Week Ahead: Fresh Look at Retail & Employment

The Latest Retail and Jobs Data

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Week Ahead

Despite the Dubai debacle, this week will take its lead from retail Chain Store Sales, due out on Thursday, and Employment figures, scheduled for Friday release. These key economic barometers should offer investors reason to buy or sell for some time to come.

Monday

The surviving Thanksgiving Day turkeys are returning to Capitol Hill to debate health care reform beginning on Monday. With at least a full week's preparation, the cackling Congressmen should be loud from the start.

The day's only economic report is due for publishing at 9:45 AM Monday morning. Economists forecast November's Chicago Purchasing Managers Index will have deteriorated to 53.0 (53.3 based on Barron's), from 54.2 in October. Manufacturing activity was reported deteriorated in the New York region two weeks ago, according to the 11 point lower Empire State Manufacturing Index. However, Philadelphia area activity improved in November.

At 3:00 PM, the Department of Agriculture will report on Farm Prices. This report for November provides a nice read into food prices, and perhaps the renewed advent of inflation in the future.

Monday's EPS report schedule includes data from Compania Cervecerias Unidas S.A. (NYSE: CCU), Alloy (Nasdaq: ALOY), Golar LNG Ltd. (Nasdaq: GLNG), Inergy Holdings (Nasdaq: NRGP), Knightsbridge (Nasdaq: VLCCF), Linktone (Nasdaq: LTON), Omnivision Technologies (Nasdaq: OVTI), Telvent (Nasdaq: TLVT), Unify Corp. (Nasdaq: UNFY) and more.

Tuesday

The President will announce his plans for Afghanistan on Tuesday. President Obama will address the nation on prime time television, and is expected to announce a significant troop increase.

Weekly same-store sales will be reported Tuesday morning for the week ended November 28, which is inclusive of Black Friday. Sales will, therefore, be sharply above the prior week count. Last year, Black Friday fell on November 28, so the year-to-year comparison should be relevant as well. What's not relevant, therefore, is the comparison to the prior week result. At last check, sales were flat on a weekly basis, but jumped 3.3% when compared to the prior year total. Look for monthly Chain Store Sales results Thursday.

ISM's Manufacturing Index is expected to show only slight deterioration for November, to 55.0, from 55.7 in October. Clearly, Monday's data from Chicago might alter expectations a bit, depending on whether it concurs with data from New York or Philly for the same month. The New Orders Index backed off a bit last month, giving cause for concern here. Also, October's results represented a nice jump up from September. Remember, a reading above 50.0 signifies economic expansion.

Construction Spending is scheduled for report at 10:00 AM. This latest reading for the month of October is seen falling 0.4% from September's take, based on Bloomberg's survey of economists. September Spending increased 0.8%, and this segment of real estate activity may have also benefited from the First-Time Homebuyer Tax Credit. Also, while September's spending increased, August was revised nearly equally lower (revised to 0.1% growth from 0.8%).

The National Association of Realtors is scheduled to report on Pending Home Sales at 10:00 AM Tuesday. The Pending Home Sales Index increased for the eighth consecutive month in September. This was most certainly driven by the rush to get the benefit from the First-Time Homebuyer Tax Credit, as early October marked the effective deadline to enter into contract for early December closing (prior to extension). The index rose 6.1%, to 110.1 in September, standing 21.2% higher than September 2008. We expect an October/November decline in this data.

Motor Vehicle Sales will be reported by individual carmakers Tuesday. In aggregate, Motor Vehicle Sales are expected to slip to an annualized pace of 7.75 million, down from 7.9 million in October. Cash for Clunkers and a resulting letdown in October should stabilize toward some sort of normal run rate reported for November here. Sales of domestic and imported vehicles rose to a 10.5 million rate in October, from 9.2 million in September.

Philadelphia Federal Reserve President Charles Plosser is scheduled to give a lunchtime speech on the economic outlook to a seminar in Rochester. The Reserve Bank of Australia is due to make a decision on its key rate.

General Motors' board meets to discuss and debate what to do with its Saab unit. A deal to sell the segment to a Scandinavian company fell apart last week. Tuesday's earnings slate includes data from China Nepstar Chain Drugstore (NYSE: NPD), Universal Technical Institute (NYSE: UTI), Beacon Roofing Supply (Nasdaq: BECN), Staples Inc. (Nasdaq: SPLS) and more.

Wednesday

Wednesday starts the monthly employment report parade. The first of the data will come from Challenger Gray & Christmas, as the group reports on planned corporate Job-Cuts at 7:30 AM. Last month's data showed announced layoffs fell to 55,679, down from 66,404 in September. October's layoffs represented the lowest monthly figure since March of 2008. We opined recently that once panic set in, corporations likely fired more employees than the environment called for. Thus, as economic growth emerges, significant need for rehiring should ensue.

ADP's Private Employment Report is due for release at 8:15 AM on Wednesday as well. Net monthly labor market attrition has eased in recent months, both within the private marketplace and the overall market, which will be reported by the Federal government Friday. Still, jobs are being lost on net, and unemployment has kept on the rise, reaching 10.2% in October.

ADP's report showed the private labor market shed 203,000 jobs in October, improved from September's revised loss of 227K. Economists do not generally publish their forecast for this component of the labor market separately, but investors will still pay attention to the report on Wednesday morning for signs of what's to come Friday.

The Weekly Applications Survey, produced by the Mortgage Bankers Association, has garnered our attention in recent weeks. We've well documented the impact of the First-Time Homebuyer Tax Credit on real estate, as seen through mortgage application volume. However, last week's data showed a change in trend. For the first time in roughly two months, the Purchase Index, which measures applications on home purchases, rose. It increased 9.6% over the prior week measure. The Market Composite Index, however, deteriorated by 4.5%, as the Refinance Index fell 9.5%. Mortgage rates held relatively steady at 4.82% (from 4.83%) and 4.32% on average for contracted 30-year and 15-year fixed rate mortgages, respectively. This change in trend could prove important in defining how long and deep this latest real estate test runs.

Platts will hold its Global Energy Outlook forum Wednesday in New York. Look for the regular Petroleum Status Report at 10:30. Last week's inventory data showed commercial crude oil stocks increased by 1.0 million barrels in the week ended November 20. Total Motor Gasoline inventory also increased by the same amount, while Distillate Fuel Inventories decreased by 0.5 million barrels.

Treasury Secretary Tim Geithner testifies before the Senate Agriculture Committee for the sake of aiding Congress' understanding surrounding a new bill on over-the-counter derivatives. The Fed releases its Beige Book of regional economic indicators at 2:00 p.m. This data is integral in the development and maintenance of Fed policy.

Walgreens (NYSE: WAG) and Hot Topic (Nasdaq: HOTT) are due to report November sales a day ahead of most retailers. Bristol-Myers Squibb (NYSE: BMY) holds its shareholders meeting. The day's earnings schedule includes reports from Aeropostale (NYSE: ARO), Collective Brands (NYSE: PSS), Jo-Ann Stores (NYSE: JAS), Casella Waste Systems (Nasdaq: CWST), Charming Shoppes (Nasdaq: CHRS), SeaChange Int'l (Nasdaq: SEAC), Shanda Interactive Entertainment (Nasdaq: SNDA), Synopsys (Nasdaq: SNPS), Synovis Life Technologies (Nasdaq: SYNO), The Descartes Systems Group (Nasdaq: DSGX), The Pantry (Nasdaq: PTRY) and more.

Thursday

The pace of trading is likely to be dictated by retailers' Chain Store Sales announcements for November and the critical Black Friday, which has already been reported up about 0.5% from 2008's horrible result. Thomson Reuters data indicates chain store sales might have risen 2.5% in November.

