Wall Street Greek

Editor's Picks | Energy | Market Outlook | Gold | Real Estate | Stocks | Politics
Wall Street, Greek

The Wall Street Greek blog is the sexy & syndicated financial securities markets publication of former Senior Equity Analyst Markos N. Kaminis. Our stock market blog reaches reputable publishers & private networks and is an unbiased, independent Wall Street research resource on the economy, stocks, gold & currency, energy & oil, real estate and more. Wall Street & Greece should be as honest, dependable and passionate as The Greek.



Wall Street, business & other videos updated regularly...

Seeking Alpha

Sunday, March 31, 2013

Week Ahead – Jobs & Manufacturing Data Could Shake Things Up

weakening supportThe week ahead offers a slew of important manufacturing and jobs data capable of shaking things up for stocks. The first quarter produced stellar stock gains, with the SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones Industrial Average (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ) gaining 10.5%, 11.9% and 6.1%, respectively, after adjustment for dividends (total return). The second quarter starts this week, but after the S&P 500 marked a historical high on the last day of Q1, it may have some reconciling to do against softening economic data moving forward.

Monday

Some markets, including in Germany and Italy, will not even open for Easter Monday. In the U.S., the first week of the month and the second quarter kicks off with a heavy economic data load. Three major data points find the morning market, with the PMI Manufacturing Report, ISM Manufacturing Index and Construction Spending data all due.

The Markit Economics PMI Manufacturing Index leads off with its 8:58 AM ET reporting. Last month, the data for February showed the index at 54.3 at its final reading. It slipped significantly through the month though, dropping from its initial “Flash” reading of 55.2. In January, the index closed out at 55.8. All indications are that manufacturing activity tailed off. There’s no consensus estimate for March, but these indications are not good.

The Institute for Supply Management (ISM) Manufacturing Index will follow at 10:00 AM ET. This widely followed manufacturing measure is seen by economists slipping slightly in March to 54.0, down from 54.2 in February. The range of economists’ views extends from 51.6 to 55.0, so it’s leaning to the downside. If we get two poor manufacturing data points, stocks could slip Monday. Manufacturing has been a linchpin of this economy, and if it is pulled out from under us, it will join recently softer housing data in weakening support for stocks.

Construction Spending data is due at 10:00 as well. After a 2.1% spending dip in January, economists expect February spending rose 1.1%. Between the three of these data points, the market should have filled its pallet for one day.

The corporate wire has earnings from Cal-Maine Foods (Nasdaq: CALM), Dago New Energy (NYSE: DQ), MFC Industrial (NYSE: MIL), Oxford Resource Partners (NYSE: OXF), American Shared Hospital Services (NYSE: AMS) and Derma Sciences (Nasdaq: DSCI).

Tuesday

More manufacturing and other goods producer information reaches the wire Tuesday, with Factory Orders being reported for the month of February. It’s just one week since the Durable Goods Report showed pretty soft data excluding transportation orders. For Factory Orders, economists see a 2.9% increase in this figure, compared to last month’s 2.0% decline.

Monthly motor vehicle sales will be reported on Tuesday instead of Monday, due to the holiday. The news from Ford (NYSE: F), General Motors (NYSE: GM), Chrysler (owned mostly by Fiat (OTC: FIATY)), and Toyota (NYSE: TM) fits nicely with the other manufacturing reports set for release through the first two days of the week. In aggregate, domestic motor vehicle sales are expected to have run at an annual pace of 12.1 million in March, the same as in February. Total vehicle sales by American producers are expected to be running at a pace of 15.4 million now, the same as the month before.

Richmond Fed Bank President Jeffrey Lacker and the Chicago Fed’s Charles Evans are scheduled to speak on monetary policy Tuesday. World Bank President Jim Yong Kim will address global poverty. President Obama is meeting with the Prime Minister of Singapore at the White House.

Tuesday also offers the regular retail same-store sales data. Last week, the International Council of Shopping Centers (ICSC) showed week-to-week sales decreased 1.7%. On a year-to-year basis, sales were marked up 1.0%. Each measure represented deterioration against the prior week’s rates, but were likely impacted by Easter.

In corporate news, look for investor and analyst days at EnerSys (NYSE: ENS) and Global Brass & Copper (Nasdaq: BRSS). Expect earnings from McCormick (NYSE: MKC), Global Payments (NYSE: GPN), Blonder Tongue Laboratories (NYSE: BDR), BOS Better Online Solutions (Nasdaq: BOSC) and ZaZa Energy (Nasdaq: ZAZA).

Wednesday

The Bank of England (BOE) and the Bank of Japan (BOJ) hold monetary policy meetings Wednesday, but the ECB is inactive. San Francisco Fed President John Williams speaks on the economy and monetary policy in the U.S. at a Town Hall meeting in Los Angeles.

ADP’s Private Employment Report is set for release in the premarket Wednesday. This first of the week’s monthly employment report parade is expected to show private nonfarm payrolls increased by 205K in March. That would mark deterioration against February’s 246K increase. Remember that ADP’s data point is but an estimate itself of the federal government’s report scheduled for release two days later.

At 10:00 AM ET, look for ISM’s report on the service sector. ISM’s Nonmanufacturing Index is expected to hold steady in March at the 56.0 mark it set in February. Anything above 50 marks economic expansion, so no change is still good news.

We will also get the latest mortgage activity data from the Mortgage Bankers Association in the premarket Wednesday. Last week’s report covering the period ending March 22 showed mortgage applications increased 7.7%. Interest rates fell last week, spurring both purchase and refinance activity.

Look for the EIA’s regular Petroleum Status Report at 10:30 AM ET. Last week’s report covering the week ending March 22 showed crude oil inventory increased by 3.3 million barrels, and remained well above the upper limit of the average range for this time of year. Total motor gasoline decreased by 1.6 million barrels but remained in the middle of the average range.

In corporate news, Pandora Media (NYSE: P) is having a fireside chat at the Wells Fargo (NYSE: WFC) Tech Transformation Summit. The day’s EPS schedule highlights reports from ConAgra Foods (NYSE: CAG), Monsanto (NYSE: MON), Acuity Brands (NYSE: AYI), Harry Winston Diamond (NYSE: DDC) and TEAM Inc. (Nasdaq: TISI).

Thursday

Two more employment data points find the wire Thursday. First catch the Challenger, Gray & Christmas Job-Cuts Report. There was a bit of a pickup in announced corporate layoffs in February, to 55,356. The March report has no economists’ forecast to peg to. This data is often impacted by large layoff announcements at major companies. The financial sector dominated February’s layoffs, with J.P. Morgan Chase (NYSE: JPM) announcing large cuts. Still, industrial firms, especially defense companies, may take the baton soon. United Technologies (NYSE: UTX) announced 3,000 layoffs in March.

