This week will always be remembered as one without precedent, the first day of trading in a market contained by a less than perfectly rated United States of America. Standard & Poor’s downgraded the USA’s sovereign debt rating on Friday afternoon, when all the worst news usually reaches the wire. In this case, it wasn’t in the hopes of hiding the news like many corporates do, as it was too huge to keep undercover. Rather, it was in order to allow the markets two days to contemplate all the aspects of the downgrade and to best understand the immediate impact and the potential impact of the rating change.
Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.
Standard and Poor’s Worst Mistake Yet
The downgrade, while important, would be much worse if accompanied by a downgrade by Moody’s (NYSE: MCO) or Fitch. Perhaps this is what gave the
TV-telling seemingly terrified men behind the decision the courage to actually venture into the darkness. As yet, this move by S&P in isolation does not seem to force fund and other portfolio holders of AAA only credits to sell perhaps their most important asset, U.S. Treasuries. So, it does not drive a flood of treasury securities sales; nor does it push the treasury yield higher; nor make it more difficult for the U.S. to borrow money; nor raise the cost of capital across the investment spectrum. Yet, the gun that could end life as we know it is now cocked. A warning shot has been recklessly fired across the bow, and within the crosshairs of the crooked rifle is the very foundation of our economy, and the global economy which is tied to it.
Over the weekend, influential people ranging from the government ranks to the gurus of Wall Street to the financial genius of Omaha argued that Standard & Poor’s had made the wrong decision at the wrong time. The Treasury Department even noted a $2 trillion math error in S&P’s calculation, and reminded the world of S&P’s other great blunder, the rating of Mortgage Backed Securities (MBS) AAA all the way through the blowing up of the real estate bubble. That previously most grand mistake of S&P and the others allowed the bubble to keep growing toward its eventual bursting and the birth of the financial crisis, which was inevitable thanks to the poison investment securities so broadly held across America’s financial institutions, mistaken as good medicine thanks to the mad scientists’ review.
Indeed, S&P’s move looked to me like a blunder beyond all imagination, at least beyond the imagination of all those outside of its Financial District headquarters in the murky part of Manhattan.
After all, a debt deal was just reached in Washington, at the cost of many political careers. The debt ceiling was raised, and significant budget cuts were initiated. America remained the strongest nation on earth, and the dollar standard continued to drive global markets. S&P had not even whispered of the risk of a
near-term downgrade, and had only just warned of the potential for one down the road should America’s legislators not change our path and contain costs, especially for entitlements. It seems the rating agency got caught up in politics, as they even noted the political gamesmanship that took the DC deal to the midnight hour. But Cinderella escaped in time… Based on the action, it almost seems as if the rating agency wished she hadn’t, which I suppose makes her kind of like Cinderella’s evil stepmother or sister or something averse to her economic triumph.
Being well-informed, we’ll have plenty more to say about S&P in the days and weeks ahead, and years if there are any to come…
Monday
Markets will be on edge Monday, if they don’t fall off it into the abyss after Standard & Poor’s downgrade of the U.S. sovereign rating to AA+ from AAA.
All the action overseas will be under the microscope, so the Bank of Japan’s (BOJ) monthly report could be quickly rendered mute by emergency action by central banks across the globe. Indeed, the ECB acted to buy significant quantities of stressed Italian and Spanish debt. Russian government representatives are meeting to discuss the impact of taxes on crude oil output.
