Economic Data Exhaustion - Pass the Spinach Popeye

By The Greek - Economy & Markets:

I think it was Popeye who used to say, "That's all I can stands! I can't stands no more!" Then he would squeeze open a can of spinach with his bare hand, sending the greens arching through the air and into his mouth, and in one great gulp, into his belly. His muscles would bulge sequentially one by one. Spinach digested, iron running through his veins, he would then do something incredible like motor across the surface of a lake via the power of his gyrating legs alone.

On Friday, I, like Popeye, said those words to myself after enduring a full week's worth of the harshest of economic data... and myself answered (that's the scary part). Myself replied, "If you’re exhausted now Greek, prepare to enter a comatose state next week when the Employment Situation Report is published!" Seriously, the constant battering of dire economic data is like a nightmarish fight to the death with Mike Tyson in his prime, and absent the three knock down rule! We’re taking a beating here, and there's just no end in sight!

Last week, jobless claims jumped into frightening territory, reaching 667,000, and the insured unemployed rate moved another tenth of a percentage point higher to 3.8%. While all these folks are getting laid off, nobody is finding a job you see. Unemployment is no doubt skyrocketing, and we'll get the unavoidable horror story of a report detailing the chaos on Friday. I think there's a decent chance the unemployment rate could have soared to as high as 8.0% in February, from 7.6% in January. The economists' consensus is for 7.9% unemployment, according to Bloomberg. The real unemployment rate, the one that includes people who are working part-time, but wish they had a real job, and the people who have completely given up their job search for the fantasy of full-time blogging, is moving into the mid-teens!

Last week's data dump was not limited to employment news. GDP, that sometimes considered noteworthy gauge of economic activity, was revised dramatically lower. GDP contraction deteriorated to 6.2% in the fourth quarter, marking a rare sharp revision from the 3.8% initial report. The grand shortfall was driven by expired export demand (-23.6%), fretful residential fixed investment (-22.2%) and sad equipment and software sales (-28.8%).

It was a week that saw Durable Goods Orders diminish by 5.2% in January, versus expectations for a 2.5% decline, according to Bloomberg's survey of economists. Meanwhile, the Conference Board's measure of Consumer Confidence sank to 25.0, a record low. Existing and New Home Sales both dropped precipitously, but the sector's decline this particular month was attributed to the still pending status of fiscal stimulus in January. The theory goes that would-be real estate buyers knew great new incentives would soon avail themselves, and so they waited a little longer.

The coming week will offer more than unemployment data for reason to hide under the covers. Personal Spending threatens to dwindle into the nothingness as a direct result of rising unemployment. Construction Spending and Manufacturing Sentiment are likely to pound a few more painful blows home when reported on Monday. Tuesday brings Motor Vehicle Sales, though it would be more appropriate to call it the reporting of the lack of sales these days. Economists see the pace slowing to 6.2 million in February, compared to the anemic 6.8 million pace reported in January. You get the picture, there's more bad news in store...

We should note that retailers received some good news this past week; the government might loosen the rules for them around bankruptcy and liquidation proceedings. Sounds wonderful right, like choosing the guillotine over hanging.

A few retailers (stressing "few") exhibited some resiliency last week, managing costs well enough to surprise analysts despite tough declines in sales. The Gap (NYSE: GPS) was one of those few, and Dell (Nasdaq: DELL) did the same job in its business. Saks (NYSE: SKS) thawed the frozen hearts of its shareholders, when after reporting a terrible quarter, management declared its expectation for the luxury retailer to survive at least through '09. This coming week, look for important reports from the likes of American International Group (NYSE: AIG), MBIA (NYSE: MBI), Toll Brothers (NYSE: TOL), Anheuser-Busch InBev (Brussels: ABI.BR) and AnnTaylor Stores (NYSE: ANN). You might want to also thank the Lord for the start of lent, and the opportunity to consume more spinach.


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)

Business Review - Defense Sector, Told You So!

By The Greek - Economy & Markets:

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

Economic Data Analysis

GDP Revision

The "Preliminary" reporting of GDP offered a drastic revision of the figure from the "Advance" reporting. GDP contraction was revised to 6.2%, from 3.8% previously estimated, and the great degree of change was a rare event.

The economic deterioration of the fourth quarter compared against third quarter contraction of 0.5%. The drivers of this recent extreme economic weakness were mostly derived from exports (-23.6%), equipment and software (-28.8%), personal consumption expenditures (-4.3%) and residential fixed investment (-22.2%). By the way, nonresidential fixed investment fell 21.1%.

Lower imports (-16.6%) helped to offset the impact of export weakness, but the fact that Americans are buying less is clearly not a sign of good economic health. Clearly global economic issues are now impacting us in a bad way.

We're sure you will be interested to know that motor vehicle output subtracted 2.04 percentage points from real GDP. Government spending (+6.7%) helped a little, and should help more in the future now that we are so aggressively addressing the crisis. But are we also addressing every liberal dream, and overextending ourselves, like Mitt Romney said today at a conference of conservatives?

Prices paid (price index) for gross domestic purchases decreased 4.1% in Q4. Excluding food and energy, prices increased by 1.1% in Q4, versus a 2.8% rise in the third quarter. Prices naturally adjust when demand falls off, and the Fed's prophecy plays true here as inflation concerns are but a vague memory and distant fear.

NAPM - Chicago Business Barometer

The National Association of Purchasing Managers data released today concurred that prices were on the decline, as its index for prices paid for raw materials declined to 37.8 in February, from 39.8 the prior month. Measures below 50 indicate contraction, so what we can perhaps garner from this data is that prices are declining more rapidly across a broader base.

NAPM - Chicago's best known index, its Business Barometer increased to 34.2 in February, from 33.3 in January. While directional change matters, as does improvement, the reading still represents dismal economic contraction. The most dire of the dismal was found in the Employment Index, which measured 25.2, the lowest point seen in seven years.

Reuters/University of Michigan Consumer Sentiment

February's final reading of the University of Michigan's sentiment measure steadied in hopelessness. The final measure of the month, at 56.3, was not much different than the drab consumers described at mid-month when the measure reached 56.2.

But how do we describe hopelessness? It's not a feeling about the present, but of the future. We characterize it as an absence of hope, a sense that all is lost. Well, Reuters/Michigan seems to paint that picture today with its index measuring the 12-month economic outlook. That prospective barometer sees no light at the end of the tunnel, based on the reading of 31 in February, as compared to 47 in January.

Government Moves

President Seeks Defense Cuts

I told you so! Really I did. Click on that there link and see for yourself. I said the market would be surprised to hear about defense spending cuts, despite the already sour performance of the defense sector over the past 12 months. Lockheed Martin (NYSE: LMT) dropped 8.4% today on rumors its F-22 Raptor might be one of the casualties of Obama's smart bomb. Northrop Grumman (NYSE: NOC) fell 5.2%; General Dynamics sank (NYSE: GD) 4.1%; Rockwell Collins (NYSE: COL) -3.2%; Honeywell (NYSE: HON) -2.7%; and Goodrich (NYSE: GR) -2.1%.

"America's men and women in uniform have fought block by block, province by province, year after year, to give the Iraqis this chance to choose a better future. Now, we must ask the Iraqi people to seize it." President Obama

Today our President laid out his time-line to end the war in Iraq. He said it will be 19 months from now, not the 16-month original plan many were hoping he would stick to. Even after it's over, the President plans to leave a decent sized force in Babylon for a year longer. Still, combat operations will cease as of August of 2010.

However, at the same time, Obama plans a new initiative in Afghanistan, but we get the goal there loud and clear... Kill or capture Osama Bin Laden (sounds familiar). Chop the head off of our many minded enemy, and gain redemption for the many deeply wounded Americans whose hearts have bled since 9/11, mine included. However, I am leaning toward love now; I'll probably do so even more after I finish reading a Merton book recently gifted to me by a good friend.

Treasury Raises Citigroup Stake

The Treasury Department upped the ante with Citigroup (NYSE: C) today, increasing its stake to a fully diluted 36% (or it will anyway). Citi dropped like a rock today, moving 39% lower, to a price of $1.50. Citigroup needs to strengthen its capital structure, and will do so partly through the conversion of preferred securities to common equity. Citi asked the Treasury to participate in "exchange offerings," which will effectively take the government's stake higher. The Feds will effectively govern Citi after this process, considering the significant ownership interest and comments from Ben Bernanke this week. Citi likely looked ahead to the upcoming stress test, and realized what was necessary, or the Federal government did so for it. Citi is a shadow of its former self, which seems destined to become a faded memory before long. Asset sales and the shrinking of Citigroup are pending.

Folks, I'm exhausted, so forgive me for cutting this article short...

Today's EPS Schedule

Friday's EPS schedule included news from Aqua America (NYSE: WTR), Calgon Carbon (NYSE: CCC), Calpine (NYSE: CPN), CapitalSource (NYSE: CSE), Caraustar (Nasdaq: CSAR), Cobra Electronics (Nasdaq: COBR), Coeur d'Alene Mines (NYSE: CDE), Deutsche Telekom (NYSE: DT), DiamondRock Hospitality (NYSE: DRH), EMC Insurance (Nasdaq: EMCI), Empresas ICA (NYSE: ICA), Endo Pharmaceuticals (Nasdaq: ENDP), Golar LNG (Nasdaq: GLNG), Gulf Island (Nasdaq: GIFI), Int'l Royalty (NYSE: ROY), Iowa Telecommunications (NYSE: IWA), James River Coal (Nasdaq: JRCC), Lydall (NYSE: LDL), Magellan Health (Nasdaq: MGLN), Mirant (NYSE: MIR), Osiris Therapeutics (Nasdaq: OSIR), Republic Services (NYSE: RSG), Shanda Interactive (Nasdaq: SNDA), Telecom Italia (NYSE: TI), TETRA Tech (NYSE: TTI), The Blackstone Group (NYSE: BX), The Interpublic Group (NYSE: IPG), The Phoenix Cos. (NYSE: PNX), The Progressive (NYSE: PGR), Trex Co. (NYSE: TWP), Triad Guaranty (Nasdaq: TGIC), Trico Marine (Nasdaq: TRMA), Warner Chilcott (Nasdaq: WCRX), Westar Energy (NYSE: WR) and more.


