Wall Street Greek: Daily Stock Market Preview 11-17-09

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(Tickers: NYSE: ATV, Nasdaq: ALOT, ADSK, CSIQ, DL, CPSL, CRTP, CSKI, CHBT, CNQR, COV, EJ, EDAP, GIGM, HD, JEC, JST, KEI, LZB, PLNR, RTLX, SKS, CRM, SYPR, TGT, TJX, ULU, VIT, WX, DIA, SPY, QQQQ, NYX, DOG, SDS, QLD, XLF, IWM, TWM, IWD, SDK)

Fed Chair Bernanke addressed inflation in his Monday speech to the Economic Club of New York, and he gave the all-clear. Well, the Producer Price Index is due for its latest reporting Tuesday morning at 8:30, so the market has stew to chew on.

Daily Stock Market Preview

Producer Price Index

Inflation was non-existent again in September, as the Core PPI, which excludes food and energy prices, actually fell by 0.1%. A drop in auto pricing, on "Cash for Clunkers" snap-back, as automakers seek to keep the flow of inventory moving, apparently drove price decline. For the October period, economists are looking for a 0.1% rise in Core Producer Prices. Headline PPI is regularly swayed by changes in energy prices, and should show rebound in October (+0.5%), according to economists surveyed by Bloomberg.

At 9:00 AM, the Treasury Department will report on Treasury International Capital (TIC). The TIC report tallies net purchases of long-term US securities. The report for August counted net purchases of $28.6 billion. However, purchases by foreign official institutions were only $11.6 billion, and foreign holdings of US Treasury bills decreased by $2.5 billion. Net purchases of long-term US securities were down to $264.8 billion in the twelve months ended August 2009, versus $772.2 billion in the relative 2008 period. Considering the dollar's demise and threats from foreign entities of abandonment of US Treasury instruments, this is one report that is likely to garner greater and greater attention as time passes (warranted attention mind you). Speaking of timely... President Obama meets with Chinese President Hu Jintao today. There's an awful lot to discuss between the economic heavyweights...

Chairman Bernanke also spoke about production gains on Monday, noting that they were coming at the cost of overburdened employees, not technology gains nor significant new business scale gain. This bodes well for hiring, once real and sustainable economic demand finds traction. Bernanke suggested that panic led companies to layoff excessively this recession, as compared against prior downturns. This in turn should require sharp hiring once demand picks up.

Industrial Production is due for report Tuesday at 9:15. Production rose 0.7% in September, after increasing a revised 1.2% in August. Economists see a 0.4% increase for October, according to Bloomberg's survey. The gurus forecast an improvement in Capacity Utilization to 70.7% in October, versus the 70.5% measured in September.

For the week ended November 7, the International Council of Shopping Centers (ICSC) noted retail same-store sales fell 0.1% on a week-to-week basis. Sales improved over the prior year by 2.9%, continuing a sales trend advantaging on soft comparable results. You will find the ICSC's latest data on the pre-market wire Tuesday.

Look for the Housing Market Index to be reported at 1:00 p.m. The National Association of Homebuilders' regular report has reflected builder depression for quite a while now, but has recovered from drop-dead lows found at the beginning of the year. More recently, the index has stuck range-bound, slipping to 18 for October, versus 19 in September. We suspect this next reading will stick at 18, but over the next month or so it could deteriorate further based on our analysis of housing (see pending article in coming days).

"If a big bank can't cover fifty cents for me, then I'll take my business elsewhere,"

At 10:00 AM, Jeffrey Lacker is due to address a Virginia group on the economic outlook. In DC proper, the House Financial Services Committee will discuss banks' abusive overdraft fees. "The Greek" has heard a lot about this on the streets of New York from disgruntled bank customers suffering to pay bills they do not need (shout out to Valerie, my good friend who pointed this out to me recently). Guess what, I'm in agreement. The last thing poor people need is a fee for a fifty cent overdraft. "If a big bank can't cover fifty cents for me, then I'll take my business elsewhere," quoting Val; and she did! Problem is, these fees are commonplace and very few banks are capitalizing on an opportunity to win customers (by eliminating them!). I guess we folks who care about silly things like fees are small fish... Well then, Congress better look out for us! Call your Congressman and put an end to oversized and unfair fees for small short-term overdrafts!

Earnings Drivers

Tuesday's EPS reports include Acorn International (NYSE: ATV), Astro-Med (Nasdaq: ALOT), Autodesk (Nasdaq: ADSK), Canadian Solar (Nasdaq: CSIQ), China Distance Education (NYSE: DL), China Precision Steel (Nasdaq: CPSL), China Ritar Power (Nasdaq: CRTP), China Sky One Medical (Nasdaq: CSKI), China-Biotics (Nasdaq: CHBT), Concur Technologies (Nasdaq: CNQR), Covidien PLC (NYSE: COV), E-House Holdings (NYSE: EJ), Edap TMS (Nasdaq: EDAP), GigaMedia (Nasdaq: GIGM), Home Depot (NYSE: HD), Jacobs Engineering (NYSE: JEC), Jinpan Int'l (Nasdaq: JST), Keithley Instruments (NYSE: KEI), La-Z-Boy (NYSE: LZB), Planar Systems (Nasdaq: PLNR), Retalix (Nasdaq: RTLX), Saks (NYSE: SKS), Salesforce.com (NYSE: CRM), Sypris Solutions (Nasdaq: SYPR), Target (NYSE: TGT), The TJX Cos. (NYSE: TJX), ULURU (AMEX: ULU), VanceInfo Technologies (NYSE: VIT) and WuXi PharmaTech (NYSE: WX).