Egyptian Tremors

A New Day Dawning

A week of rioting across Egypt have placed the future of President Hosni Mubarak in question. Egypt, the leader of the Arab World, now faces a crisis that may very well signal the closing of an old and the opening of a new chapter in Egyptian history.

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Egyptian Tremors

Egyptian protesters are calling for President Mubarak to step down and to open up the political system. Protestors also want solutions to end severe unemployment and widespread corruption. Unlike protests in the past, this week's protests are centered squarely on economic and political issues. What has taken the ruling establishment by surprise are the continuing and growing calls for Mr. Mubarak to resign and leave office (and the country).

Riots are occurring in Al-Qahira (Cairo), Al-Iskandriya (Alexandria), and Asyut, Port Said, Al-Arish, Suez, Nasr City, Dumyat, Mansoura and others.

Mr. Mubarak became President on October 6, 1981, succeeding Anwar el-Sadat after the latter's assassination. Mr. Mubarak's tenure has included a stagnant economy, loss of stature both in the Arab and Islamic world and a governing bureaucracy that is very corrupt. Egyptians have been frustrated by their lack of jobs, access to jobs and economic opportunities.

Over 50% of Egypt's 80 million people are under age 30; many have never known neither any other ruler other than Hosni Mubarak, nor the dominance of the ruling National Democratic Party (NDP). Mubarak has won four elections since assuming office, with several of those elections being questioned as to their integrity. (The term of office for the Egyptian president is six years). Dissent of the regime is not tolerated. A state of emergency has been in place since President Sadat's assassination in 1981.

The state of emergency was originally instituted to combat "radical" Islamists associated with Sadat's murder. Since, however, it has been widely applied against all challengers to the regime. Those who challenge the rule of the NDP, or are seen to threaten the principals of the 1952 Officers' Revolution (brought about by Gamal abd El-Nasir), face prosecution and / or persecution by the government.

Nasir's revolution sought to modernize Egypt. The goals of the Officers' Revolution were to make Egypt a self-sufficient, secular leader in the Arab world. The leaders of the 1952 Officers' Revolution were from the Egyptian military, probably the most progressive and modern institution in Egypt. Gamal abd El-Nasir, Anwar el-Sadat and Hosni Mubarak were officers prior to becoming President. Like the U.S., the President of Egypt is also the Commander-in-Chief of the Egyptian military.

As calls for Mr. Mubarak's resignation continue and riots take hold in most Egyptian cities, the future of Egypt becomes cloudy. Can Mubarak continue to hold power? He has dissolved his cabinet and promised reforms. This has not placated the protestors.

Recent reports from Egypt include looting and attacks on the Interior Ministry. Protestors so far, have not been attacked by the military. In many instances, protestors are riding on military vehicles without incident. Also of note is that the protests have not taken on any anti-American or anti-Western tones. This is, as of now, a solely domestic matter.

Two things are notable about Egypt's protests. First, is that the military is holding back. Other than protecting government facilities and key economic assets the military has had little involvement in the protests or (at least not seen in public) in the political offices. Whether or not the military acts (on its own) or is provoked into acting is yet to be seen.

Second, is that like Tunisia (and Iran in 2009); this is a "mobile and electronic revolution". Protestors are using cell and satellite telephones and the internet to communicate, and to set and plan protests. Despite a shutdown of the nation's mobile communications networks, Egyptians are able to communicate and stage protests (many have circumvented the government's blockages). Vodafone (Nasdaq: VOD) and Mobinil remain active in numerous locations across Egypt.

Whether or not a regime change occurs, we are witnessing the beginning of a new era in the Middle East. The "street" is awakening. This is the third set of protests to break out in the Middle East where the people themselves have taken to the streets to seek and establish change: Iran in 2009, Tunisia in mid-January 2011 and now Egypt. Similar riots have occurred in Yemen, Lebanon, and Jordan this past week.

Tunisians overthrew President Zine el-Abidine Ben-Ali after nearly thirty years of one party rule. President Mubarak may very well be next.

The people in these protests are and have been motivated by economic frustration and political repression, coupled at times with political and institutional corruption. A new tool in facilitating the protests (and revolution) in Tunisia's case is the cell phone and the internet. One cannot but help but wonder at the power of the pocket sized phone or laptop. Earlier revolutions were fought with guns and bullets, will the new revolutions be fought with flip tops and send buttons?

Whatever change lies ahead for Egypt is yet to manifest itself. Egypt is critical to the U.S. and the Middle East, due to the Suez Canal, Egypt's commitment to the "war on terror" and the peace existing between Israel and Egypt.

Should Mubarak prevail, the inevitable will only be delayed. At some point in the future, a new leader will succeed him. Whether be through the military, an electoral process or some form of revolution, a new day in the Middle East is soon rising.



This article should interest investors in: Market Vectors Egypt Index ETF (NYSE: EGPT), Egyptian Mobile (OTC: EGYMF.PK), Telecom Egypt (OTC: TEGPY.PK), T. Rowe Price Africa & Middle East (Nasdaq: TRAMX), T. Rowe Price Institutional Africa & Middle East (Nasdaq: TRIAX), Cellcom Israel (NYSE: CEL), Aberdeen Israel Fund (AMEX: ISL), Northrop Grumman (NYSE: NOC), Raytheon (NYSE: RTN), Alliant Techsystems (NYSE: ATK), Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA), NYSE: IWM, NYSE: TWM, NYSE: IWD, Honeywell (NYSE: HON), General Dynamics (NYSE: GD), Rockwell Collins (NYSE: COL), Goodrich (NYSE: GR), L-3 Communications (NYSE: LLL), SAIC (NYSE: SAI), FLIR Systems (Nasdaq: FLIR), EMBRAER (NYSE: ERJ), Spirit Aerosystems (NYSE: SPR), BE Aerospace (Nasdaq: BEAV), TransDigm Group (NYSE: TDG), CAE (NYSE: CAE), Hexcel (NYSE: HXL), Esterline Technologies (NYSE: ESL), Teledyne Technologies (NYSE: TDY), Curtiss-Wright (NYSE: CW), HEICO (NYSE: HEI), Triumph Group (NYSE: TGI), Orbital Sciences (NYSE: ORB), AAR Corp. (NYSE: AIR), Kaman Corp. (Nasdaq: KAMN), AeroVironment (Nasdaq: AVAV), Smith & Wesson (Nasdaq: SWHC), DigitalGlobe (NYSE: DGI), GenCorp (NYSE: GY), Hawk (AMEX: HWK), LMI Aerospace (Nasdaq: LMIA), Exxon Mobil (NYSE: XOM), Halliburton (NYSE: HAL), Schlumberger (NYSE: SLB), ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX), Noble Energy (NYSE: NBL), Baker Hughes (NYSE: BHI).

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.

Q4 2010 GDP Tosses Its Government Crutches

Making It On Its Own

The Bureau of Economic Analysis (BEA) today reported on fourth quarter Gross Domestic Product (GDP), and the news was mixed. While the pace of economic growth sped up from Q3, it missed economists' forecasts. Also, according to the Treasury Secretary, the pace of growth is not enough to lift the labor situation, and so the recovery is threatening to be a jobless one. That said, it appears the economy has gained its footing, and will not be needing its government crutches any longer (or until the next hacking at the knee).

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Q4 2010 GDP Report

The BEA reported that Q4 GDP increased 3.2% over Q3, continuing the nascent economic recovery. Still, we have to question the stability of economic expansion, given that it is coming without a commensurate increase in jobs. When such a large portion of the country is underemployed, and while credit is less available to risky borrowers, you can expect a dampening effect on GDP growth.

The pace of economic growth exceeded that of Q3, which at final tally, was marked at 2.6%. However, economists surveyed by Bloomberg had forecast a pace of 3.5% at the consensus. Thus, investors found conundrum as to whether the news was good or bad today. Then Treasury Secretary Geithner commented on the quarter's result from Davos, Switzerland, where he was attending the World Economic Forum. Geithner helped settle that debate in saying, "It's not an expansion that's going to offer a rapid decline in unemployment." According to economists, we need greater than 3% growth to create jobs, and the higher above 3% we get, the more job creation we will have. But if unemployment threatens consumer demand, which historically contributes 70%+ of GDP, well then we'll need to find a driver from somewhere else. That's certainly why the President is seeking to get it from international trade, but will that change lead to the employment of more Americans? Some say yes it will and is…

Still, Geithner called the recovery a "sustainable expansion," and that has got to be better than a government propped up one, which we saw for most of the first year out of the red. It is certainly better than recession, and beats the hell out of the terrifying financial crisis just survived (by some, or so we hear).