On the corporate wire, Franklin Resources (NYSE: BEN) will report its assets under management for the month of July. Needless to say, assets under management could be much lower across investment managers come Monday afternoon. Great Plains Energy (NYSE: GXP) is having its analyst day after reporting results. The full EPS schedule follows here:
1st Century Bancshares Inc (Nasdaq: FCTY)
99 Cents Only Stores (NYSE: NDN)
Aastrom Biosciences Inc (Nasdaq: ASTM)
Ability Enterprise Co Ltd (2374.TW)
Accelrys Inc (Nasdaq: ACCL)
Achillion Pharmaceuticals Inc (Nasdaq: ACHN)
ADAMS Resources & Energy Inc (AMEX: AE)
Adventrx Pharmaceuticals (AMEX: ANX)
Air Lease Corp (NYSE: AL)
Airmedia Group Inc (Nasdaq: AMCN)
Albany International (NYSE: AIN)
Albany Molecular Research Inc (Nasdaq: AMRI)
Alexander and Baldwin Inc (Nasdaq: ALEX)
Alexza Pharmaceuticals Inc (Nasdaq: ALXA)
Alliance HealthCare Services (NYSE: AIQ)
Altra Holdings Inc (Nasdaq: AIMC)
Ambient Corp (Nasdaq: AMBT)
America First Tax Exempt Investors LP (Nasdaq: ATAX)
American Caresource Holdings Inc (Nasdaq: ANCI)
American Shared Hospital Services (AMEX: AMS)
American States Water Co (NYSE: AWR)
Amicus Therapeutics Inc (Nasdaq: FOLD)
Anadys Pharmaceuticals Inc (Nasdaq: ANDS)
Antares Pharma Inc (AMEX: AIS)
Appliance Recycling Centers Of America (Nasdaq: ARCI)
ARC Wireless Solutions (Nasdaq: ARCW)
Arca Biopharma (Nasdaq: ABIO)
Arcadia Resources (AMEX: KAD)
Array Biopharma (Nasdaq: ARRY)
Arrowhead Research (Nasdaq: ARWR)
Ascent Capital Group (Nasdaq: ASCMA)
Assured Guaranty Ltd (NYSE: AGO)
Avanir Pharmaceuticals (Nasdaq: AVNR)
Ballantyne Strong (AMEX: BTN)
BANKS com (AMEX: BNX)
Beacon Roofing Supply (Nasdaq: BECN)
Biglari Holdings Inc (NYSE: BH)
BioDelivery Sciences International (Nasdaq: BDSI)
Bioscrip Inc (Nasdaq: BIOS)
Black Diamond Inc (Nasdaq: BDE)
BNK Petroleum Inc (BKX.TO)
BP Prudhoe Bay Royalty Trust (NYSE: BPT)
Breitburn Energy Partners LP (Nasdaq: BBEP)
Bridgeline Digital Inc (Nasdaq: BLIN)
Brigham Exploration Co (Nasdaq: BEXP)
Bristow Group Inc (NYSE: BRS)
BroadSoft Inc (Nasdaq: BSFT)
Broadway Financial Corp (Nasdaq: BYFC)
Brookdale Senior Living Inc (NYSE: BKD)
BRT Realty Trust (NYSE: BRT)
Callon Petroleum Co (NYSE: CPE)
Canterbury Park Holding (Nasdaq: CPHC)
Cardionet Inc (Nasdaq: BEAT)
Carefusion Corp (NYSE: CFN)
Carmike Cinemas Inc (Nasdaq: CKEC)
Carrols Restaurant Group Inc (Nasdaq: TAST)
Caspian Energy Inc (CEK.TO)
Castle Brands Inc (AMEX: ROX)
Cellcom Israel Ltd (CEL.TA)
Celsius Holdings Inc (OTC: CELH.PK)
Celtic Exploration Ltd (TOR: CLT.TO)
Central Vermont Public Service (NYSE: CV)
Chatham Lodging Trust (Nasdaq: CLDT)
Chemspec International Ltd (NYSE: CPC)
China Communication Telecom Services (8206.HK)
China E-Learning Group Ltd (8055.HK)
China Fire & Security Group (Nasdaq: CFSG)
China Gerui Advanced Materials (Nasdaq: CHOP)
China Housing & Land Development (Nasdaq: CHLN)
China Marine Food Group Ltd (Nasdaq: CMFO)
China Metro-Rural Holdings Ltd (NYSE: CNR)
China Natural Gas (Nasdaq: CHNG)
China Primary Resources Holdings (8117.HK)
China Technology Development (Nasdaq: CTDC)
China Yuchai International (NYSE: CYD)
