Wall Street Week Ahead - Kaminis Called Stock Market Bottom

As Wall Street rallies in stealth for some, your Wall Street Greek reminds you that Markos Kaminis predicted on March 10 (the stock market's bottom) that it was time to "buy the news."

Wall Street rallied into the close on Friday, and turned in another positive week. The Dow Jones Industrials closed 1.9% higher through the five-day period, while the S&P 500 moved up 2.7% and the Nasdaq Composite climbed 3.4%. The Nasdaq is up 17% from its low of March 10.

Might the end truly be here for the bears? In this reactionary, counter-reactionary world, I have found criticism from both bulls and bears over the course of the last twelve months. So-called "experts" and novices alike have jumped down my throat via email and commentary to my articles at the site when I prognosticated correctly ahead of the game and against the herd on both occasions. Did you know that I once again called another economic forecast to the very day. See this article published on March 10, 2008, the exact day the market bottomed. Wall Street Greek predicted the very bottom of the stock market in 2008. If you've been reading, you know this is just another correct call in a series of prescient economic forecasts we've made.

Remember, it was "The Greek" who began warning of this economic downturn as early as the winter of 2006. Then it was I again who forecast stock market recovery early this year, despite my expectations for ongoing economic softness. So, with all the headless chickens running around investing in stocks, I have to wonder why then investors find it logical that the even-keeled Warren Buffet and Peter Lynch are the greatest of all time?

The key to successful long-term investing is in not letting emotions dictate your money flow, which is much harder said than done. Heck, equity mutual funds were still reporting outflows of capital as recently as the week before last. Meanwhile, stocks have been on the rise since March 10th. I bet you are surprised by that news, because during that span you've very likely been moving your money out stocks. It's a stealth rally if you are Main Street news centric, but for those of us well-versed in market phenomenon, we saw this coming. Plenty of capital is still on the sidelines, so as the herd gets on board, there should be plenty of opportunity still for latecomers. Even so, let's not rule out further market reconsideration, since GDP will be revised next week. Finally, our most important forecast yet: we view an Iran event as probable over the next few months, and that's not going to lead to peaceful times for investors, or anyone for that matter.

The Week Ahead

The coming week offers a relatively light load of economic data, but includes important information for economic forecasts.

Monday

On Monday, Leading Economic Indicators for April will provide insight into just how realistic the recession scenario is. Yes, that's right, we're not officially in a recession yet, though we expect that upon revision of first quarter GDP next week, there's a chance we'll see the economy contracted. Remember though, we need two quarters of contraction for an official "recession" label. Bloomberg's consensus of economists is looking for April Leading Indicators to have fallen 0.1% (rose 0.1% in March) despite the stock market's rise through the period. We remind you again, in case you missed it, market action is a leading economic indicator.

Internationally, markets in Canada, India, Malaysia, Singapore and Thailand will be closed on Monday. Earnings season continues here in the states, driven greatly by the reporting of retailers for their first quarter ended in April. Monday's schedule includes Lowe's (NYSE: LOW), Campbell Soup (NYSE: CPB), DryShips (Nasdaq: DRYS), Echelon (Nasdaq: ELON), Excel Maritime (NYSE: EXM), Arotech (Nasdaq: ARTX), BMP Sunstone (Nasdaq: BJGP), China GrenTech (Nasdaq: GRRF), China Techfaith Wireless (Nasdaq: CNTF), Elron Electronics (Nasdaq: ELRN), Hastings Entertainment (Nasdaq: HAST), Longtop Financial Technologies (NYSE: LFT), Loral Space & Communications (Nasdaq: LORL), Optibase (Nasdaq: OBAS), Pacific Ethanol (Nasdaq: PEIX), Perfect World (Nasdaq: PWRD), Raven Industries (Nasdaq: RAVN), Streamline Health Solutions (Nasdaq: STRM), The9 Limited (Nasdaq: NCTY) and a few more.

Tuesday

On Tuesday, State Street's Investor Confidence reading will be reported for May (April's was 72.8). This measure is rather current, since it is tallied on the second Tuesday of each month. Also, it's important to note that it measures the level of actual risk in investment portfolios. Indications are that there remain significant levels of cash within portfolios. Barron's reported that funds equal to 26% of total stock market value currently reside in cash alternatives, marking the greatest such level since 2003.

We very well may see an uptick in investor confidence, but consumer sentiment, which was reported on Friday by Reuters/University of Michigan, indicated consumers feel as bad now as they did in the early eighties. Remember though, sentiment is a lagging indicator, so that when consumers and investors think things are most dire, the economy/market is usually already in recovery. Guess what, we are already in recovery. The perhaps early cyclical heavy Nasdaq is doing especially well, up some 17% since March 10.

The Producer Price Index will also reach the wires on Tuesday, but this inflation gauge is likely to offer little interest to the market ahead of the report. Investors have already been primed by last week's moderate consumer price metric. We noted on the Wall Street Greek website this past Wednesday that CPI benefited from petroleum price back up that we already know reversed itself in May. At the same time, oil services pricing increased, as did food inflation. Thus, we found little reason to cheer the data, despite the market's positive interpretation. PPI is still worth paying attention to though, as producer prices continue to eventually find their way to your wallet. Bloomberg's consensus is looking for April's measure to have risen by 0.4% over March. Core PPI, excluding food and energy, is seen 0.2% higher. These barometers were up 1.1% and 0.2%, respectively, in March.

Of course, the weekly ICSC-UBS Same Store Sales Report is due before the market open on Tuesday. Remember, last week we estimated that the sharp rise in sales was probably a weather influenced figure, and we forecast a return to weak sales would likely result last week. We were right. Sales were only up 0.5% year-over-year last week, and fell 1.0% from the week before.

Fed Vice Chairman Donald Kohn, a man not afraid to speak his mind, will address a group in New Orleans; the topic, the economic outlook. The Japanese Central Bank has an important decision to make Tuesday, and is seen holding rates steady at 0.5%. In the increasingly controversial Democratic Party contest, Obama and Hillary slug it out in Kentucky and Oregon.