Usually, the devil is in the details of all economic reports, so we thought we would get to unveiling those demons for you. With our cross at the ready, we discovered instead only good angels. The drivers of fourth quarter growth were personal consumption expenditures, an archangel of a factor, growing 4.4% - the fastest rate since the start of 2006; exports, a saint prayed for; and nonresidential fixed investment, a miracle desperately sought. And more good news: there was a decrease in the synthetic driver of federal government spending.

Most of the media, government gurus and well-paid econo-speak-easies (I can take liberty with language, cause it's my blog) were pleased with the pace of inflation too, as Q4's price index, excluding food and energy, increased by 1.1%, versus the 0.4% increase in Q3. Taking food and energy into account, because it matters to some (like say Tunisians and anywhere where the price of commodities make up a significant portion of income), well then prices rose more significantly, up 2.1% (after a 0.7% increase in Q3).

The Greek is extremely concerned about the burgeoning demand for scarce resources and the dilution of fiat currency that together threaten to transfer these prices through to finished goods. It may not be so farfetched to imagine New Yorkers on the streets before too long, protesting hikes in MTA fares, not dissimilarly to Tunisians protesting sugar prices. But for now, we suppose you can take solace in the growth of GDP, however, be warned that this "advance estimate" of GDP is often significantly revised.



Article should interest investors in Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), State Street (NYSE: STT), Janus (NYSE: JNS), T. Rowe Price (Nasdaq: TROW), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM), Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), General Employment Enterprises (NYSE: JOB) and TeamStaff (Nasdaq: TSTF).

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.

Jobless Claims Spike to 454K

Blame it on the rain... or snow

The Labor Department is pinning this week's spike in Jobless Claims on the bad weather. While the amount of snow was enough to close government offices across New York, Boston and Philadelphia, like the unemployment office, I doubt any amount of fluff is enough to keep a poor man away from his check or a Greek reader away from the truth.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Jobless Claims Spike!

Weekly Initial Jobless Claims, which had been flirting with the psychological threshold of 400K for weeks, reconsidered with conviction today. Jobless Claims spiked through the period ended January 22, 2011, rising by 51,000 over the prior week, to 454K. The increase was so significant that it took the four-week moving average up by 15,750, to 428,750.

This week, we also saw the increase in the insured unemployment rate that we had expected to find last week. The rate increased a tenth of a point to 3.2% through January 15, and the count rose by 94,000, to 3.991 million. However, a recent survey showed that more employers are planning to increase hiring this year than at any time over the last decade. Meanwhile, the December NFIB survey showed small business lost confidence at last check. And be warned, next week's Employment Situation Report should show an increase in the unemployment rate in January.

Much of the blame for this past week's jobs demise is being attributed to weather, but it's also a seasonally slow period for hiring, or for doing much of anything. You might have noticed based on traffic to your favorite restaurant in January. Weather might just be a factor, given the amount of snowfall seen through various storms in the Northeast, which shut down government offices, including the Unemployment Office. In any event, the Jobless Claims count offered a dampener for stocks today, with the Dow unchanged at the hour of publishing here.

FYI:

The highest insured unemployment rates in the week ending Jan. 8 were in Alaska (7.5 percent), Oregon (5.4), Wisconsin (5.4), Idaho (5.3), Pennsylvania (5.2), Montana (5.1), Puerto Rico (5.0), Michigan (4.9), California (4.8), Connecticut (4.7), and New Jersey (4.7).

The largest increases in initial claims for the week ending Jan. 15 were in Florida (+6,646), Nevada (+242), and the Virgin Islands (+103), while the largest decreases were in New York (-28,714), Georgia (-19,429), North Carolina (-16,132), Pennsylvania (-14,859), and California (-14,309).



Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.OB), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM). The day’s earnings included Deere (NYSE: DE), Tiffany (NYSE: TIF), China Cord Blood (NYSE: CO) and Frontline (NYSE: FRO).

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.

Netflix (Nasdaq: NFLX) a Buy for Aggressive Investors

Stock Pick Long Idea

While not for the faint of heart, Netflix (Nasdaq: NFLX) shares look to me like a buy for aggressive capital. The company blew away fourth quarter EPS forecasts. Consensus estimates look too conservative, which have the effect of over-inflating the P/E and PEG ratios. Beware though that high growth and valuation bring with it sensitivity to news, and so any failing can be disastrous for capital.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Netflix (Nasdaq: NFLX) a Buy for Aggressive Investors

Netflix (Nasdaq: NFLX) shares jumped 10% after-hours Tuesday and were up 14% through the premarket morning, after the pioneer in the movie rental business beat the street with its quarterly earnings. Netflix grew EPS by 55% in its fourth quarter, with its $0.87 in EPS exceeding the analysts' consensus of $0.71 by 22.5%. The growth came on 34% revenue growth, which was short of but close enough to the analysts' consensus for the top line.

The blockbuster growth was driven by better than forecast subscriber growth. The company added 3.08 million new subscribers in the quarter, some 500K more than analysts had forecast. Netflix grew subscribers at a fierce rate of 18% from the third quarter, and at a count of 20.01 million, it can now boast the third largest US video subscription service, behind Comcast (Nasdaq: CMSCA) and DirecTV (Nasdaq: DTV).

Subscriber growth was certainly lifted by its late year launch of its unlimited streaming-only subscription plan. The company's expansion into Canada, while generating an international operations operating loss momentarily, will be followed shortly with a launch into a second international market. I'll go ahead and speculate that to be the United Kingdom, because it just makes sense due to language, custom and technological consistencies. Netflix estimates that it will take about 8 quarters to turn that second market profitable; we say it will happen quicker, as is occurring with the Canadian market. We expect Netflix is underestimating its brand power and the nearness of the global community.

The leverage of revenue over operating expenses allowed for operating margin expansion and operating profit growth of 47%. Since the company had been buying back shares, the lower count allowed for even faster EPS growth. It appears the company also produced the most free cash flow in its history this past quarter.

We find Netflix's partnership with Amazon.com (Nasdaq: AMZN) quite interesting. What already appears to be a complementary fit, is now working together, and we have to wonder if either Netflix or Amazon knew exactly what they were doing by engaging the other when this deal formed. In case you were not aware, Netflix has shifted from its own servers to AWS servers, and things got a whole lot easier for them since.

I must say that I've read a lot of earnings releases over the years, and have rarely come across the tone found in Netflix's news. Perhaps this is the direction we're heading, casual conversation on corporate releases, but sometimes people and corporate executives speak perfectly and the words are all made up (God knows I've seen too much of that on Wall Street). One thing I like about the Netflix team though is the candid conversation, and perhaps this is why the company does not take live questions on its conference calls; they might accidentally say too much to the rightly posed query.

The management team of this firm might not be up to par with the task at hand, or perhaps it is precisely because the CEO and Founder cares about his company so much that it will continue to astound. Usually though, these guys are pushed out, and it's unfortunate, because these companies are their babies. I feel I should say congratulations to Netflix's founder, for thinking outside the box, and then doing it again when the box changed. All small businessmen should be inspired by this success. Still, I will say that the trouble with the forecasting we saw this quarter, which resulted in a wildly positive surprise and stock surge, might someday lead to a bad miss or reflect a poor decision.

That said…

Given the big miscalculation by analysts this past quarter, let's assume the high estimate for 2011 is correct, and NFLX will earn $4.55. Let's say the stock opens where after hours trading took it, at $202. That gives NFLX a P/E ratio of roughly 44 on the forward estimate. The growth that estimate projects for the company in 2011 is 54%, and it would seem, if this or somewhere near is more correct than the conservative consensus estimates out there, then the high flying stock might not be overvalued.