Chinacom Inc (8006.HK)
Chindex International (Nasdaq: CHDX)
Citizens Community Bancorp (Nasdaq: CZWI)
Citizens Inc (NYSE: CIA)
CKX Lands Inc (AMEX: CKX)
Clarke Inc (TOR: CKI.TO)
Clean Energy Fuels (Nasdaq: CLNE)
Coeur d Alene Mines (NYSE: CDE)
Comstock Homebuilding Companies (Nasdaq: CHCI)
Connecticut Water Service (Nasdaq: CTWS)
Corcept Therapeutics (Nasdaq: CORT)
Core Mark Holding Co (Nasdaq: CORE)
Core Moldings Technologies (AMEX: CMT)
Cover All Technologies (Nasdaq: COVR)
Credit China Holdings Ltd (8207.HK)
Crestwood Midstream Partners LP (Nasdaq: CMLP)
Crown Crafts Inc (Nasdaq: CRWS)
CryptoLogic Ltd (TOR: CRY.TO)
Crystallex International Corp (TOR: KRY.TO)
Cyanotech Corp (Nasdaq: CYAN)
CytRx Corp (Nasdaq: CYTR)
Dahe Media Co Ltd (8243.HK)
DARA Biosciences (Nasdaq: DARA)
Daxor Corp (AMEX: DXR)
Day4 Energy Inc (TOR: DFE.TO)
Dealertrack Hldg (Nasdaq: TRAK)
DG Fastchannel (Nasdaq: DGIT)
Digital Power (AMEX: DPW)
Document Security Systems (AMEX: DSS)
Dollar Thrifty Automotive Group Inc (NYSE: DTG)
Douglas Dynamics Inc (Nasdaq: PLOW)
DRI Corp (Nasdaq: TBUS)
DTS Inc (Nasdaq: DTSI)
Ducommun Inc (NYSE: DCO)
Dynegy Inc (NYSE: DYN)
Electro Sensors Inc (Nasdaq: ELSE)
Ellington Financial LLC (NYSE: EFC)
Elong Inc (Nasdaq: LONG)
Emdeon Inc (NYSE: EM)
EnergySolutions Inc (NYSE: ES)
EnerNOC Inc (Nasdaq: ENOC)
Enova Systems Inc (AMEX: ENA)
Entercom Communications Corp (NYSE: ETM)
Essex Rental Corp (Nasdaq: ESSX)
Evergreen Energy Inc (NYSEArca: EEE)
Evergreen Solar Inc (Nasdaq: ESLR)
Express 1 Expedited Solutions Inc (AMEX: XPO)
Fairpoint Communications Inc (Nasdaq: FRP)
Falconstor Software Inc (Nasdaq: FALC)
Fibrocell Science Inc (OTC: FCSC.OB)
First Advantage Bancorp (Nasdaq: FABK)
First Bancorp (NYSE: FBP)
First Citizens Bancshares (Nasdaq: FCNCA)
First Community Corp (Nasdaq: FCCO)
Flexible Solutions International (AMEX: FSI)
Forward Industries Inc (Nasdaq: FORD)
Friedman Industries Inc (AMEX: FRD)
Fuel Tech Inc (Nasdaq: FTEK)
G Willifood International Ltd (Nasdaq: WILC)
Gaiam Inc (Nasdaq: GAIA)
Gastar Exploration Ltd (NYSE: GST)
Genon Energy Inc (NYSE: GEN)
Giant Interactive Group Inc (NYSE: GA)
Globus Maritime Ltd (Nasdaq: GLBS)
Golden Minerals Co (Nasdaq: AUMN)
Golub Capital BDC Inc (Nasdaq: GBDC)
Gran Tierra Energy Inc (AMEX: GTE)
Gray Television Inc (NYSE: GTN)
Great Atlantic and Pacific Tea (OTC: GAPTQ.PK)
Green Bankshares Inc (Nasdaq: GRNB)
GTSI Corp (Nasdaq: GTSI)
Gyrodyne Co of America (Nasdaq: GYRO)
Hallador Energy Co (Nasdaq: HNRG)
Hallwood Group Inc (AMEX: HWG)
Handy and Harman Ltd (Nasdaq: HNH)
Hanover Insurance Group (NYSE: THG)
Harbor Biosciences Inc (OTC: HRBR.OB)
Harleysville Group Inc (Nasdaq: HGIC)
Hawthorn Bancshares Inc (Nasdaq: HWBK)
Healthcare Realty Trust (NYSE: HR)
Hill International Inc (NYSE: HIL)
Hillenbrand Inc (NYSE: HI)
Himax Technologies Inc (Nasdaq: HIMX)
HMG/Courtland Properties (AMEX: HMG)
Horsehead Holding Corp (Nasdaq: ZINC)
Houston Wire and Cable (Nasdaq: HWCC)
HSW International Inc (Nasdaq: HSWI)
Idenix Pharmaceuticals (Nasdaq: IDIX)
IEC Electronics (AMEX: IEC)
Imperial Industries (OTC: IPII.OB)