(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). Please see our disclosures at the Wall Street Greek website and author bio pages found there.

Today's Market Review: Feb-26-09

By The Greek - Economy & Markets:

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

The President's expensive budget combined with a climate of inhospitable economic reports this morning to turn today's technically driven rally sour before the close. Obama told us he would halve the budget deficit by the end of his term, and Republican voices immediately tried to paint him a snake by saying he meant he would do so after running it up higher. Today, a representative of the Administration cleared the air, stating the budget deficit was targeted to reach $533 billion by 2013. That means that the starting point is the inherited deficit point, not the '09 level. We are still hearing this reported both ways, and so Obama needs to spell it out. What does halving mean!?

Either way, people are really starting to worry about all this spending, and especially about the execution risk tied to fiscal stimulus spending and other outreach efforts. Obama has promised accountability and responsible supervision, but it's a monumental task we are talking about... let's not understate that. We hope and pray the effort plays out to plan, and we support the outreach here. As a matter of fact, if the President wanted to enlist The Greek to help out, I would be there in a minute. Execution is now key to making this work.

Economic Data Analysis

The President's Budget

President Obama released his budget this morning. All this spending is adding up, and though we've been warned, seeing it on paper is still concerning. Obama sees the budget deficit reaching $1.75 trillion in '09, and that would put it at its highest level since WWII (measured as a percentage of GDP 12+%). If you have not gotten a grip on how bad things really are, and are going to be, maybe that helps. However, the $1.75 trillion level would be higher, if not for budget cuts in some areas. Obama is already looking for fat to cut away, even as he is increasing spending for our today and tomorrow.

The details of the plan highlight a $634 billion allocation over a ten year period, set forth to overhaul health care. Health insurance companies that participate in Medicare are going to bear that cost.

Taxes are going up for those couples making more than $250K a year, and deductibles are getting a trim as well for the higher income folks. Green house gas polluters are going to have to buy a license to pollute now, and that money will be put toward funding an alternative energy push.

Finally, more money is being allocated to the financial sector, nearly doubling TARP. Hedge Funds and Private Equity Managers are going to see ordinary income tax rates replace lower capital gains rates, and internationally earned income tax rates will rise for American multinationals. Some of this stuff is damaging to American industry on the surface. I'll have to take a closer look for you to see if the Administration is trying to encourage more domestic production or is just plain making a bonehead move on this one.

Weekly Initial Jobless Claims Reach Unimaginable Level

Weekly Jobless Claims reached a nightmarish level last week. Today's report showed new claims filers mounted to an enormous 667K. That was up from the 627K reported last week, and above the consensus estimate for 625K this week. It was a frightening jump, and offers an omen for February unemployment levels (7.6% in January). The four-week moving average moved up to 639K new claims, and total insured unemployment rose a tenth of a percentage point again, to 3.8%. People are not finding jobs as all these new claims filers mount.

The highest insured unemployment rates in the week ending Feb. 7 were in Michigan (7.5 percent), Oregon (7.3), Idaho (7.0), Wisconsin (6.4), Pennsylvania (6.2), Nevada (5.9), Montana (5.7), Rhode Island (5.7), Alaska (5.6), Indiana (5.5), and New Jersey (5.5).

The largest increases in initial claims for the week ending Feb. 14 were in New Jersey (+2,093), Virginia (+912), Rhode Island (+493), Vermont (+106), and South Dakota (+22), while the largest decreases were in California (-16,550), Kentucky (-7,741), Pennsylvania (-6,547), Illinois (-6,248), and New York (-3,955).

Durable Goods Orders Sink More than Expected

Durable Goods Orders dropped for the sixth month in a row, declining 5.2% in January after a 4.6% fall in December. Excluding transportation, orders fell 2.5%, versus a 2.1% expectation. Defense new orders dropped dramatically, falling 35.3% or $8 billion. Orders for new aircraft for defense purposes were especially impacted. This fits in with our recent advice to avoid the defense sector at the start of the Obama Administration (until the war with Iran sparks).

New Home Sales Pace Slips Below Anticipated

New Home Sales reached a record low in December and then broke it in January. The further slippage was foreseen, but not to the extent to which it occurred. January's annual pace of new home sales measured 309K, short of the expected 330K, which would have been one thousand lower than December's pace. As we mentioned in our analysis of Existing Home Sales earlier this week, the pending status of the fiscal stimulus bill kept many would be home buyers at bay. "Many" is a relative term of course, and means a handful in this case.

Commodity Markets

Oil was on the rise again today, and we're surprised the popular press has not connected the dots. All the excitement about the Iranian regime's nuclear progress, with Bibi about to take the wheel in Israel at the same time, has got oil bulls giddy. WTI Crude was up another 4+% today, to about $44.31 on the closest futures contract.

Corporate Drivers

Dell Reported After the Bell

Dell (Nasdaq: DELL) shares were up about 3% after hours, as the company learned how to make lemonade from lemons. Despite posting a revenue shortfall versus analysts' consensus view, Dell surprised investors with excellent operations management. The company said revenues were down on economic related spending cuts by both business and retail customers, not to mention an increase in the share of lower cost computer sales. Still DELL boasted of market share gain, and posted EPS of $0.29, after one-time items, beating the analysts view for $0.28. Despite pointing toward an ongoing tough operating environment, Dell said it saw more opportunities for cost cutting than it had previously identified. The market is rightly enthused by this value creation effort.

The Gap - After the Bell

Gap (NYSE: GPS) shares, down 2% on the day, were down fractionally after hours as well. GPS posted results after the close today. A recurring theme ran true at Gap as well, as the company managed its inventory and cost controls well enough to exceed analysts' consensus despite sharply lower sales. Same-store sales fell 14% in the company's most critical quarter ended January. However, 6% lower inventory per square foot and other cost controls allowed the company to earn $0.34 per share, compared to the $0.32 analysts were looking for. Gap runs its namesake stores, as well as Old Navy and Banana Republic. The company boasts of $2 billion in cash with little debt, and plans to cut capital spending sharply in the current fiscal year. We expect the news will help the shares solidify footing and maybe even rise tomorrow. Gap still has a significant current to work against though in a deteriorating operating environment.

Today's Full EPS Report List:

J.P. Morgan Chase (NYSE: JPM) held its investor day, while the earnings schedule highlighted news from Akeena Solar (Nasdaq: AKNS), Allianz SE (NYSE: AZ), American Dental Partners (Nasdaq: ADPI), Ansys (Nasdaq: ANSS), Autodesk (Nasdaq: ADSK), Bare Escentuals (Nasdaq: BARE), Biovail (NYSE: BVF), Blue Coat Systems (Nasdaq: BCSI), Boyd Gaming (NYSE: BYD), Cablevision (NYSE: CVC), Checkpoint Systems (NYSE: CKP), Churchhill Downs (Nasdaq: CHDN), Cinemark Holdings (NYSE: CNK), CommScope (NYSE: CTV), Cooper Tire & Rubber (NYSE: CTB), Deckers Outdoor (Nasdaq: DECK), Dell (Nasdaq: DELL), DPL, Inc. (NYSE: DPL), Dynegy (NYSE: DYN), El Paso (NYSE: EP), EMCOR (NYSE: EME), Employers Holdings (NYSE: EIG), Ensco Int'l (NYSE: ESV), Easterline Technologies (NYSE: ESL), Federal Signal (NYSE: FSS), Frontier Oil (NYSE: FTO), Frontline (NYSE: FRO), Gap (NYSE: GPS), Genco Shipping (NYSE: GNK), Global Cash (NYSE: GCA), Hansen Natural (Nasdaq: HANS), Hughes Communications (Nasdaq: HUGH), Human Genome Sciences (Nasdaq: HGSI), Huntsman (NYSE: HUN), Internet Gold (Nasdaq: IGLD), Iron Mountain (NYSE: IRM), Key Energy Services (NYSE: KEG), King Pharma (NYSE: KG), Kohl's (NYSE: KSS), Leap Wireless (Nasdaq: LEAP), Macquarie Infrastructure (NYSE: MIC), Mentor Graphics (Nasdaq: MENT), Met-Pro (NYSE: MPR), Mine Safety (NYSE: MSA), Novatel (Nasdaq: NVTL), Omnicare (NYSE: OCR), Pioneer Drilling (NYSE: PDC), Quanex (NYSE: NX), Repsol (NYSE: REP), Rowan Cos. (NYSE: RDC), Royal Bank of Canada (NYSE: RY), Safeway (NYSE: SWY), Sanderson Farms (Nasdaq: SAFM), Scientific Games (Nasdaq: SGMS), Senior Housing (NYSE: SNH), Ship Finance Int'l (NYSE: SFL), Sotheby's (NYSE: BID), First American (NYSE: FAF), Nasdaq OMX (Nasdaq: NDAQ), U.S. Cellular (NYSE: USM), Universal Health (NYSE: UHS), Vonage (NYSE: VG) and more.


(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). Please see our disclosures at the Wall Street Greek website and author bio pages found there.

Today's News

By Markos N. Kaminis - Economy & Markets:

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

The day's news was like an interesting mosaic full of colorful sprinklings of economic reports, international happenings, energy market activity, global affairs drivers and corporate events. Read on, as we think you'll enjoy our take on it all. As our schedule settles, we intend to provide you with this report regularly in the pre-market.