While markets will be closed in India and Indonesia, Tuesday's U.S. earnings schedule includes news from Analog Devices (NYSE: ADI), Hewlett-Packard (NYSE: HPQ), Home Depot (NYSE: HD), Medtronic (NYSE: MDT), Saks Inc. (NYSE: SKS), Target (NYSE: TGT), Astro-Med (Nasdaq: ALOT), AutoZone (NYSE: AZO), China Sunergy (Nasdaq: CSUN), Dr. Reddy's Laboratories (NYSE: RDY), DRS Technologies (NYSE: DRS), Dycom (NYSE: DY), Elbit Systems (Nasdaq: ESLT), Imperial Tobacco (NYSE: ITY), Intuit (Nasdaq: INTU), Metalink (Nasdaq: MTLK), MF Global (NYSE: MF), Mitsubishi UFJ Financial (NYSE: MTU), Mobile Telesystems (NYSE: MBT), NeoMagic (Nasdaq: NMGC), Neonode (Nasdaq: NEON), Palm Harbor Homes (Nasdaq: PHHM), Phillips-Van Heusen (NYSE: PVH), Quest Resource (Nasdaq: QRCP), Red Robin Gourmet Burgers (Nasdaq: RRGB), Staples (Nasdaq: SPLS), Tower Semiconductor (Nasdaq: TSEM), United Natural Foods (Nasdaq: UNFI), Virtusa (Nasdaq: VRTU), WidePoint (AMEX: WYY) and a few more.

Wednesday

The Federal Open Market Committee April meeting minutes will be released on Wednesday, and the notes always offer economists material to debate with in regards to what the Fed will do next. As a result, it moves stocks, so pay attention to that on Wednesday afternoon at our website.

Look for the weekly reports from the Mortgage Bankers Association (Mortgage Activity) and the Energy Information Administration (Petroleum Status). Oil jumped back into record territory last week, driven again by geopolitical concerns and a perceived negative news report from Saudi Arabia. The Arabs were viewed as in defiance of President Bush when they said they would increase oil output if demand called for it. This was interpreted as a denial to Bush's request for more oil now. However, The Greek interprets it this way, they will boost output when the war starts with Iran. That's actually good news, in a bad scenario.

Fed Governor Kevin Warsh grabs a microphone in Washington, as he addresses the use of the fed-funds rate tool in times of economic need. While we're on DC, a Senate committee will interview oil company executives on the price situation. House of Representatives committees will be busy studying sovereign wealth funds and sub-prime mortgage concerns.

While the Chilean market is shut, Wednesday's earnings reports here include BJ's Wholesale Club (NYSE: BJ), Limited Brands (NYSE: LTD), Napster (Nasdaq: NAPS), NetEase.com (Nasdaq: NTES), Ross Stores (Nasdaq: ROSS), Salesforce.com (NYSE: CRM), Tsakos Energy Navigation (NYSE: TNP), Tween Brands (NYSE: TWB), 8X8, Inc. (Nasdaq: EGHT), Abiomed (Nasdaq: ABMD), Brady Corp. (NYSE: BRC), Bristow Group (NYSE: BRS), Brown Shoe Co. (NYSE: BWS), CDC Corp. (Nasdaq: CHINA), Charming Shoppes (Nasdaq: CHRS), Citi Trends (Nasdaq: CTRN), Computer Sciences (NYSE: CSC), Cost Plus (Nasdaq: CPWM), Eaton Vance (NYSE: EV), Gladstone Investment (Nasdaq: GAIN), Gymboree (Nasdaq: GYMB), Hot Topic (Nasdaq: HOTT), Jackson Hewitt Tax Service (NYSE: JTX), Long's Drug Stores (NYSE: LDG), NetApp (Nasdaq: NTAP), Nordson (Nasdaq: NDSN), Perry Ellis Int'l (Nasdaq: PERY), PetSmart (Nasdaq: PETM), Retalix (Nasdaq: RTLX), Rosetta Genomics (Nasdaq: ROSG), Semtech (Nasdaq: SMTC), Solarfun Power Holdings (Nasdaq: SOLF), Synopsys (Nasdaq: SNPS), Talbots (NYSE: TLB), Westell Technologies (Nasdaq: WSTL), Zarlink Semiconductor (NYSE: ZL) and more.

Thursday

After jobless claims were noted at 371K last week, this week's consensus view for new claims filings adds up to 370K. Also look for the weekly Natural Gas Report from the EIA at 10:30. Energy investors will want to keep a look out for the government's annual hurricane forecast, though it's been far from accurate in recent years.

Fed-man Randall Kroszner addresses a group of bankers in Florida, and Treasury Secretary Paulson participates in a panel discussion in Chicago.

Markets will be closed in Austria, Brazil, Poland and Frankfurt, Germany. Thursday's earnings reports include Aeropostale (NYSE: ARO), Air France-KLM (Paris: AF.PA), AnnTaylor Stores (NYSE: ANN), Barnes and Noble (NYSE: BKS), Dick's Sporting Goods (NYSE: DKS), Gamestop (NYSE: GME), Gap Inc. (NYSE: GPS), Hormel Foods (NYSE: HRL), The Children's Place (Nasdaq: PLCE), Alkermes (Nasdaq: ALKS), Aruba Networks (Nasdaq: ARUN), Black Box (Nasdaq: BBOX), Blue Coat Systems (Nasdaq: BCSI), Bon-Ton Stores (Nasdaq: BONT), CA, Inc. (Nasdaq: CA), ChinaEdu (Nasdaq: CEDU), Columbus McKinnon (Nasdaq: CMCO), Ditech Networks (Nasdaq: DITC), Flowers Foods (NYSE: FLO), Global Sources (Nasdaq: GSOL), Hibbett Sports (Nasdaq: HIBB), Ixys Corp. (Nasdaq: IXYS), Linktone (Nasdaq: LTON), Mentor Graphics (Nasdaq: MENT), Met-Pro (NYSE: MPR), New York & Co. (NYSE: NWY), Opnext (Nasdaq: OPXT), Pacific Sunwear (Nasdaq: PSUN), Patterson Dental (Nasdaq: PDCO), Sanderson Farms (Nasdaq: SAFM), Shiloh Industries (Nasdaq: SHLO), Ship Finance Int'l (NYSE: SFL), Stage Stores (NYSE: SSI), Stein Mart (Nasdaq: SMRT), Suntech Power (NYSE: STP), Tech Data (Nasdaq: TECD), Telvent (Nasdaq: TLVT), The Buckle (NYSE: BKE), The Cato Corp. (NYSE: CTR), Toro (NYSE: TTC), Trans World Entertainment (Nasdaq: TWMC), Verigy (Nasdaq: VRGY), Zale (NYSE: ZLC) and Zumiez (Nasdaq: ZUMZ).