Information Services (Nasdaq: III)
Ingles Markets (Nasdaq: IMKTA)
Inhibitex (Nasdaq: INHX)
Innospec (Nasdaq: IOSP)
Innovaro (AMEX: INV)
Inovio Pharmaceuticals (AMEX: INO)
Insmed (Nasdaq: INSM)
Integra Bank (OTC: IBNKQ.PK)
Integrated Electrical Services (Nasdaq: IESC)
Intelligent Systems (AMEX: INS)
International Stem Cell (OTC: ISCO.OB)
Intersections (Nasdaq: INTX)
Investors Capital Holdings (AMEX: ICH)
IR BioSciences Holdings (OTC: IRBS.PK)
Iridium Communications (Nasdaq: IRDM)
Ironwood Pharmaceuticals (Nasdaq: IRWD)
Irvine Sensors (OTC: IRSN.OB)
Isramco (Nasdaq: ISRL)
Jinpan International (NasdaqGS: JST)
Kennedy Wilson Holdings (NYSE: KW)
Kent Financial Services (Nasdaq: KENT)
Keryx Biopharmaceuticals (Nasdaq: KERX)
Kindred Healthcare (NYSE: KND)
Kohlberg Capital (Nasdaq: KCAP)
KSW (Nasdaq: KSW)
Landmark Bancorp (Nasdaq: LARK)
LDK Solar Co (NYSE: LDK)
Lexicon Pharmaceuticals (Nasdaq: LXRX)
Lifetime Brands (Nasdaq: LCUT)
Ligand Pharmaceuticals (Nasdaq: LGND)
Lime Energy (Nasdaq: LIME)
Limelight Networks (Nasdaq: LLNW)
Live Nation Entertainment (NYSE: LYV)
Livedeal (Nasdaq: LIVE)
LJ International (Nasdaq: JADE)
LMI Aerospace (Nasdaq: LMIA)
LSB Industries (NYSE: LXU)
LTC Properties (NYSE: LTC)
Luminex (Nasdaq: LMNX)
MAKO Surgical (Nasdaq: MAKO)
Manhattan Bridge Capital (Nasdaq: LOAN)
Markel (NYSE: MKL)
MarkWest Energy Partners LP (NYSE: MWE)
Maxygen (Nasdaq: MAXY)
Medicis Pharmaceutical (NYSE: MRX)
MexCo Energy (AMEX: MXC)
MGM Resorts International (NYSE: MGM)
Mindray Medical International Ltd (NYSE: MR)
Motorcar Parts of America (Nasdaq: MPAA)
Move (Nasdaq: MOVE)
National Security Group (Nasdaq: NSEC)
Nautilus Inc (NYSE: NLS)
Neenah Paper (NYSE: NP)
NF Energy Saving (Nasdaq: NFEC)
Nordic American Tanker (NYSE: NAT)
North Central Bancshares (Nasdaq: FFFD)
Norwood Financial (Nasdaq: NWFL)
Novelos Therapeutics (OTC: NVLT.OB)
NuPathe (Nasdaq: PATH)
Oasis Petroleum (NYSE: OAS)
Odyssey Marine Exploration (Nasdaq: OMEX)
Omeros Corp (Nasdaq: OMER)
Oncothyreon (Nasdaq: ONTY)
One Liberty Properties (NYSE: OLP)
OPKO Health (AMEX: OPK)
OptimumBank Holdings (Nasdaq: OPHC)
Ossen Innovation Co (Nasdaq: OSN)
Otter Tail (Nasdaq: OTTR)
Overhill Farms (AMEX: OFI)
Panhandle Oil And Gas (NYSE: PHX)
Paradigm Holdings (OTC: PDHO.OB)
Paragon Shipping (Nasdaq: PRGN)
PDI (Nasdaq: PDII)
Pennichuck (Nasdaq: PNNW)
Pharmathene (AMEX: PIP)
Phazar (Nasdaq: ANTP)
PICO Holdings (Nasdaq: PICO)
Poniard Pharmaceuticals (Nasdaq: PARD)
Preformed Line Products (Nasdaq: PLPC)
Presidential Life (Nasdaq: PLFE)
Providence Service (Nasdaq: PRSC)
Quicksilver Resources (NYSE: KWK)
Rda Microelectronics (Nasdaq: RDA)
Real Goods Solar (Nasdaq: RSOL)
Repros Therapeutics (Nasdaq: RPRX)
Resolute Energy (NYSE: REN)
Response Genetics (Nasdaq: RGDX)
Rgc Resources (Nasdaq: RGCO)
Rosetta Resources (Nasdaq: ROSE)
RRSat Global Communications (Nasdaq: RRST)
Salix Pharmaceuticals Ltd (Nasdaq: SLXP)
Scotts Miracle Gro (NYSE: SMG)
SIFCO Industries (AMEX: SIF)
Silver Wheaton (TOR: SLW.TO)
Sino-Forest (TOR: TRE.TO)
Sinohub (Nasdaq: SIHI)
SMF Energy (Nasdaq: FUEL)
Sorl Auto Parts (Nasdaq: SORL)
South Jersey Industries (NYSE: SJI)