Economic Data Analysis

Existing Home Sales - January

Existing Home Sales were reported this morning lower than expected. Sales ran at an annual pace of 4.49 million, versus consensus expectations for 4.8 million. The sales rate was also well below December's pace of 4.74 million.

National Association of Realtors Chief Economist Lawrence Yun clarified why. Mr. Yun noted that with fiscal stimulus hanging in the balance, potential home buyers were well aware of new incentives that would soon be made available to them. For this reason, real estate investors simply held off purchases while waiting for the economic value add.

Despite the headline bad news, however extraordinary it may have been, the report contained a good share of positive real estate market information. For instance, the total level of housing inventory declined in January to a two-year low! So, even though sales weakened, inventory dropped. The level of inventory measured in months, however, is influenced by the most recent rate of sales (which was unnaturally low), so that metric rose slightly to a 9.6 month supply (9.4 in December).

Even better, the NAR believes fiscal stimulus and interest rate incentives will create 900,000 home sales in 2009. Those extra sales that should result from government efforts (and your tax money) are expected to allow inventory to fall to an 8-month supply by the end of the year, which is a level consistent with price stabilization. Woo hoo! Of course, if you've been reading Wall Street Greek's Real Estate Analyst Michael Douville, you already knew that.

Mortgage Applications

Mortgage Applications fell 15.1% last week, according to the Mortgage Bankers Association. After reading the previous paragraphs, you might think the fiscal stimulus wait had something to do with this data as well. However, mortgage refis still dominate the weekly data, making up 69.7% of them last week. Keeping that in mind, we note that mortgage rates had increased about 8 basis points last week, to 5.07% on 30-year fixed rate mortgages. So lower refinancing activity, alongside decreased new purchases, served to suffocate total mortgage demand. Also, despite data adjustment for it, perhaps the President's Day holiday was not completely out of play.

The important information to take from this report is that mortgage rates remain extremely accommodating, and the 4-week moving average was still up 0.4% on a seasonally adjusted basis.

Bernanke Testimony

Federal Reserve Chief Ben Bernanke wrapped up his second day of testimony on Capitol Hill today. The prepared statement matched yesterday's, but today Ron Paul and House committee members got their stab at the Fed boss. We thought Bernanke's clarification yesterday of the bank "stress test" and resolved concerns over bank nationalization were the reasons for equity rise. Specifically, Bernanke said the test would not have a "pass/fail" result. We think that went a long way toward reassuring investors. Today, Bernanke went as far as to say complete bank nationalization was not in his plans, nor the Treasury's. Still, stocks sobered up.

International News

S&P Downgrades Ukraine

A day after doing in Latvia, Standard & Poor's downgraded the Ukraine to junk status. More specifically, the sovereign rating fell to CCC+, seven levels short of investment grade and two levels lower than it was prior to the move. S&P said the country's political turmoil could put its IMF funding resource at risk. The Ukraine is now the lowest rated nation in Europe, which should be concerning enough to the EU. The Ukraine represents a significant distribution channel for natural gas to the region. Therefore, Ukrainian stability and its means of payment (to Russia) should be important enough to the EU for it to push the IMF to squeeze funding through to the Ukraine, despite its recent inability to meet requirements set forth for the money flow. We expect the Ukraine will get its gift, and the credit rating should be restored thereafter.

Japan Exports Drop

Japan's equity market was amazingly unfazed today by news that the nation's exports were down 45.7% in January, versus the year before. The aggregate level of exports hit a 10-year low as demand for Japanese cars and electronics waned on collapsed global spending. Global markets seemed enthused today by the breath of fresh air provided by President Obama last evening. Japan is, however, facing its harshest economic climate since World War II.

Asia:

1. MSCI Asia APEX 50: 1.35%


2. Japan NIKKEI 225: 2.65%


3. Hong Kong Hang Seng: 1.61%


4. China CSI 300: 0.10%


5. India BSE SENSEX 30: 0.91%

Europe:

1. DJ Euro STOXX 50: -0.62%


2. UK FTSE 100: 0.85%


3. France CAC 40: -0.41%


4. Germany DAX: -1.27%

(Index prices are as available at hour of publishing and may not be the closing price)

Commodity Markets

The Energy Information Administration (EIA) published its weekly Petroleum Status Report today at 10:30. The data showed U.S. commercial crude oil stockpiles increased by 0.7 million barrels this week, reversing a short-lived trend of draw (last week: draw of 0.2 million). WTI Crude was up about 6.8% today though, which would be inconsistent with the oil inventory data.

News from Iran may have been behind the rise in oil prices. Iran test fired a Russia/Iranian built nuclear plant today, and though it is not fully operational yet, spent fuel could be used to make nuclear weapons. Also, today the head of Iran's Atomic Energy Organization disputed U.N. claims that Iran had slowed its nuclear work. He said Iran currently had 6K centrifuges in operation and a plan to get to 50K up in five years time.

The U.N. report was still troubling, because it declared that Iran had a stockpile of nuclear fuel that was large enough to make a bomb. Now let's see: Israel bombed Iraq when it was building a plant; and then it bombed Syria recently on a suspected effort. So tell me again why Israel will not bomb Iran soon, a nation that has declared Israel its mortal enemy while also calling for its destruction?

Corporate News Drivers

First Solar

Yesterday we told you to consider alternative energy, including solar stocks. We like alternative energy on two drivers. The first is a pending war involving a critical supplier of oil, Iran. Secondly, President Obama is dedicated to energy independence.

However, First Solar (Nasdaq: FSLR) made that call of ours look bad today, as it fell 21% on company specific weakness. To put it in layman's terms, FSLR has a competitive disadvantage due to declining input costs at its competitors. Other solar companies use a different material for their competing products, and its price is dropping swiftly and deeply. Also, the overall solar market has taken a hit, due to the economic crisis. Nations, utilities, commercial and retail clients have much less money to spend on solar energy investment now. Spain, for instance, was a key solar buyer, but is now not nearly as important in the marketplace.

Solar stocks are reporting earnings these days, so you might wait to get a better entry point for the names you like, if you believe in the idea. Stockpicking is important here, and we noted that yesterday, but the overall group should benefit substantially (the survivors anyway) from both economic recovery and the war event I see ahead of us. Also, the high beta shares of the growth segment should lead the market out of this mess eventually.

Saks

Saks (NYSE: SKS) missed the analysts' consensus loss estimate by a large amount, but its shares rose nonetheless today. Excluding a nonrecurring charge, Saks posted a loss of $0.60 per share for its most critical quarter, ended January 31st. That compared against analyst expectations for a loss of $0.30, according to Thomson Reuters. Sales fell 15%, as the company slashed prices to move inventory in a slow marketplace; this is something a fashion retailer must do, as styles get old from year to year and useless from season to season. Still, SKS shares rose 13% today, as management dispelled bankruptcy rumors, noting the company had enough capital to survive the year. Management also indicated it was focused on preserving capital, and would take actions to secure survival through the rough economy.

Insurance Stocks Hit

Insurance stocks took a hit today on bad news from Ambac (NYSE: ABK). Ambac's shares fell 9.9% after it reported a Q4 loss of $2.34 billion. Ambac has been reducing its risk related to some financial instruments (the usual suspects), and paying for it. MBIA (NYSE: MBI) shares fell 5.8% today in sympathy and Assured Guaranty (NYSE: AGO) was down on its own sad quarterly report.

EPS Schedule

The day's EPS schedule includes Aegean Marine (NYSE: ANW), Ambac (NYSE: ABK), Angeion (Nasdaq: ANGN), Avis Budget (NYSE: CAR), Cadbury plc (NYSE: CBY), Centerpoint Energy (NYSE: CNP), Clean Harbors (NYSE: CLH), Cliff's Natural Resources (NYSE: CLF), CMS Energy (NYSE: CMS), Cogent (Nasdaq: COGT), Dana Holding (NYSE: DAN), Del Monte Foods (NYSE: DLM), Dollar Tree (Nasdaq: DLTR), Donaldson (NYSE: DCI), Eaton Vance (NYSE: EV), El Paso Electric (NYSE: EE), Equity One (NYSE: EQY), Express Scripts (Nasdaq: ESRX), Famous Dave's (Nasdaq: DAVE), FBR Capital (Nasdaq: FBCM), Flowserve (NYSE: FLS), Fluor (NYSE: FLR), General Maritime (NYSE: GMR), Gibraltar Industries (Nasdaq: ROCK), Goodrich Petroleum (NYSE: GDP), Greif Brothers (NYSE: GEF), HealthStream (Nasdaq: HSTM), Hearst-Argyle (NYSE: HTV), Internet Capital Group (Nasdaq: ICGE), Isis Pharma (Nasdaq: ISIS), J.M. Smucker (NYSE: SJM), KBR Inc. (NYSE: KBR), Liberty Media (Nasdaq: LINTA), Limited Brands (NYSE: LTD), Martha Stewart (NYSE: MSO), Medarex (Nasdaq: MEDX), NetEase (Nasdaq: NTES), Nicor (NYSE: GAS), Petrohawk (NYSE: HK), Psychiatric Solutions (Nasdaq: PSYS), Quality Distribution (Nasdaq: QLTY), Saks (NYSE: SKS), Salesforce.com (NYSE: CRM), Service Corp. (NYSE: SCI), The TJX Cos. (NYSE: TJX), The Washington Post (NYSE: WPO), Toronto Dominion Bank (NYSE: TD), True Religion Apparel (Nasdaq: TRLG), Tween Brands (NYSE: TWB), United Rentals (NYSE: URI), Visteon (NYSE: VC), Zale (NYSE: ZLC) and more.


(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). Please see our disclosures at the Wall Street Greek website and author bio pages found there.

State of the Union Address, Effectively...