Weekly Initial Jobless Claims is due for report at 8:30. Last week’s report covering the period ending March 23 showed weekly claims increased by 16K to 357K. The four-week moving average for jobless claims increased 2,250 to 343K. If another increase follows, investor concern will heighten.

Federal Reserve Vice Chair Janet Yellen speaks at the Sabew Spring Conference.

Bloomberg’s Consumer Comfort Index deteriorated for the second straight week last week. The weekly measure of the consumer mood fell by 0.5, to a mark of -34.4. In relative news, last week offered the Conference Board’s Consumer Confidence Index, which fell significantly. In a report published elsewhere, we said it served as a recession signal.

The EIA’s Natural Gas Report is due Thursday at 10:30 AM. Last week’s report covering the period ending March 22 showed working gas in storage fell by 95 Bcf. Stocks were 642 Bcf less than last year at this time, but still 61 Bcf above the five-year average for this time of year.

The corporate wire has Urban Outfitters (Nasdaq: URBN) presenting at the Morgan Stanley (NYSE: MS) Retail & Restaurant Conference. Hanesbrands (NYSE: HBI) has its April investor meeting. The EPS slate highlights presentations by Franklin Covey (NYSE: FC), Greenbrier Companies (NYSE: GBX), International Speedway (Nasdaq: ISCA), WD-40 (Nasdaq: WDFC) and others.

Friday

The Employment Situation Report is due at 8:30 AM ET. The report for March is expected to show nonfarm payrolls increased by 193K, less than February’s 236K. Private nonfarm payrolls are expected to increase by just 200K this month, versus the 246K increase last month. The unemployment rate should hold steady at 7.7% according to economists, but last month, we saw it closer to 11.8%.

Look for the International Trade data at 8:30 AM as well. Economists expect February’s trade gap widened to $44.8 billion from $44.4 billion in January. Exports declined last month versus an increase in import demand.

The Federal Reserve reports on Consumer Credit at 3:00 PM ET. Economists see February’s consumer credit expanding by $15 billion, against January’s expansion of $16.2 billion.

The corporate wire has the BioCentury Publications Future Leaders in Biotech Industry Conference, with highlighted presentations from Cytokinetics (Nasdaq: CYTK), Cytori Therapeutics (Nasdaq: CYTX) and Sucampo Pharmaceuticals (Nasdaq: SCMP).

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.

Cake NYC

Labels: , , ,

free email financial newsletter Bookmark and Share

Friday, March 29, 2013

Banks are Open on Good Friday, Stock Market is Closed

Good FridayU.S. equity markets are closed for Good Friday, but banks are open in the United States. Internationally, securities markets are also closed in Australia, Brazil, Canada, Hong Kong, Singapore, the U.K., across South America and many other places for this very important day. The new Pope, Francis, should be awaited with great joy and love as he presides over services for the first time as Pope of the Catholic Church. Orthodox Christians do not mark Good Friday until May 3rd this year.

There are two economic reports on the schedule.

Personal Income & Outlays data are due for release at 8:30 AM. Economists are looking for personal spending to increase by 0.6% in February, compared to 0.2% growth in January. Personal income is seen higher by 0.9% in February, after falling 3.6% in January. The Fed’s favored inflation gauge, the Core PCE Price Index is expected to show 0.2% increase month-to-month, versus the prior month’s 0.1% increase.

The Reuters / University of Michigan Consumer Sentiment Index is up for 9:55 AM release. Economists expect improvement for March, with the index expected to rise to 72.5, from 71.8 in February.

The corporate wire has EPS from Birner Dental Management Services (Nasdaq: BDMS), China Armco Metals (Nasdaq: CNAM), Tengasco (NYSE: TGC) and USA Technologies (Nasdaq: USAT). Our founder published a long report on Annaly Capital (NYSE: NLY) and a short report on Blackberry (Nasdaq: BBRY) yesterday. Today Mr. Kaminis posed the question, should we Sell the SPY on its High (NYSE: SPY)?

We wish you a happy Easter and Passover dear friends from your friends at Wall Street Greek.

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.

Labels: , ,

free email financial newsletter Bookmark and Share

Thursday, March 28, 2013

THURSDAY'S TRADE - A Tug of War

tug of warBy Kelly Barth:

With equity markets closed in the U.S. on Friday, a great deal of economic data is being bunched into Thursday. Three economic data points reach the wire in just the premarket. First of all, the GDP Report for the fourth quarter of 2012 is scheduled for revision. Economists are looking for GDP growth to be adjusted higher to 0.6%, up from 0.1% when last adjusted (from negative 0.1%). Cypriot banks reopened with some restrictions to limit a run on the banks from happening. The U.S. bond market closes early Thursday at 2:00 PM ET. Several markets around the world are closed for Holy Thursday. The Vanguard S&P 500 ETF (NYSE: VOO) is unchanged in the premarket as a tug of war is taking place on the Street. Also catch our founder's reports on Blackberry (Nasdaq: BBRY) and Alcatel-Lucent (NYSE: ALU) linked to below here.

Weekly Initial Jobless Claims is due for report at 8:30. Last week’s report covering the period ending March 16 showed weekly claims increased by 2,000, to 336K. The four-week moving average for jobless claims improved by 7,500 last week, on its way down to 339,750.

At 9:45 AM, the Chicago Purchasing Managers Index (PMI) is expected to show Chicago area business expanded at a slower rate. The index is seen dropping to 56.1 in March, down from 56.8 in February. Measures above 50.0 mark economic expansion.

Bloomberg’s Consumer Comfort Index fell last week by 2.3 points, to -33.9. The weekly measure of the consumer mood should be overshadowed this week by the monthly reports.

The EIA’s Natural Gas Report is due Thursday at 10:30 AM. Last week’s report covering the period ending March 15 showed working gas in storage declined by 62 Bcf. Stocks were 502 Bcf less than last year at this time, but still 162 Bcf above the five-year average for this time of year.

The Kansas City Fed issues its manufacturing index Thursday. Economists expect manufacturing improved in the middle of the nation, but remained in contraction. The index is expected to improve to negative 3.0 from negative 10 last month. Zero marks breakeven.

There will be a bankruptcy hearing today for Birmingham, Alabama.