President Obama will hold a jobs forum with leaders of the business, labor, finance and nonprofit markets. Meanwhile, standing Chairman of the Federal Reserve Bernanke begins his confirmation process for another term with a hearing before the Senate Banking Committee. The Fed reports on its balance sheet today at 4:30 p.m. The ECB is expected to close out its crisis-support measures, though announce it will hold rates steady at its policy meeting that ends today.

The employment data parade continues with the early morning reporting of the Monster Employment Index, compiled by Monster WorldWide (NYSE: MWW). The MEI highlights demand for jobs online, and last month's report showed very slight index improvement to 120, from a level of 119 in September.

Weekly Jobless Claims are due for report at their usual 8:30 a.m. We received good news on this front last week, when the count of new benefits filers fell deep under 500K. The reading at 466K was much improved from the prior week's tally of 501K. The four-week moving average also fell to below that psychological threshold, to 496,500. Economists forecast a reading of 485K for this week.

Look for the third quarter Productivity and Costs Report at 8:30 as well. Economists expect unfavorable revision to both data points. Productivity is seen reduced to an 8.6% gain for the quarter, thanks still to improving demand and slim workforce. Unit Labor Costs are expected to be trimmed by 4.2%, instead of the initially reported -5.2% change.

The Institute for Supply Management will report its Nonmanufacturing Index at 10:00 a.m. The service sector is catching up to manufacturing, as the index is seen rising to 52.0 for November, up from 50.6 in October. This looks like a nonstarter for Thursday, as real change is not yet showing.

The EIA reports on Natural Gas Inventory at 10:30. Last week's report showed natural gas stocks increased just 2 Bcf. Natural gas stores are still well above last year's level and the five year average for this time of year. It is not the current supply/demand equation that is moving price in energy commodities, but dollar weakness, concern regarding Chinese stocking, and a reviving global economy.

Thursday's earnings slate includes news from Canadian Imperial Bank of Commerce (NYSE: CM), Structured Products (NYSE: KOS), Del Monte Foods (NYSE: DLM), Quanex Building Products (NYSE: NX), Siemens AG (NYSE: SI), Toll Brothers (NYSE: TOL), Toronto Dominion (NYSE: TD), A-Power Energy (Nasdaq: APWR), Argon ST (Nasdaq: STST), Cost Plus (Nasdaq: CPWM), Diamond Foods (Nasdaq: DMND), Kewaunee Scientific (Nasdaq: KEQU), Liquidity Services (Nasdaq: LQDT), Magma Design Automation (Nasdaq: LAVA), Marvell Technology (Nasdaq: MRVL), Mentor Graphics (Nasdaq: MENT), Novell Inc (Nasdaq: NOVL), Smith & Wesson (Nasdaq: SWHC), UTI Worldwide (Nasdaq: UTIW), XETA Technologies (Nasdaq: XETA) and more.

Friday

The Labor Department produces its monthly Employment Situation Report Friday morning at 8:30. The unemployment rate is expected to hold steady at 10.2%, based on economists surveyed. Nonfarm payrolls are seen dropping by 100K, after falling 190K in October. The average workweek is expected to have increased slightly to 33.1 hours, and average hourly earnings should have increased by 0.2% (0.3% in Oct.), based on economists surveyed.

Look for October Factory Orders at 10:00 a.m. Orders are expected to have risen by 0.2% in October, after improving by 0.9% in September. Durable Goods Orders posted recent decline, but strength in chemicals pricing may help keep overall order dollar volume up in October.

Former Fed Chairman Volcker is scheduled to report to President Obama on tax reform options on this day. Philly Fed President Plosser discusses the crisis at a morning meeting in Philadelphia. St. Louis Fed President Bullard will address the same meeting at 1:15 p.m.

The day's EPS schedule includes news from Big Lots (NYSE: BIG), Royal Bank of Canada (NYSE: RY) and Sirona Dental Systems (Nasdaq: SIRO).


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Dubai Development Disaster

Morning Markets

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The situation in Dubai has financial press busy this morning, but overseas exchanges are indicating the extent of this crisis may be limited. US stock exchanges and the dollar are exhibiting stability this morning in the wake of a still dangerous Dubai disaster. Overseas markets started the day shaky, especially in Dubai where the Dubai Financial Market General Index is off 7.3%. Europe is also off at the hour of publishing, with the DJ Euro Stoxx 50 down 0.8%. However, US stocks started the day flat, while Asian shares exhibited strength.

Dubai Development Disaster

Adding kindling to the fire this morning, a representative of the United Arab Emirates (UAB) said Dubai World's debt is not guaranteed by his nation. These guys obviously need to take their cue from the penguins over at the US Treasury Department and Federal Reserve.

The UAB is not setting its financial markets at ease this morning, as it should be. This first of trading since the news broke could have been controlled, since time allowed for it thanks to religious holiday. Instead the whole of Dubai is up in arms, and Middle Eastern shares are shaky across the board.

Dubai World is looking for a six month reprieve on $60 billion in debt. The nerve! You do not see American companies acting so brazenly... well AIG (NYSE: AIG)... oh and Citigroup (NYSE: C), J.P. Morgan (NYSE: JPM), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE), Bank of America (NYSE: BAC) among others... well okay then.

Remember how Dubai once bragged about its world leading development, with its skyline cluttered with giant cranes? Yeah, not no more... Real estate prices are reportedly 50% lower in the UAB, and this crisis ain't helping. We suspect that in the end Dubai World's debt situation will get a lift from its parent state, and this crisis will blow away like sand in the wind. In other words, don't panic here at home.

Washington News

The surviving Thanksgiving Day turkeys are returning to Capitol Hill to debate health care reform beginning on Monday. With at least a full week's preparation, the cackling Congressmen should be loud from the start.

Economic Data

The day's only economic report is due for publishing at 9:45 AM Monday morning. Economists forecast November's Chicago Purchasing Managers Index will have deteriorated to 53.0 (53.3 based on Barron's), from 54.2 in October. Manufacturing activity was reported lower in the New York region two weeks ago, according to the 11 point lower Empire State Manufacturing Index. However, Philadelphia area activity improved in November.

At 3:00 PM, the Department of Agriculture will report on Farm Prices. This report for November provides a nice read into food prices, and perhaps the renewed advent of inflation in the future.

Corporate News Drivers

Monday's EPS report schedule includes data from Compania Cervecerias Unidas S.A. (NYSE: CCU), Alloy (Nasdaq: ALOY), Golar LNG Ltd. (Nasdaq: GLNG), Inergy Holdings (Nasdaq: NRGP), Knightsbridge (Nasdaq: VLCCF), Linktone (Nasdaq: LTON), Omnivision Technologies (Nasdaq: OVTI), Telvent (Nasdaq: TLVT), Unify Corp. (Nasdaq: UNFY) and more.


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Thanksgiving Wishes 2009

We here at Wall Street Greek thank you for your ongoing interest in and support of our independent effort, and for the value-added insight you have contributed through commentary to our articles and reports. We appreciate and welcome your thoughts, and pledge to you to remain an open-minded institution willing to challenge the status quo when we find good reason.

Thanksgiving Wishes 2009

From the moment President Lincoln asked our nation to set aside a day for thanksgiving, Americans have taken the opportunity to mindfully consider his request. Over the years, our nation has celebrated the holiday through both economic boom and times like the current. Despite the difficulties of the day, of which there are now many for most of us, we should always remember to remain thankful for what we still have. Even if that only gift this year is continued life, I wish we could be thankful for it, because it is a great gift that is bigger than temporary struggle. Life, by its very nature, is full of opportunity and offers great reward, which comes at the cost of struggle.