By The Greek:

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

Tonight's address by the President before a joint session of Congress is exactly what it seems like, a State of the Union Address. In the first year of a presidential term, the new chief is not expected to make the speech, but President Obama is smart and realizes the need for it this year.

Bad news Obama is gaining an understanding of the importance of setting a positive tone for a public that is mostly unsophisticated. While George W. Bush's economic cheerleading likely insulted the intelligence of many of you, it also kept consumer spending from collapsing, at least until it was clear to the party that a Republican was not going to succeed Bush in office. Seriously, if you go back and study when the Administration's message got bluntly honest, it was right around the time Obama created a huge gap between he and John McCain. Perhaps that happened to be just how long the spit and dirt could hold things together.

Obama has been consumed with reminding America of his "inheritance" of this crisis, and in so doing, he has also been sobering for the nation. While Americans deserve complete honesty, they don't always want to hear it... Today's Consumer Confidence measure from the Conference Board hit a new all-time low in February, blowing the last record into oblivion in the process. By the way, that last record was set in the dark ages of January, yes this January.

Obama needs to now focus on uplifting America, while telling us the truth. We think he'll get started on that message tonight. However, before he does so, we are equally sure he will remind America once again of the faults of his predecessor and the direness of our situation. Like a wrestling match, tonight's drama will have twists and turns, loss and redemption, with a triumphant and energizing victory in the end... we hope...

We also expect the President will spend a significant amount of time exposing Republicans for their failure to support the passage of fiscal stimulus into law. This should throw burning salt into the wound of the recently decimated party, and hopefully help it put aside political posturing for the better good.

The President has a real opportunity tonight to uplift the nation, to give hope to the hopeless, and to start a path toward consumer confidence and investor sentiment restoration.

Meaning for Specific Sectors

The President's address will carry greater significance for some than others, and we suspect he's offered hint of his focus already this week. Obama noted in recent discussions that despite special spending targeted toward this economic crisis, he also plans to cut the budget deficit in half by the end of his first term. That's no small task with current needs in mind and because of the absolute size of the deficit. Obama is going to introduce his first budget on Thursday, but there's great chance he'll present some of his ideas tonight. So who will feel the bite of spending cuts, and what stocks stand to suffer and benefit from Obama's first four years in office?

Sell Defense for Now

It's no small secret that the President wants to end the war in Iraq and win the war in Afghanistan. However, we think it may not be well understood that he wants to cut defense spending. We expect the President will have something to say about this tonight.

Can you believe the guy who is telling you that a war with Iran is inevitable and probable this year, is at the same time telling you the defense sector will not do well, at least not until that war. Obama did not mince words during his campaign, and we understand he wants to reduce the nuclear warhead stockpile and work with Russia to revive efforts toward missile reduction.

Senior level military officials will be talking to the Chinese on Friday, and we suspect a similar goodwill outreach will occur with China. What two nations seem most likely to prove problematic over the next fifty years, and at the same time extremely dangerous to our safety? The answer is China and Russia. I haven't forgotten the risk posed by radical Islam, nor the weapon stockpile in Pakistan and dangerous passions of Iran. Also, I know what a cornered Israel is capable of, so no need to remind me. Feel free to comment though.

The competitive global landscape, with a scarcity of resources, while full of nations demanding those resources, will only grow more crowded with time. Obama is right. Now is the time to start working toward sincere and lasting goodwill, if ever there was. If nations could trust one another, and work out disagreements peacefully, imagine what good could come of all the money now being directed toward building aircraft carriers and nuclear missile submarines.

The most important question, however, remains the same, "How civilized is humanity really?" The realist understands that the world is a savage place where evil roams freely; a place where America's military might has likely kept chaos in check up until now.

That said, our President seems a pious man interested in world peace. Conspiracy theorists will warn of biblical scripture of false prophets, and I will remind them that whatever will be will be, by God's will.

President Obama is going to cut defense spending, and that points toward avoiding the shares of defense stocks. Now, as all sector correlation converged in the downturn, defense was not spared. Also, investors could foresee Obama's rise and the likely defense spending cut. Therefore, defense has already taken a hit, and the Fidelity Select Defense and Aerospace Fund (Nasdaq: FSDAX) is down about45% over the past twelve months, adjusted for dividends.

Even so, we think defense will take some more pain as the President talks about his plans. While we have not looked at individual dynamics, a necessary step before investment in a particular stock, some shares that might take a hit on the President's speech include Alliant Techsystems (NYSE: ATK), Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), Rockwell Collins (NYSE: COL), Honeywell (NYSE: HON), etc.

I would also avoid the health care sector for a while now, as free health care for all has got to cost somebody something, and so the providers are going to have to bear the load.

What might rise? How about alternative energy stocks, since we know this is a favorite area for the President. Even though he talked up clean coal, we're not a fan here, and so we will not recommend Peabody Energy (NYSE: BTU) and Arch Coal (NYSE: ACI) on this catalyst. However, it might be time to take another look at wind and solar stocks like Vestas Wind Systems (Nasdaq: VWDRY.PK), First Solar (Nasdaq: FSLR), LDK Solar (NYSE: LDK), Evergreen Solar (Nasdaq: ESLR) and others.

Remember, do your individual homework before buying any stock. Our call is a sector specific one, and so you might take a look at the ETF's and select investment mutual funds in these areas.


(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). Please see our disclosures at the Wall Street Greek website and author bio pages found there.

This Week: Governors' Giddy Good Sign

By The Greek - Economy & Markets:

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

Financial markets received a desperately needed injection of hopeful news this past weekend, one bit of which originated from here at home and another born abroad. In the U.S., governors of the nation's states met, and many were outright giddy over their allocation of the new fiscal stimulus package. That reaction should be welcomed by the markets as a good sign that government action might drive real positive economic results. Recent state struggles and budget cuts have been well noted, and have contributed to this month's share retreat.

Some Republican governors are reportedly considering rejecting federal stimulus funds, which is just plain stupid in this writer's opinion. Citizens of states in question should let their governors know they'll not be reelected if they make this bonehead decision. The money has been agreed to, and other states are now requesting to receive the money rejected by their peers. There seems to be no sense in rejecting this money, and I would go so far as to call it irresponsible and negligent for the governors in question. How would you like your state's portion to find its way to another state because of the decision of your governor?

The second bit of positive news originated from across the Atlantic Ocean. In Europe, where doubt grew last week about the willingness of the EU to act meaningfully toward the salvation of its region, leaders gathered and worked together over the weekend to develop useful plans. The EU decided to inject more money into the IMF to help troubled nations, and to increase the regulation of troubled sectors.

Many a guru has pointed to U.S. banking sector concerns as the key driver for last Friday's decline, but the market was already lower in Europe to start the day. Granted, the scandalous scare that drove the unveiling of Swiss banking certainly played a role as well. The Greek thinks we will see the Swiss backtrack on the UBS move, or perhaps quarantine the problem to UBS due to specific money trails that seem to lead there. After the broad decline of its banking sector on Friday, we think the Swiss have now realized the potential catastrophic loss to their unique economy should the UBS (NYSE: UBS) settlement serve as precedent for other similar moves.

So between the two positives events of the weekend, we have only U.S. banking collapse to lose sleep over. Perhaps Tim Geithner will have something to say on that issue early this week, and the market might have reason for a rebound rally. As for now, there's nothing but stress around this subject of the bank stress test.

The Week Ahead

Monday

Indian markets will be closed on Monday, and appropriately so, as Slumdog Millionaire won the Oscar for Best Picture on Sunday evening; so the nation has time and reason to rejoice.

Several Fed Presidents will give speeches this week, and Atlanta's Dennis Lockhart and Dallas' Richard Fisher get a go on Monday before separate audiences. Meanwhile, the White House is holding a "fiscal responsibility summit." The American Enterprise Institute is hosting a forum on credit-default swaps.

The day's earnings schedule highlights news from H&R Block (NYSE: HRB), Sears Holdings (Nasdaq: SHLD), Campbell Soup (NYSE: CPB), DTE Energy (NYSE: DTE), Advanced Energy Industries (Nasdaq: AEIS), American Reprographics (NYSE: ARP), AmeriSafe (Nasdaq: AMSF), ATS Medical (Nasdaq: ATSI), Bidz.com (Nasdaq: BIDZ), Developers Diversified Realty (NYSE: DDR), Ducommun (NYSE: DCO), Entertainment Properties Trust (NYSE: EPR), Euroseas (Nasdaq: ESEA), Forest Oil (NYSE: FST), General Growth Properties (NYSE: GGP), Greenlight Property Re (Nasdaq: GLRE), Grupo Radio Centro (NYSE: RC), GulfMark Offshore (NYSE: GLF), Health Management Associates (NYSE: HMA), Healthcare Realty Trust (NYSE: HR), Hecla Mining (NYSE: HL), Hertz Global (NYSE: HTZ), ICON plc (Nasdaq: ICLR), International Royalty (AMEX: ROY), iPass (Nasdaq: IPAS), Ituran Location & Control (Nasdaq: ITRN), Kaydon (NYSE: KDN), Liberty Global (Nasdaq: LBTYA), Lincoln Electric (Nasdaq: LECO), Nordstrom (NYSE: JWN), ONEOK Partners (NYSE: OKS), Onyx Pharmaceuticals (Nasdaq: ONXX), Orbotech (Nasdaq: ORBK), Partner Communications (Nasdaq: PTNR), PC Mall (Nasdaq: MALL), Ramco-Gershenson Properties Trust (NYSE: RPT), Saul Centers (NYSE: BFS), SenoRx (Nasdaq: SENO), Solta Medical (Nasdaq: SLTM), St. Mary Land and Exploration (NYSE: SM), TeleTech Holdings (Nasdaq: TTEC), Texas Roadhouse (Nasdaq: TXRH), The9 (Nasdaq: NCTY), TranS1 (Nasdaq: TSON), TTI Telecom (Nasdaq: TTIL), USANA Health Sciences (Nasdaq: USNA), Valspar (NYSE: VAL), Verenium (Nasdaq: VRNM), Waste Services (Nasdaq: WSII), Weingarten Realty (NYSE: WRI), Weyco (Nasdaq: WEYS) and Whiting Petroleum (NYSE: WLL).