Whenever you get an unsustainable growth rate, though, and a P/E value that nearly matches it, you're going to find volatility and sensitivity to news. Thus, even though the PEG ratio might be 0.8 when applying that one-year growth, or close to 1.0 for a lesser three-year growth rate, owning the shares is not for the faint of heart. That said, the run up after hours appears justified to me, and the stock still seems a proper fit for aggressive investors.



Disclosure: I have no interest in any mentioned stock.

This article should interest investors in Disney (NYSE: DIS), DreamWorks Animation (NYSE: DWA), Cinemark Holdings (NYSE: CNK), Regal Entertainment (NYSE: RGC), RealD (NYSE: RLD), Lions Gate Entertainment (NYSE: LGF), Rentrak (Nasdaq: RENT), Carmike Cinemas (Nasdaq: CKEC), LYFE Communications (OTC: LYFE.OB), New Frontier Media (Nasdaq: NOOF), Public Media Works (OTC: PUBM.OB), Independent Film Development (OTC: IFLM.OB), Point 360 (Nasdaq: PTSX), Seven Arts Pictures (Nasdaq: SAPX), Affinity Medianetworks (OTC: AFFW.OB), Time Warner (NYSE: TWX), News Corp. (Nasdaq: NWSA), Vivendi (Paris: VIV.PA), Liberty Starz Group (Nasdaq: LSTZA), McGraw-Hill (NYSE: MHP), Pearson Plc (NYSE: PSO), John Wiley & Sons (NYSE: JW-A, NYSE: JW-B), Scholastic (Nasdaq: SCHL), Courier (Nasdaq: CRRC), Noah Education (NYSE: NED), Peoples Educational Holdings (Nasdaq: PEDH), Barnes & Noble (NYSE: BKS), Amazon.com (Nasdaq: AMZN), Books-A-Million (Nasdaq: BAMM) and Borders (NYSE: BGP).

Other of the day's corporate EPS Wednesday came from from Qualcomm (Nasdaq: QCOM), Abbott Labs (NYSE: ABT), Boeing (NYSE: BA), Symantec (Nasdaq: SYMC), Teradyne (NYSE: TER), Citrix Systems (Nasdaq: CTXS), Astoria Financial (NYSE: AF), BOK Financial (Nasdaq: BOKF), Canadian Pacific Railway (NYSE: CP), Cohu (Nasdaq: COHU), ConocoPhillips (NYSE: COP), Cooper Industries (NYSE: CBE), Covance (NYSE: CVD), E*Trade (Nasdaq: ETFC), Eastman Kodak (NYSE: EK), General Dynamics (NYSE: GD), International Shipholding (NYSE: ISH), Kyocera (NYSE: KYO), Legg Mason (NYSE: LM), Logitech International (Nasdaq: LOGI), LSI Corp. (NYSE: LSI), McCormick & Co. (NYSE: MKC), MeadWestVaco (NYSE: MWV), Netflix (Nasdaq: NFLX), Occidental Petroleum (NYSE: OXY), Rockwell Automation (NYSE: ROK), SAP (NYSE: SAP), SEI (Nasdaq: SEIC), Southern Co. (NYSE: SO), Starbucks (Nasdaq: SBUX), Tractor Supply (Nasdaq: TSCO), United Technologies (NYSE: UTX), Valero Energy (NYSE: VLO), WellPoint (NYSE: WLP), and Xerox (NYSE: XRX).

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.

Housing Stocks Sniffing Around for Higher Ground

New Home Sales Data Set Housing Stocks in Motion

Stronger than expected New Home Sales in December has housing stocks higher Wednesday, but whether the lift will last beyond the short short-term is still unclear. Yes, while there is hungry money sniffing for the turn in housing - in order to prosper on the inflection point and the beaten down sector - this latest spike is partly an expression of greed and speculation, and could be too early to hold.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative tickers: NYSE: BAC, OTC: FMCC.OB, OTC: FNMA.OB, NYSE: GS, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: SRS, NYSE: URE, NYSE: IGR, NYSE: XIN, Nasdaq: RYHRX, Nasdaq: TRREX, NYSE: TOL, NYSE: HOV, NYSE: DHI, NYSE: BZH, NYSE: LEN, NYSE: KBH, NYSE: PHM, NYSE: NVR, NYSE: GFA, NYSE: MDC, NYSE: RYL, NYSE: MTH, NYSE: BHS, NYSE: SPF, NYSE: MHO, AMEX: OHB, NYSE: VNQ, NYSE: PNC, NYSE: JPM, Nasdaq: HOFT, NYSE: ETH, NYSE: PIR, NYSE: WSM, NYSE: HD, NYSE: LOW, AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Nasdaq: AVTR, NYSE: AIV, NYSE: EQR, NYSE: AVB, NYSE: UDR, NYSE: ESS, NYSE: CPT, NYSE: SNH, NYSE: BRE, NYSE: HME, NYSE: MAA, NYSE: ELS, NYSE: ACC, NYSE: CLP, Nasdaq: AGNC, NYSE: SUI, NYSE: AEC, NYSE: PMT and AMEX: TWO, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ

Housing Stocks Sniffing Around for Higher Ground

New Home Sales were reported running at an annual rate of 329K in December, above expectations for 300K, based on Bloomberg's survey of economists. In percentage terms, the pickup in rate of sales was an impressive 17.5% over the revised November rate of 280K (from 290K), but when small numbers are compared, percentages are exaggerated. The absolute rate of sales, at 329K, still represents a pathetic state of affairs, despite the season being measured here. This is illustrated through the comparison of this December with the prior year period; that measure shows New Home Sales are actually down 7.6% from a run rate of 356K last year.

Other data of late around housing has been mixed on a relative basis and is still weak in absolute terms. Of course, change of direction and velocity matter more than absolute, but that change has to be sincere for it to provide a long-term basis for stock purchase.

Today, the Mortgage Bankers Association reported Mortgage Activity fell. The Market Composite Index of activity declined 12.9% for the period ended January 21. The decline came on 15.3% lower Refinance activity and 8.7% lower Purchase activity. In fact, the Purchase Index was at its lowest level since October. Given, this kind of activity during this time of year can be influenced by seasonal issues, like excessive storm activity, we should not read too much into it.

S&P Case Shiller showed ongoing pricing weakness. While this is reflective of softness in the measured November period, it is actually prospective for the industry's outlook. At some point, price will meet demand and drive it. The Census Bureau estimates 321K new homes were sold in 2010, down from 2009's 375K. It seems likely that 2010 marked the bottom in the new home market, and so the hungry speculators have good enough reason to prospect. Still, foreclosure activity and distressed property flow is still heavy, and represents an obstacle for homebuilders.

Existing Home Sales were reported last week for December up to a rate of 5.28 million, exceeding the November run rate of 4.7 million. It also surprised economists' views, who, as a consensus, were looking for a gain to only 4.9 million. Housing Starts data for December were down though, to an annual rate of 529K, from 553K. What's worse is that single-family starts were down from November, to a rate of 417K, from 458K. Permitting, however, which is more important to readers here, spiked up to 635K, from 530K. Since this directly measures the new construction arena, it is certainly on housing investors' minds. However, closer inspection shows that permitting for single-family home construction, most relative to homebuilder shares, rose at a lesser rate, up only 5.5%, to 440K.

Thus, the data is inconclusive. While bottom looks to have been marked, that possibility does not necessarily signify that new growth is in store. Now, the housing stocks will precede that eventual business growth in claiming capital ground, due to the type of prospective betting that is occurring today. Thus, the question to ask is will near-term data flow support a case for steady gains? I have to believe that remains suspect. So, while shares of Toll Brothers (NYSE: TOL +1.4%), Hovnanian (NYSE: HOV +3.4%), D.R. Horton (NYSE: DHI +1.0%) and others are on the rise today, you can expect their movement through the next year's clarification to be choppy. Thus, there's trading opportunity, versus investment at the moment, and you might even sell on the day's strength and take a trading profit in the short short-term if you can get it.



Editor's Note: Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), 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 Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (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), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO).

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.