Friday

On Friday, we'll see if this week's positive Housing Starts report has a solid base. Existing Home Sales for the month of April are set for release. We theorized on Friday, in our article entitled "Housing Starts See Seasonal Impact Despite Adjustment," that housing benefited from an abnormal current period that applied an irrelevant average seasonal adjustment. We were in fact the sole voice discussing this possibility, while everyone else just passed it off as an anomaly without offering solid basis. We might see the same type of positive housing news in this Friday's report, so be wary when the market starts betting on housing recovery prematurely. Bloomberg's consensus sees the annual pace of existing home sales running at 4.85 million in April, compared to 4.93 in March.

Bond markets close at 2:00 p.m. on Friday, ahead of the Memorial Day weekend holiday. The sole noteworthy earnings report we could find for Friday was Nordic American Tanker Shipping (NYSE: NAT).

Keep up with daily market happenings with us all week long.

Please see our disclosure at www.wallstreetgreek.blogspot.com. Article also interests AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: DOG, AMEX: SDS, AMEX: QLD.

Week in Video Review - May 12 - 18

Please enjoy our weekly video review, packed with important economic, geopolitical and humorous content we hope you enjoy.


As always, the opinions expressed within the videos may not agree with the view of "The Greek." Please see our disclosure at the Wall Street Greek website. Interests AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: DOG, AMEX: SDS, AMEX: QLD.

Housing Starts See Seasonal Impact, Despite Adjustment

Housing starts lifted the stock market to start the day today, but only until consumer sentiment was reported.

Economic news today was mixed, but it was the one factor that did the market in which raised it this morning, housing.

Housing Starts

April housing starts were reported ahead of forecast today, but we expect seasonality played a role, despite supposed seasonal adjustment. Here's why...

The spring season is typically the strongest selling period for the housing industry. Therefore, economic reporting of housing starts is seasonally adjusted. However, this is an imperfect science. Adjustments are made based on averages over years of study, and in real life, we exist in a world that is anything but average...

The current housing market is in fact within a dramatic decline, perhaps the greatest on record. So, rising from the depths of such dramatic decline should prove quite different than the average seasonal rise. This is a qualitative description of a mathematical relation to help you to see things outside the equation.

Typically, every spring, the housing market performs better than the winter before. There's an average seasonal boost that has been calculated, and that adjustment is applied to newly reported quarters in an attempt to relay what the real change is, excluding seasonal factors. April's starts rose 8.2% over March, but were 30.6% short of the prior April figure. Thus, you can see how we could get an irregular reading this time around. For this reason, there's an error estimation of give or take 14.5% that could apply to the month-to-month figure, but only a 6.7% margin for the year-over-year measure. So, you see, the entire improvement could be explained by error.

Therefore, hold your horses before predicting the housing market turn. We must say though that even we want to believe in it. Permits increased 4.9% over March, but were likewise off 34.3% from the prior year month. Here, the margins of error were calculated at just 1.2% and 1.4%, respectively. Still, let's wait and see how results prove out later on this year before we call a bottom.

University of Michigan Consumer Confidence

Consumer sentiment was reported very weak, at 59.5, short of the forecast for a reading of 62.5. The measure was also down from April's 63.2. However, remember that consumer sentiment is a lagging indicator. By the time Main Street thinks things are dire, the worst is usually over. In any event, the market turned lower once the news broke.

Please see our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: DOG, AMEX: SDS, Nasdaq: QQQQ.

Daily Market Recap

Please find Thursday's video review below.



Opinions expressed within the videos may not agree with "The Greek." Article interests AMEX: DIA, AMEX: SPY, AMEX: DOG, AMEX: SDS, AMEX: QLD, Nasdaq: QQQQ, Nasdaq: YHOO.

PreMarket Stock Market Report

We are committed to bringing you premarket news. Please find all the early economic news and corporate events that broke this morning, either within this article or within our sidebar section "Market Moving News" at the Wall Street Greek website.

Before we begin, we want to note that we are omitting discussion of the very important Monthly Oil Market Report released by OPEC this morning, because a second article will detail the petroleum market today, and recent events within it. It's going to be an otherwise busy day, so you'll find plenty of information to keep you occupied here in the meantime.

Weekly Initial Jobless Claims

New unemployment benefits filers numbered 371K for the week ended May 10, 2008. Reported this morning at 8:30 a.m., the measure was forecast just 1,000 below the actual figure, which exceeded last week's measure of 365K. So, "playing it safe," so to speak, worked for economic forecasters this week. We outlined in our weekly market planner that economists seem to keep forecasts for this important labor market barometer near prior week result. We also noted, that while we were disappointed in this fact, sometimes the past does serve as the best predictor of the future, especially with a metric that is reported so frequently (weekly).

Generally, unemployment has held recently, after starting higher earlier this year. The government's tax rebate stimulus might also support the economy over the next few months, and further limit corporate reason for workforce reduction. However, we continue to expect the retail/restaurant space to cut some fat over the course of the year. Weaker players must be weeded out of the saturated marketplace, and we've already seen some bankruptcies, Linen n' Things being the most recent. Department stores like Macy's (NYSE: M) and JC Penney (NYSE: JCP), and mall-based apparel retailers (non-teen) seem to fit the bill for trouble. Price-minded consumers are finding their way to discount shops like Wal-Mart (NYSE: WMT). The high end has held up in specialty, but in broader reaching stores like Nordstrom (NYSE: JWN), which the super-rich would still not consider their store anyway, we've seen signs of trouble as well.