Tuesday

The first news of the day will emanate from Japan. The Bank of Japan is scheduled to publish its January meeting minutes. In the early morning, the International Council of Shopping Centers (ICSC) makes its regular reporting of weekly same-store sales. Last week's report showed a surprising gain on a week-to-week basis (+0.9%). On a year-to-year view, sales fell 0.9%, as consumer spending is drastically lower now than it was a year ago. The week's sales may have benefited from relatively warmer weather, according to the ICSC, but the measured period extended through Saturday of President's Day weekend this year. President's Day sales may have attracted shoppers waiting for best possible price opportunities to buy things of interest. Since President's Day fell on the 18th of February last year, versus the 16th this year, this year's holiday weekend day compared against a regular Saturday last year. This week's comps, therefore, will be tougher, as two days of the holiday weekend this year, compare against three from the prior year.

February's Consumer Confidence Index, reported by the Conference Board, is due at 10:00 a.m. Bloomberg's consensus sees the measure declining in February, to 35.5, versus 37.7 in January. Considering that job losses have continued to mount, and stock losses in turn, confidence should not be improved from January's worst reading in 40 years.

The two most powerful men in America are scheduled to address groups on Tuesday. President Obama will speak to a joint session of Congress, perhaps to talk about teamwork. The second most powerful man in America, Fed Chairman Ben Bernanke will testify before the Senate Banking Committee at 10 AM. The S&P Case Shiller Home Price Index should show ongoing price decline generally. The reading is a bit behind on a two-month lag, which proves limiting in terms of its value add.

The day's earnings schedule includes news from Acorda Therapeutics (Nasdaq: ACOR), Alnylam Pharmaceuticals (Nasdaq: ALNY), Applied Signal (Nasdaq: APSG), Assisted Living (NYSE: ALC), Astec Industries (Nasdaq: ASTE), Atlas Air (Nasdaq: AAWW), Balchem (Nasdaq: BCPC), BankFinancial (Nasdaq: BFIN), Bill Barrett (NYSE: BBG), Birks and Mayors (NYSE: BMJ), Boise (NYSE: BZ), Broadpoint Securities (Nasdaq: BPSG), BTU Int'l (Nasdaq: BTUI), Cardtronics (Nasdaq: CATM), Carter's Inc. (NYSE: CRI), Catalyst Health Solutions (Nasdaq: CHSI), CBRL Group (Nasdaq: CBRL), Ceradyne (Nasdaq: CRDN), Chicago Bridge & Iron (NYSE: CBI), China Mass Media (NYSE: CMM), CIBER (NYSE: CBR), Computer Task Group (Nasdaq: CTGX), Concho Resources (NYSE: CXO), Crown Castle (NYSE: CCI), Daktronics (Nasdaq: DAKT), Home Development (NYSE: HXM), Dolan Media (NYSE: DM), Domino's (NYSE: DPZ), DreamWorks (NYSE: DWA), Dresser-Rand (NYSE: DRC), Dycom (NYSE: DY), Eclipsys (Nasdaq: ECLP), Entercom (NYSE: ETM), EPIQ Systems (Nasdaq: EPIQ), Euronet Services (Nasdaq: EEFT), ev3 (Nasdaq: EVVV), EXCO (NYSE: XCO), Federal-Mogul (Nasdaq: FDML), First Advantage (Nasdaq: FADV), First Solar (Nasdaq: FSLR), FirstEnergy (NYSE: FE), Foster Wheeler (Nasdaq: FWLT), Franklin Street (NYSE: FSP), Fresh Del Monte (NYSE: FDP), Gmarket (Nasdaq: GMKT), GrafTech Int'l (Nasdaq: GTI), H.J. Heinze (NYSE: HNZ), HCC Insurance (NYSE: HCC), Healthsouth (NYSE: HLS), Heartland Payment (NYSE: HPY), HEICO (NYSE: HEI), Heidrick and Struggles (Nasdaq: HSII), Helix Energy (NYSE: HLX), Henry Schein (Nasdaq: HSIC), Herbalife (NYSE: HLF), Home Depot (NYSE: HD), Huron Consulting (Nasdaq: HURN), Iam Gold (NYSE: IAG), Iconix Brand (Nasdaq: ICON), Internet Brands (Nasdaq: INET), IPG Photonics (Nasdaq: IPGP), Kendle (Nasdaq: KNDL), Macy's (NYSE: M), Magna Int'l (NYSE: MGA), Marvel Entertainment (NYSE: MVL), Medco Health (NYSE: MHS), Mohawk (NYSE: MHK), Nabors (NYSE: NBR), Office Depot (NYSE: ODP), Orbitz Worldwide (NYSE: OWW), Papa John's (Nasdaq: PZZA), PG&E (NYSE: PCG), Quanta Services (NYSE: PWR), Radian (NYSE: RDN), RadioShack (NYSE: RSH), SeaBright Insurance (NYSE: SBX), Sempra Energy (NYSE: SRE), Steve Madden (Nasdaq: SHOO), Target (NYSE: TGT), Taser (Nasdaq: TASR), Tenet Healthcare (NYSE: THC), The St. Joe Co. (NYSE: JOE), Thomson Reuters (NYSE: TRI), Vornado Realty Trust (NYSE: VNO), Winmark (Nasdaq: WINA), World Wrestling (NYSE: WWE), Wynn Resorts (Nasdaq: WYNN) and more.

Wednesday

Fed Chairman Bernanke closes out his time on the Hill Wednesday, as he testifies before a House committee. Existing Home Sales will be reported for the month of January at 10:00 AM. Bloomberg's consensus of economists forecasts the annual pace of sales at 4.8 million, which compares against December's pace of 4.74 million. Housing analysts will have interest in the day's Purchase Applications report from the Mortgage Bankers Association as well. This report offered news of a surge in activity last week, and has generally benefited from falling mortgage rates. However, housing recovery remains on hold.

The European Commission will review a report on financial architecture reform, while an economic advisory group publishes a report on the state of the European economy. The regular EIA Petroleum Status Report is due at its usual 10:30 publishing. Oil inventories decreased by 0.2 million barrels last week, a welcomed change for oil bulls.

The day marks Ash Wednesday and the start of lent for Western Christians. Companies are also living in a state of lent these days, enjoying less of everything, net income and bonus payments alike; and shareholders are giving up capital gains and dividends as well.

The day's EPS schedule includes Aegean Marine (NYSE: ANW), Ambac (NYSE: ABK), Angeion (Nasdaq: ANGN), Avis Budget (NYSE: CAR), Cadbury plc (NYSE: CBY), Centerpoint Energy (NYSE: CNP), Clean Harbors (NYSE: CLH), Cliff's Natural Resources (NYSE: CLF), CMS Energy (NYSE: CMS), Cogent (Nasdaq: COGT), Dana Holding (NYSE: DAN), Del Monte Foods (NYSE: DLM), Dollar Tree (Nasdaq: DLTR), Donaldson (NYSE: DCI), Eaton Vance (NYSE: EV), El Paso Electric (NYSE: EE), Equity One (NYSE: EQY), Express Scripts (Nasdaq: ESRX), Famous Dave's (Nasdaq: DAVE), FBR Capital (Nasdaq: FBCM), Flowserve (NYSE: FLS), Fluor (NYSE: FLR), General Maritime (NYSE: GMR), Gibraltar Industries (Nasdaq: ROCK), Goodrich Petroleum (NYSE: GDP), Greif Brothers (NYSE: GEF), HealthStream (Nasdaq: HSTM), Hearst-Argyle (NYSE: HTV), Internet Capital Group (Nasdaq: ICGE), Isis Pharma (Nasdaq: ISIS), J.M. Smucker (NYSE: SJM), KBR Inc. (NYSE: KBR), Liberty Media (Nasdaq: LINTA), Limited Brands (NYSE: LTD), Martha Stewart (NYSE: MSO), Medarex (Nasdaq: MEDX), NetEase (Nasdaq: NTES), Nicor (NYSE: GAS), Petrohawk (NYSE: HK), Psychiatric Solutions (Nasdaq: PSYS), Quality Distribution (Nasdaq: QLTY), Saks (NYSE: SKS), Salesforce.com (NYSE: CRM), Service Corp. (NYSE: SCI), The TJX Cos. (NYSE: TJX), The Washington Post (NYSE: WPO), Toronto Dominion Bank (NYSE: TD), True Religion Apparel (Nasdaq: TRLG), Tween Brands (NYSE: TWB), United Rentals (NYSE: URI), Visteon (NYSE: VC), Zale (NYSE: ZLC) and more.

Thursday

President Obama will usher in his first budget proposal on Thursday, and he's already given notice that he hopes to work towards halving the deficit. Given the amount of government aid being handed out, some hard decisions will be made cutting costs. We expect a significant cut to defense spending could surprise many and hurt that sector's stocks on Thursday.

New Home Sales, which are running at the slowest pace in history, are due for 10:00 AM report. Bloomberg's consensus of economists forecasts the pace will remain in the dumps in January, with expectations for an annual pace of 330K, versus 331K last month.

In the pre-market, Durable Goods Orders and Weekly Initial Jobless Claims should offer more market concerning news, though the weakness is commonplace now. Durable Goods Orders are seen falling another 2.5% in January, compared with a similar 2.6% decline in December. New orders, excluding transportation, are seen falling 2.1% in January. Weekly Initial Jobless Claims have been running extra hot this year, now solidly above 600K each week. Economists are expecting the current reading will measure 625K, versus 627K last week.