The corporate wire has investor or analyst meetings for eBay (Nasdaq: EBAY) and Chicago Bridge & Iron (NYSE: CBI). Becton Dickinson (NYSE: BDX) is having a conference call to discuss a new product. Autodesk (Nasdaq: ADSK) is having an investor relations BIM update webinar. The CIBC Retail & Consumer Conference has a presentation by Target (NYSE: TGT). The EPS schedule highlights news from Blackberry (Nasdaq: BBRY). Last night, our founder wrote that Blackberry Reminds Me of Palm Just Before the End. He also noted that Alcatel-Lucent (NYSE: ALU) was half-way to his downside target. Also look for reports from Accenture (NYSE: ACN), GameStop (NYSE: GME), Mosaic (NYSE: MOS), China Nepstar Chain Drugstore (NYSE: NPD), Commercial Metals (NYSE: CMC), AEHR Test Systems (Nasdaq: AEHR), Century Casinos (Nasdaq: CNTY), dELiA’s (Nasdaq: DLIA), Finish Line (Nasdaq: FINL), Fred’s (Nasdaq: FRED), Gentium (Nasdaq: GENT), Guanwei Recycling (Nasdaq: GPRC), InfuSystem (Nasdaq: INFU), Kips Bay Medical (Nasdaq: KIPS), Netlist (Nasdaq: NLST), NTN Buzztime (NYSE: NTN), PCTEL (Nasdaq: PCTI), PLUG Power (Nasdaq: PLUG), Quantum Fuel Systems (Nasdaq: QTWW), REX American Resources (NYSE: REX), Signet Jewelers (NYSE: SIG), Southcross Energy Partners (NYSE: SXE), Tranzyme (Nasdaq: TZYM), Universal Power Group (NYSE: UPG), UTi Worldwide (Nasdaq: UTIW), Winnebago Industries (NYSE: WGO) 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.

Phillies

Labels: , ,

free email financial newsletter Bookmark and Share

Wednesday, March 27, 2013

Wednesday – Worries About Europe Weigh

US stock market By Ed Gaynor:

The U.S. market is finally taking Europe’s ineptness seriously. The iShares Core S&P 500 (NYSE: IVV) is lower by 0.7% to start the day.

Even more housing data finds the wire on Wednesday, leading the day. In the premarket, we’ll get the latest mortgage activity data from the Mortgage Bankers Association. Last week’s report covering the period ending March 15 showed mortgage applications decreased by 7.1%. Mortgage rates generally increased in the period.

Pending Home Sales data is due at 10:00 AM EDT Wednesday. Economists are looking for a 0.7% decrease in the February reading, matching against the 4.5% increase in activity seen in January. Investors will want to eye the SPDR S&P Homebuilders (NYSE: XHB) for perspective of how the market is receiving the news.

A slew of Federal Reserve representatives are scheduled to address the public Wednesday. They are all set to speak around noon, with addresses from Chicago’s Charles Evans, Boston’s Eric Rosengren, Cleveland’s Sandra Pianalto and Minneapolis’ Narayana Kocherlakota.

Look for the EIA’s regular Petroleum Status Report at 10:30 AM ET. Last week’s report covering the week ending March 15 showed crude oil inventory decreased by 1.3 million barrels, but remained well above the upper limit of the average range for this time of year. Total motor gasoline decreased by 1.5 million barrels and remained in the middle of the average range.

There’s a BRICs summit in South Africa today. Indian markets are closed today.

In corporate news, Pinnacle Foods is expected to make a 29 million share initial public offering at a price of $18 to $20 per share. Pinnacle is the maker of the Birds Eye frozen vegetables brand. The deal is backed by Blackstone Group (NYSE: BX). AMR Corporation's (OTC: AAMRQ.PK) subsidiary American Airlines seeks bankruptcy court approval for its proposed merger with U.S. Airways Group (NYSE: LCC).

Look for analyst and investor meetings at Zillow (NYSE: Z), AGL Resources (NYSE: GAS) and Aruba Networks (Nasdaq: ARUN). The Bank of America Merrill Lynch New York Auto Summit brings presenters Ford (NYSE: F), Hertz (NYSE: HTZ), Delphi Automotive (Nasdaq: DLPH), Dana Holding (NYSE: DAN) and Tenneco (NYSE: TEN). Look for EPS reports from PVH Corp. (NYSE: PVH), Paychex (Nasdaq: PAYX), Red Hat (NYSE: RHT), Adcare Health Systems (NYSE: ADK), Exceed (NYSE: EDS), ASA Gold & Precious Metals (NYSE: ASA), Asia Entertainment & Resources (Nasdaq: AERL), Astea Int’l (Nasdaq: ATEA), Books-a-Million (Nasdaq: BAMM), China Automotive (Nasdaq: CAAS), China Marine Food (Nasdaq: CMFO), Chinaedu (Nasdaq: CEDU), Cyclacel Pharmaceuticals (Nasdaq: CYCC), Exa (NYSE: EXA), ExOne (Nasdaq: XONE), Five Below (Nasdaq: FIVE), H.B. Fuller (NYSE: FUL), Intellicheck Mobilisa (NYSE: IDN), Kingold Jewelry (Nasdaq: KGJI), LGL Group (NYSE: LGL), Natuzzi (NYSE: NTZ), Newtek Business Services (Nasdaq: NEWT), P&F Industries (Nasdaq: PFIN), PFSweb (Nasdaq: PFSW), Saratoga Resources (Nasdaq: SARA), Steelcase (NYSE: SCS), SYNNEX (NYSE: SNX), Texas Industries (NYSE: TXI), UniFirst (NYSE: UNF), U.S. Geothermal (NYSE: HTM), Verastem (Nasdaq: VSTM), Verenium (Nasdaq: VRNM), Verint Systems (Nasdaq: VRNT) and others.

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.

American Idol store

Labels: , ,

free email financial newsletter Bookmark and Share

Tuesday, March 26, 2013

Recession Omen - Consumer Confidence Collapse on Payroll Tax Hike

ApocalypseBy Markos N. Kaminis:

Tuesday’s consumer confidence report could be offering important insight into the real impact of the payroll tax break expiration. Confidence soared once politicians got out of the way of the stock market. However, as Americans noticed shrinkage in their paychecks, the consumer view changed. The government itself thinks there should be a 1.5 percentage point drag on economic growth as a result, but in a consumer driven economy, everything is at stake.

The Conference Board reported its Consumer Confidence Index for March Tuesday morning. The index, which had gained more than 10 points last month on new hope for stocks and the economy, shed all of its gains this month I believe on the reality of lighter paychecks. Economists surveyed by Bloomberg were expecting a slight slippage in the index, to 68.0, from the 69.6 reported in February. What they got was a far worse result, with the Consumer Confidence Index falling nearly 10 points to 59.7.

Stocks ignored the recession warning signal, with all the broader indexes higher on the day, as gold retrenched. However, the ignorance of the major indexes was in the shadow of the move of a broader grouping of stocks measured by the iShares Russell 2000 (NYSE: IWM), which was only fractionally higher toward the close. That was against the 0.7% gain of the S&P 500 Index at 3:30 PM ET.

Broad Indicator
Tuesday Through 3:10 PM
SPDR S&P 500 (NYSE: SPY)
+0.7%
SPDR Dow Jones (NYSE: DIA)
+0.6%
PowerShares QQQ (Nasdaq: QQQ)
+0.4%
iShares Russell 2000 (NYSE: IWM)
+0.1%
SPDR Gold Shares Trust (NYSE: GLD)
-0.3%


The Confidence Report showed that the consumer view for the current situation fell off. The Present Situation Index dropped to 57.9, from 61.4. Still, the news about the future was even worse. The Expectations Index collapsed to 60.9 from 72.4 last month.