Our theory is that still high costs of living and food and energy inflation, as well as credit unavailability, will continue to pinch consumer spending this year. So, we expect restaurant/retail to layoff a good amount of employees before it's all said and done. Mind you, this does not bode well for commercial real estate either.

Empire State Manufacturing Survey

The New York regional barometer of manufacturing was also reported this morning at 8:30. The General Business Conditions Index, the metric you see headlining at major media, was reported at a negative 3.2, versus consensus forecast for a reading in limbo, at 0.0. While this offers indication of slight manufacturing deterioration in May, it still marked improvement from the reading of -22.2 in March. The figure was just slightly off the 0.6 measure in April. We do not expect the market to react harshly to this mild result, as economic expectations have a low bar to hurdle at this point, despite the forecast for this month's NY figure.

The details of the Empire State report offered some reason for concern. Participants were asked about the prices paid for inputs, and responded that prices had increased 8.7% on average over the past twelve months. Respondents expected prices to continue to rise 6.8% in the coming twelve months. Here's what should concern you most. While manufacturer's selling prices had not risen much over the past 12 months (+2.9%), executives expected to raise prices by a higher level in the coming 12 months (4.1%) in order to offset their input price pressure.

So, while manufacturers shipments had decreased, they were not cutting prices to move goods, often a positive consequence of competition, and instead were raising prices due to inflation in their component and raw materials costs. Margins are being squeezed at these firms, and this explains manufacturers' contribution to the layoff count to date. If the economy were not to recover this year, you could expect more consolidation; even so, we doubt the bottom has been met yet in manufacturing. The Philly Fed Survey is up next today, at 10:00 a.m., and consensus expectations are set much lower for Philly area business conditions. Economists are looking for a reading of -20.0.

Treasury International Capital (March)

Net foreign purchases of long-term U.S. securities measured $80.2 billion in March, marking an increase from $77.9 billion in February. Roughly 60% of foreign investment came from official institutions and 40% from private investors. The figure has increased through each month of this year, but was lower over the trailing 12-months, when compared to the 12 months prior. As the dollar strengthens, or, should it continue to strengthen, we would expect demand to increase.

The momentum trade is over in the dollar, as currency investors now look to hedge bets and reverse them, looking to dollar appreciation. The problem is, the ECB becomes more likely to raise rates with each passing month, in our view. Much depends on the wherewithal of the European economy, and the commitment of Union members to the will of the whole. But, once the ECB starts raising rates, you can expect reconsideration of dollar/euro value (looking for dollar weakness again).

Industrial Production & Capacity Utilization

Here's where the real bad news originated today. Both production and capacity utilization disappointed for the month of April. Production fell 0.7%, versus expectations for a 0.3% drop. Capacity utilization fell to 79.7%, versus expectations for 80.1%. Lower capacity utilization and production means increased likelihood of consolidation and workforce reduction. This is bad news considering the measures missed forecasts. They are therefore likely to lead economists to reduce more general economic forecasts, and phone calls to equity strategists will not be enthusiastic this morning either. This compounds the impact of the regional manufacturing data. If the market declines today, this is the fundamental reason for it, though it may not be the real driver. Even so, we do not expect a significant impact as this result is still an arms length from employment figures and corporate news that would more likely move the market.

Economic Data On Tap

Check in to our "Market Moving News" section to catch the releases of the EIA Natural Gas Report at 10:30 and the Housing Market Index at 1:00 p.m.

Corporate News

Barclay's (NYSE: BCS) hit the news wires early today with its earnings news and another write-down of $1.94 billion, but the company did not announce any new financing plans. However, that seems like just a matter of time.

Carl Icahn is launching a proxy battle to elect some favorable members to the board of Yahoo! (Nasdaq: YHOO). By doing so, he'll put the fate of Yahoo into the hands of its shareholders, and out of the hands of Jerry Yang and the management team. So, you may yet get your $30+ a share, if you vote Icahn's way. We, here at "The Greek," would actually vote against Icahn. We see far too much value creation opportunity at Yahoo! to sell out at the offered price now. While the combined Microsoft (Nasdaq: MSFT), Yahoo! will still find that value, it will drive less of an impact to the giant that is Microsoft. We view the deal better for MSFT than YHOO shareholders as a result.

Please see our disclosure at the Wall Street Greek website. Article also interests: AMEX: SPY, AMEX: DIA, AMEX: DOG, AMEX: SDS, AMEX: QLD, Nasdaq: QQQQ.

Money Minute Market Wrap

Enjoy the daily video market wrap up below.



Views expressed within the video may not agree with the opinion of "The Greek." Article interests AMEX: DIA, AMEX: SDS, AMEX: QLD, AMEX: SPY, AMEX: DOG, Nasdaq: QQQQ.

Economic Data Analysis - Chew on This!

Glue in your dentures tightly, because there's a plateful of economic analysis to chew on today. Between today and yesterday, we absorbed the newest inflation measure, two retail reports, a spot of housing news mixed with mortgage and foreclosure data, an updated energy outlook and weekly inventory, business inventories and import and export prices. Chew on that morsel before you choke on it! We are not schooled in the Heimlich Maneuver here at "The Greek." This article focuses on the big inflation report.

Consumer Price Index (CPI)

The market is rising today on what, on the surface of things, looks like a positive development for inflation. However, the published headline numbers alone do not tell the whole story. Simply looking at the result, would be like passing a great impressionist's painting from three feet away. You really need to back up, take a close look, blink and look again, to understand and make good use of the data. So, let us do that for you.