This blog and blogger is not one that holds neutral position on controversial issues for the sake of political correctness, and is one based on the faith of its founder. Therefore, I would be remiss not to note my view of the importance of faith through struggle. The difficult days of life do not have to be endured alone, because we have a great advocate. The greatest reward is available to those who give love selflessly and without prejudice, especially when we have little to give.

In difficult times, I request from you, hopefully without intrusion-but nonetheless, to remember those who are even less fortunate. Though I have no authority nor ability to say so, I promise you that in so doing, you will be remembered. I beg you to ignore the faults of men and the deceptions of evil, and to give steadfastly of yourself and blindly to the open hand and to love your fellow man with all his faults.

Thanksgiving is about giving thanks, and we are fortunate that the process of doing so allows us to notice more clearly those less fortunate. We thank you again, and pledge to sincerely and actively remember and work for those less fortunate through our own personal and Wall Street Greek organized efforts. Therefore, we are launching a new page entitled "Give to Charity," where we list charities we work with and for, or otherwise support, and which we hope you will help as well.

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Give to Charity

Wall Street Greek supports good causes, including the charities listed here below. If you are considering to give to charity, we hope you will consider these specific goodwill workers listed here. These are charities we have gotten to know intimately in some cases, and where we have also given time and effort.

We only list charities here that we view legitimate. However, any gift you make to a listed charity is of your own decision making and review. We will not be held responsible for any dealing between individuals and these charities. Still, we support these efforts below, and want to see the greater enabling of their good work.

In the future, our own blog's founder will seek to raise capital for a charity he has planned over the course of a lifetime. Please check back with us from time to time, as we hope to make that dream into reality as well, if God wills it. Whether you help these specific organizations or others, please give to charity, because without your charitable giving, their good work is not possible.

Give to Charity

• Mercy House - An Orthodox Christian Community of the Moscow Patriarchate, Mercy House was opened in 1993 to serve the needs of the poor in the Lower East Side of Manhattan. It continues to do so, but also serves now as a parish dependence to the monastery in Treadwell, NY. While the Lower East Side has greatly improved over the years in terms of poverty, it may never have needed spiritual nourishment more than today.


• Emmaus House - A homeless outreach facility in Harlem, Manhattan, New York. Provides food, clothing, love and more to those in need within the community and throughout New York.


• Jan Hus Presbyterian Church & Neighborhood House - Provides food, clothing, shelter and other services for those in need who knock on the door.


• Ronald McDonald House - Helps the families of children in need of health care services, lodging and other care to stay together while they receive those services far from home.


• CROP Hunger Walk - Help us to feed the hungry throughout the world and within the United States.


• A Georgian Church in America - Please email us (below) if you are interested in helping a Georgian Orthodox congregation to establish the first Georgian Church in America and in New York City. A large group of Georgian Americans are congregating regularly now in a mission within a Catholic high school in New York City. We would like to help them to raise the money they need to buy their first property, and to grow their wonderful congregation within sound walls, and with the love of God.

WOULD YOU LIKE YOUR CHARITY LISTED HERE?

Contact us by emailing: Charity@ WallStreetGreek .com

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US Economy - Return to Normal OR New Normal?

Just how far can government assisted growth stretch? Are we returning to normal or finding a new normal?

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The downward revision to third quarter GDP was no surprise to economists who had forecast the change. What might surprise them though is if government assisted growth does not translate into a more natural form. The problem with the third quarter's style of growth, you see, was that it was greatly driven by direct and indirect government stimulus. This specific recession has been quite special though, and so we expect more stimulus is going to be necessary to help bridge the gap to normal economic activity. However, the extensive quantity of stimulus allocated to "bridge the gap," quoting the President, is not coming without a cost, and should bear burden of its own.

US Economy - A Return to Normal OR a New Normal?

Third quarter GDP faced its first revision this past week, with quarter-over-quarter growth reduced to 2.8%, from 3.5%. That's not the best news for an economy that has recently seen the return of raised concerns. However, the result was right in line with the economists' consensus view. Therefore, not much market impact resulted from the sour data. Still, much can be gleaned from a closer inspection...

"Stopgap measures drove economic growth in Q3"

Even after revision, growth of any sort is comforting to an economy emerging from The Great Recession; but is it misleading as well? In the year's second quarter, GDP contracted by 0.7%, so anything positive would have worked for Q3... the bar was set low. The drivers of growth, however, may not be the kind we can count on in quarters to come.

1. Giving proof that "Cash for Clunkers" paid tangible dividends, Motor Vehicle sales added 1.45 percentage points to Q3 GDP, after only contributing 0.19 to Q2.
2. A sign that the "First-Time Homebuyer Tax Credit" made a difference, Real Residential Fixed Investment increased 19.5%, after falling 23.3% in Q2.
   
3. The government also continued to play an influential role outside of the two incentive programs detailed here, as its direct investment in the economy increased 8.3% in Q3. Of course, state and local government consumption expenditures and gross investment decreased 0.1%, due to lower capital inflows, a requirement to balance budgets and an inability to print money like Uncle Sam.
   
4. Higher food and energy prices also played a role, as they drove a 1.4% increase in the price index for gross domestic purchases.

Are you getting the picture? Stop-gap measures and inflationary like price change drove economic growth in Q3. Government representatives would rightly respond to this by noting the necessity of government stimulus in times like these, and the effectiveness of its specific effort. That's not what we are worried about though; rather, we wonder if this particular recession will respond and return to normal as quickly as in past economic cycles. And if it does finally recover to special amounts of stimulus, then what repercussions might result from that excess?

More on GDP Factors

On a positive note, revived global demand led exports 17.0% higher in Q3, but a likewise increase in imports led to a net reduction to GDP for the quarter. Still, we find it reassuring that both foreign demand and domestic demand for goods are on the rise, and certainly Chinese domestic growth plays a special role in current times. Also, a favorable quarterly change in inventories helped GDP by 0.87 of a percentage point, and is likely to contribute more to GDP in the near future. Finally, Corporate Profits also improved, increasing by $130 billion in Q3, versus a $43.8 billion in Q2.

Still, another less explored negative aspect threatens; commercial real estate non-investment continues to portend more trouble for that particular marketplace and lenders too, and weighed against the overall economy in Q3. We should also consider what drag this segment of our economy might bring in 2010.

A New Normal OR a Return to Normal?

So if the drivers of growth are unnatural, and if a new normal is taking hold as it seems, then Q3 economic growth might not mean as much as generally thought. Tightened lending standards, increased regulation, new government spending and likely taxation, excessive unemployment, war spending, and inflationary threats weigh on our future, so how then can we find hope in this nascent report of economic growth? This rhetorical question was attempted to be answered for me actually by an economist, whose name I failed to note, interviewed on Bloomberg Radio this past week. He said his faith in the future was fueled by Leading Economic Indicators.

Let's take a look at the leading indicators then...

Leading Economic Indicators (LEI) were reported for the month of October on November 19, and increased by 0.3%, after rising 1.0% in September and 0.4% in August. In fact, October marked the 7th consecutive month of LEI rise. Conference Board Economist Ken Goldstein said, "The data indicates that economic recovery is finally setting in. We can expect slow growth through the first half of 2010. The pace of growth, however, will depend critically on how much demand picks up, and how soon." Well duh...

Taking a closer look at the numbers, 6 of 10 indicator components increased. With all due respect, I'm sorry, but I would not call that "broad-based" nor "wide-spread," like the Conference Board describes them. Positive drivers of LEI improvement included interest rate spread, average weekly initial claims for unemployment insurance (inverted), stock prices, average weekly manufacturing hours, real money supply and manufacturers new orders for consumer goods and materials.