The Treasury will auction 7-year notes for the first time since 1993. Look for the EIA Natural Gas Report at 10:30 as always. British monetary officials face public scrutiny on Thursday, as they testify before elected representatives.

J.P. Morgan Chase (NYSE: JPM) holds an investor day, while the earnings schedule highlights news from Akeena Solar (Nasdaq: AKNS), Allianz SE (NYSE: AZ), American Dental Partners (Nasdaq: ADPI), Ansys (Nasdaq: ANSS), Autodesk (Nasdaq: ADSK), Bare Escentuals (Nasdaq: BARE), Biovail (NYSE: BVF), Blue Coat Systems (Nasdaq: BCSI), Boyd Gaming (NYSE: BYD), Cablevision (NYSE: CVC), Checkpoint Systems (NYSE: CKP), Churchhill Downs (Nasdaq: CHDN), Cinemark Holdings (NYSE: CNK), CommScope (NYSE: CTV), Cooper Tire & Rubber (NYSE: CTB), Deckers Outdoor (Nasdaq: DECK), Dell (Nasdaq: DELL), DPL, Inc. (NYSE: DPL), Dynegy (NYSE: DYN), El Paso (NYSE: EP), EMCOR (NYSE: EME), Employers Holdings (NYSE: EIG), Ensco Int'l (NYSE: ESV), Easterline Technologies (NYSE: ESL), Federal Signal (NYSE: FSS), Frontier Oil (NYSE: FTO), Frontline (NYSE: FRO), Gap (NYSE: GPS), Genco Shipping (NYSE: GNK), Global Cash (NYSE: GCA), Hansen Natural (Nasdaq: HANS), Hughes Communications (Nasdaq: HUGH), Human Genome Sciences (Nasdaq: HGSI), Huntsman (NYSE: HUN), Internet Gold (Nasdaq: IGLD), Iron Mountain (NYSE: IRM), Key Energy Services (NYSE: KEG), King Pharma (NYSE: KG), Kohl's (NYSE: KSS), Leap Wireless (Nasdaq: LEAP), Macquarie Infrastructure (NYSE: MIC), Mentor Graphics (Nasdaq: MENT), Met-Pro (NYSE: MPR), Mine Safety (NYSE: MSA), Novatel (Nasdaq: NVTL), Omnicare (NYSE: OCR), Pioneer Drilling (NYSE: PDC), Quanex (NYSE: NX), Repsol (NYSE: REP), Rowan Cos. (NYSE: RDC), Royal Bank of Canada (NYSE: RY), Safeway (NYSE: SWY), Sanderson Farms (Nasdaq: SAFM), Scientific Games (Nasdaq: SGMS), Senior Housing (NYSE: SNH), Ship Finance Int'l (NYSE: SFL), Sotheby's (NYSE: BID), First American (NYSE: FAF), Nasdaq OMX (Nasdaq: NDAQ), U.S. Cellular (NYSE: USM), Universal Health (NYSE: UHS), Vonage (NYSE: VG) and more.

Friday

The first revision to fourth quarter GDP is due on Friday morning, and economists are not expecting good news. The consensus forecast is that Q4 GDP contraction will worsen, to 5.4%, from the 3.8% back-step initially reported. Despite the poor consensus view, if this actually plays out to plan, we do not expect it will be digested well by the market on Friday.

A couple of Federal Reserve bosses will draw a crowd when the presidents of the St. Louis and San Francisco Feds address a forum on monetary policy and oil prices. The National Association of Purchasing Managers - Chicago issues its Purchasing Managers Index on Friday. The NAPM report is seen still showing deep sector contraction in February, with a measure of 33.0 forecast (33.3 in January).

Reuters/University of Michigan's final Consumer Sentiment reading for February is expected to remain weak. Bloomberg's consensus sees a final reading of 56.0, versus the mid-February reporting of 56.2. The Farm Prices Report is due for February at 3:00 PM. This report shows the prices received by farmers for their produce at the end of the month, versus mid-month.

Overseas, the Association of South East Asian Nations will hold its summit in Thailand this time around. Perhaps this is the reason Secretary of State Clinton visited Asia ahead of Europe, marking the first such ordering of any new American administration. President Obama's good intentions and change theme will likely be discussed by the grouping. On this same day, China and the United States are due to resume senior level military discussions.

On Saturday, European Union representatives meet to quell rising nationalistic protectionism among its member states. The unique individual populations of Europe are putting pressure on their local governments, which in turn are forced to act in their constituents' interests. This makes for the first true test of the union.

Friday's EPS schedule includes news from Aqua America (NYSE: WTR), Calgon Carbon (NYSE: CCC), Calpine (NYSE: CPN), CapitalSource (NYSE: CSE), Caraustar (Nasdaq: CSAR), Cobra Electronics (Nasdaq: COBR), Coeur d'Alene Mines (NYSE: CDE), Deutsche Telekom (NYSE: DT), DiamondRock Hospitality (NYSE: DRH), EMC Insurance (Nasdaq: EMCI), Empresas ICA (NYSE: ICA), Endo Pharmaceuticals (Nasdaq: ENDP), Golar LNG (Nasdaq: GLNG), Gulf Island (Nasdaq: GIFI), Int'l Royalty (NYSE: ROY), Iowa Telecommunications (NYSE: IWA), James River Coal (Nasdaq: JRCC), Lydall (NYSE: LDL), Magellan Health (Nasdaq: MGLN), Mirant (NYSE: MIR), Osiris Therapeutics (Nasdaq: OSIR), Republic Services (NYSE: RSG), Shanda Interactive (Nasdaq: SNDA), Telecom Italia (NYSE: TI), TETRA Tech (NYSE: TTI), The Blackstone Group (NYSE: BX), The Interpublic Group (NYSE: IPG), The Phoenix Cos. (NYSE: PNX), The Progressive (NYSE: PGR), Trex Co. (NYSE: TWP), Triad Guaranty (Nasdaq: TGIC), Trico Marine (Nasdaq: TRMA), Warner Chilcott (Nasdaq: WCRX), Westar Energy (NYSE: WR) and more.

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)

Weekly Video Compilation

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



The week just passed was one interesting span, and that's well reflected in the video compilation we've assembled for you here. You'll find the usual mix of business news, politics and geopolitics, heart warming stories and some comedy to lighten it all up. If you do not see the video player from your vantage point, simply click on the image below.


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)

Forgettable, That's What You Are

By Markos N. Kaminis - Economy & Markets:

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

Like the day you lost your job, this past week was, for investors, forgettable. The Dow Jones Industrials Index set a six-year low last week, and dropped 6.2% through the holiday-shortened spat. So, I say we just pretend it never happened. Let's just leave it all behind us shall we? It's time to move on anyway.

Try as we may though, we just can't get that nasty memory out of our minds. It strikes us tragic how it all went down. It was supposed to be a good week after all. President Obama signed his stimulus bill into law, and promised America he would put our tax money to good use saving jobs. So what happened then?

Well, perhaps our "Week Ahead" article from last week presciently summed up the reason in two words. We entitled that piece, "Now What?" The fact is that the government has given this recession its best shot, and the recession has stood its ground and taken the blows. Investors have only to wait now for some sign of result, some semblance of economic turn. However, the market is impatient, and she speculates, anticipates and predicts economic scenarios. These days, she's like the selfish wife who forgets everything you've done for her and leaves you the minute the waters get rough. What will you do now, chase her into bankruptcy or find yourself a new blue chip lady? This week's market action tells you what is natural to human nature and what is ideological.

The Ominous Horizon

The horizon is dark and gray and full of ominous whirlwinds left and right, to and fro. Panic and trepidation grabbed a hold of the hearts of financial sector investors this past week. Fear of new bank failures and government interventions took the shares of Citigroup (NYSE: C) and Bank of America (NYSE: BAC) spiraling toward zero. Only a late Friday White House statement could settle traders, and not completely so, as Citi still closed down 22%.

Overseas, the dark clouds are circling around Switzerland and Eastern and Central Europe. When UBS (NYSE: UBS) announced a settlement with U.S. tax authorities, a Pandora's box was effectively opened. The secrets of Swiss banking can now be shared because of phonies like Bernard Madoff changing the game.

European Union officials warned reactive leaders of young and volatile European markets to quiet their boastful chatter of currency defense. However, when fiction mirrors reality we traverse dangerous territory. The World Bank and IMF would like to raise funding for the pending minor catastrophes that seem in store, but the EU is only willing to oblige for the sake of its member states. This is a message Germany's Finance Ministry confirmed on Friday, and European shares set global markets aflame thereafter.

The coming week only offers more opportunity for dismay, as words alone may not be enough to keep a bank or two from busting. Bad news Obama ought to try taking Bill Clinton's advice and George Bush's example, and just talk up the market and pretend everything is okay.

So I say we take a stab at pretending it all never happened. We will go to bed, shut our tired eyes and dream of butterflies and lilies. Then we will awaken to the cold sweat-soaked reality that our nightmares now live and walk boldly and defiantly in the broad daylight.


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).

Financial News Summary - 02-20-09

By Markos N. Kaminis - Economy & Markets:

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

The Dow slid to a new six-year low Friday, as troubling economic data from Europe exacerbated an already shaky week. In the States, corporate data flow only compounded the situation, and bank investigations both here and abroad have the financial sector right back in the pits of hell.

Economic Data Analysis

Consumer Price Index (CPI) - January

* Headline CPI: +0.3%
* Consensus: +0.3%
* Core CPI: +0.2%
* Consensus: +0.1%

January's Consumer Price Index was reported this morning, and it played no role in futures action or market tone, in our opinion. The CPI figures were about in line, though the tenth of a percentage point higher Core CPI result is not negligible.