In the past I’ve talked about the importance of the Present Situation measure versus the Expectations measure. We want to see improvement in the present situation to realize real economic gains. Stocks may move on “expectations” just as well though. Still, we cannot really consider this measure as a good gauge of the economy unless the overall gain is driven by the Present Situation Index. Expectations can change on a whim, for instance on the passing of the fiscal cliff or the debt ceiling issues.

The truth today is that Americans are seeing smaller paychecks because of the expiration of the payroll tax break. This was made real for me when last week I shared a meal with a maintenance worker from my church. Vangelis told me that he no longer liked President Obama, because his taxes went up. When Americans feel like they’re poorer, they are less likely to spend. With so many just getting by, a little less income makes a big difference. Also, the expiration of the tax break is not viewed as such, but as a tax increase by people who are not following the complicated news flow. Tax hikes have a way of killing spending, whether they are real or perceived.

Last week, I talked about the Fed’s economic forecast, which were hardly changed even despite their own acknowledgement that the payroll tax break expiration and the sequester spending cuts could burden economic growth by as much as 1.5% this year. I said The Fed’s Math Just Doesn’t Add Up. What might add up though is if consumers stop spending, as indicated by the sentiment result Tuesday. Then the Fed’s nearly unchanged GDP expectation for 2.3% to 2.8% growth this year could also be exposed. Make no mistake about it, in this consumer driven economy, the March message from consumers could signal a recession. I’ll be following this week’s GDP revision and Personal Spending data so you may want to follow along.

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.

Labels: , , , , , , , ,

free email financial newsletter Bookmark and Share

Tuesday – A New Question is Being Posed

Stocks opened higher today, but after 10:00 AM reports showing a slower pace of new home sales and a drop off in consumer confidence, there seems to be a new question being posed. The Vanguard S&P 500 ETF (NYSE: VOO) is up about a half of a point despite the news. Find all the day’s reports here for your inspection.

durable goods orders chart

PopeOur 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.

Several economic reports are set for Tuesday’s schedule. The important but volatile Durable Goods Orders Report is scheduled for 8:30 AM release. There’s something interesting I want you to realize about durable goods order trends. While the month-to-month comparisons seem to show improvement most months, the long-term chart comparing yearly results show a slowing of improvement.

Economists expect durable goods orders rose 3.5% in February, based on Bloomberg’s survey. That compares against the decrease in orders in January, when they fell 5.2%. Excluding transportation goods, which carry high ticket prices and can skew the message, orders are expected to edge up just 0.7%, versus last month’s 1.9% increase.

The first of the week’s real estate data reaches the wire on Tuesday when Case Shiller reports on its Home Price Index. The 9:00 AM report covers the month of January. Economists expect the group’s 20-city seasonally adjusted index to show price increase of 1.0%, against December’s increase of 0.9%. Such news continues to support the real estate sector, but even the slightest sign of weakness would damage housing stocks, which some say are priced for perfection. New Home Sales data for February follows at 10:00 AM ET. Economists are expecting a slip in the annual pace of new home sales to 425K, against January’s pace of 437K.

The Conference Board reports on Consumer Confidence at 10:00 AM ET. Confidence has been improving since Washington D.C. got out of the way of the economy earlier this year. The data for February showed the Confidence Index rose sharply to 69.6, up more than 10 points from the prior month. According to Barron’s, the consensus expects a lower reading of 67.5 for March. Tuesday also offers the regular retail same-store sales data. Last week, the International Council of Shopping Centers (ICSC) showed week-to-week sales increased 1.4%. On a year-to-year basis, sales were marked up 2.3%. Each measure represented improvement against the prior week. As we near Easter, sales should be markedly higher.

The Richmond Federal Reserve Bank reports on regional manufacturing activity at 10:00 AM. Economists expect the bank’s index to show a slight drop to a reading of 5.5 for March, which would be down from 6.0 in February.

State Street (NYSE: STT) reports on Investor Confidence at 10:00 AM. Last month’s report showed that global investor confidence (or risk taking in institutional portfolios) increased due to a greater appetite in North America. The Global Index measured 94.8, and the North American Index reached 86.3.

Dallas Fed Bank President Richard Fisher is set to speak about U.S. monetary policy.

There’s a nuclear summit in Seoul, South Korea. It would make perfect sense for North Korea to do something provocative.

The U.S. Supreme Court will start talking about same-sex marriage.

In corporate news, Dupont (NYSE: DD) and Monsanto (NYSE: MON) are holding a conference call on a new and improved soybean. Look for analyst or investor meetings at United Parcel Service (NYSE: UPS) and General Cable (NYSE: BGC). A Delaware bankruptcy court considers whether to approve the $10.5 million sale of Pension Worldwide’s brokerage assets. The earnings slate highlights reports from SAIC (NYSE: SAI), Alexza Pharmaceuticals (Nasdaq: ALXA), Bacterin Int’l (Nasdaq: BONE), Landec (Nasdaq: LNDC), Luna Innovations (Nasdaq: LUNA), Children’s Place (Nasdaq: PLCE), China Gerui Advanced Materials Group (Nasdaq: CHOP), Digital Ally (Nasdaq: DGLY), Dover Saddlery (Nasdaq: DOVR), Envivio (Nasdaq: ENVI), Image Sensing Systems (Nasdaq: ISNS), Linktone (Nasdaq: LTON), Mattress Firm Holding (Nasdaq: MFRM), Metabolix (Nasdaq: MBLX), Neogen (Nasdaq: NEOG), Nupathe (Nasdaq: PATH) 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.

blessed incense

Labels: , ,

free email financial newsletter Bookmark and Share

Monday, March 25, 2013

Unholy Trading Week in Store on Cyprus, GDP & More

Holy WeekThe holiday shortened trading week still has a full week’s worth of data to digest, with some reports even scheduled for Friday. The most important news of the week might even come on Friday, when personal spending and inflation get a read. However, the week started off on a sour note, when Cyprus agreed to a drastic set of measures set forth by its European brothers. The tax being imposed on depositors as a result of the agreement place into question all deposits in the euro zone and raise specter globally. GDP gets a revision Thursday, after being revised once up to 0.1% growth from a 0.1% contraction at initial report. It makes for an interesting look Thursday morning. The week seems shaky, though the S&P 500 was hoping for a breakout into record territory to begin with. The SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones Industrial Average (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ) each reversed intraday Monday as a result of market introspection around the real data.

famous ChristiansOur 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.