The headline CPI increased 0.2% in April, while the core figure (ex-food and energy) rose 0.1%. Both results were a tenth of a point below consensus expectations, undeniable good news. Still, Core CPI looked good on the surface, but let's take a step back and look closer at the components. Energy was relatively unchanged, but behind that apparent stagnation were volatile factors that simply moved counter to one another. This created the illusion of stability.

The energy index advanced 1.9% in March, but was relatively unchanged in April. Here's why... In April, petroleum pricing actually backed off, and we know things have changed dramatically for the worse again in May, so we take little solace from this data. Still, while petroleum based energy declined 1.6%, the energy services index saw price rise of 2.5%. This means that inflation is trickling through the system on the energy end of things. We see this happening plain and evidently in gasoline pricing, and with news that some refiners are scaling back capacity. Gasoline refiners, like Valero (NYSE: VLO), Tesoro (NYSE: TSO), Sunoco (NYSE: SUN), Hess (NYSE: HES) and others have been losing money making your cars run, so they've taken to scaling back capacity, thus forcing the competitive marketplace to allow price increase. So, next month, when petroleum prices come in higher in the CPI data, and services continue to rise as well, inflation might also present a more frightening picture for those only passing within three feet of it.

Inflation was clearly evident on the food end of the CPI table. The food index component of the index increased 0.9% in April. The index for food at home (vs. restaurant dining) rose 1.5%, reflecting increase across all major grocery store groups. So, agricultural born inflation continues to more readily pass through to consumers, which makes perfect sense. Food is a need item, a commodity driven resource, and is mostly dominated by large processors who can pass price rise through easily to retail, who of course will pass it on to consumers. Margins are tight when it comes to plain foods, where differentiation is hard to come by. Price increase will therefore be passed forward quickly and efficiently.

So, we say, hold your horses on the good-bye party the market is throwing for inflation. Its demise is greatly overstated.

See our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SDS, AMEX: SPY, AMEX: DOG, AMEX: QLD, Nasdaq: QQQQ.

Stock Market Recap: No Chance in Iran... I Mean Hell

Stocks sagged, but the tech-heavy Nasdaq benefited from company specific news. Yahoo! (Nasdaq: YHOO) may find pressure to accept Microsoft's acquisition bid from none other than Carl Icahn. This is just what Microsoft (Nasdaq: MSFT) and yours truly expected when the software giant recognized Yahoo!'s stall tactics, and backed away from its offer. Another deal was in the news again today as well. Hewlett-Packard's (NYSE: HPQ) acquisition of EDS (NYSE: EDS) has been judged too rich by the market, and HPQ is off 10% in two days as it suffers the penalty.

Congress voted against the president, and against America's best interest in my book, by passing legislation to stop the president's filling of the strategic oil reserve until oil prices fall to a threshold level. This bill has no chance in Iran, I mean hell, of passing through the Oval Office, so why even bother...



If you do not see the video above this text, we encourage you to visit the website via the text link below. As always, the opinions expressed within the video may not agree with the view of "The Greek." Please see our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: DOG, AMEX: SDS, Nasdaq: QQQQ.

Retail Sales Sag, but God Bless Ex-Auto

Today's highly anticipated retail sales report offered quite a mix of color. Sales fell 0.2%, as you might have expected, but excluding autos, sales actually rose 0.5%.

April Retail Sales

We've been dreaming about this report over the past two weeks, which probably says something about the quality of life over here at Greek HQ. The report itself offered no letdown from the hype, as it portrayed a bifurcated world. As expected, given recent news from General Motors (NYSE: GM) regarding its plans to cut production further to better match soft market demand, auto sales weighed on the retail figure.

The graphs to the right depict the horror of the automobile industry in a fashion that Terror Film Festival founder "Claw" might enjoy best. That bar shaded in light gray to the right offers the pain of the auto industry via embarrassing public display.

But wait a second, the auto industry is suppose to be on the road to recovery is it not? Ford (NYSE: F) just got a great vote of support in Barron's, and management did not disappoint when America's greatest family run business, as The Greek's favorite cousin and dedicated employee of Ford likes to say, reported earnings.

The cheer was not supposedly limited to Ford either. Remember that breakthrough deal GM signed with the UAW... The company's efforts to cut pension and other employee costs are helping GM also improve its profit (they use to say "cost" over there) structure. Heck, things are well enough at Toyota Motors (NYSE: TM), that the company was recently emboldened to raise prices in the U.S. "So what gives then Greek," you must be thinking.

Hey, let's face it. Credit is tight and Americans are broke! Nobody is lending, and you could not afford it if they were. These legends of manufacturing are saving bucks on the cost end, but sales are not recovering yet. $600 from Uncle Sam might help The Greek make his rent this month, but it's not going to reach far enough for that Maserati I've been dreaming of (hint, hint... super wealthy Greek fans). Heck, it won't even get me a good bicycle in New York City, the showcase of the world. This place is just starting to see real estate values decline (inside Manhattan proper anyway). But it's no better for my fans outside this town either. So, while the auto companies and the stocks benefit from management actions to create value, the most important driver of earnings and value creation, sales, are not so hot.

God Bless Ex-Auto

Meanwhile, in the world "ex-auto" everything is hunker dory? Growth of 0.5% does not a celebration inspire, and the market is kind of drab today partly as a result. I like this term though, "ex-auto." I think the next time someone asks me how I'm doing, I'm going to respond, "well, I'm suicidal, but ex-auto, life's peachy!" Or, "clouds and rain color my day, but for the "core" Greek, rainbows and sunshine light my way!" Thank God for "core," "ex," data mining and the birth/death rate component of the government's employment data. Heck, if not for these things, and the media's coverage of economic cheerleading by Hank Paulson, Ben Bernanke and President Bush, you all might be as negative as the Europeans... Instead, look at you, all excited about buying a plasma TV with your government payout! God bless "ex auto."

Please see our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SPY, AMEX: DOG, AMEX: SDS, AMEX: QLD, Nasdaq: QQQQ.

Stock Market Review: Technology Stocks in the News

Be sure to see this week's edition of "The Greek's Week Ahead" directly below this article, or through the text link offered here.