Like the PPI, reported yesterday, headline CPI was greatly influenced by the first energy index rise since mid-summer '08. Energy was up 1.7%, mostly driven by a 6% increase in retail level gasoline prices; given that gasoline was up a higher percentage on the producer level, we would expect consumer prices to have some momentum in February as well.

You must be wondering what drove the Core CPI rise, since food and energy are excluded from it. Well, the Transportation Index was up 1.3% in January, after falling 5.0% in December and 9.7% in November. Clearly energy prices have the potential of a multiplier effect here, eventually leading to greater shipping and travel cost adjustments tied to variable fuel costs. However, the driver last month was more direct, as "motor fuel costs," which is included in "transportation," rose 5.3%. Motor vehicle prices also increased in January, helping boost the total.

In the future, we wonder how much municipal transportation costs, or those tied to city subway, bus, regional rail and tolls will rise as municipalities do everything they can to balance budgets. Look out for this counterbalance to generally easing prices elsewhere. Even so, in January, the index for public transportation fell 1.8%.

CPI on a Year-to-Year Perspective

* Headline CPI: 0.0%
* Core CPI: +1.7%

A 20.4% decrease in consumer level energy prices was offset by rising prices across the board, especially a 5.3% increase in the price of food and beverages. The rate of inflation clearly eased through the period.

International Markets News

Euro Zone Purchasing Managers Index

The Euro-Zone manufacturers PMI touched a record low in February, falling to 33.6, from 34.4, giving the ECB more impetus to get off its rear in March and do what it should have done in February (read cut rates from the current 2.0% level). Economists were reportedly looking for a rise in the index, so perhaps there are still too many folks taking happy pills in Europe. Like our similar indexes, a measure below 50 signifies economic contraction.

The service sector measure also dipped, where economists saw it improving. It slipped to 38.9, from 42.2. The overall PMI obviously fell as well, touching 36.2, versus 38.3 in January. The Europeans had been enthused by a previous improvement in January figures, but February leaves no doubt now that the worst is yet ahead for Europe. Another quarter of drastic GDP contraction seems nearly certain for Q1.

Germany Denies Rescue Plan

Talk about being in denial, Germany killed rumors today that it might be about to lead a rescue effort for struggling EU states. The German Finance Ministry contested an article in Der Spiegel that had rumored as much, but also noted that concerted efforts of the European Commission, ECB and euro-zone finance ministers were in order. We warned yesterday that with the rumor of this effort alive on the wire and in the minds of Europeans, a lack of near-term action or statement of such action to come could pull support out from under European shares. Voila! European shares fueled a global shakeout today, driven by the weak economic data and partly by the German Finance Ministry statement, in our view.

Asia:

1. MSCI Asia APEX 50: -3.0%


2. Japan NIKKEI 225: -1.87%


3. Hong Kong Hang Seng: -2.49%


4. China CSI 300: -2.0%


5. India BSE SENSEX 30: -2.21%

Europe:

1. DJ Euro STOXX 50: -4.21%


2. UK FTSE 100: -3.22%


3. France CAC 40: -4.25%


4. Germany DAX: -4.76%

(Index prices are as available at hour of publishing and may not be the closing price)

Swiss Banks Roiled

Yesterday's news that UBS would settle with U.S. tax authorities, and in so doing, provide information on U.S. investor funds kept in secret accounts, has effectively destroyed significant value in Swiss bank firms. The secrecy distinction served as a differentiator, providing Swiss banks with a means of drawing excess deposits from rival institutions across borders. That's not to mention the aristocratic appeal of Swiss banking, which mostly resulted from its exclusivity and secrecy. UBS (NYSE: UBS) shares are down 12.7%, while Credit Suisse (NYSE: CS) is off 3.1% and Julias Baer (VTX: BAER.VX) 6.9%.

Commodity Markets

Gold on the Rise

In recent articles in which we discussed what to own in 2009, we joked about canned goods, bottled water and guns, but we were serious when we mentioned gold. The shiny metal passed a thousand dollars today on the most current futures contract. It was up 2%, to $996.50 when last we checked. This article is meant for quick reading; we hope to discuss gold in a more detailed fashion in the near-term, and you might be surprised by our complicated forecast.

Corporate News Drivers

Anglo American

Mining firm, Anglo American (Nasdaq: AAUK), today announced a massive workforce reduction of 19,000 employees. It was an interesting development, occurring the same day gold broke above $1,000. However, Anglo American is a well-diversified mining company, and therefore, most of its products are cyclical in nature. In case you've been in a coma, we should inform you that the economic downturn has severely damaged commodity pricing. As a result, the company's Base Metals Division took a 42% operating profit hit in 2008. The Base Metals Unit was responsible for 45% of the company's operating profit in 2007, and so you understand the problem... While capital expenditure cuts had been previously announced, today's workforce news accompanied a dividend suspension, offering clear warning to all industry investors.

A total of 10% of the company's workforce is scheduled to go away, but the means described offers an interesting note: through layoffs, scaling back of contracting arrangements and through natural attrition... What's natural attrition in the mining industry, accidental asphyxiation, elevator malfunction and being buried alive? I think they could have left that part out, because even if there is normally a high turnover rate in the business, today's economy will solidify employee willingness to bear jerky bosses and asphyxiation risk... I would think...

General Motors

General Motors (NYSE: GM) seems to have initiated a partial minor bankruptcy, and appears to us to be orchestrating an orderly restructuring not too dissimilar to bankruptcy proceedings. However, in this case, thanks to U.S. government aid and sought after foreign government aid, GM can avoid major disruption of its supplier and dealer networks, preserving the greater auto economy. It's as if the U.S. and other directly impacted nations are getting together to save the GM nation. One notation is called for here though... This salvation is not painless. GM is planning to shut down another five or six U.S. plants.

Today, it looks to have stepped toward a mini-bankruptcy of its Saab unit, and it hopes that through Swedish government reorganization protection (read bankruptcy), it might effect this while freezing its financing needs at Saab for three months. After that, it hopes to spin off the unit or sell it. It seems a whole lot more reading is required to explain how this can occur, so we'll take a look for ya!

J.C. Penney

Popular media noted today that J.C. Penney (NYSE: JCP) reported better than expected results. That was a bit deceiving now wasn't it chums? It put a jazzy label on a battered, pre-worn useless garment, so to speak... JCP actually posted a 51% shortfall from its prior year net profit, on a same-store sales decline of 10.8%! The company drastically marked down inventory in Q4 in order to move it before the store itself was forced to move out of the mall. Not only that... J.C. Penney said the first quarter of this fiscal year would not meet the analysts' view, not by far. The company's forecast loss is about 50% greater than analysts foresaw on average. JCP shares were down 1% at hour of publishing.

Lowes

Lowes (NYSE: LOW) didn't mince words. The country's #2 home improvement retailer posted a 60% profit decline and lowered market expectations for the future. Blunt presentation did it no good today though, cause the truth hurts! Its quarterly same-store sales dropped 9.9% as it had to mark down prices aggressively while in the midst of desperate competition doing the same. That's what happens in a saturated marketplace during drastic demand decline folks, and we prepared you for it here long ago. LOW shares are off by 6.5% at the hour of publishing.

Bank of America

New York State Attorney General Andrew Cuomo subpoenaed Bank of America (NYSE: BAC) CEO Ken Lewis. Regulators are reviewing the questionable bonus planning and payouts that occurred for Merrill Lynch executives before the deal closed. There were exchanges of information and nonpublic documents detailing the maximum Merrill could pay out in bonuses, and these computations reportedly took place before the quarter end, which is highly irregular. Investigators want to know if information was withheld from and/or falsely reported to shareholders. Bank of America shares are down 31% so far today as a result!

Corporate EPS Schedule

The earnings schedule highlights news from Advanced Medical Optics (NYSE: EYE), Anglo American (Nasdaq: AAUK), Barrick Gold (NYSE: ABX), Brady Corp. (NYSE: BRC), Colfax Corp. (NYSE: CFX), Constellation Energy Partners (NYSE: CEP), HMS Holdings (Nasdaq: HMSY), Interline Brands (NYSE: IBI), Jaco Electronics (Nasdaq: JACO), J.C. Penney (NYSE: JCP), Kingsway Fin'l (NYSE: KFS), LifePoint Hospitals (Nasdaq: LPNT), Lowe's (NYSE: LOW), Ore Pharmaceuticals (Nasdaq: ORXE), Pacific Office Properties (AMEX: PCE), Pinnacle West (NYSE: PNW), Prudential PLC (NYSE: PUK), RTI Biologics (Nasdaq: RTIX), Standard Register (NYSE: SR), TC Pipelines (Nasdaq: TCLP), TRW Auto (NYSE: TRW) and Weingarten Realty Investors (NYSE: WRI).


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)

World Business Report

By Markos N. Kaminis - Economy & Markets:

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

The markets seemed interested in rising today, until the release of economic reports at 8:30. Weekly initial jobless claims and PPI data were not supportive, and set the tone of the trading day. This article serves as a wonderful one-stop shop to study the day's economic data, international market news and corporate drivers. Future editions will also include commodity and currency market commentary when appropriate.

Economic Reports

Weekly Initial Jobless Claims

* Week Ended Feb 14: 627K
* Bloomberg Consensus: 620K
* Prior Week Revised: 627K
* Four Week Average: 619K, +10,500

Weekly claims unfortunately stuck at very high levels last week, and offered a bitter data point for the start of trading on Thursday. The most concerning information in the report is the rising four-week average, which is now solidly above 600K. Also ominous for the February Employment Situation Report and unemployment rate, continuing claims rose 170K, taking insured unemployment to 4.987 million in the week ended February 7th. Insured unemployment increased a tenth of a percentage point in the week measured, to 3.7%. Despite being a lagging indicator, unemployment feeds the vicious cycle of recession by removing fuel from consumer spending, which overwhelmingly drives our economy. Note, this lagging indicator is still a forecasting tool until the economy actually turns.