Unholy Week



Monday

Cyprus accepted the dramatic demands of its European masters in order to stay in the union, but at the cost of its international banking credibility and its citizen depositors. It’s a big day for more than just Cyprus though, as it sets a precedent that could prove a grave mistake for Europe with far reaching repercussions. This deal that taxes depositors indiscriminately raises the likelihood of future runs on banks globally and certainly in Europe. In other European news, a summit between the EU and Japan takes place Monday.

Is Federal Reserve Chairman Bernanke really addressing the London School of Economics on the lessons of the financial crisis Monday at midday, or is he secretly headed over to the What’s Brewing Seminar, which is coincidentally also scheduled to take place in London Monday. Heineken will be presenting there. New York Federal Reserve Bank President William Dudley is giving a speech to the Economic Club of New York at midday.

We have two reports on the economic slate Tuesday. The Chicago Fed’s National Activity Index, a gauge of overall business activity, reaches the wire at 8:30 AM ET. Last month’s report covering January showed the index deteriorated to negative 0.32 from positive 0.25 in December. The report for February will offer interesting insight clear of Washington D.C. political noise.

At 10:00 AM ET, look for the Dallas Federal Reserve Bank’s Manufacturing Survey for the month of March. The Texas Manufacturing Outlook Survey, as it is properly called, is expected to improve slightly to a mark of 3.4, according to Bloomberg’s survey of economists. Last month, the index measured 2.2.

A bankruptcy court is examining the Chapter 9 plea of the City of Stockton, California, with its bankruptcy being contested by municipal bondholders who are claiming that it is being used to force bigger cuts from them than from city workers and pensioners.

The corporate wire has an investor day at ABB Ltd. (NYSE: ABB). Hewlett-Packard (NYSE: HPQ) is having a technology briefing on its OfficeJet Pro X. Look for earnings news from Dollar General (NYSE: DG), Apollo Group (Nasdaq: APOL), Focus Media (Nasdaq: FMCN), JA Solar (Nasdaq: JASO), ZaZa Energy (Nasdaq: ZAZA) and more. (See Monday’s Preview for the complete list)

Tuesday

Several economic reports are set for Tuesday’s schedule. The important but volatile Durable Goods Orders Report is scheduled for 8:30 AM release. There’s something interesting I want you to realize about durable goods order trends. While the month-to-month comparisons seem to show improvement most months, the long-term chart comparing yearly results show a slowing of improvement.

Economists expect durable goods orders rose 3.5% in February, based on Bloomberg’s survey. That compares against the decrease in orders in January, when they fell 5.2%. Excluding transportation goods, which carry high ticket prices and can skew the message, orders are expected to edge up just 0.7%, versus last month’s 1.9% increase.

The first of the week’s real estate data reaches the wire on Tuesday when Case Shiller reports on its Home Price Index. The 9:00 AM report covers the month of January. Economists expect the group’s 20-city seasonally adjusted index to show price increase of 1.0%, against December’s increase of 0.9%. Such news continues to support the real estate sector, but even the slightest sign of weakness would damage housing stocks, which some say are priced for perfection. New Home Sales data for February follows at 10:00 AM ET. Economists are expecting a slip in the annual pace of new home sales to 425K, against January’s pace of 437K.

The Conference Board reports on Consumer Confidence at 10:00 AM ET. Confidence has been improving since Washington D.C. got out of the way of the economy earlier this year. The data for February showed the Confidence Index rose sharply to 69.6, up more than 10 points from the prior month. According to Barron’s, the consensus expects a lower reading of 67.5 for March. Tuesday also offers the regular retail same-store sales data. Last week, the International Council of Shopping Centers (ICSC) showed week-to-week sales increased 1.4%. On a year-to-year basis, sales were marked up 2.3%. Each measure represented improvement against the prior week. As we near Easter, sales should be markedly higher.

The Richmond Federal Reserve Bank reports on regional manufacturing activity at 10:00 AM. Economists expect the bank’s index to show a slight drop to a reading of 5.5 for March, which would be down from 6.0 in February.

State Street (NYSE: STT) reports on Investor Confidence at 10:00 AM. Last month’s report showed that global investor confidence (or risk taking in institutional portfolios) increased due to a greater appetite in North America. The Global Index measured 94.8, and the North American Index reached 86.3.

Dallas Fed Bank President Richard Fisher is set to speak about U.S. monetary policy.

There’s a nuclear summit in Seoul, South Korea. It would make perfect sense for North Korea to do something provocative.

The U.S. Supreme Court will start talking about same-sex marriage.

In corporate news, look for analyst or investor meetings at United Parcel Service (NYSE: UPS) and General Cable (NYSE: BGC). A Delaware bankruptcy court considers whether to approve the $10.5 million sale of Pension Worldwide’s brokerage assets. The earnings slate highlights reports from SAIC (NYSE: SAI), Alexza Pharmaceuticals (Nasdaq: ALXA), Bacterin Int’l (Nasdaq: BONE), Landec (Nasdaq: LNDC) and Luna Innovations (Nasdaq: LUNA).

Wednesday

Greek lambadesEven more housing data finds the wire on Wednesday, leading the day. In the pre-market, we’ll get the latest mortgage activity data from the Mortgage Bankers Association. Last week’s report covering the period ending March 15 showed mortgage applications decreased by 7.1%. Mortgage rates generally increased in the period.

Pending Home Sales data is due at 10:00 AM EDT Wednesday. Economists are looking for a 0.7% decrease in the February reading, matching against the 4.5% increase in activity seen in January. Investors will want to eye the SPDR S&P Homebuilders (NYSE: XHB) for perspective of how the market is receiving the news.

A slew of Federal Reserve representatives are scheduled to address the public Wednesday. They are all set to speak around noon, with addresses from Chicago’s Charles Evans, Boston’s Eric Rosengren, Cleveland’s Sandra Pianalto and Minneapolis’ Narayana Kocherlakota.

Look for the EIA’s regular Petroleum Status Report at 10:30 AM ET. Last week’s report covering the week ending March 15 showed crude oil inventory decreased by 1.3 million barrels, but remained well above the upper limit of the average range for this time of year. Total motor gasoline decreased by 1.5 million barrels and remained in the middle of the average range.

There’s a BRICs summit in South Africa today. Indian markets are closed today.

In corporate news, Pinnacle Foods is expected to make a 29 million share initial public offering at a price of $18 to $20 per share. Pinnacle is the maker of the Birds Eye frozen vegetables brand. The deal is backed by Blackstone Group (NYSE: BX). AMR Corporation's (OTC: AAMRQ.PK) subsidiary American Airlines seeks bankruptcy court approval for its proposed merger with U.S. Airways Group (NYSE: LCC).

Look for analyst and investor meetings at Zillow (NYSE: Z), AGL Resources (NYSE: GAS) and Aruba Networks (Nasdaq: ARUN). The Bank of America Merrill Lynch New York Auto Summit brings presenters Delphi Automotive (Nasdaq: DLPH), Dana Holding (NYSE: DAN) and Tenneco (NYSE: TEN). Look for EPS reports from PVH Corp. (NYSE: PVH), Paychex (Nasdaq: PAYX), Red Hat (NYSE: RHT), Adcare Health Systems (NYSE: ADK), Exceed (NYSE: EDS) and others.