Pro-Business Obama

Obama's Approval Rating is Gaining

Who is this guy flying around in Marine One and giving speeches on podiums reserved for that liberal loose-canon the Republicans were getting ready to unseat in 2012? Oh hold on, that's pro-business Obama, the guy who is taking back opinion poll points like the Bush boys on Iraq.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

(Tickers: NYSE: BAC, NYSE: JPM, NYSE: GS, NYSE: C, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: PNC, NYSE: STT, NYSE: JNS, Nasdaq: TROW, NYSE: GE, NYSE: WMT, NYSE: MCD, NYSE: AA, NYSE: AXP, NYSE: BA, NYSE: CAT, Nasdaq: CSCO, NYSE: CVX, NYSE: DD, NYSE: DIS, NYSE: HD, NYSE: HPQ, NYSE: IBM, Nasdaq: INTC, NYSE: JNJ, NYSE: KFT, NYSE: KO, NYSE: MMM, NYSE: MRK, Nasdaq: MSFT, NYSE: PFE, NYSE: PG, NYSE: T, NYSE: TRV, NYSE: UTX, NYSE: VZ, NYSE: XOM, Nasdaq: PAYX, NYSE: MAN, NYSE: RHI, Nasdaq: JOBS, NYSE: MWW, NYSE: KFY, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, Nasdaq: KELYA, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, NYSE: JOB, Nasdaq: TSTF, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ)

Pro-Business Obama

It looks as though the President scored pretty well last week, even by Wall Street investment banking standards. In fact, I suppose the President would be raking in a huge bonus in short time on his accomplishments, had he a VP position at Goldman Sachs (NYSE: GS) or Morgan Stanley (NYSE: MS). As farfetched as that is, he is still going to get some credit for the roughly 60 business deals secured in a whirlwind trip Chinese President Hu Jintao took through the Midwest; though those deals were clearly part of a pre-prepared effort, and the President's role was somewhat questionable. Still, it's his economic panel that his administration put together, and that he is making decisions with, that is helping make the inroads for American-made exports into China, India and beyond.

That's more than the GOP can say. Under the last Republican regime, our government was more focused on the cost saving, profit margin boosting opportunities American corporations could find via China, and let it be at the cost of American jobs.

The United States exports more than $100 billion in goods and services to China per year. According to the President, as a result of the deals completed this past week, US exports to China will increase by more than $45 billion and China's investment in America will grow by several billion dollars. More importantly to Midwesterners, who were very likely seething when they first heard Hu was coming, the deals will support some 235K American jobs, many of which will be in manufacturing. In related news, Mitt Romney had a bad day and Michigan ain't looking like a given no more (BTW: I supported Romney, and ended up voting for Obama).

His latest pre-stump speech has Obama talking also about his South Korean trade deal, which will support more than 70K new American jobs. Trade deals with India, including one arranged by GE (NYSE: GE), will generate $10 billion more for American businesses while creating more than 50K new American jobs. While the President was big in China, he hit Schenectady, NY too, visiting a GE plant there that is manufacturing steam turbines and generators for a project in India, which supports more than 1600 jobs in New York.

Obama's got a big goal too: he wants to double exports in five years time. He says, "China sells their stuff here, and that's alright, but we want them to buy our stuff too. We need two-way trade." He says, "We've got to sell outside of America, because that's where the customers are. It's that simple." And in the meantime, he is sneaking up on the GOP and taking away the big anti-business card that they had hoped to use against the President in 2012.

Now I know many of you small business chums will weigh in with your health care complaints, but somehow you get the feeling he might just find a way to help the small businessman in a bigger way too before he's through. So far, the tax incentive provided to firms for hiring guys, just isn't inspiring the hiring. I've been pointing out why over recent months, along with my old Dean from Temple University, Bill Dunkelberg, now Chief Economist of the National Federation of Independent Business (NFIB). No smart small businessman who wants to keep his shop operating is going to hire new help without the revenues to support them. In fact, in December, when the Small Business Optimism Index slipped, 33% of the small businessmen surveyed said sales were simply their greatest concern. Dunkelberg said that marked about the highest percentage the NFIB has ever measured. Thus, what the government has offered us up to now has come up just short of a solution to that key issue. But give the kid a minute, because he's focused now on his so-called weakness (business), and aiming for a vote of confidence in 2012.



Article should interest investors in Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), State Street (NYSE: STT), Janus (NYSE: JNS), T. Rowe Price (Nasdaq: TROW), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM), Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), General Employment Enterprises (NYSE: JOB) and TeamStaff (Nasdaq: TSTF).

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 Schedule - GDP, Housing Data, EPS Reports Key

Stock Market Schedule

This week's stock market schedule highlights the fourth quarter GDP report, several important housing data points and the continuing flow of EPS reports.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

(Tickers: NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ)

Stock Market Schedule - GDP, Housing Data, EPS Reports Key

Monday

While there were no economic reports scheduled for Monday, the National Association of Business Economics (NABE) released its January 2011 Industry Survey. The report offered good news, as the NABE said the number of businesses expressing hiring plans for 2011 was the highest seen in over a decade.

Standard & Poor's warned that downgrades of municipal bonds could increase in the near future, due to the financial pressures and obligations on municipalities.

The Saudi Oil Minister to OPEC issued comments that included speak on the possibility of production increases, and so oil prices moderated Monday.

Amgen (Nasdaq: AMGN) had a conference call with regard to its acquisition of BioVex. J.C. Penney (NYSE: JCP) had a call to discuss its strategic plans, which included the closing of several stores. The day's EPS schedule highlighted news from McDonald's (NYSE: MCD), Amgen, American Express (NYSE: AXP), Halliburton (NYSE: HAL), CSX (NYSE: CSX), Sealed Air (NYSE: SEE), Bank of Hawaii (NYSE: BOH), Ethan Allen (NYSE: ETH), ICICI Bank (NYSE: IBN), Mindspeed (Nasdaq: MSPD), Optical Cable (Nasdaq: OCCF), Packaging Corp. of America (NYSE: PKG), PetMed Express (Nasdaq: PETS), Sensata Technologies (NYSE: ST), SL Green (NYSE: SLG), Texas Instruments (NYSE: TXN), VMware (NYSE: VMW), Volterra (Nasdaq: VLTR) and Zions Bancorp (Nasdaq: ZION).

Tuesday

Tuesday brings two separate housing price metrics, including the S&P Case Shiller and the FHFA measures. In our view, both play second fiddle to the pricing data found in the Existing Home Sales Report, which was released last week. The National Association of Realtors (NAR) data showed the national median existing home price for all housing types fell about 1.0% against the prior year month, to a level of $168,800.

S&P Case Shiller will report on the month of October this week, but its data has reflected the price decline we've seen in the NAR data, just a couple months later. The FHFA data is not much better, as it will report on November. Economists don't bother to forecast this late data, as Bloomberg and others have no consensus estimates posted. Nonetheless, the reports will garner media attention and deserve yours, I suppose.

The Conference Board will report on Consumer Confidence for this January at 10:00 AM. Confidence unexpectedly slipped in December, catching many by surprise, since consumer activity seemed to be solid. We surmised here that perhaps consumers were experiencing buyer's remorse, after spending beyond their means and while still underemployed. The consensus of economists surveyed by Bloomberg anticipates the confidence index could gain to 54.3 this month, up from the 52.5 mark posted in December.

The Weekly Same-Store Sales data complement the consumer confidence report well Tuesday. Both the International Council of Shopping Centers (ICSC) and Redbook report before the market opens on Tuesday. Last week's ICSC data, covering the period ended January 15, showed sales fell 0.1% week-to-week and inched up 1.4% against the prior year comparable period. Redbook saw a 2.5% year-over-year sales increase, still marking a slower rate of period relative growth than that seen through the year in 2010. Comps are of course normalized now, and the economy is not all that much better.

The Bank of Japan (BOJ) is expected to keep its monetary policy unchanged when it determines course Tuesday. The US Federal Open Market Committee (FOMC) begins its two-day meeting.

In the evening, be sure to catch President Obama's State of the Union Address at 9:00 PM. Early whisperings are that the Congressional members might sit together, rather than separated by party line. The President's focus is likely going to be on restoring business, international trade, jobs and considering the fiscal budget. He will remind Americans why his health care legislation was passed and for whom, and we suspect geopolitical commentary will be hopeful, but strong. Look for a request for bipartisanship as well, given his hope for re-election and his need for GOP support to get things done over the next two years.