Producer Price Index (PPI) - January

* PPI M/M: 0.8%
* Consensus: 0.2%
* PPI Y/Y: -1.3%
* Core M/M: 0.4%
* Consensus: 0.1%
* Core Y/Y: 4.2%

Producer prices came in unexpectedly hot for January, and this is not good news. While we would like to avoid deflation at all costs, we need inflation now like a hole in the head. Let's take a closer look.

We expected the absence of drastic energy price decline, with oil prices actually rising in January, would turn headline price decline around. What we got was a bit more. Gasoline prices increased 15% in January. Other finished energy goods, excluding residential natural gas and diesel fuel, also found better pricing last month, explaining the boost in the headline PPI figure. Foods prices generally eased, but not across the board.

Still, we need to explain the three-tenths excess in the Core PPI figure versus consensus expectations. While December's price strength in autos moderated in January, the prices of guns and alcohol rose (and for good reason)! We should note that auto prices still rose, and played a role as well.

Leading Indicators - January

* Leading Indicators Index: 0.4%
* Consensus: 0.0%
* December: 0.2% (revised)

Like last month, leading indicators rose on the push of money supply and interest rate spreads. If the Fed, Treasury and Congressional efforts result in good use of funds and intended economic stimulus, the leading indicators index seems to tell us economic recovery may not be too far out of sight. Excluding the impact of money supply increase, the index would have softened by 0.1%. Execution is the key now for our government. Efforts to target employment, the greatest negative factor in the Indicators Index, seem well-placed. At this point, however, we're still shedding jobs at a dangerous rate. We hope to follow up this article with a detailed report on Leading Indicators, as we've found some interesting tidbits.

Philly Fed Survey - February

* Diffusion Index: -41.3
* Consensus: -26.0
* January: -24.3

The Philadelphia Fed Survey's General Activities Indexes deteriorated in February, which coincided with a similar result from the Empire State Manufacturing Survey. Every facet of this index fell from January, but employment led the decline with a substantial drop-off (its lowest reading in history). Firms reported inventory higher than expected, and they are still seeing prices of inputs and finished goods declining. The only offering of hope came from the Future General Activity Index, which improved to 15.9 from 7.4. Firms still see hours and workers dropping further over the next six months though, but there is a sign of hope. We're guessing government efforts have a lot to do with that. Again, we want to stress how important execution is, or else we might let these folks down.

International News

We had a bunch of international market moving news this morning. The Bank of Japan led things off, holding rates steady in its policy decision. The world's second largest national economy didn't have much room to move today, with its target rate already at 0.1%. The BOJ also introduced a slew of initiatives to spur economic recovery, using creative means similar to our Federal Reserve.

If you thought things were bad in the U.S. during Q4, Japanese GDP contracted at an annualized rate of 12.7%. Annualized rates can be deceiving though; I remember as an analyst how much I enjoyed projecting out returns on an annualized basis to get a laugh or two. The reality is that the Japanese economy would not likely continue its Q4 pace through the full year; but it makes a good headline for popular press nonetheless... Japan declared it would continue to promote liquidity in its marketplace, and extend, expand and broaden measures to do so.

Eastern Europe Leans on Europe Which Leans on Germany

Perhaps a legacy of the ancient monarchies, in times of trouble, Europeans seem to still look for aid from the king. In a Financial Times interview, World Bank President Robert Zoellick said his organization, along with the IMF, sees it imperative to aid Eastern and Central Europe, but he needs the help of the EU to do so. He says quite poetically, "the financial crisis, now economic crisis is expanding to an employment crisis, which threatens to evolve into social, political and even human crises." The EU is not ignoring his plea, but would prefer a nation by nation approach, prioritizing EU members. The article also raises concern about pending runs against currencies of nations in trouble.

Meanwhile, greater Europe is looking to its biggest brother, Germany, to shoulder a heavier load for the greater whole. We noted Germany's soft relative commitment thus far in our article, "Protectionism and Hypocrisy." The euro rebounded today, after taking a recent beating on Eastern European concerns, as speculation mounts that Germany might lead a new EU bailout or fiscal stimulus package. An announcement would help cement some support here, but the absence of one in the near-term would take all support away.

Asia:

1. MSCI Asia APEX 50: 0.0%


2. Japan NIKKEI 225: +0.31%


3. Hong Kong Hang Seng: +0.06%


4. China CSI 300: +0.99%


5. India BSE SENSEX 30: +0.3%

Europe:

1. DJ Euro STOXX 50: -0.17%


2. UK FTSE 100: +0.29%


3. France CAC 40: -0.05%


4. Germany DAX: +0.24%

(Index prices are as available at hour of publishing and may not be the closing price)

Corporate News Drivers

UBS

UBS (NYSE: UBS) has agreed with U.S. tax authorities to share details of U.S. investor funds and portfolios in secret offshore accounts in Switzerland. The $780 million settlement will reveal the names of U.S. tax evaders, and offer yet another scandalous reason for global markets to panic. Seriously, there might have been a better time for this than now, don't you think... Now every capital strapped nation will use this as precedent to chase runaway tax funds in Switzerland. Net net, we think the U.S. is not this cash desperate yet, and the implications only offer more fuel for global market turmoil.

Hewlett-Packard

Hewlett-Packard (NYSE: HPQ) posted EPS in line with expectations. Unit shipments were down though, and revenues were short of expectations as well. HPQ also offered a reduced forecast for Q2 and narrowed its full year forecast short of analyst expectations. The shares are off by more than 7%, despite managing EPS well through cost cutting.

CVS Caremark

Here's a rarity in today's marketplace, profit growth. CVS Caremark (NYSE: CVS) grew its fourth quarter profit by 17%. Revenue and EPS growth exceeded estimates, and CVS shares are up over 7% as a result. When same-store sales are up 3.6% in a horrible quarter, something is working! CVS seems to be managing its operations well, and operates partly in a recession resistant market. The shares are well off their 52-week high, and the valuation looks good to me on a relative and intrinsic basis (P/E and PEG ratios). Again, this is based on a twenty minute take, so take a closer look yourself, unless you want to pay me too.

Sprint Nextel

Sprint Nextel (NYSE: S) reported a $1.6 billion fourth quarter loss, but still beat estimates. A great portion of the loss was due to Nextel acquisition related write-offs, but subscribers and revenue continue to erode as well. As an analyst, the subscriber losses would be my greatest concern here, and how Sprint is addressing them. The company lost 1.3 million subscribers, and its base is down 8.4% from the end of 2007. Now, the company's CEO said it is cash flow positive and can make debt payments through 2010, but bleeding to death slowly is painful for investors too.

While losing market share, the company is not sitting idle either. It's taken steps to improve its shortcomings, working to strengthen customer service. It's going to launch a new smartphone with Palm (Nasdaq: PALM) shortly, and is outsourcing jobs to lower cost markets. The stock is up 24% today, to $3.31; the reason being, change. The initiatives the company is effecting offer opportunity for it to improve competitiveness and stop the bleeding. Investors are betting today that that will occur before it can no longer pay creditors. We would have to take an even closer look before making a recommendation, but I like what I see on the fly anyway.

Today's EPS Reports

Cooper Industries (NYSE: CBE) will hold its annual investor webcast event, and the earnings schedule highlights news from Advance America (NYSE: AEA), Amerigroup (NYSE: AGP), AmSurg (Nasdaq: AMSG), Answers (Nasdaq: ANSW), Apache (NYSE: APA), Barnes (NYSE: B), Brocade Communications (Nasdaq: BRCD), Bucyrus Int'l (Nasdaq: BUCY), Build-A-Bear (NYSE: BBW), Builder's FirstSource (Nasdaq: BLDR), Cabela's (NYSE: CAB), Career Education (Nasdaq: CECO), CenturyTel (NYSE: CTL), Community Health Systems (NYSE: CYH), Chiquita (NYSE: CQB), Crocs (Nasdaq: CROX), CVS Caremark (NYSE: CVS), Diana Shipping (NYSE: DSX), Ditech (Nasdaq: DITC), Eldorado Gold (AMEX: EGO), Expedia (Nasdaq: EXPE), Fairfax Fin'l (NYSE: FFH), Goldcorp (NYSE: GG), Group 1 Automotive (NYSE: GPI), Harleysville Group (Nasdaq: HGIC), Home Properties (NYSE: HME), Hormel (NYSE: HRL), Hornbeck Offshore (NYSE: HOS), Idacorp (NYSE: IDA), Interactive Data (NYSE: IDC), Intuit (Nasdaq: INTU), Kindred Healthcare (NYSE: KND), Morningstar (Nasdaq: MORN), Mylan (NYSE: MYL), Newmont Mining (NYSE: NEM), Noble Energy (NYSE: NBL), Nordson (Nasdaq: NDSN), Oil States Int'l (NYSE: OIS), OSI Pharma (Nasdaq: OSIP), Pool Corp. (Nasdaq: POOL), Pride Int'l (NYSE: PDE), Regal Entertainment (NYSE: RGC), Reliance Steel (NYSE: RS), Spartan Motors (Nasdaq: SPAR), Superior Energy (NYSE: SPN), Sycamore Networks (Nasdaq: SCMR), Tesoro (NYSE: TSO), TheStreet.com (Nasdaq: TSCM), TradeStation (Nasdaq: TRAD), VCA Antech (Nasdaq: WOOF), WebMD (Nasdaq: WBMD), Williams Cos. (NYSE: WMB) and more.

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)