Monday's news flow was somewhat light on the schedule, but offered unscheduled surprise. Please find all of Monday's highlights within the video below. Summarizing, Hewlett-Packard (NYSE: HPQ) will acquire EDS (NYSE: EDS), and Wal-Mart (NYSE: WMT) posted strong results, while warning on its outlook. Research in Motion (Nasdaq: RIMM) offered a new and improved smart phone, and the market recovered much of Friday's losses. Oil fell $2 as geopolitical tensions aged, and the dollar strengthened.

Please find our disclosure at the Wall Street Greek website. Article interests AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: SDS, AMEX: DOG, Nasdaq: QQQQ.

The Greek's Week Ahead - Theme Week

Our Wall Street week ahead article has been engineered to serve as a reference you can look back upon all week long to keep ahead of the economic and corporate news flow.

After last week's geopolitical news flow domination, this week offers several individual themes for each specific day. The President's week, however, will be geared toward preparing the Middle East for the near-term therapy he likely has in mind for Iran. He'll be sure to mix that into the conversation with his Israeli counterpart in between the fireworks and the champagne, as Israel celebrates its 60 year anniversary. Five decades have passed, and not a peaceful day among them it seems.

A Choice This Time. But Which One is Really Correct?

Between John McCain and apparently Barak Obama, it looks like Americans might have a distinct choice to make about Middle Eastern policy. But, is there really a choice, because we suspect the scenario playing itself out will not allow much free play between potential presidential actions. Also, McCain's experience with war, and his wisdom, might actually lead him to make the better-advised decisions. Anyway, we expect GW and Israel to make the important Iranian decision for the incoming president, so it's a non-factor.

Guess what, The Greek, now an Independent with Republican leanings, is actually bending toward McCain, despite our concern that he may have war in his genes at this point. Obama may promise change, but we remain concerned with the risk related to not dealing with Iran now. Change for a peaceful future is a great ideology, but Iran is too far progressed for us to bank on its changing its present direction.

In an ironic twist, it turns out McCain is actually less ballistic than Hillary Clinton. Jest we may, but we completely agree with Hillary's position on Iran. The threat of annihilation is not taken seriously in Iran, and it plainly exists. So, if we would do it, we need them to know we would. That might just prevent the next 9/11, which could be a thousand times worse than the wake up call of nearly seven years ago.

The market continues to wrestle with whether the worst is really over in the financial sector, or if the flow of financial reports exposing further asset write-downs and continued share dilution signal a need to discount stocks further. Last week's news from AIG (NYSE: AIG) and Fannie Mae (NYSE: FNM) raised some doubt, but let's look forward to the week ahead.

The Week Ahead

What happens to stocks this week will likely have as much to do with how geopolitical issues develop as it will with economic data flow. However, there are three key economic reports that could still have an impact.

Monday - Theme-less

A dearth of economic data greets investors on Monday. Lending to the abyss of information, markets in Hong Kong, South Korea and parts of Europe, including France and Germany, will be closed due to religious holidays.

The earnings schedule offers news from Sprint Nextel (NYSE: S), Fluor (NYSE: FLR), MBIA (NYSE: MBI), Cousins Properties (NYSE: CUZ), Tetra Tech (NYSE: TTI), InVentiv Health (Nasdaq: VTIV), PMI Group (NYSE: PMI), 4Kids Entertainment (NYSE: KDE), A.C. Moore Arts & Crafts (Nasdaq: ACMR), Akorn (Nasdaq: AKRX), Answers Corp. (Nasdaq: ANSW), ActivIdentity (Nasdaq: ACTI), American Technology Corp. (Nasdaq: ATCO), Ark Restaurants (Nasdaq: ARKR), Arqule (Nasdaq: ARQL), Artes Medical (Nasdaq: ARTE), Bally Technologies (NYSE: BYI), Basin Water (Nasdaq: BWTR), Building Materials Holding (NYSE: BLG), Calpine (NYSE: CPN), Carmike Cinemas (Nasdaq: CKEK), Century Casinos (Nasdaq: CNTY), Charter (Nasdaq: CHTR), Clearwire (Nasdaq: CLWR), Coeur d'Alene Mines (NYSE: CDE), Cogent (Nasdaq: COGT), Doral Financial (NYSE: DRL), Dynex Capital (NYSE: DX), Emmis Communications (Nasdaq: EMMS), Energy Solutions (NYSE: ES), GeoResources (Nasdaq: GEOI), Hecla Mining (NYSE: HL), Holly (NYSE: HOC), HSBC Finance (NYSE: HTB), IMAX (Nasdaq: IMAX), Imperial Sugar (Nasdaq: IPSU), IndyMac Bancorp (NYSE: IMB), JA Solar (Nasdaq: JASO), Kenexa (Nasdaq: KNXA), Knology (Nasdaq: KNOL), LDK Solar (NYSE: LDK), McDermott Int'l (NYSE: MDR), Medarex (Nasdaq: MEDX), Miller Industries (NYSE: MLR), MTR Gaming (Nasdaq: MNTG), MIVA Inc. (Nasdaq: MIVA), Nanogen (Nasdaq: NGEN), Nelnet (NYSE: NNI), Neurobiological Technologies (Nasdaq: NTII), Orleans Homebuilders (AMEX: OHB), PetMed Express (Nasdaq: PETS), Petrobras (NYSE: PBR), Radian Group (NYSE: RDN), Sirius Satellite (Nasdaq: SIRI), Standard Pacific (NYSE: SPF), Stifel Financial (NYSE: SF), Tercica (Nasdaq: TRCA), Valspar (NYSE: VAL) and XMSatellite Radio (Nasdaq: XMSR).

Tuesday - Consumer Spending (Retail)

Tuesday's theme is certainly consumer spending, with a focus on retail. As usual, the International Council of Shopping Centers starts the day off with its weekly same-store sales report. Remember, last week surprised us with its further improvement that we speculated was likely weather related since the week-to-week change was far different than the year-over-year improvement. Looking back, year-over-year growth of 2.3% compared to a week-to-week decline of 0.2%. Therefore, we would expect this week's year-to-year change to prove more cohesive with recent strife in the space.