Southern Connecticut Bancorp (AMEX: SSE)
Southern Union (NYSE: SUG)
Southwest Gas (NYSE: SWX)
Spanish Broadcasting System (Nasdaq: SBSAD)
Sparton (NYSE: SPA)
Sri Surgical Express (Nasdaq: STRC)
Star Scientific (Nasdaq: CIGX)
Stereotaxis (Nasdaq: STXS)
Sterling Construction (Nasdaq: STRL)
Stifel Financial (NYSE: SF)
Summer Infant (Nasdaq: SUMR)
Sun Hydraulics (Nasdaq: SNHY)
Sunstone Hotel Investors (NYSE: SHO)
Supertel Hospitality (Nasdaq: SPPR)
Sutron (Nasdaq: STRN)
Sykes Enterprises (Nasdaq: SYKE)
Symmetricom (Nasdaq: SYMM)
Synalloy (Nasdaq: SYNL)
Syncora Holdings Ltd (OTC: SYCRF.PK)
SyntheMed (OTC: SYMD.PK)
Take Two Interactive (Nasdaq: TTWO)
Talon Therapeutics (OTC: TLON.OB)
Tandy Leather Factory (Nasdaq: TLF)
Targa Resources (Nasdaq: TRGP)
TBS International PLC (Nasdaq: TBSI)
Technical Communications (Nasdaq: TCCO)
Techtarget (Nasdaq: TTGT)
Tegal (Nasdaq: TGAL)
Telephone And Data Systems (NYSE: TDS)
Telestone Technologies (Nasdaq: TSTC)
Telik (Nasdaq: TELK)
Telkonet (OTC: TKOI.OB)
Tesoro Logistics LP (Nasdaq: TLLP)
The Babcock and Wilcox Co (NYSE: BWC)
The Daily Journal (Nasdaq: DJCO)
The Madison Square Garden (NYSE: MSG)
Tier Technologies (Nasdaq: TIER)
TigerLogic (Nasdaq: TIGR)
Tower Group (Nasdaq: TWGP)
Transmontaigne Partners LP (NYSE: TLP)
Transwitch (Nasdaq: TXCC)
Tri Valley (AMEX: TIV)
Trimeris (Nasdaq: TRMS)
Tyson Foods (NYSE: TSN)
United Security Bancshares (Nasdaq: UBFO)
Universal Display (Nasdaq: PANL)
Universal Insurance Holdings (AMEX: UVE)
Uranerz Energy (AMEX: URZ)
US Energy (Nasdaq: USEG)
Vimicro International (Nasdaq: VIMC)
Vision Sciences (Nasdaq: VSCI)
Waccamaw Bankshares (Nasdaq: WBNK)
Walter Investment Management (AMEX: WAC)
Whitestone REIT (AMEX: WSR)
Willis Lease Finance (Nasdaq: WLFC)
Wireless Telecom Group (AMEX: WTT)
Wireless Xcessories Group (OTC: WIRX.PK)
WorldHeart (Nasdaq: WHRT)
Xerium Technologies (NYSE: XRM)
York Water (Nasdaq: YORW)
Youkucom (Nasdaq: YOKU)
Tuesday
The Federal Open Market Committee (FOMC) is scheduled to meet and make its announcement at 2:15 PM EDT Tuesday. We would have heard something from the Fed before the close of trading Monday if a stock market crash followed the U.S. downgrade. The Dow did shed 600+ points, or 5.6%. Needless to say, the Fed will be at work doing whatever it can (if anything) to stop the bleeding.
Productivity and Costs data will be reported for the second quarter before the market open Tuesday. Economists surveyed by Bloomberg are looking for a nonfarm productivity decline of 0.7%, which matches against the first quarter increase of 1.8%. The range of estimates spans from -1.5% to 1.0%. Unit Labor Costs are seen increasing 1.9%, after increasing 0.7% in Q1.
The National Federation of Independent Business (NFIB) reports its Small Business Optimism Index before the bell. Small businessmen have reflected the slipping confidence of consumers, and have not been impressed with the government’s various incentive programs geared toward tax incentive for hiring. Small businessmen would rather see revenues as incentive to hire new workers. The index slipped to 90.8 in July, from 90.9 in June.