Thursday

With equity markets closed in the U.S. on Friday, a great deal of economic data is being bunched into Thursday. Three economic data points reach the wire in just the premarket. First of all, the GDP Report for the fourth quarter of 2012 is scheduled for revision. Economists are looking for GDP growth to be adjusted higher to 0.6%, up from 0.1% when last adjusted (from negative 0.1%).

Weekly Initial Jobless Claims is due for report at 8:30. Last week’s report covering the period ending March 16 showed weekly claims increased by 2,000, to 336K. The four-week moving average for jobless claims improved by 7,500 last week, on its way down to 339,750.

At 9:45 AM, the Chicago Purchasing Managers Index (PMI) is expected to show Chicago area business expanded at a slower rate. The index is seen dropping to 56.1 in March, down from 56.8 in February. Measures above 50.0 mark economic expansion.

Bloomberg’s Consumer Comfort Index fell last week by 2.3 points, to -33.9. The weekly measure of the consumer mood should be overshadowed this week by the monthly reports.

The EIA’s Natural Gas Report is due Thursday at 10:30 AM. Last week’s report covering the period ending March 15 showed working gas in storage declined by 62 Bcf. Stocks were 502 Bcf less than last year at this time, but still 162 Bcf above the five-year average for this time of year.

The Kansas City Fed issues its manufacturing index Thursday. Economists expect manufacturing improved in the middle of the nation, but remained in contraction. The index is expected to improve to negative 3.0 from negative 10 last month. Zero marks breakeven.

There will be a bankruptcy hearing today for Birmingham, Alabama.

The U.S. bond market closes early Thursday at 2:00 PM ET. Several markets around the world are closed for Holy Thursday.

The corporate wire has investor or analyst meetings for eBay (Nasdaq: EBAY) and Chicago Bridge & Iron (NYSE: CBI). The CIBC Retail & Consumer Conference has a presentation by Target (NYSE: TGT). The EPS schedule highlights news from Accenture (NYSE: ACN), GameStop (NYSE: GME), Mosaic (NYSE: MOS), China Nepstar Chain Drugstore (NYSE: NPD), Commercial Metals (NYSE: CMC) and more.

Friday

U.S. equity markets are closed for Good Friday, but banks are open in the U.S. Markets are also closed in Australia, Brazil, Canada, Hong Kong, Singapore and the U.K. among others. The new Pope should be awaited with great joy and love to preside over services for the first time. Orthodox Christians do not mark Good Friday until May 3rd this year.

There are two economic reports on the schedule friends, so stay tuned.

Personal Income & Outlays data are due for release at 8:30 AM. Economists are looking for personal spending to increase by 0.6% in February, compared to 0.2% growth in January. Personal income is seen higher by 0.9% in February, after falling 3.6% in January. The Fed’s favored inflation gauge, the Core PCE Price Index is expected to show 0.2% increase month-to-month, versus the prior month’s 0.1% increase.

The Reuters / University of Michigan Consumer Sentiment Index is up for 9:55 AM release. Economists expect improvement for March, with the index expected to rise to 72.5, from 71.8 in February.

The corporate wire has EPS from Birner Dental Management Services (Nasdaq: BDMS).

We wish you a happy Easter and Passover dear friends from your friends at Wall Street Greek.

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.

blog

Labels: , , ,

free email financial newsletter Bookmark and Share

Friday, March 22, 2013

Ignore the Home Builder Pessimism

homebuildersBy The Greek:

Earlier this week, the National Association of Homebuilders’ (NAHB) Housing Market Index showed an intensified level of pessimism for homebuilders. Yet, I’m telling you not to worry about it, because it doesn’t matter.

The NAHB’s Housing Market Index (HMI) dropped 2 points in March, after shedding a point in February. The HMI fell to a mark of 44 in March, from 46 the month before, and made fools of economists who on average were expecting the index to improve by one point to 47.

The NAHB explained the falloff and the third straight month of flat to deteriorating data on ancillary issues. The industry group said that builders were still seeing increasing demand for new homes, but were frustrated by “bottlenecks in the supply chain for developed lots along with rising costs for building materials and labor.” And despite what seems like a better capital position for housing lenders like Bank of America (NYSE: BAC), according to the Federal Reserve, credit availability was reported as an ongoing problem. The NAHB also regularly mentions faulty appraisals, which include the values of sold distressed properties as comparables.

Yet, I’m telling you that there’s nothing to worry about. This index has remained underwater since the real estate market collapse, despite the nascent success of the nation’s largest builders. That’s the issue here. The NAHB is made up of builders, large and small, liquid and insolvent. Many small builders remain constrained by an inability to access capital. However, the large publicly traded builders including those listed herein are doing fine and dandy and are on an optimistic high today. They have access to capital, and the ability to steal market share from their humbled brothers. The evidence of their success is clear here.

Publicly Traded Builder
Year-to-Date Gain Thru 03/21/13
SPDR S&P Homebuilders (NYSE: XHB)
+13%
K.B. Homes (NYSE: KBH)
+40%
D.R. Horton (NYSE: DHI)
+26%
PulteGroup (NYSE: PHM)
+16%
Ryland Group (NYSE: RYL)
+14%
NVR (NYSE: NVR)
+14%
Toll Brothers (NYSE: TOL)
+10%
Lennar (NYSE: LEN)
+10%
MDC Holdings (NYSE: MDC)
+5%


They are not all higher on the year though. Beazer Homes (NYSE: BZH) and Hovnanian (NYSE: HOV) are in the red. Some of the difference has to do with regional variation. Some of the once hottest markets fell far from their peaks, but those same markets are on fire today again, including Phoenix, Las Vegas, California and Florida. K.B. Homes’ (KBH) west coast operations are a big reason for its performance this year. The HMI Report showed that the three-month moving average for the West Regional Index was up four points in March, and was easily in positive territory above 50 at a mark of 58. The Northeast Index was unchanged at 39, while the Midwest and South Indexes skidded by a point each to 47 and 46, respectively.

The part of the report I’ve always found most interesting is where builders are asked to report on current sales conditions, forward expectations and actual prospective buyer traffic. I find the first two measures are purely perceptional, and that the measure of real traffic tells a different and truer story for the majority of builders, who are mostly small. The index measuring current sales conditions fell by four points to reach a mark of 47. The measure of sales expectations for the next six months rose by one point to 51. However, the measure of prospective buyer traffic rose three points, and still measured deeply under breakeven sentiment at a mark of 35. Remember, though, it doesn’t matter because the real estate recovery is underway nonetheless. It’s just being enjoyed by a select few publicly traded companies which have garnered a good deal of market share from the least among their peers.