Nielsen Holdings is expected to go public Tuesday. Navistar International (NYSE: NAV) and Lagardere (Paris: MMB.PA) hold investor meetings. IPO lockup curbs expire on Molycorp (NYSE: MCP). Markets are closed in Brazil, but look for EPS report s in the US by the likes of EMC (NYSE: EMC), Altera (Nasdaq: ALTR), CA, Inc. (NYSE: CA), Tellabs (Nasdaq: TLAB), Quest Diagnostics (NYSE: DGX), Waters (NYSE: WAT), 3M (NYSE: MMM), A.O. Smith (NYSE: AOS), AK Steel (NYSE: AKS), Alaska Air (NYSE: AKA), Amdocs (NYSE: DOX), Baker Hughes (NYSE: BHI), BlackRock (NYSE: BLK), Boston Properties (NYSE: BXP), Brinker International (NYSE: EAT), Broadvision (Nasdaq: BVSN), Canadian National Railway (NYSE: CNI), Coach (NYSE: COH), Corning (NYSE: GLW), DuPont (NYSE: DD), Gilead Sciences (Nasdaq: GILD), Harley-Davidson (NYSE: HOG), Iberiabank (Nasdaq: IBKC), Jacobs Engineering (NYSE: JEC), Johnson & Johnson (NYSE: JNJ), KeyCorp (NYSE: KEY), Kimberly-Clark (NYSE: KMB), Norfolk Southern (NYSE: NSC), Peabody Energy (NYSE: BTU), Rayonier (NYSE: RYN), RF Micro Devices (Nasdaq: RFMD), Siemens (NYSE: SI), Travelers (NYSE: TRV), United States Steel (NYSE: X), Verizon (NYSE: VZ) and Yahoo (Nasdaq: YHOO).

Wednesday

Three important drivers impact the market Wednesday morning. First of all, the President's address has the ability to move specific sectors, like alternative energy and defense, and beyond. The Federal Reserve FOMC decision is due today, and the New Home Sales data also reaches the wire.

New Home Sales will be reported for the month of December at 10:00 AM. Last week's Existing Home Sales report showed a pick up in the annual rate of sales, but homebuilder shares still shrank through the week (NYSE: XHB). Economists look for New Home Sales to speed up slightly to a still slow rate of 300K annually, up from 290K reported in November.

The Mortgage Bankers Association's Mortgage Activity data complements home sales data well on Wednesday. Last week's report showed the MBA's Market Composite Index increased 5.0% for the period ending January 14. The Refinance Index gained 7.7%, while the Purchase Index fell 1.9%. Fresh data will be available before the market opens Wednesday.

The Fed's Federal Open Market Committee (FOMC) is expected to offer more of the same at 2:15 PM, a continuation of its QE2 effort and the maintenance of key interest rates in place at current levels. We've got a few new members in the Fed shuffle that could make for some interesting commentary when the meeting minutes are released.

The Congressional Budget Office will produce its annual budget and outlook. Treasury Secretary Timothy Geithner gets another invite to testify before the House Oversight Committee regarding the TARP program. Expect Geithner to get some business from the Congressional members with regard to his promise to report on China on time, which he promptly disregarded when the time came and passed… again.

A separate House meeting will hear testimony with regard to the Deepwater Horizon oil spill in the Gulf. Also, the CFTC is holding a meeting on its reform plans.

Davos, Switzerland takes center stage, with many of the world's financial leaders, economists, and government representatives meeting to discuss the problems of the world, etc. This event usually produces interesting discussion, like the trade of blame and debate by Turkish President Erdogan and Israeli President Peres a couple years ago.

The EIA Petroleum Status Report is due at 10:30 AM as usual Wednesday. Last week's report, covering the period ended January 14, showed crude oil inventory increased by 2.6 million barrels to a level above the upper limit of the average range. On Monday, an OPEC minister signaled that oil production could be hiked to keep prices tame. Gasoline inventory increased by 4.4 million barrels last week, and is above the upper limit of the average range.

Markets are closed today in Australia and India. The American corporate EPS schedule highlights news from Qualcomm (Nasdaq: QCOM), Abbott Labs (NYSE: ABT), Boeing (NYSE: BA), Symantec (Nasdaq: SYMC), Teradyne (NYSE: TER), Citrix Systems (Nasdaq: CTXS), Astoria Financial (NYSE: AF), BOK Financial (Nasdaq: BOKF), Canadian Pacific Railway (NYSE: CP), Cohu (Nasdaq: COHU), ConocoPhillips (NYSE: COP), Cooper Industries (NYSE: CBE), Covance (NYSE: CVD), E*Trade (Nasdaq: ETFC), Eastman Kodak (NYSE: EK), General Dynamics (NYSE: GD), International Shipholding (NYSE: ISH), Kyocera (NYSE: KYO), Legg Mason (NYSE: LM), Logitech International (Nasdaq: LOGI), LSI Corp. (NYSE: LSI), McCormick & Co. (NYSE: MKC), MeadWestVaco (NYSE: MWV), Netflix (Nasdaq: NFLX), Occidental Petroleum (NYSE: OXY), Rockwell Automation (NYSE: ROK), SAP (NYSE: SAP), SEI (Nasdaq: SEIC), Southern Co. (NYSE: SO), Starbucks (Nasdaq: SBUX), Tractor Supply (Nasdaq: TSCO), United Technologies (NYSE: UTX), Valero Energy (NYSE: VLO), WellPoint (NYSE: WLP), and Xerox (NYSE: XRX).

Thursday

Four economic reports clutter the morning Thursday. Look for the regular Weekly Initial Jobless Claims at 8:30 AM ET. Last week's data covering the period ended January 15 showed weekly claims eased back down to 404K, and the consensus is looking for 405K this week.

Durable Goods Orders are also due at 8:30 AM, and economists are looking for December orders to have risen by 1.5%, which compares against November's 0.3% drop (revised from -1.3%). This is a very volatile economic data point and regularly misses the mark wildly.

The Pending Home Sales Report is up for the month of November. The National Association of Realtors' index rose in November, continuing a five month trend, but it remains below the prior year level. Improvement has been gradual and not really all that noteworthy as yet; meanwhile other signs have indicated continued soft real estate pricing and sales activity.

The EIA reports on the status of Natural Gas at 10:30 AM. Last week's report covering the period ended January 14 showed working gas in storage decreased by 243 Bcf to a level 51 Bcf above the five-year average.

The Financial Crisis Inquiry Commission is set to produce its report Thursday.

In corporate news, El Paso (NYSE: EP), Flowserve (NYSE: FLS), Wendy's (NYSE: WEN), Repsol (NYSE: REP) are each scheduled to meet with investors and analysts. The EPS schedule highlights news from Bristol-Myers Squibb (NYSE: BMY), Procter & Gamble (NYSE: PG), Amazon.com (Nasdaq: AMZN), QLogic (Nasdaq: QLGC), SanDisk (Nasdaq: SNDK), Baxter International (NYSE: BAX), 1-800-Flowers.com (Nasdaq: FLWS), Altria (NYSE: MO), Ametek (NYSE: AME), AT&T (NYSE: T), Astrazeneca (NYSE: AZN), Ball Corp. (NYSE: BLL), Blyth (NYSE: BTH), Bridge Capital (Nasdaq: BBNK), Briggs & Stratton (NYSE: BGG), Caterpillar (NYSE: CAT), Cash America (NYSE: CSH), Celgene (Nasdaq: CELG), Chubb (NYSE: CB), Cirrus Logic (Nasdaq: CRUS), Colgate-Palmolive (NYSE: CL), Compuware (Nasdaq: CPWR), Cypress Semiconductor (NYSE: CY), D.R. Horton (NYSE: DHI), Danaher (NYSE: DHR), Eli Lilly (NYSE: LLY), Federated Investors (NYSE: FII), Invesco (NYSE: IVZ), Janus Capital (NYSE: JNS), JetBlue (Nasdaq: JBLU), L-3 Communications (NYSE: LLL), Lockheed Martin (NYSE: LMT), Microsoft (Nasdaq: MSFT), Newell Rubbermaid (NYSE: NWL), Nokia (NYSE: NOK), Nucor (NYSE: NUE), Potash (NYSE: POT), Raytheon (NYSE: RTN), Taiwan Semiconductor (NYSE: TSM), Time Warner Cable (NYSE: TWC), Tyco International (NYSE: TYC), VeriSign (Nasdaq: VRSN), VistaPring (Nasdaq: VPRT).