Well, at 8:30 our speculation will no longer be necessary, as April's aggregate retail sales are reported. Bloomberg's consensus of economists forecasts a month-to-month decrease of 0.1%, and a 0.3% increase when excluding autos. In March, sales including autos increased 0.2%, rising 0.1% without.

Last week, individual retailers noted chain store sales, and "the cheaper the better" theme played on. Discounters like Wal-Mart (NYSE: WMT), Costco (Nasdaq: COST) and TJX Cos. (NYSE: TJX) continued to outperform department stores and mall-based retailers like JC Penney (NYSE: JCP), Nordstrom (NYSE: JWN), The Limited (NYSE: LTD) and The Gap (NYSE: GPS).

We hope you noted that "The Greek" beat the much more famous and well-paid Bob Dole on The Gap call. When Bob recommended GPS recently on CNBC, we came out critical of the pick. Seems to us Bob's wife must be shopping at an extraordinary location atypical of GPS' overall game.

Import and Export Prices are set for 8:30 a.m. release, with consensus expectations looking for an April increase in import prices of 1.7%. Energy pricing always plays a big role here, and we see no exception this time around, or the next for that matter.

March Business Inventories are scheduled for 10:00, with expectations for a 0.5% increase. That's slightly less than in recent months, but remember, it's not inventories in isolation that matter, but inventories-to-sales. Wholesale inventories were reported last week, and they decreased 0.1%, which was good to see.

Presidential primaries run off in West Virginia and Nebraska. Finally, Fed men Ben Bernanke and Richard Fisher are scheduled to find microphone's on Tuesday, and that's always fun!

Tuesday's earnings include Wal-Mart (NYSE: WMT), Applied Materials (Nasdaq: AMAT), Cameco (NYSE: CCJ), Canadian Solar (Nasdaq: CSIQ), Electronic Arts (Nasdaq: ERTS), Toll Brothers (NYSE: TOL), Fossil (Nasdaq: FOSL), Hill-Rom Holdings (NYSE: HRC), Liz Claiborne (NYSE: LIZ), American Apparel (NYSE: APP), American Science & Engineering (Nasdaq: ASEI), Dish Network (Nasdaq: DISH), Echostar (Nasdaq: SATS), Employers Holdings (NYSE: EIG), Fortress Int'l Group (Nasdaq: FIGI), GigaMedia (Nasdaq: GIGM), Given Imaging (Nasdaq: GIVN), Gushan Environmental Energy (NYSE: GU), Hana Biosciences (Nasdaq: HANB), Helen of Troy (Nasdaq: HELE), Hitachi Limited (NYSE: HIT), Icahn Enterprises (NYSE: IEP), KEMET (NYSE: KEM), Kubota (NYSE: KUB), Nissan Motors (Nasdaq: NSANY), Opnet Technologies (Nasdaq: OPNT), Palatin Technologies (AMEX: PTN), Pan American Silver (Nasdaq: PAAS), Paragon Technologies (AMEX: PTG), Park-Ohio Holdings (Nasdaq: PKOH), Photronics (Nasdaq: PLAB), Repsol YPF (NYSE: REP), Rubio's Restaurants (Nasdaq: RUBO), Russ Berrie (NYSE: RUS), SatCon Technology (Nasdaq: SATC), SenoRx (Nasdaq: SENO), Singapore Airlines (Nasdaq: SINGF.PK), Societe Generale (Paris: GLE.PA), StatoilHydro (NYSE: STO), Supreme Industries (NYSE: STS), TJX Cos. (NYSE: TJX), US Shipping Partners (NYSE: USS), Vector Group (NYSE: VGR), Verasun (NYSE: VSE) and Whole Foods Market (Nasdaq: WFMI).

Wednesday - Inflation

Wednesday's theme is "inflation" with important consumer price and oil information on tap. The Consumer Price Index (CPI) for the month of April is expected to show prices increased 0.3% on the headline, month-to-month, and 0.2% on Core CPI, or after subtracting out food and energy price change (delusional CPI might be more like it). This month's forecast perfectly matches last month's actual change, and I guess lack of deterioration is a good thing?.. Bernanke keeps telling us prices will moderate though.

EIA Petroleum Status is on tap for 10:30 release, and last week noted a build of 5.7 million barrels of oil inventory. What's more important this week is if Hezbollah backs off in Lebanon, if The Wall Street Journal report on Hugo Chavez's aid to Colombian rebels proves poorly researched, and if Iran decides to build wind farms instead of nuclear plants...

The Mortgage Bankers' Association is also on the slate as usual for Wednesday. Overseas, President Bush meets with his Israeli counterpart in Jerusalem, marking the 60th anniversary of the nation's founding.

Wednesday's earnings schedule includes Deere (NYSE: DE), Freddie Mac (NYSE: FRE), Agilent Technologies (NYSE: A), Macy's (NYSE: M), Jack-In-The-Box (NYSE: JBX), Acxiom (Nasdaq: ACXM), Akorn Int'l (NYSE: ATV), Amtech (Nasdaq: ASYS), ArcelorMittal (NYSE: MT), Audiovoxx (Nasdaq: VOXX), Brocade Communications (Nasdaq: BRCD), CAE (NYSE: CGT), China Digital TV (NYSE: STV), CGGVeritas (NYSE: CGV), Compugen (Nasdaq: CGEN), Comstock Homebuilding (Nasdaq: CHGI), Dana Holding (NYSE: DAN), Diana Shipping (NYSE: DSX), Double Hull Tankers (NYSE: DHT), Intelli-Check (NYSE: IDN), Interleukin Genetics (NYSE: ILI), Media Sciences Int'l (Nasdaq: MSII), Memory Pharmaceuticals (Nasdaq: MEMY), NICE Systems (Nasdaq: NICE), O'Charley's (Nasdaq: CHUX), Pioneer Behavioral Health (NYSE: PHC), Protection One (Nasdaq: PONE), ReneSola (NYSE: SOL), Salary.com (Nasdaq: SLRY), Sina (Nasdaq: SINA), Sony (NYSE: SNE), Spartan Stores (Nasdaq: SPTN), Stanley (NYSE: SXE), Steak n' Shake (NYSE: SNS), Synta Pharma (Nasdaq: SNTA), Teekay Shipping (NYSE: TK), Taseko Mines (AMEX: TGB), Telefonica (NYSE: TEF) and Vivendi (Paris: VIV.PA).