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.

Labels: , , , , , , , , , ,

free email financial newsletter Bookmark and Share

FRIDAY - No News Means a Focus on Cyprus

focusIn the premarket, futures trading in the S&P 500 (NYSE: SPY), Dow Jones Industrial Average (NYSE: DIA) and the Nasdaq (Nasdaq: QQQ) are indicating a higher open.

There are no economic reports scheduled for Friday, and as such, the market has its focus. It is squarely on Cyprus. The Russians reportedly rebuked the Cypriot outreach to it, probably because the Cypriots would not give up the EU in exchange, or enough of whatever else was being offered for the greedy Russians. Now Cyprus supposedly has until Monday to stabilize its banks, which under the threat of the gun cocked by the Europeans and the IMF means either taxing its citizens’ bank deposits and facing their fury or accepting bankruptcy and a return to the Cypriot pound outside of Europe. Cyprus is rightly afraid because if it stands beyond Europe’s reach, it would have to deal with the Turks alone (not really though). There are so many issues at play that I will concentrate a specific article on the topic for the weekend at the blog.

In other news, Federal Reserve Governor Sarah Raskin address U.S. labor market conditions in a speech Friday. Thursday produced a Weekly Initial Unemployment Claims increase of 2,000. The four-week moving average was 339,750, which is lower by 7,500.

On the corporate news wire, look for Headwaters (NYSE: HW) to meet with analysts. Salesforce.com (NYSE: CRM) is giving a customer company tour in Boston. Thomson Reuters (TRI.TO) is having its investor day in Toronto. Reporting earnings are Tiffany (NYSE: TIF), Darden Restaurants (NYSE: DRI), Intelligent Systems (NYSE: INS), GenVec (Nasdaq: GNVC), Michael Foods (Nasdaq: MIKL) and NTS Inc. (NYSE: NTS). Coca-Cola (NYSE: KO) said it would fire 750 workers after paring distribution centers. J.C. Penney (NYSE: JCP) said its turnaround could take a bit longer than initially expected. Apple (Nasdaq: AAPL) hit 100% renewable energy usage at its data centers run by solar arrays.

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.

travel

Labels: , ,

free email financial newsletter Bookmark and Share

Thursday, March 21, 2013

Thursday – The Day After the Fed’s Big Bluff

bluffThe day after the Fed’s big bluff, S&P 500 and NASDAQ futures are indicating a lower open. In case you missed it, yesterday, the Federal Reserve produced a magical economic forecast that seemed to deceive those with eyes to see and a memory of the Fed’s discussion of a 1.5% economic hit to GDP growth in 2013 on fiscal measures. Voila, 1.5% became 0.2% when the forecasts found the wire. I’m doing my best to make sure there is some reconciliation regarding where the difference was made up in just one month’s time, because otherwise, I can do nothing but assume the Fed’s forecasts are relatively baseless.

famous people living in New YorkOur 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.

Weekly Initial Jobless Claims are due for release at 8:30 AM ET Thursday. Last week’s data covering the period ending March 9 showed claims fell by 10K to a level of 332K. The four-week moving average declined to a historically significant point last week, exciting the market a bit. On the news last week, I asked the question whether 7.1 million Americans mattered or not, because they remain unaccounted for in labor statistics.

The Markit Economics PMI Manufacturing Index (Flash) is due around 9:00 AM EDT Thursday. The index drifted lower at the close of February to a reading of 54.3. Economists see the measure up to 55.0 this time around.

At 9:00 AM, catch the FHFA House Price Index. This reading for January is seen showing a 0.7% increase, versus last month’s noted 0.6% gain.

Bloomberg’s Consumer Comfort Index is up for its weekly release at 9:45 AM. Last week’s data showed a 0.8 point increase in confidence to -31.6. It was the highest level since last April, and the sixth straight week of improvement.

Existing Home Sales will be reported for February at 10:00 AM ET. Economists see sales rising to an annual pace of 5.01 million, up from 4.92 million in January. The housing market is critical to the market’s confidence, so each of this week’s data points will be scrutinized by us and should be noted by you.

Leading Economic Indicators (LEI) will be reported at 10:00 AM for the month of February. The LEI is seen by economists increasing by 0.4% in February, versus the 0.2% gain in January.

The Philadelphia Federal Reserve Bank issues its survey on manufacturing conditions at 10:00 AM. The Philly Fed’s General Business Activity Index is seen improving to a still negative -1.5 mark in March, better than its -12.5 level the month before.

The EIA presents its weekly Natural Gas Storage Report at 10:30 AM. Last week’s report covering the period ending March 8 showed natural gas stores decreased by 145 Bcf, to a level 440 Bcf below last year and 198 Bcf above the five-year average.

The new Chinese leader Xi Jinping will visit Vladimir Putin in Moscow, an interesting early travel plan that should be noted by metals investors and commodity interests.

In corporate news, an FDA advisory panel reviews a drug application for opioid dependence by Titan Pharmaceuticals (Nasdaq: TTNP). Reader’s Digest Association is asking for approval from a bankruptcy court for a $105 million loan for reorganization purposes. Look for analyst and investor meetings at AstraZeneca (NYSE: AZN), Palo Alto Networks (Nasdaq: PANW) and Susser Petroleum (Nasdaq: SUSP). Honeywell (NYSE: HON) and 3M (NYSE: MMM) present at the Bank of America Merrill Lynch Global Industrials & EU Autos Conference. Fluor (NYSE: FLR) presents at the BB&T Commercial & Industrial Conference. PetSmart (Nasdaq: PETM) presents at the ISI Retail Summit. Unum (NYSE: UNM) presents at the J.P. Morgan Insurance Conference. The earnings schedule includes news from Ross Stores (Nasdaq: ROST), Nike (NYSE: NKE), China Zenix Auto (NYSE: ZX), IHS (NYSE: IHS), Micron Technology (NYSE: MU), Adecoagro (Nasdaq: AGRO), Alimera Sciences (Nasdaq: ALIM), Cato (Nasdaq: CATO), CTI Industries (Nasdaq: CTIB), Dialogic (Nasdaq: DLGC), Highpower Int’l (NYSE: HPJ), K.B. Home (NYSE: KBH), Magal Security Systems (Nasdaq: MAGS), Met-Pro (NYSE: MPR), Movado (NYSE: MOV), New York & Company (NYSE: NWY), Perry Ellis Int’l (Nasdaq: PERY), Response Genetics (Nasdaq: RGDX), rue21 (NYSE: RUE), Scholastic (Nasdaq: SCHL), SuperMedia (Nasdaq: SPMD), The Marcus Corp. (NYSE: MCS), TIBCO Software (Nasdaq: TIBX), Vertex (Nasdaq: VTNR), Vringo (Nasdaq: VRNG), Wet Seal (Nasdaq: WTSL) and Worthington Industries (NYSE: WOR).

