Week Ahead: Closing the Year of Plenty

In absolute terms, 2009 was a year of plenty, though stocks are still roughly 50% off recent times' highs.

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Yet another shortened holiday week is in store, but trading volume should tick a bit higher as last minute end-of-year jockeying drives the movement of some shares. If you are holding losers in this year of plenty, you might try the ponies instead of stocks, or maybe even the lottery. The few dogs among you will be selling those losers, if you have not already, and others among you will be moving the shares of yearly winners that still carry long-term capital losses. Still, the other side of the argument is that perhaps we booked enough losses last year to last us through 2009 plus some. In any event, the week is a relatively light one on the economic and corporate news front, as holiday good cheer, or downright depression, will keep most folks focused elsewhere.

Week Ahead - Closing the Year of Plenty

Monday

A quiet day follows up the long weekend. Look for the Bank of Israel to make its latest monetary policy announcement. Hong Kong will auction two large residential land positions in a suburban region, marking the first such sale in two years. The day's earnings schedule includes news from Carter's (NYSE: CRI) and Cal-Maine Foods (Nasdaq: CALM).

Tuesday

Last week's ICSC Weekly Same-Store Sales data showed a modest 0.4% year-over-year gain for the week ending December 19; and sales improved 0.6% on a weekly basis. This year's snow storm likely played some havoc with the Christmas week, so we will be curiously watching to see if weather related lost sales were made up in the final days before Christmas. Look for this data in the pre-market.

S&P Case Shiller's Home Price Index is due for release at 9:00 a.m. Recall, this data is two-month lagged and so relatively useless, in my view… September's report showed further gains in pricing. Prices of homes within Shiller's 10-City Composite improved 0.4% through the month, though still declined 8.5% against the prior year period. The next couple of months' data may be skewed by the previously anticipated expiration of the First-Time Homebuyer Tax Credit; though it was later extended and expanded. The credit has provided a boost to housing (read crutch), and has helped stabilize inventory (excluding the Foreclosure Overhang) and pricing.

The Conference Board will report on Consumer Confidence at 10:00 a.m. Tuesday morning. December's reading follows a slight improvement in November, when the index moved up fractionally to 49.5, from 48.7 in October. Holiday cheer, or too much cinnamon beer, should have the index somewhat improved this month. Still, with the labor market far from vibrant, we would not expect a new year's jubilee just yet. Economists forecast a healthy bump up to 53.0 though, which on a relative basis, should prove enthusing to stocks.

State Street's (NYSE: STT) Investor Confidence Index is up for December report at 10:00 a.m. This measurement of investor risk taking slipped significantly in November, to 100.8, from 108.4 in October.

The earnings slate is empty for Tuesday, but China National Chemical Engineering has its Shanghai IPO planned.

Wednesday

The Mortgage Bankers Association is taking the week off, so look for its weekly mortgage applications survey on January 6, when it will report on last week's data and the current period simultaneously.

The Chicago Purchasing Managers Index is due for report at 9:45 a.m. The Index improved in November, to 56.1, but economists are looking for moderation this month, to 54.9. Recall, readings above 50 signify expansionary activity. This Midwest measure will help economists tell whether this month's New York region weakness or Philadelphia area strength was symbolic for the whole of the country. Last month, Chicago New Orders improved to 62.8.

The EIA produces its Petroleum Status Report at 10:30. Data for the week ending December 18 showed crude oil inventory declined by 4.9 million barrels; this while OPEC kept production rates steady, despite production steadily coming on line in Iraq. Total Motor Gasoline inventory decreased by 0.9 million barrels last week, and distillate fuel inventories fell by 3.1 million barrels. Gasoline stocks likely fell on holiday travel and shopping activity, while fuel oil demand in the Northeast likely weighed on distillate stores. Both seasonal factors likely played true again in the current reporting period.

Thursday

The last trading day of 2009 is upon us! Markets in Japan, Brazil, Germany, Italy and Switzerland will already be closed for the day while traders in France, the Netherlands and the United Kingdom get a shortened session to work with. Frenchmen have until the end of the day to declare Swiss bank accounts, so the nation's elite are on suicide watch. Whether declared or discovered, expect some of the names to prove scandalous… The US bond market closes at 2:00 p.m.

Weekly Initial Jobless Claims are due for release at their usual 8:30 morning report. Jobless Claims fell to 452K in the week ending December 19, a marked improvement from 480K the week before. The four-week moving average improved to 465,250.

The EIA reports on Natural Gas Inventory at 10:30. Last week's data showed another sharp draw of inventory (net 166 Bcf) for the week ending December 18. Stocks were still 395 Bcf above the five-year average for this time of year. We told you last week that seasonal draw logically ensues from increased holiday season electricity usage both in commercial and residential centers.

Look for earnings from Delta Plc (LSE: DLTA.L). Today, Ford Motors (NYSE: F) and General Motors turn over control of their hourly workers' health care to the United Auto Workers Union (UAW). Disney (NYSE: DIS) is due to close on its savvy acquisition of Marvel Entertainment (NYSE: MVL). Taro Pharmaceuticals (OTC: TAROF.PK) holds its annual meeting while under attack by significant shareholder Sun Pharmaceuticals of India.

Friday

Happy New Year! Markets are closed around the world for the turnover to the new decade. Starting in 2010, Spain will take over the presidency of the European Union, and Canada takes over the G-8.



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