Thursday - Manufacturing

Thursday's theme is as clear cut as the two days preceding it, the state of manufacturing. Three separate reports will offer plenty of insight into how the guys who make things are doing. Leading off, the New York Federal Reserve will post its Empire State Manufacturing Survey for May at 8:30. The take on New York area manufacturing looks to show a state of limbo, with Bloomberg's consensus seeing a measure of 0.0, versus +0.6 last month.

In what looks to be a real treat, Industrial Production and the Philly Fed will follow that report up all before you've had your second cup of coffee (I know some of you will be on the third!). Consensus expectations for Philly area manufacturing see a reading of -20.0, compared to last month's -24.9. It's kind of sad really, the clarity in the fact that these expectations are most dependent upon the prior month result, rather than any solid gauge. Of course, the past is often the best forecaster of the near-term future, but I'm very sure from experience, that human weakness is at play here as well, and that's disappointing.

April Industrial Production is set for 9:15 reporting. Production is forecast to decrease 0.3%, compared to an increase of 0.3% in March. Capacity utilization is seen deteriorating to 80.1%, from 80.5%. The direction makes sense, but the intensity might be off; or could international demand for U.S. goods be enough to offset domestic softness in both durables and nondurables. The gauntlet has been tossed.

The auto industry has not been shy about posting cutbacks in production and noting its relevance to current demand. We've seen such moves from General Motors (NYSE: GM), and Ford (NYSE: F) is rumored to be considering putting its old Mercury line to bed. We say, good riddance! Companies should not fall in love with product lines, just as investors should not fall in love with stocks.

Thursday proves to be a busy day, with the regular Initial Weekly Jobless Claims Report also set for the early AM. This one almost religiously sees forecasts matched with prior week results, and almost always proves significantly off that estimate. Economists are looking for new benefits claims to have numbered 370,000 this week; that compares to 365K last week.

Treasury International Capital is also due before the market open. Foreign demand for long-term U.S. securities increased last month to $72.5 billion. The EIA reports on Natural Gas storage at its usual 10:30 a.m. time, just a week after Goldman Sachs (NYSE: GS) added it to its list of energy spikes to fear in the future. Finally, in the afternoon, the National Association of Home Builders will release its Housing Market Index. As you might imagine, this has not offered a party atmosphere of late, and measured 20 at last reading, and through most of this year. Chairman Bernanke will also appear in Chicago, to discuss banking and credit market turmoil. Have some wine with that buffet of information.

Thursday's earnings include Hewlett-Packard (NYSE: HPQ), Kohls (NYSE: KSS), JC Penney (NYSE: JCP), Autodesk (Nasdaq: ADSK), Nordstrom (NYSE: JWN), BMC Software (NYSE: BMC), Urban Outfitters (Nasdaq: URBN), Advance auto Parts (NYSE: AAP), Compuware (Nasdaq: CPWR), Mentor Corp. (NYSE: MNT), Arctic Cat (Nasdaq: ACAT), Blockbuster (NYSE: BBI), China Precision Steel (Nasdaq: CPSL), FreeSeas (Nasdaq: FREE), Gilat Satellite (Nasdaq: GILT), Irvine Sensors (Nasdaq: IRSN), Modtech Holdings (Nasdaq: MODT), National Grid (NYSE: NGG), Noah Education (NYSE: NED), Perceptron (Nasdaq: PRCP), Prestige Brands (NYSE: PBH), Quantum (NYSE: QTM), The Blackstone Group (NYSE: BX), UT Starcom (Nasdaq: UTSI), Yingli Green Energy (NYSE: YGE) and more.

Friday - Housing

After taking a breath following a busy Thursday, Friday offers a couple key data points. Housing is the theme for Friday. Treasury Secretary Paulson is scheduled to talk to few Congressmen on the topic in Washington. Recall, there's a bill working its way through Congress that the president has threatened to veto. Meanwhile, economists expect housing starts moderated even further, to a pace of 940,000 in April, from 947K in March.

The University of Michigan will update its Consumer Sentiment Index for May, and economists are looking for a still drab 62.5 measure. April sentiment was a robust 63.2 (that's sarcasm, we do that here on occasion).

While President Bush closes out his Middle Eastern themed week, some 60 government leaders have a nice weekend planned in Peru. We're looking forward to a possible round 2 between the royals of Spain and Hugo Chavez, or perhaps, a steel cage match between Chavez and the head of Colombia. You know they make unique bow ties over there...

Friday's earnings include Abercrombie & Fitch (NYSE: ANF), Fairpoint Communications (NYSE: FRP), Multi-Color Corp. (Nasdaq: LABL) and Pinnacle Gas Resources (Nasdaq: PINN). Please find our market commentary all week long at the site.

Please see our disclosure at the Wall Street Greek website.

Week in Video Review: May 5 - 11

It was quite a week, including two holidays, MBCW and Mother's Day. The week in video is not short on interesting events either, with a new president taking position in Moscow, the ECB and IMF renewing the fear of inflation, and intensifying geopolitical tensions that took oil prices $10 higher. If you cannot see the video where you are, please visit the Wall Street Greek website.



As always, the views expressed within the videos may not agree with the opinion of "The Greek."

Please see our disclosure at the Wall Street Greek website. Article interests (AMEX: SPY, AMEX: DIA, AMEX: SDS, AMEX: QLD, AMEX: DOG, Nasdaq: QQQQ, NYSE: XOM, NYSE: GE, NYSE: AIG, NYSE: GS).