Friday

Three economic reports fill Friday morning. The Advance Report of GDP for the Fourth Quarter is expected to show the economy grew by 3.5%. That would be up from the 2.6% rate seen in Q3. Look for this news in the premarket at 8:30 AM ET.

The Employment Cost Index is also due at 8:30 AM. This latest report is for the fourth quarter of 2010, and should reflect lax labor conditions. Some expect inflation to contribute something to this figure though.

At 9:55 AM, look for the Reuters/ University of Michigan Consumer Sentiment reading. Economists surveyed by Bloomberg see a slight pickup to a reading of 73.1 in January's final look, up from 72.7 in the preliminary read.

Corporate news includes the 3-for-2 split of Progress Software shares (Nasdaq: PRGS). The EPS schedule highlights news from AirTran Holdings (NYSE: AAI), Alliance Holdings (Nasdaq: AHGP), American Electric Power (NYSE: AEP), Arch Coal (NYSE: ACI), Artio (NYSE: ART), Chevron (NYSE: CVX), Columbia Sportswear (Nasdaq: COLM), Columbus McKinnon (Nasdaq: CMCO), Dime Community (Nasdaq: DCOM), Dominion (NYSE: D), Dover (NYSE: DOV), Eastern Virginia Bankshares (Nasdaq: EVBS), Enbridge Energy Management (NYSE: EEQ), Ford (NYSE: F), Honeywell (NYSE: HON), Idexx Laboratories (Nasdaq: IDXX), Interactive Intelligence (Nasdaq: ININ), K-Sea (NYSE: KSP), MB Financial (Nasdaq: MBFI), NTT DoCoMo (NYSE: DCM), Oppenheimer Holdings (NYSE: OPY), Oshkosh (NYSE: OSK), Provident Financial (NYSE: PFS), Quality Systems (Nasdaq: QSII), Standex (NYSE: SXI), Synovus (NYSE: SNV), T. Rowe Price (Nasdaq: TROW), Taylor Capital (Nasdaq: TAYC), The Scotts Miracle-Gro (NYSE: SMG), United Community Banks (Nasdaq: UCBI) and Wilmington Trust (NYSE: WL). That's all for this week's stock market schedule.

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.

Vasilopita - Greek New Year's Bread

Traditional Greek New Year's Bread

Wall Street Greek welcomes the contribution of a new Greek master. Our regular Greek Cooking Columnist Pinelope has been keeping a big secret from us. His name is Nikolaos, and he will be sharing many of his treasured Greek recipes over the next few months along with Pinelope.

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Vasilopita – Greek New Year's Bread

My husband Nikolaos shares his long treasured recipe for Greek New Year's bread, known as Vasilopita. Nick is a wonderful chef, having learned much of the skill from his father, who was the preferred chef for the private parties of several important Greek ship owners residing in New Rochelle, New York.

Ingredients: Makes 12 to 14 loaves of 1 pound each and the Vasilopita of 2 pounds in weight

You may divide the ingredients for a lesser quantity of loaves, but when Nick cooks Greek New Year's or Easter Bread, he makes enough to share with our many friends and neighbors who look forward to its delivery with great anticipation.

• 9 Pounds of All Purpose Flour


• 2 3/4 lbs. Granulated Sugar


• 1 lb. Unsalted Butter


• 8 Envelopes of Dry Yeast (1/4 oz. each)


• 22 Eggs


• 1 Stick of Cinnamon


• 3 Bay Leaves


• 2 Teaspoons Mahlepi (found at your local Greek store – from the seeds of the St. Lucie Cherry)


• 1 8 oz. Glass Warm Milk


• 1 ½ Cups of Lukewarm Water

Cooking Steps:

• Aromatic Liquid: Boil a cup of water, adding in the bay leaves, cinnamon stick and a 1 ½ teaspoons of mahlepi until you smell the essence of the aromas. Then set it aside for later use.


• Ground the remaining mahlepi from the standard little jar they are sold in (perhaps 2 teaspoons or more of it) and save it for later use as well.


• Dissolve the yeast into 1 ½ cups of lukewarm water


• Make a hole or clearing in the center of the flour


• Place yeast mixture there and mix flour into the yeast


• Cover the bowl with aluminum foil or linen towel

While it sits...

• Place room temperature butter into a mixer bowl and cream it


• While the butter is mixing, add egg yolks to the butter as you separate them from the whites, while saving the whites of the eggs


• Add your sugar to the mixture until mixed well

While it's mixing...

• Beat the egg whites into a stiff meringue


• Add the three mixtures (egg yolk butter, whites meringue and aromatic liquid) to the flour


• Add the ground mahlepi


• Add the milk as well


• Knead the dough until it comes together


• Cover the dough with aluminum foil or a linen towel


• Allow to rise until it doubles in size


• Knead it down and size out loaves (1 lb each for braided loaves and 2 lbs. for the Vasilopita)

Forming the Loaves

Forming the Vasilopita:

• This is your round New Year's loaf


• You'll need a 2 pound piece of dough for this


• Take a dime, wash it and wrap it in aluminum foil


• Place it into the dough as you form the loaf


• Form the dough into a circular shape for the Vasilopita or Greek New Year Bread


• Take pieces of dough to label the bread with the number of the New Year


• Be sure to account for the expansion of the dough and numbers so that they are legible once expanded

Forming the braided loaves:

• Take the one pound dough piece and break it into three equal pieces (or 2, one twice the size of the other)


• Roll them out until they are about 11 inches long or 11 and 22 inches if you make it the alternate way


• Connect the three at a point and braid them as if you were braiding hair, pinching them together at the close. Or wrap the long piece around like a horse shoe and place the other in the center, and begin braiding


• Place on cookie sheet with wax paper, leaving enough space between to account for rising (3 per sheet)


• Cover with linen towels in a warm place, and let rise again to double their size


• Beat 2 or 3 eggs and brush the surface of each loaf


• Place into a preheated oven and cook at 350 degrees


• Cook until they have a nice golden brown color (30 to 35 minutes or until browned if longer, as ovens will vary)

The Custom of Cutting the Vasilopita:

Greek families the world over honor an annual custom of cutting the Vasilopita or Greek New Year Bread as a family unit for good luck through the New Year. Greeks have extended this ceremonial cutting to include extended families, or organizations. The cutting of the Vasilopita thus offers loved ones and friends a chance to come together to celebrate the New Year.

While tradition may vary from place to place and family to family, in our Greek Orthodox family, we cut slices for each member, but we start with a slice for Jesus Christ. The second slice is for our home, and then come the elders of the family and each member, incorporating all who live in the home. Only one piece will contain the coin, and the person who receives this piece will enjoy a blessing of the best luck through the New Year. On occasion, the coin may fall in between pieces, in which case we like to say the luck is shared.

Kali Orexi! Bon Appetit!