Jobless Claims - While an improved rate of job shedding might be a positive indicator, it's generally agreed that the degree of panic that spread across the economy led to excessive layoffs versus historical recessions. Jobs are not being added to the economy yet on net, and once those excessively cut jobs are returned to compensate for productivity stretching (overworking the employees kept), we wonder if a lull in hiring might ensue in our services heavy economy. By "wonder," I mean, I think there is a good enough chance of it occurring.

Stock Prices - Stocks are clearly acting in a manner now that is indicative of a re-evaluation of valuation. Like the overcompensation in the labor market, stocks had dropped to a sort of anti-bubblistic point in March and have adjusted for that excess decline since. We suspect as we near January, there exists a decent possibility of a different sort of adjustment for a slow recovery, which could include a return into economic contraction. By "could" I mean I think there's a good enough chance for it.

Manufacturers Hours - Overworking the few employees you have left tends to drive increased manufacturers hours. While that happens due to demand renewal, it also happens due to post recession business inventory restocking. In other words, businesses tend to stock at a lower level and in a targeted manner matching lighter recession environment demand. When expectations adjust for an improving economy, great need arises to restock goods. That's not necessarily a sign of longer term economic virility though.

Money Supply - We know why this is higher, and we understand the stimulative effects of it, but we are also aware a dead zone between significant stimulus funds and those for whom it is finally intended. Banks are still not lending like they use to, which is likely a good thing in some respects, but it makes for a new environment that perhaps will not be as vibrant as past economic norms. By "perhaps"...

Manufacturers Orders - We reiterate our inventory restocking note here, and wonder again if a lull will follow such restocking. Historically speaking, inventory restocking occurs after recession and often is followed by a quarter of economic contraction as inventory flow returns to normal and demand adjusts as well.

The Negative LEI Factors

Consumer Expectations - This was the most important negative weight on LEI in October and thus the economy. We live in a consumption economy (we don't make things), and so if consumers are feeling frugal, well that's not a good sign for future economic activity. Clearly some of the LEI factors are going to weigh more than others, and we would likely assign a significant weight to consumer expectations, if it was under our charge to do so.

Building Permits - Housing has always been a critical driver of the US economy. Despite recent New and Existing Home Sales data, we are concerned about what Housing Starts indicated recently (look for an article on this topic soon). We expect incentive provided by the First-Time Homebuyer Tax Credit is running thin, though expansion of the program should help it retain some of its impact.

Supplier Deliveries - We need sales to keep inventory flowing, and so if there is no near-term return to normal after inventory adjustment, then perhaps the US economy, and thus stocks, will teeter along for a bit longer. This is consistent with most expectations for slow economic growth in 2010, and this may already be greatly priced into stocks as well. By "may" I mean...

Manufacturers Orders for Capital Goods - Businesses are not investing significantly yet, as seen in the results of the tech sector. Corporate cost cuts have run deep, and until margins begin to expand on sales growth rather than cost reduction, businesses will not invest in growth. Public companies have a bottom line to manage for the sake of their shareholder overseers after all.

In Conclusion

We opine that the drivers of nascent US economic growth are unnatural, and seem unlikely to be followed by the natural factors necessary to drive substantial near-term growth. While leading economic indicators are somewhat enthusing, they certainly do not indicate economic boom ahead, if even modest growth. We conclude, therefore, that further economic stimulus should be considered, but we also worry about the tangible repercussions of such actions.

Rather than a return to a normal economic environment, a new US economy seems to be emerging. While the "new normal" or "new economy" theory is often posed, we have a more encompassing view of these individual theories. We see each such change as a tweaking toward a better economic machine. Technology has brought with it productivity improvement and margin expansion. Globalization has created a more competitive environment beneficial to consumers and shareholders. Given, in a fair competitive operating environment, the benefits of globalization might better serve long-term American prosperity and the American worker.

This latest tweaking toward "new economy" will be the result of recent excesses, and will likely include excessive and politically inspired changes of its own. The drag of substantial unemployment; and the weight of regulation (whether necessary or not); tightened lending standards; inflationary pressures; and the other factors highlighted here bear a cost and point toward a new normal. The consequences of that "new normal" are many and varied, and so we hope you will join us as we better serve you with those communications as extensions of this theory and article.

Editor's Note: This article should interest all investors, especially those in cyclical shares including Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS), J.P. Morgan Chase (NYSE: JPM), U.S. Bancorp (NYSE: USB), Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE), Toronto-Dominion (NYSE: TD), Royal Bank of Canada (NYSE: RY), PNC Financial Services (NYSE: PNC), SunTrust (NYSE: STI), Robert Half Int'l (NYSE: RHI), Korn Ferry (NYSE: KFY), Manpower (NYSE: MAN), Monster World Wide (NYSE: MWW), Wal-Mart (NYSE: WMT), Target (NYSE: TGT), Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT), General Electric (NYSE: GE), Ford (NYSE: F), Berkshire Hathaway (NYSE: BRK-A, BRK-B).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Stock Market News 11-25-09

Visit the front page of Wall Street Greek to see our current coverage of stock market news.

(Tickers: Nasdaq: JRJC, CONN, GDOCF.PK, TTPA, ASYS, BCSI, TIVO, NYSE: DE, TIF, NZ, LSE.L, DIA, SPY, QQQQ, NYX, DOG, SDS, QLD)

Traditionally one of the busiest travel days of the year, the day before Thanksgiving will have most of you focused on other things today. However, the stock market news day is a busy one for Wall Street. Many of the week's economic reports that might have otherwise been published Thursday or Friday have been pushed to today's stock market news flow so that bankers can avoid indigestion Friday. That means we have to swallow eight reports the day before we digest an enormous quantity of turkey. The data has offered a decidedly positive flavor though, with Jobless Claims coming in well below 500K and Personal Outlays riding much higher than forecasts.

Stock Market News 11-25-09

Mortgage Applications

The now highly anticipated Weekly Applications Survey produced by the Mortgage Bankers Association was reported in the premarket stock market news. Over recent weeks, this regular report has provided interesting insight into the effects of the First-Time Homebuyer Tax Credit on the real estate market. See our research on this topic in the linked to article above.

For the week ended November 20, the Market Composite Index of mortgage activity decreased 4.5%. While the Refinance Index declined 9.5%, despite relatively stable mortgage rates, the Purchase Index went against recent trend and rose 9.6% from a historical low point that had not been seen since 1997. The rates on contracted 30-year and 15-year fixed rate mortgages stood stable at 4.82% and 4.32%, respectively.

Durable Goods Orders

In the day's early stock market news, Durable Goods Orders were reported lower. New Orders declined by 0.6% in October (+2.0% in September - revised), well below economists' expectations for improvement of 0.5%. Excluding transportation, orders fell by 1.3% (+1.8% in September. October's decline was attributed to machinery (-8.0%) and computers and electronics (-2.1%). Defense orders were also reported lower.

Personal Income & Outlays

Also in the early stock market news flow, Personal Income and Outlays were noted for October. Bloomberg's consensus of economists was looking for a 0.2% increase for October and got it. Economists had a clear precursor, as average weekly earnings had already been reported up 0.3% in October.

Consumer Outlays declined 0.5% in September following "Cash for Clunkers" cut-off. Economists were looking for an increase of 0.5% for October, as the month's retail sales and motor vehicle sales both improved. October's consumer outlays actually came in better than expected, rising 0.9%. This is an important stock market news driver today, a positive for stocks.

The Core PCE Price Index was expected to rise 0.2% in October, versus the 0.1% increase in September, and it did. The previously reported Core Consumer Price Index (CPI) was also up 0.2% for the month.

Jobless Claims

The final premarket stock market news bit for Wednesday was the Weekly Initial Jobless Claims data. Economists were looking for an important dip in initial benefits filings this time around, to 495K, versus 505K last week. What they got was even better, as jobless claims fell to 466K. The four-week moving average fell for the 12th straight week, to 496.5. This is more uplifting stock market news.