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.

Greek

Labels: , ,

free email financial newsletter Bookmark and Share

Wednesday, March 20, 2013

The Fed's Funny Math

Fed mathI know our math skills are poor in this nation, but the Fed would not try to blatantly pull the rug over our eyes while testing our elementary math skills would they? Let me get out my calculator and try this again, because my math skills must be failing me. So the Fed is saying then that 3.0% – 1.5% = 2.8%? Did they really just say that? Let’s move on to the lower end of the GDP growth forecast range for 2013. So then the money men are saying that 2.3% – 1.5% = 2.3%? What is this phantom math or quantum physics? Are there assumptions here that are beyond human comprehension? Is it just me, or do the numbers not add up? Fed Chairman Bernanke just reconfirmed in his press conference that there was a 1.5% drag to economic growth this year. So why didn’t that drag show up in the latest Fed forecasts? Did the Fed just lie to me?!?!

the truth hurtsOur 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.

They say, “Fool me once, shame on you; fool me twice, shame on me.” I stopped getting fooled by Fed economic forecasts when they said the financial crisis would be contained within the real estate sector at the end of the last decade. Then some time passed and Ben started to grow on me I suppose. I even grew a beard like his. Before I knew it, I guess I can say in the words of Nicki Minaj, my new favorite American Idol judge, “I beez in the trap!” (Warning – the linked to video contains profanity) Actually, so does my ego right now. I mean, we just took the Fed for its word and authored this article, Fed Warning – Expect a Sharp Cut to the Economic Forecast. I suppose I should have continued, “but based on the new math…”

What bothered me most was that during his press conference, Bernanke reiterated that there would be a 1.5% drag to Real GDP growth this year. Okay then, so where did the 1.3% offsetting and quite suddenly arriving factor come from and what is it exactly? Because otherwise, this math just does not add up. I’m sitting here with a calculator, a sundial and the spirit of Nostradamus losing my mind over this thing. I may have to send Nosti to dig up Einstein or Steven Hawking, because this math may have dimensional aspects to it or fall under string theory. Unfortunately, I hear the genius mathematicians are busy battling. I would like to see an Epic Rap Battle between Bernanke and Greenspan.



Here’s the actual Fed forecast. The simplicity of the PDF should have tipped me off I suppose. The math is reminiscent of something actually. It reminds me of the adjustments some of my superiors used to make to their tear sheet stock reports without earnings models to support them. Is the room spinning for you too? This is phantastic. I just can’t make sense of it, so it really deserves nothing more than a cynical editorial really. What really peeves me about it is that real money is moving on this news, and nobody (I mean nobody!) is questioning it. The market gained on the day and rose into the close. On what?!

Security
Blind Direction
SPDR S&P 500 (NYSE: SPY)
+0.7%
SPDR Dow Jones (NYSE: DIA)
+0.4%
PowerShares QQQ (Nasdaq: QQQ)
+0.7%
iShares Russel 2000 (NYSE: IWM)
+0.9%
iShares Dow US Real Estate (NYSE: IYR)
+0.6%
Financial Select Sector SPDR (NYSE: XLF)
+0.7%
SPDR Gold Trust (NYSE: GLD)
-0.5%


All those reporters got up and asked questions and not one of them said, “Um, Mr. Bernanke, could you help me get the math here?” I think the Fed has some explaining to do. What say you?

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 article interests Bank of America (NYSE: BAC), J.P. Morgan (NYSE: JPM), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Citigroup (NYSE: C), Exxon Mobil (NYSE: XOM), Apple (Nasdaq: AAPL), Facebook (NYSE: FB), Google (Nasdaq: GOOG), GE (NYSE: GE), Microsoft (Nasdaq: MSFT), Cisco (Nasdaq: CSCO) and Ford (NYSE: F).

Labels: , , , , , , ,

free email financial newsletter Bookmark and Share

Sell These Energy Stocks Today

By The Greek:

I believe that a Federal Reserve cut to its 2013 economic forecast Wednesday should serve as a driver of concern about cyclical energy demand. If I am correct, these energy ideas should see near-term weakness. Thus, I believe capital could be preserved by a temporary reduction in holdings here. Over the longer term (one-year), I favor energy for geopolitical and economic reasons, but I believe a nimble trade here could prove to be value-added.

I recently discussed long/short considerations for Exxon Mobil (XOM) in a stock specific article. However, as I considered the issue, I believe it has broader reaching impact than to just Exxon Mobil, and that investors in the five widely held energy stocks discussed here would also benefit from the investment thesis.

Stock
Year-to-Date Performance 
Exxon Mobil (NYSE: XOM)
+3.0%
Chevron (NYSE: CVX)
+11.3%
ConocoPhillips (NYSE: COP)
+3.4%
BP (NYSE: BP)
Unch.
Halliburton (NYSE: HAL)
+14.6%


As you can see, the upward gains of the energy equipment and services and exploration and production companies have been outsized in comparison to the integrated behemoths. They tend to be more cyclical in nature, with exploration and development activity weighing heavily on demand and the price of the commodities. As a result, they are likely to exaggerate downside performance as well.

Stock
Year-to-Date Thru 3/19
Beta
Halliburton (HAL)
+14.6%
1.8
Schlumberger (NYSE: SLB)
+7.2%
1.8
Baker Hughes (NYSE: BHI)
+10.8%
1.8
Transocean (NYSE: RIG)
+16.9%
2.0
Chesapeake Energy (NYSE: CHK)
+27.3%
1.3


However, the entire energy sector should be impacted by a reconsideration of global economic activity. Each of these stocks should be negatively impacted by any such downgrade to U.S. economic expectations as discussed in my previous work, Fed Warning – Expect a Sharp Cut to the Economic Forecast.

In short, my expectation is that the Fed will revise its 2013 economic outlook significantly lower Wednesday. The basis of this view is multifaceted. I believe the fourth quarter GDP growth disappointment was born of the government’s fumbling of the fiscal cliff and debt ceiling issues. Economic growth was just 0.1% in Q4 2012, versus expectations for 0.5% growth. There’s strong possibility that the same issue impacted Q1 2013, though to a lesser degree. I do not believe the issue was adequately accounted for within the Fed’s December 2012 published economic forecast.

Also, we know from the Fed and the Budget Office that the sequester spending cuts will likely burden economic growth by 0.6 percentage points this year. We also know that the Fed expects a 1.5 percentage point burden in total from the sequester cuts and from the expiration of the payroll tax break and on other implemented austerity-like measures. These figures do not appear to be accounted for within the previous Fed forecasts, since December’s forecast was only cut slightly versus September’s, to a 2.3% to 3.0% growth range. If the Fed revises the economic outlook today, the shares of cyclical stocks and other major energy names should retrench along with oil and gas prices.

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.

Labels: , , , , , ,

free email financial newsletter Bookmark and Share