Relevant tickers include Smithfield Foods (NYSE: SFD), Brasil Foods SA (Nasdaq: BRFS), Tyson Foods (NYSE: TSN), Hormel (NYSE: HRL), Seaboard (NYSE: SEB), Pilgrim's Pride (NYSE: PPC), Sanderson Farms (Nasdaq: SAFM), Industrias Bachoco (NYSE: IBA), Balchem (Nasdaq: BCPC), Zhongpin (Nasdaq: HOGS), Bridgford Foods (Nasdaq: BRID), Sara Lee (NYSE: SLE), Pepsico (NYSE: PEP), Unilever NV (NYSE: UN), Unilever plc (NYSE: UL), General Mills (NYSE: GIS), Kellogg (NYSE: K), Campbell Soup (NYSE: CPB), ConAgra Foods (NYSE: CAG), Mead Johnson Nutrition (NYSE: MJN), J.M. Smucker (NYSE: SJM), McCormick (NYSE: MKC), Green Mountain Coffee (Nasdaq: GMCR), Ralcorp (NYSE: RAH), Del Monte (NYSE: DLM), Corn Products (NYSE: CPO), Flowers Foods (NYSE: FLO), Treehouse Foods (NYSE: THS), Gruma S.A.B. (NYSE: GMK), American Italian Pasta (Nasdaq: AIPC), Diamond Foods (Nasdaq: DMND), J&J Snack Foods (Nasdaq: JJSF), Lance (Nasdaq: LNCE), B&G Foods (NYSE: BGS), Seneca Foods (Nasdaq: SENEB), Smart Balance (Nasdaq: SMBL), Farmer Brothers (Nasdaq: FARM), John B. Sanfilippo (Nasdaq: JBSS), China Marine Food (Nasdaq: CMFO), MGP Ingredients (Nasdaq: MGPI), China Nutrition (Nasdaq: CNGL), Overhill Farms (AMEX: OFI), Omega Protein (NYSE: OME), Key Technology (Nasdaq: KTEC), Tasty Baking (Nasdaq: TSTY), Inventure Foods (Nasdaq: SNAK), Golden Enterprises (Nasdaq: GLDC), Kroger (NYSE: KR), Companhia Brasileiria (NYSE: CBD), Safeway (NYSE: SWY), Delhaize (NYSE: DEG), Whole Foods (Nasdaq: WFMI), SuperValu (NYSE: SVU), Casey's General Stores (Nasdaq: CASY), Ruddick (NYSE: RDK), Weis Markets (NYSE: WMK), Winn-Dixie (Nasdaq: WINN), Blue Square Israel (NYSE: BSI), Ingles Markets (Nasdaq: IMKTA), Village Super Market (Nasdaq: VLGEA), Pantry (Nasdaq: PTRY), Arden (Nasdaq: ARDNA), Susser (Nasdaq: SUSS), QKL Stores (Nasdaq: QKLS), Wal-Mart (NYSE: WMT), Target (NYSE: TGT), Costco (Nasdaq: COST), BJ Wholesale (NYSE: BJ), Coca-Cola Hellenic (NYSE: CCH), OTE Telecom (NYSE: OTE), National Bank of Greece (NYSE: NBG), Darden (NYSE: DRI), Brinker (NYSE: EAT), Dryships (Nasdaq: DRYS), Navios Maritime Partners (NYSE: NMM), Navios Holdings (NYSE: NM), Tsakos Energy Navigation (NYSE: TNP), Genco Shipping (NYSE: GNK), Danaos (NYSE: DAC), Paragon Shipping (Nasdaq: PRGN), Top Ships (Nasdaq: TOPS).

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.

Jobless Claims, China Steals Jobs, Boeing Layoffs

Which One of These Things Doesn't Look Like the Others?

Remember that old Electric Company or Sesame Street skit referenced in the title here? Boeing's layoffs don't look like the others, for now, while jobless claims still above 400K have a lot to do with all the work American companies have shifted abroad and the unfair trade play of China generally, stealing our jobs. This article just brushes on it, but please use the opportunity to vent via the "Discuss" tab below nonetheless.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative Tickers: NYSE: BA, NYSE: LMT, NYSE: RHI, NYSE: KFY, NYSE: MAN, NYSE: MWW, Nasdaq: KELYA, Nasdaq: JOBS, NYSE: JOB, Nasdaq: CECO, Nasdaq: PAYX, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, OTC: ASRG.OB, OTC: MCTH.OB, OTC: IGEN.OB, OTC: STJO.OB, OTC: TNUS.OB, Nasdaq: TSTF, OTC: STTH.OB, OTC: PSRU.OB, OTC: CRRS.OB, NYSE: BAC, NYSE: JPM, NYSE: GS, NYSE: C, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: PNC, NYSE: GE, NYSE: WMT, NYSE: MCD, NYSE: AA, NYSE: AXP, NYSE: BA, NYSE: CAT, Nasdaq: CSCO, NYSE: CVX, NYSE: DD, NYSE: DIS, NYSE: HD, NYSE: HPQ, NYSE: IBM, Nasdaq: INTC, NYSE: JNJ, NYSE: KFT, NYSE: KO, NYSE: MMM, NYSE: MRK, Nasdaq: MSFT, NYSE: PFE, NYSE: PG, NYSE: T, NYSE: TRV, NYSE: UTX, NYSE: VZ, NYSE: XOM, NYSE: DE, NYSE: CO, NYSE: FRO, Nasdaq: MEAFX, Nasdaq: EBASX, Nasdaq: EVASX, Nasdaq: MACSX, Nasdaq: MATFX, NYSE: CZJ, Nasdaq: CHINA, PCX: FXI, PCX: CYB, NYSE: IWM, NYSE: TWM, NYSE: IWD, Nasdaq: AACFX, Nasdaq: GOPAX, Nasdaq: CHUSX, Nasdaq: GCHAX, Nasdaq: BUFCX, Nasdaq: DXHSX, Nasdaq: XHAOX, Nasdaq: NGCAX, Nasdaq: LNGZX, Nasdaq: DPCTX, Nasdaq: EICGX, Nasdaq: EPHCX, Nasdaq: FHKAX, Nasdaq: FHKCX, Nasdaq: IFCAX, Nasdaq: JCOAX, Nasdaq: XCAFX, Nasdaq: MCHFX, Nasdaq: NPCAX, Nasdaq: OBCAX, Nasdaq: UHPIX, Nasdaq: XGCHX, Nasdaq: TCWAX, Nasdaq: HPCHX, NYSE: ACH, Nasdaq: CHINA, Nasdaq: CBAK, Nasdaq: CSUN, NYSE: CHN, NYSE: GCH, Nasdaq: SOLF, Nasdaq: CAAS, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ

Jobless Claims, China Steals Jobs, Boeing Layoffs

Weekly Initial Jobless Claims were reported today for the period ending January 15. We've been tracking the holiday sponsored miscue that had jobless claims dip below 400K, before suffering a sort of pent-up demand spike last week. That prior period claims count was revised today, to a still troubling 441K, from the initially reported 445K. This latest weeks' data perhaps offered a normalization of the flow of newly jobless, and may be our first indicator since mid-December of the real weekly jobless rate.

Claims ran at 404K, just above that important psychological threshold, which we have posited has been a catalyst for the fall market burst, in addition to the GOP Congressional push. The four-week moving average of jobless claims slipped by 4,000 this week, to 411,750, and represents a more accurate barometer of the state of labor. It has been slowly trending toward the ordinary though magic mark, which will then be replaced by 300K (matters more).

The advanced seasonally adjusted insured unemployment rate held unexpectedly at 3.1% in the January 8 period. The Greek was looking for this figure to revive post the holiday effect, after dropping by two-tenths in the holiday week. It's a suspect reading in my view, and may dip next week. It is impacted by folks dropping out of the labor force and the unemployment pool, some of which we believe occurred on despair through the holidays, but also by people getting jobs.

Sifting through corporate news isn't offering signs of a new tide today though. Boeing (NYSE: BA) announced it would let 1,100 people go from its C-17 operations, some 24% of the product workforce, including folks in Long Beach, California; St. Louis, Missouri; Mesa, Arizona; and Macon, Georgia. Domestic orders, a.k.a. from the Defense Department, are on the decline, given government capital constraints. However, Boeing sees burgeoning international demand and wants to simply slow production while it continues to capture that increasing business channel.

The question to answer moving forward is whether corporations are going to find earnings growth from revenue gains or whether they'll be cutting more costs, which could include further layoffs. Many signs point to that happening still in the state and municipal arena, especially within hot spot regions of the country, like Illinois, California and others including New York.

One question Americans should be asking their Congressmen today, ahead of their interrogation of Chinese President Hu Jintao, should be, are American workers benefiting from the growth of companies like Apple (Nasdaq: AAPL)? And don't forget to ask them what we can do to create American manufacturing jobs in the alternative energy space, something that is not likely to happen at the status quo. They'll all be made in China, unless the Chinese play fair on the yuan and stop stealing our jobs.

FYI:

The highest insured unemployment rates in the week ending Jan. 1 were in Alaska (7.2 percent), Puerto Rico (6.1), Idaho (5.6), Oregon (5.6), Wisconsin (5.6), Pennsylvania (5.4), Montana (5.1), Connecticut (5.0), Rhode Island (4.9), Illinois (4.7), and New Jersey (4.7).