Consumer Sentiment Index

The second of the week's consumer confidence measures came due today at 9:55 AM ET. The Reuters/University of Michigan Consumer Sentiment Index dropped a significant 4.6 points in early November on renewed economic concerns. Economists were looking for this latest reading today to place the index slightly higher, at 67.0, versus 66.0 at last check. The actual reading came in slightly higher, at 67.4.

New Home Sales

Just reported, Existing Home Sales came in strong for October, running at an annual pace of 6.1 million, up 10.1%. New Home Sales were reported this morning at 10:00 AM, and economists were forecasting improvement there as well. Based on Bloomberg's survey, economists expected the annual pace of New Home Sales to improve to a pace of 410,000 for October, up slightly from 402K in September. Actual sales ran at a much higher rate, to 430K for the month. This is good news, but not something bank on, and we'll explain why in a forthcoming article.

EIA Oil & Gas Reports

The EIA will report on both Petroleum Status and Natural Gas today, due to the holiday. Last week's oil report showed crude stocks decreased by 0.9 million barrels in the week ended November 13. Total motor gasoline stores fell by 1.7 million barrels. Natural gas inventory increased by 20 Bcf. Look for this week's oil data at 10:30 AM ET and the natural gas report at noon.

Corporate News Drivers

The day's earnings schedule includes China Finance Online (Nasdaq: JRJC), Conn's (Nasdaq: CONN), Deere & Co. (NYSE: DE), London Stock Exchange (LSE: LSE.L), Golden Ocean Group (Nasdaq: GDOCF.PK), Tiffany & Co. (NYSE: TIF) and Trintech (Nasdaq: TTPA). Reported last evening: Amtech (Nasdaq: ASYS), Blue Coat Systems (Nasdaq: BCSI), Netezza (NYSE: NZ), TIVO (Nasdaq: TIVO), .


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

News Summary 11-24-09

Visit the front page of Wall Street Greek to see our most current news summary.

(Tickers: Nasdaq: AHCI, AIPC, AMWD, ASYS, AVNR, BCSI, CEDU, CWTR, CBRL, DAKT, DLIA, DLTR, FRED, GORX, QADI, TIVO, NYSE: AEO, BMO, BKS, BGP, FRE, FNM, STT, HPQ, BWS, DSW, EV, GCO, GA, HNZ, HI, HRL, NTZ, JCG, MDT, NZ, SIG, WMG, WBD, WH, DIA, SPY, QQQQ, NYX, DOG, SDS, QLD)

Today's news summary highlights several important economic datapoints. The revision of third quarter GDP carried significant weight this morning, but despite the deceleration of growth, GDP was reported in line with expectations. This news summary also includes analytical color on Home Prices, Consumer Confidence, Weekly Same-Store Sales, Investor Sentiment and Hewlett-Packard's results.

News Summary 11-24-09

GDP Revision

Third quarter GDP faced its first revision today, and the result was a reduction from 3.5% growth to 2.8%. That's not the best news for an economy that has recently raised concerns again, however, the result was right in line with the economists' consensus view. Still, the market drifted lower through midday on GDP and other data detailed below. Look for our followup article on GDP that is sure to help your understanding of the report.

Consumer Confidence

Very little change ensued today in the Conference Board's Consumer Confidence Index. No change, however, is no longer good news, especially after the index had fallen in the prior month's checkup.

The Confidence Index improved slightly to 49.5 in November, up from 48.7 in October. The October reading was down sharply though from August's stronger take on consumers, which read 54.5. The Expectations Index, at heightened importance now due to consumers' poor view of the current situation, improved only slightly to 68.5, from 67.0 in October.

Investor Confidence

State Street (NYSE: STT) reports monthly on Global Investor Confidence, and bases its index on held risk within institutional portfolios. Investor Confidence dropped for the third month in a row, and is now well off of the summer peak of 122.8, sitting currently at 100.8. The 100 point mark represents neutrality on the part of institutional investor fund flows toward/away from risky assets, so we are now at the threshold of trouble.

Housing Prices

The S&P Case Shiller Home Price Index showed home price improvement in both its 10-City and 20-City Composite Indexes. However, the gains were not as substantial as in recent months, or rather the pace of gain is decelerating significantly. It seems home prices have also been buoyed by the First-Time Homebuyer Tax Credit. Case Shiller's 20-City Composite improved for the fifth straight month, but the pace of improvement was down to 0.33% in September, from 1.21% in August.

The FHFA Home Price Index was also published today. FHFA's take on September also produced no change from August prices. FHFA's data is limited by the ceiling amount for conforming loans purchased by GSEs: Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).

Same-Store Sales

The ICSC's regular report on weekly same-store sales showed no change on a week-to-week basis and a strong 3.3% gain over the easy comp from a year ago. We told you about this trend in our copy, "This Week."

FOMC Meeting Minutes

The Dow rose after the Fed published its November FOMC meeting minutes, but still closed the day lower than it opened it. We did not get a chance to review the minutes, and so offer a link to the data here for you to peruse.

Corporate News Drivers

Hewlett-Packard (NYSE: HPQ) reported results last evening, and the shares traded 1.6% lower Tuesday as a result. HP offered preliminary results ahead of this report though, and so its nice expectations beating was less flavorful given the time passage. The company exceeded analysts' expectations on both the revenue and EPS lines, but revenues declined and so gains came on margin improvement (on cost cuts). In its PC business, however, prices are eroding as competition is getting to be cutthroat for slim pickings among poor consumers. Still, demand for HP's goods is coming from China and American consumers, as businesses continue to exhibit cautious spending traits. The company's acquisition of EDS has also helped smooth out a traditionally cyclical revenue stream, allowing HPQ to post growth even now.

Tuesday's EPS reports included Allied Healthcare (Nasdaq: AHCI), American Eagle Outfitters (NYSE: AEO), American Italian Pasta (Nasdaq: AIPC), American Woodmark (Nasdaq: AMWD), Amtech Systems (Nasdaq: ASYS), Avanir Pharmaceuticals (Nasdaq: AVNR), Bank of Montreal (NYSE: BMO), Barnes & Noble (NYSE: BKS), Blue Coat Systems (Nasdaq: BCSI), Borders Group (NYSE: BGP), Brown Shoe (NYSE: BWS), ChinaEdu (Nasdaq: CEDU), Coldwater Creek (Nasdaq: CWTR), Cracker Barrel Old Country Store (Nasdaq: CBRL), Daktronics (Nasdaq: DAKT), dELiA*s (Nasdaq: DLIA), Dollar Tree Stores (Nasdaq: DLTR), DSW (NYSE: DSW), Eaton Vance (NYSE: EV), Fred's (Nasdaq: FRED), Genesco (NYSE: GCO), GeoPharma (Nasdaq: GORX), Giant Interactive Group (NYSE: GA), H.J. Heinz (NYSE: HNZ), Hillenbrand (NYSE: HI), Hormel Foods (NYSE: HRL), Industrie Natuzzi (NYSE: NTZ), J. Crew Group (NYSE: JCG), Medtronic (NYSE: MDT), Netezza (NYSE: NZ), QAD (Nasdaq: QADI), Signet Jewelers (NYSE: SIG), TIVO Inc. (Nasdaq: TIVO), Warner Music Group (NYSE: WMG), Wimm-Bill-Dann Foods (NYSE: WBD) and WSP Holdings (NYSE: WH). That's all for today's news summary...


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

This Week: Turkey Nearly Cooked

Visit the front page of Wall Street Greek to see our current coverage of Wall Street, economic reports and global financial markets.

