier Exhibitions (Nasdaq: PRXI), Resources Global Professionals (Nasdaq: RECN), Standard Microsystems (Nasdaq: SMSC), Team Inc. (Nasdaq: TISI) and Xyratex (Nasdaq: XRTX).
Wednesday
All the morning buzz will be about the two monthly employment reports set for release. ADP's Private Employment Report (8:15 ET) is an approximation tool, used by the pros to make last minute adjustments to their Labor Department report forecasts (due Friday). Challenger's Job-Cut Report (7:30) notes the month's tally of planned corporate layoffs. Both these figures have been staggering in recent months, and there's all the more reason to expect another horror show on Wednesday.
The day also brings its regular weekly reports. In the pre-market, the Mortgage Bankers Association data on application activity should note similar news to recent trend. Activity has spiced up a bit as mortgage rates have ebbed. The EIA Petroleum Status Report, at 10:35, last week noted a slight crude inventory increase of 0.5 million barrels. This came a week after a significant draw from stores. Gaza is clearly the foremost driver of energy prices at the moment, with all eyes on Arab states' reactions. An Iranian official has called on oil producers to cut shipments to Israel, and his voice has already found some support from Bahrain.
By mid-morning, all eyes will move to DC, as all living ex-Presidents join Barack Obama and George W. Bush for lunch. We're guessing this is where and when they discuss aliens, secret societies, subsurface White House chambers and the Bat-phone.
Citigroup (NYSE: C) is still holding its Entertainment, Media and Telecom Conference in Arizona, but shrimp is off the menu this year. Wednesday's earnings slate holds some important names, including Bed Bath and Beyond (Nasdaq: BBBY), Christopher & Banks (NYSE: CBK), Constellation Brands (NYSE: STZ), Family Dollar (NYSE: FDO), Monsanto (NYSE: MON), Supervalu Inc. (NYSE: SVU), Immucor (Nasdaq: BLUD), Merix (Nasdaq: MERX), Richardson Electronics (Nasdaq: RELL), Ruby Tuesday (NYSE: RT), Sonic Corp. (Nasdaq: SONC), Spectrum Control (Nasdaq: SPEC), UniFirst (NYSE: UNF) and WD-40 (Nasdaq: WDFC).
Thursday
Look eastward to the United Kingdom, where the Bank of England is widely expected to cut its key rate by 50 basis points, to 1.5%. It was not all too long ago that this rate stood at 5%.
Weekly Initial Jobless Claims, the staple pre-market report each Thursday, held steadily above the 500K level for many weeks up until last week's dip to 492K. We feel confident that had something to do with the holidays, and this week could offer similar mercy; though Bloomberg's consensus of economist grinches forecast a reading of 540K. Monster Worldwide (Nasdaq: MNST) reports on online job availability, as it releases its Monster Employment Index Thursday morning. Expect further deterioration here as well, but pressure on newspaper companies, forcing many to fold, will help give this figure a jolt once the cycle turns.
Individual retailers will provide their chain store sales results for December mostly on Thursday of this week. As the carnage is noted, so should the guillotines be prepared for staff, unfortunately. Several retailers also note earnings this week, and most of those reports are scheduled for Wednesday. You can expect those specific reporters to also provide their December sales data on the same day.
The regular Natural Gas Report is due at 10:35 from the EIA. At 3:00 p.m., November Consumer Credit is expected to have fallen by $0.5 Billion. In October, credit declined by $3.6 billion. Believe it or not, consumer credit kept expanding surprisingly deep into this recession.
The Consumer Electronics Show is on in Las Vegas, and while many of us can no longer afford new gadgets, we'll still find them interesting to inspect, just as financial media will find them cool to cover. The earnings week finds its busiest day on Thursday, with news from Chevron (NYSE: CVX), Adams Express (NYSE: ADX), Allscripts (Nasdaq: MDRX), Apollo Group (Nasdaq: APOL), DemandTec (Nasdaq: DMAN), FCStone Group (Nasdaq: FCSX), Great Atlantic & Pacific Tea (NYSE: GAP), Healthways (Nasdaq: HWAY), Helen of Troy (Nasdaq: HELE), IHS, Inc. (NYSE: IHS), Lawson Software (Nasdaq: LWSN), Matrix Service (Nasdaq: MTRX), MSC Industrial Direct (NYSE: MSM), Nu Horizons Electronic (Nasdaq: NUHC), Penford (Nasdaq: PENX), PriceSmart (Nasdaq: PSMT), Robbins & Myers (NYSE: RBN), RPM Int'l (NYSE: RPM), Saba Software (Nasdaq: SABA), Schnitzer Steel Industries (Nasdaq: SCHN) and Synnex Corp. (NYSE: SNX).
Friday
Unemployment is expected to break 7.0% when the Labor Department releases its data for December. The jobless rate hit 6.7% in November, and has been steadily rising. We expect it to break 7% cleanly, based on the regular flow of newly jobless we've seen. Nonfarm Payrolls are expected to have decreased by a net of 500K jobs in December, after losing 533K in November. Average hourly earnings are still forecast to increase 0.2%, while the average workweek sticks at 33.5 hours. This report has the potential of scaring the market back into its Fall panic, or perhaps panicked fall.
The Wholesale Trade Report for November is due at 10:00 a.m. Inventories are seen declining by 0.7%, after a 1.1% drop in October. Finally, look for the United Nations to publish its "World Economic Situation and Prospects" report on Friday.
BMW is expected to report its December sales a little later than the rest of its peers. Europeans are, after all, rarely in a hurry. They even entered recession late! Look for earnings news from KB Home (NYSE: KBH), AZZ Inc. (NYSE: AZZ), Northfield Labs (Nasdaq: NFLD) and Greenbrier Cos. (NYSE: GBX).
Please see our disclosures at the Wall Street Greek website and author bio pages found there. Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK.
Labels: Week Ahead
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