The largest increases in initial claims for the week ending Jan. 8 were in New York (+24,363), California (+17,536), North Carolina (+16,873), Texas (+13,828), and Illinois (+11,211), while the largest decreases were in Oregon (-9,579), Iowa (-3,122), Michigan (-3,101), Wisconsin (-2,029), and Kentucky (-1,006).



Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.OB), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM).

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.

Apple's (Nasdaq: AAPL) Smart PR Effort and Our Outlook

Managing Disaster

Apple's PR team did a decent job of best managing the worst possible scenario, the loss of its iconic leader, but we suspect guarding against investor concern will require a little more than just blowout earnings.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative Tickers: Nasdaq: AAPL, Nasdaq: DELL, Nasdaq: GOOG, Nasdaq: RIMM, NYSE: HPQ, Nasdaq: MSFT, Nasdaq: AMZN, NYSE: NOK, NYSE: GLW, NYSE: MOT, NYSE: ALU, NYSE: HRS, Nasdaq: TLAB, NYSE: SNE, NYSE: PHG, NYSE: PC, NYSE: HIT, NYSE: ST, NYSE: HUB-B, NYSE: HAR, Nasdaq: GNRC, Nasdaq: DTSI, NYSE: FN, NYSE: TCH, NYSE: LXU, Nasdaq: UEIC, NYSE: VPG, Nasdaq: KLIC, Nasdaq: KLAC, Nasdaq: COHR, Nasdaq: DSPG, NYSE: PLT, Nasdaq: BBOX, NYSE: EMC, NYSE: BAC, Nasdaq: ALTR, Nasdaq: ISRG, NYSE: FRX, NYSE: AOS, NYSE: AEP, Nasdaq: ASRV, Nasdaq: ASTE, NYSE: BMI, NYSE: BK, Nasdaq: BBND, NYSE: BSX, Nasdaq: CREE, Nasdaq: CYBI, Nasdaq: DTLK, Nasdaq: DEAR, NYSE: DPZ, Nasdaq: EFSC, Nasdaq: ESBF, Nasdaq: FBCM, Nasdaq: FLXS, Nasdaq: FLTTE, Nasdaq: FFIC, AMEX: FRS, Nasdaq: FSII, Nasdaq: FULT, Nasdaq: GILD, NYSE: GS, Nasdaq: HA, NYSE: HDB, NYSE: HNP, Nasdaq: HUBG, NYSE: ITW, Nasdaq: JNPR, Nasdaq: MRTN, Nasdaq: MICC, NYSE: MLI, Nasdaq: ONAV, NYSE: OMC, NYSE: PH, Nasdaq: PWOD, Nasdaq: PVSW, NYSE: PII, Nasdaq: RCRC, Nasdaq: RNST, Nasdaq: SONC, Nasdaq: SFST, NYSE: STT, Nasdaq: STSA, NYSE: TPX, NYSE: MNI, NYSE: NYT, NYSE: TUP, Nasdaq: TWIN, NYSE: UNF, NYSE: UNH, NYSE: WCN, NYSE: WFT, Nasdaq: WABC, NYSE: WDC, Nasdaq: WSCI, Nasdaq: YHOO, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ

Apple's (Nasdaq: AAPL) Smart PR Effort and Our Outlook

Apple (Nasdaq: AAPL) smartly tried to control the impact of the announcement that its idea-man and CEO Steve Jobs would need to take a medical leave of absence. The pre-release of this unfortunate information, ahead of the blowout earnings numbers, were meant to allow a free flow of funds to occur on the good news. If both pieces of data were released at the same time, the effect would very likely have been neutral to negative for AAPL shares. If only The Greek were focused Tuesday on Apple, we might have offered you an opportunity to benefit from beaten down call options before they stabilized and recovered. So now the best we can do is prepare you for the decision tree before you and the prospects for Apple, short, medium and long-term.

While it's clear what Apple's PR people were up to this past weekend (basically the best possible handling of the worst possible situation), what they may not be able to stave off no matter how hard they try is investor realization of the risk of the long-term loss of Jobs to Apple and its shares. Though the company is doing its best to make this seem bearable, we suggest investors will increasingly question whether it is or not. As that uncertainty plays out and gains play, pressure should build on Apple shares, and so any momentum to the upside would seem to offer wise opportunity to seek a new driver for technology born capital investment gains - thus to exit AAPL and replace it with something else near-term.

Apple shares were up $4.25 or 1.25% after hours Tuesday after reporting EPS Tuesday afternoon, but only after falling $7.83 (2.25%) through the day Tuesday, the first day of trading since the best-timed release of Jobs' unfortunate news. AAPL shares had held their gain through much of Wednesday, but heading into the close Apple shares had moved back into negative territory. At the close, the stock had to account for a loss of near 1%.

It took this long for good reason, as the company posted blowout earnings, exceeding analysts' expectations by nearly 19%. The EPS gain was an astounding 78% greater than the year ago quarter. The company's quarterly net income, for one quarter and after expenses, was six billion dollars. Apple's sales increased 71%, to $26.7 billion in the quarter. Granted, this was the most important quarter for the consumer oriented firm, but still, those are blowout numbers, period.

Thus, Apple's PR people had quite a situation before them with regard to how to manage the news that their iconic CEO would need to leave day-to-day operations to take care of himself. Given his importance to Apple, and the perception of his importance to Apple, this became more than just a problem of how to author a public release to best serve the man. Rather, it needed to manage how investors, both current and prospective might react to this clearly unplanned division of the company and its brilliant CEO.

You'll note that in the short release, a letter Jobs' authored to employees, he states that he will remain CEO and that the 2011 operating strategy had already been laid out. In other words, he'll still be actively involved, but off-site for the most part, while he takes care of his health problem. Secondly, there's reassurance in the fact that all the important product planning has occurred already for this year, so whatever magic might be lost, perhaps another amazing year lay in store for Camelot in 2011 at least.

I know where I would focus my product attention if I were Apple, but I'm still saving that idea for a later article I had better get to soon. While AAPL shares are drifting now, be careful not to underestimate the company's marketing savvy, nor its PR prescience. Another release or important news item might lay in store for just that scenario. That said, I would expect the company to let the news of Jobs' temporary leave sink in and digest completely before any such release were made. Thus, I would be taking short-term profits in AAPL, outside of valuation and on just an artistic point of view (versus scientific). I'm not even going to talk valuation in this article, because I don't expect it will matter given the special situation.

Besides the idea-man issue, what can make a seemingly cheap stock get cheaper is when it runs the risk of losing market share. It's hard for an innovation leader of Apple's size to keep growing, and it gets increasingly easier for such a firm to fall off the top of the hill. I only need reference all the competitors and products out there that appeal to the non-fanatical fans of Apple. These are market share threats that are being discounted by investment pros of any worth right now, considering that the genius Jobs has been stumbled. That said, let me remind you that over the medium term, beware the risk of already prepared corporate plans and a still savvy PR team at Apple. The next great catalyst for Apple and stopper of a stock slide could be just an email delivery away.

Short-Short Term: Sell
Medium Term: Buy
Long Term: Not So Clear Yet - Hold



Disclosure: I have no notable position in any relative stock

Article should interest investors in Apple (Nasdaq: AAPL), Dell (Nasdaq: DELL), Research in Motion (Nasdaq: RIMM), Hewlett-Packard (NYSE: HPQ), Microsoft (Nasdaq: MSFT), Amazon.com (Nasdaq: AMZN), Nokia (NYSE: NOK), Corning (NYSE: GLW), Motorola (NYSE: MOT), Alcatel-Lucent (NYSE: ALU), Harris (NYSE: HRS), Tellabs (Nasdaq: TLAB), Sony (NYSE: SNE), Philips (NYSE: PHG), Panasonic (NYSE: PC), Hitachi (NYSE: HIT), Sensata (NYSE: ST), Hubbell (NYSE: HUB.B), Harman (NYSE: HAR), Generac (Nasdaq: GNRC), DTS (Nasdaq: DTSI), Fabrinet (NYSE: FN), Technicolor (NYSE: TCH), LSB Industries (NYSE: LXU), Universal Electronics (Nasdaq: UEIC), Vishay Precision (NYSE: VPG).

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