(Tickers: Nasdaq: AHCI, AIPC, AMWD, ASYS, AVNR, BCSI, CEDU, CWTR, CBRL, DAKT, DLIA, DLTR, FRED, GORX, QADI, TIVO, WHDIA, JRJC, CONN, GDOCF.PK, TTPA, NYSE: FNM, FRE, AEO, BMO, BKS, BGP, BWS, DSW, EV, GCO, GA, HNZ, HI, HRL, NTZ, JCG, MDT, NZ, SIG, WMG, WBD, DE, LSE.L, TIF, FRO, SFL, SPY, QQQQ, NYX, DOG, SDS, QLD)

This Week: Turkey Nearly Cooked

This holiday is one of conflict for some folks, because as you may know, Greeks do not normally like Turkey. However, for one day a year we forgive past grievances for the sake of poultry-kind. The holiday week should bring light trading volume as folks travel to be with family. Believe it or not though, the stock market is open on Black Friday, but only until 1 PM ET.

Monday

We covered Monday's schedule in our article, "Business News," found via the link provided here.

Tuesday

As we approach Black Friday, retail industry data and news will be in focus. Thus, there exists the potential for market reaction to the Weekly Same-Store Sales Report, published by the International Council of Shopping Centers every Tuesday in the pre-market. Last week's data produced the same old boring trend. Year-over-year results continue to trump increasingly easy comparisons. As you'll recall, Americans buried their cash in the backyard last holiday shopping season, and for good reason. All hell was breaking loose on Wall Street and Main Street both, and nowhere proved safe for capital.

Same-store sales improved 2.4% year-to-year at last check, which was a little less than the prior week's gain of 2.9%. On a week-to-week basis, sales slipped by 0.1%, matching the prior week's decline. Keep an eye on the week-to-week data, because despite seasonal influences, the market is watching that metric carefully in light of still rising unemployment.

Third quarter GDP is up for its first revision at 8:30 AM. Its initial read produced a market lifting +3.5% GDP gain, but economists are mostly looking for downward revision Tuesday to +2.8%, based on Bloomberg's survey. Driving the unfavorable change, lower consumer spending, greater inventory draw-down and international trade (import gains outpaced the export change). Since it's expected, the reining in of nascent economic growth may not weigh on the market, but economists' expert commentary on the matter could. NYU Professor Nouriel Roubini, for one, seems to garner a lot of airtime with controversial statements on days like these.

S&P Case Shiller weighs in on Home Prices a little later than we would prefer. Street whispers and the monthly data trend indicate that the Home Price Index will likely post another upward move for September. However, it's October we need to know about now! The FHFA House Price Index is also scheduled to be published Tuesday - at 10:00. FHFA's data is limited by the ceiling amount for conforming loans purchased by GSEs: Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).

After a steep decline in October (5.5 points to 47.7), the Conference Board is scheduled to post November's Consumer Confidence Index at 10:00 AM Tuesday. We do not see the situation much improved, and neither do economists, as their average forecast for the current month sits at 47.0. Last month's drop in the Expectations Index was alarming, as investors were hopeful that consumers who were down on current conditions might bank on better times ahead, which seemed the case not too long ago.

State Street (NYSE: STT) will report on Investor Confidence for November at 10:00 AM. October's reading showed a decline of 10 points, to 108.4. October marked the second month of decrease in a row since August's recent peak at 122.8. The 100 point mark represents neutrality on the part of institutional investor fund flows toward/away from risky assets.

At 2:00 PM, the Federal Open Market Committee (FOMC) will release the minutes of its most recent meeting. We do not expect much variance in the information from Chairman Bernanke's statements. Recall, the Chairman said inflation was tame and that rates would be kept low to help economic growth gain traction.

Tuesday's EPS reports include Allied Healthcare (Nasdaq: AHCI), American Eagle Outfitters (NYSE: AEO), American Italian Pasta (Nasdaq: AIPC), American Woodmark (Nasdaq: AMWD), Amtech Systems (Nasdaq: ASYS), Avanir Pharmaceuticals (Nasdaq: AVNR), Bank of Montreal (NYSE: BMO), Barnes & Noble (NYSE: BKS), Blue Coat Systems (Nasdaq: BCSI), Borders Group (NYSE: BGP), Brown Shoe (NYSE: BWS), ChinaEdu (Nasdaq: CEDU), Coldwater Creek (Nasdaq: CWTR), Cracker Barrel Old Country Store (Nasdaq: CBRL), Daktronics (Nasdaq: DAKT), dELiA*s (Nasdaq: DLIA), Dollar Tree Stores (Nasdaq: DLTR), DSW (NYSE: DSW), Eaton Vance (NYSE: EV), Fred's (Nasdaq: FRED), Genesco (NYSE: GCO), GeoPharma (Nasdaq: GORX), Giant Interactive Group (NYSE: GA), H.J. Heinz (NYSE: HNZ), Hillenbrand (NYSE: HI), Hormel Foods (NYSE: HRL), Industrie Natuzzi (NYSE: NTZ), J. Crew Group (NYSE: JCG), Medtronic (NYSE: MDT), Netezza (NYSE: NZ), QAD (Nasdaq: QADI), Signet Jewelers (NYSE: SIG), TIVO Inc. (Nasdaq: TIVO), Warner Music Group (NYSE: WMG), Wimm-Bill-Dann Foods (NYSE: WBD) and WSP Holdings (NYSE: WH).

Wednesday

The day before the Thanksgiving Day holiday will be a busy one for Wall Street. Many of the week's economic reports that might have been reported Thursday or Friday will be pushed to Wednesday so that bankers can avoid indigestion. That means we will have to swallow eight reports the day before we digest an enormous quantity of turkey.

Wednesday brings the now highly anticipated Weekly Applications Survey produced by the Mortgage Bankers Association. Over recent weeks, this regular report has provided interesting insight into the effects of the First-Time Homebuyer Tax Credit on the real estate market. Even as mortgage rates have dropped, Purchase Application activity has declined. Not coincidentally, this decline has coincided with the informal deadline date necessary to contract for a mortgage that would qualify for the tax credit (early October).

For the week ended November 13, the Market Composite Index of mortgage activity declined 2.5%. The Purchase Index fell 4.7%, while the Refinance Index declined 1.4%; all while the rates on contracted 30-year and 15-year fixed rate mortgages eased to 4.83% and 3.82%, respectively.

Durable Goods Orders are due for report at 8:30. Economists are looking for a 0.5% increase in orders for October, compared with the revised 1.4% increase reported for September. Excluding transportation, orders improved 1.2% in October. September new order growth was driven by machinery and transportation equipment.

Also at 8:30, Personal Income and Outlays are due for October reporting. Last month's confidence measures noted concern regarding future income, and Personal Income was unchanged at last check in September. Bloomberg's consensus of economists is looking for a 0.2% increase for October. Average weekly earnings were already reported up 0.3% in October, justifying economists' expectations here.

Consumer Outlays declined 0.5% in September following "Cash for Clunkers" cut-off. Economists are looking for an increase of 0.5% for October, as the month's retail sales and motor vehicle sales both improved. The Core PCE Price Index is seen rising 0.2% in October, versus the 0.1% increase in September. Providing some reason to expect such a rise, the Core Consumer Price Index (CPI) was just reported up 0.2% for the month.

The final premarket report for Wednesday is the Weekly Initial Jobless Claims data. Economists are looking for an important dip in initial benefits filings this time around, to 495K, versus 505K last week. The four-week moving average fell for the 11th straight week at last check, but still stood above 500K, at 514K. A move to below the 500K mark in initial filings would be uplifting for stocks, as the market is watching employment for a turn in trend.

The second of the week's consumer confidence measures comes due Wednesday at 9:55 AM ET. The Reuters/University of Michigan Consumer Sentiment Index dropped a significant 4.6 points in early November on renewed economic concerns. Economists are looking for this latest reading to place the index slightly higher, at 67.0, versus 66.0 at last check.

Existing Home Sales came in strong for October, running at an annual pace of 6.1 million, up 10.1%. New Home Sales are next up Wednesday at 10:00 AM, and economists are forecasting improvement there as well. Based on Bloomberg's survey, economists see the annual pace of New Home Sales improving to 410,000 for October, up slightly from 402K.

The EIA will report on both Petroleum Status and Natural Gas Wednesday, due to the holiday. Last week's oil report showed crude stocks decreased by 0.9 million barrels in the week ended November 13. Total motor gasoline stores fell by 1.7 million barrels. Natural gas inventory increased by 20 Bcf. Look for this week's oil data at 10:30 AM ET and the natural gas report at noon.

The day's earnings schedule includes China Finance Online (Nasdaq: JRJC), Conn's (Nasdaq: CONN), Deere & Co. (NYSE: DE), London Stock Exchange (LSE: LSE.L), Golden Ocean Group (Nasdaq: GDOCF.PK), Tiffany & Co. (NYSE: TIF) and Trintech (Nasdaq: TTPA).

Thursday

Happy Thanksgiving American readers! The remainder of the world has some important data to chew on. The European Central Bank is due to weigh in on its interest rates, and the Bank of Japan releases the minutes of its October meeting. Also, the International Atomic Energy Board is scheduled to meet.

Friday

Back to work for traders! Believe it or not, in one of those holiday anomalies that needs correction, the stock market is open on Friday until 1 p.m. The bond market also closes early, but at 2 p.m. It's Black Friday, so look for important first reads from retailers. This particular day holds great importance to the industry relative to the rest of the days of the year. In overseas news, look for the Bank of Mexico to make its key rate decision.

Friday's EPS reports include news from Frontline Ltd. (NYSE: FRO), Ship Finance International (NYSE: SFL) and a handful of foreign names.


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Business News 11-23-09

Visit the front page of Wall Street Greek to see our current coverage of the day's business news.

(Tickers: NYSE: ADI, ATW, BJS, TSN, VAL, CPB, DY, HPQ, LDK, NBG, NED, Nasdaq: JOBS, ALTU, BRCD, CDCS, CNTF, CTRN, LONG, GLAD, KCAP, NUAN, SBLK, TECD, NCTY, AMEX: EAG, DIA, SPY, QQQQ, NYX, DOG, SDS, QLD)

The day's business news highlights data on Existing Home Sales and general economic conditions. Stock index futures indicate a positive opening to the day, but watch out for another negative reading we see highly possible for the real estate market. That report is due at 10:00 AM.

Business News 11-23-09

Economic Reports

Last week's Housing Starts data for October illustrated a sort of First-Time Homebuyer Tax Credit Hangover, which we detailed in the article hereto linked. Housing Starts ran at an annual pace of 529K in October, down 10.6% from September's revised rate of 592K. The result was quite a surprise for economists, who were looking for an October sales pace of 600K on average.

"The Greek" was not caught off-guard though, as we foresaw the "hangover." Economists have not adjusted their forecasts for October's Existing Home Sales, which will be reported this morning at 10:00 AM. Based on Bloomberg's survey, economists forecast an October Existing Home Sales pace of 5.7 million, versus September's 5.57 million rate. We have a sneaking suspicion that expectations here could also prove too high.

The Chicago Fed reported on its National Activity Index this morning, and noted another reading in negative territory. The National Activity Index measures overall economic activity and inflationary pressure. October's reading dipped to -1.08, but compared slightly favorably to September's -1.01. Dips in production and income offset other factors considered within the measure.

Washington DC Drivers

The Senate voted and agreed to "debate" Health Care Reform. The bill is not going to have easy going without amendment, especially regarding the "Public Option."

Corporate News Drivers

Japanese markets are closed on Monday due to the Labor Thanksgiving Day holiday. The US business news day earnings schedule includes 51job Inc. (Nasdaq: JOBS), Altus Pharmaceuticals (Nasdaq: ALTU), American Defense Systems (AMEX: EAG), Analog Devices (NYSE: ADI), Atwood Oceanics (NYSE: ATW), BJ Services (NYSE: BJS), Brocade Communications (Nasdaq: BRCD), Campbell Soup (NYSE: CPB), CDC Software (Nasdaq: CDCS), China TechFaith Wireless (Nasdaq: CNTF), Citi Trends Inc. (Nasdaq: CTRN), Dycom (NYSE: DY), eLong (Nasdaq: LONG), Gladstone Capital (Nasdaq: GLAD), Hewlett-Packard (NYSE: HPQ), Kohlberg Capital (Nasdaq: KCAP), LDK Solar (NYSE: LDK), National Bank of Greece (NYSE: NBG), Noah Education Holding (NYSE: NED), Nuance Communications (Nasdaq: NUAN), Star Bulk Carriers (Nasdaq: SBLK), Tech Data (Nasdaq: TECD), The9 Ltd. (Nasdaq: NCTY), Tyson Foods (NYSE: TSN) and Valspar (NYSE: VAL).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Top Ten Signs You Are Getting Fired

In today's tough labor market, the few of us with jobs are constantly looking over our shoulders. It's important to catch rumors and notice the warning signs that might signal a trip to the firing line. There are important things to look for, and we've listed the top ten signs you are getting fired for you here. Pay attention now!

(Article interests: NYSE: RHI, NYSE: MAN, NYSE: KFY, NYSE: MWW, NYSE: XLF, NYSE: BAC, NYSE: AIG, NYSE: FRE, NYSE: FNM, NYSE: GS, NYSE: MS, NYSE: C, NYSE: GM)

Top Ten Signs You Are Getting Fired:

10 - When you accept Congress' request to take a position in the Treasury Department or a recently government bailed out firm, where your responsibilities will include the noble task of cleaning up someone else's mess...

9 - A month after honestly responding to an "anonymous review," your boss introduces you to his new "best friend" - who happens to be an IT techie dude you never saw him with before...

8 - When you notice emails you've never read have already been opened. Then later that same week you catch your girlfriend having dinner with your boss... OR the techie!

7 - When your supervisor, who usually comes in at 10:00 AM, suddenly turns tardy and starts beating you in. As you settle into your chair just a little late as usual, you can't help but notice him smugly typing an email entitled "Our evil trap is working."

6 - When colleagues notice your monitor is cracked and your hand is bleeding; and when they ask you if you are okay, they don't seem to believe your response about the "electrical surge."

5 - When your lunch buddies are suddenly too busy to eat with you due to what they term "pariah-itis"...

4 - When you catch the unmistakable whiff of urine around your cubicle...

3 - When the government purchases a majority stake in the bank where you are the CEO.

2 - As you boot up your computer, new software uploads and a smiley face appears on your screen and softly says, "Don't panic. This is a routine software upgrade. Why don't you go have a cup of coffee now? You deserve a break."

1 - When passing you in the restroom, your boss kindly says "hello dear friend," and then under his breath adds smartly, "I'm gonna fire you pal!"

SEE ALL OUR TOP TEN LISTS


Visit the front pages of Wall Street Greek to see our current coverage of economic reports and financial markets. Please see our disclosures at the Wall Street Greek website and author bio pages found there. Article interests: NYSE: RHI, NYSE: MAN, NYSE: KFY, NYSE: MWW, NYSE: XLF, NYSE: BAC, NYSE: AIG, NYSE: FRE, NYSE: FNM, NYSE: GS, NYSE: MS, NYSE: C, NYSE: GM.

First-Time Homebuyer Tax Credit Hangover

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(Relative Tickers: BAC, FRE, FNM, GS, MS, WFC, TD, SRS, URE, IGR, XIN, RYHRX, TRREX, TOL, HOV, DHI, BZH, LEN, KBH, PHM, NVR, GFA, MDC, RYL, MTH, BHS, SPF, MHO, OHB, WCI, DIA, SPY, QQQQ, NYX, DOG, SDS, QLD)

An ugly trend in the Mortgage Bankers Association's Weekly Applications Survey has real estate warning sirens blowing again. As the result of a relationship we see between mortgage activity and the First-Time Homebuyer Tax Credit, we are looking for a near-term pull back in the residential real estate marketplace.

First-Time Homebuyer Tax Credit

Before we tie the information together, we think it best to ensure the reader understands the First-Time Homebuyer Tax Credit. The Worker, Homeownership and Business Assistance Act of 2009 extends and expands the First-Time Homebuyer Tax Credit allowed by previous acts. Most importantly to new homebuyers, Congress extended the tax credit, which was set to expire this year. Prospective purchasers of a principal residence can now benefit from the tax incentive if they enter into a binding contract to buy a home before April 30, 2010, and close on the home by June 30, 2010. The credit, which remains $8,000, can be applied to reduce your tax bill dollar for dollar, or to boost your tax refund, in either the reported 2009 or 2010 tax year (for qualifying 2010 purchases).

A new facet of the legislation allows long-time homeowners to benefit as well. Those who have lived in the same principal residence for any five consecutive year period during the eight-year period ended on the date the replacement home is purchased, may take a $6,500 credit (up to $3,250 for married filing separately). Also, the income limit has been raised to allow more Americans to qualify. Tax credit phase out now occurs at individual income levels of $125K to $145K ($225K to $245 for joint filers).

As you can see, the First-Time Homebuyer Tax Credit provides great incentive to buy a home. Thus, a great many Americans, some advised by clever and perhaps starving real estate agents, rushed to buy homes before the previous credit would expire on December 1st. Since home closings typically take 60 days, early October marked the effective deadline for entering into contract. We think this factor drove a burst of home sales, as was intended, up to and ending in early October.

The Evidence is Clear

The last six weeks of Mortgage Activity highlighted the effect of the legislation in vivid color. Despite a favorable and consistent drop in the average contracted rate on 30-year and 15-year fixed rate mortgages, mortgage activity for the purchase of homes has declined decisively. Up until the latest reading of the Mortgage Bankers Association data, the Refinance Index, which measures contract volume for mortgage refis, had shown refinance activity benefiting from lower rates; during the same period though, the Purchase Index deteriorated consistently. In fact, purchase activity has decreased for six consecutive weeks now, and sits at its lowest point since November of 1997.

Tying the Setback in Housing to its Cause

If the then pending expiration of First-Time Homebuyer tax incentive (before its renewal) and the push of real estate and tax agents to help sales along, helped to drive home purchase activity ahead of the decline begun in early October, then perhaps significant demand has been pushed forward. Thus, similarly to the effect of the "Cash for Clunkers" program, we would expect home sales to teeter off in the coming month or so. While this article comes to you after the latest Housing Starts data, which showed a precipitous decline in the pace of Starts in October, the report now seems to only confirm our assumption that the housing recovery benefited significantly from the First-Time Homebuyer Tax Credit. Furthermore, the previous gains in home sales may have been due to pushed forward purchases that may now limit near-term sales in their absence.

Add to this the burdensome weight of still rising unemployment and tightly squeezed credit standards, and the real estate market seems set for a longer near-term retrenchment. Perhaps offering a counter to this, however, is the expansion of the legislation to bring higher income and existing homeowners into play. This wise decision seems clearly construed for the purpose of floating the housing market further down the economic stream. November Starts should provide telling results as to whether the effort was effective or not.

Editor's Note: This article should interest real estate industry participants, perhaps including in Bank of America (NYSE: BAC), Freddie Mac (NYSE: FRE), Fannie Mae (NYSE: FNM), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Toronto Dominion (NYSE: TD), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Company (NYSE: XIN), Rydex Real Estate H (Nasdaq: RYHRX), T. Rowe Price Real Estate (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Home (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR, Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO) and Orleans Homebuilders (NYSE: OHB).


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Wall Street News 11-20-09

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(Tickers: Nasdaq: DELL, NYSE: HPQ, IBM, AAPL, MDT, ORCL, JAVA, DHI, ANN, CRMT, SJM, JOUT, KIRK, MPR, SCORE.OL, DIA, SPY, QQQQ, NYX, DOG, SDS, QLD, XLF, IWM, TWM, IWD, SDK)

Today's Wall Street news schedule highlights the earnings of Dell Computer, D.R. Horton, AnnTaylor and J.M. Smucker in the US. With an absence of economic data, overseas activity took some focus. The EU selected its first president and begins seeking its next ECB chief. The Bank of Japan weighed in with its own rate decision and raised concern about falling prices.

Wall Street News

Corporate News Drivers

Dell (Nasdaq: DELL) reported earnings last night and is down about 7% in early Wall Street trading. DELL is down due to its reporting weaker than expected Q3 revenue and earnings. The stock's hit this morning is largely due to Wall Street's surprise, since many of the company's peers, including Hewlett-Packard (NYSE: HPQ), Apple (Nasdaq: AAPL) and IBM (NYSE: IBM), reported a strong quarter on improved global technology spending. Excluding one-time items, Dell posted $0.23 per share against analysts' expectations for $0.28, based on Thomson Reuters data. Adding salt to its wound, Dell was also passed by Acer in market share, as the Taiwan based company moved to #2 in the world.

D.R. Horton (NYSE: DHI) shares are lower in morning Wall Street trade, as the homebuilder missed consensus estimates on both revenue and EPS lines. Revenue of $1.01 billion, down 42% from the prior year, compared against analysts' consensus for $1.11 billion, based on Thomson Reuters survey. DHI's loss per share narrowed versus the prior year, but at $0.73 still missed analysts' view for a $0.30 loss.

An FDA panel takes up a Medtronic's (NYSE: MDT) new epilepsy treatment. Friday's Wall Street EPS schedule includes reports from America's Car-Mart (Nasdaq: CRMT), AnnTaylor Stores (NYSE: ANN), D.R. Horton (NYSE: DHI), J.M. Smucker (NYSE: SJM), Johnson Outdoors (Nasdaq: JOUT), Kirkland's (Nasdaq: KIRK), Met-Pro (NYSE: MPR), Scorpion Offshore (SCORE.OL) and a few others.

Overseas News

The European Union (EU) extended its antitrust review deadline for Oracle's (Nasdaq: ORCL) acquisition of Sun Microsystems (Nasdaq: JAVA) to January 27, 2010. Oh, and by the way, that conglomerate of nations across the pond also picked its first President, Belgian Herman van Rompuy. Jockeying is already under way to find the replacement for ECB President Jean-Claude Trichet, for when he steps down in 2011. European shares were in decline at hour of publishing, with the Dow Jones Euro Stoxx 50 off 0.66%.

The Bank of Japan (BOJ) decided to leave its key rate unchanged at 0.1%. The BOJ announced that its economy was improving both due to exports and domestic gains on stimulus efforts. However, Deputy Prime Minister Naoto Kan said Friday that Japan is in deflation, while Finance Minister Hirohisa Fujii expressed grave concern over falling prices. The NIKKEI 225 fell 0.54% on the day, and broader Asia declined as well.

Philly Fed President Plosser is in Singapore today, giving a speech on global interdependence, especially in regard to food and water. The World Economic Forum is meeting to discuss the global agenda.

In Washington, the Senate will meet Saturday to deliberate on whether to debate on health care reform or not. Yes, the Senate is meeting to decide whether to meet. Ah politics...


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