Weekly Same-Store Sales are due before the bell Tuesday. Last week’s ICSC data covering the period ending July 30 showed sales fell 0.3% week-to-week but rose 4.0% against the prior year period. Redbook showed sales up 4.5% against last year’s period.
Overseas, China reports consumer and producer prices, industrial output and retail sales for the month of July. Markets will be closed Israel, Singapore and South Africa, and I suppose many others will be wishing they were closed.
Tuesday’s most notable earnings reports arrive from: Actions Semiconductor (Nasdaq: ACTS), AOL (NYSE: AOL), Archipelago Learning (Nasdaq: ARCL), Arena Pharmaceuticals (Nasdaq: ARNA), Beacon Power (Nasdaq: BCON), Beazer Homes (NYSE: BZH), Cablevision (NYSE: CVC), Capstone Turbine (Nasdaq: CPST), Coca Cola Bottling (Nasdaq: COKE), Cree (Nasdaq: CREE), Cytori Therapeutics (Nasdaq: CYTX), Dish Network (Nasdaq: DISH), Echostar (Nasdaq: SATS), E.W. Scripps (NYSE: SSP), Federal Agricultural Mortgage (NYSE: AGM), Fossil (Nasdaq: FOSL), Global Cash Access (NYSE: GCA), Hecla Mining (NYSE: HL), Lion’s Gate Entertainment (NYSE: LGF), Loral Space and Communications (Nasdaq: LORL), Marfin Investment Group (ATH: MIG.AT), Myriad Genetics (Nasdaq: MYGN), Nanosphere (Nasdaq: NSPH), Pantry (Nasdaq: PTRY), PC Mall (Nasdaq: MALL), Piedmont Office Realty Trust (NYSE: PDM), Primus Guaranty (NYSE: PRS), Ralcorp (NYSE: RAH), Rick’s Cabaret (Nasdaq: RICK), Scientific Games (Nasdaq: SGMS), Sempra Energy (NYSE: SRE), US Auto Parts (Nasdaq: PRTS), UTStarcom (Nasdaq: UTSI), Walt Disney (NYSE: DIS), Wave Systems (Nasdaq: WAVX), Xinyuan Real Estate (NYSE: XIN), Yongye International (Nasdaq: YONG), Zhongpin (Nasdaq: HOGS), Zoltek (Nasdaq: ZOLT) and more.
Wednesday
Over the past two weeks we’ve seen paradoxical action in rates. Even as logic tells us rates should increase on the downgrade of U.S. credit worthiness, they’ve instead shrunk on increased demand for US treasuries. The global economy is stressed and doesn’t know what the cure might be, so it’s asking for more cow-bell. As a result, mortgage rates have come down too, and mortgage activity has picked up. It makes little sense, but it’s happened nonetheless. Now that the downgrade is reality, perhaps something else is in store.
The Mortgage Bankers Association (MBA) reports on Weekly Mortgage Applications in the premarket on Wednesdays. Last week, the Market Composite Index increased 7.1%, as the average contracted 30-year mortgage rate sunk to 4.45% from 4.57%. Expect more of the same in this week’s report. I suppose the Fed likes this result, and so has refrained from immediately getting in the way, at the cost of equity values.
June Wholesale Trade data is due at 10:00 AM ET. Barron’s has the consensus estimate set at a 1.0% increase for Wholesale Inventories in June, which compares to the 1.8% increase in May. The problem is that sales have not been keeping up with that pace, and given the weakness in manufacturing, the situation could have continued to deteriorate into June.
The International Energy Agency (IEA) will produce its monthly oil market report Wednesday, just as OPEC panics about production adequacy on oil price decline. And at 10:30 AM ET, look for the EIA’s weekly Petroleum Status Report.
The U.S. Treasury Budget report for the month of July is due at 2:00 PM. June’s deficit measured $43.1 billion, but that was better than the $68.4 billion deficit from a year earlier. We don’t have a consensus estimate to share with you for this data point.
Overseas, China will report its trade data for July.
Borders is seeking the right to auction off its brand name and website from bankruptcy court. The corporate earnings wire highlights news from: Aegean Marine Petroleum (NYSE: ANW), American Apparel (AMEX: APP), Astea Int’l (Nasdaq: ATEA), Bankrate (Nasdaq: RATE), China Automotive Systems (Nasdaq: CAAS), China Biologic (Nasdaq: CPBO), China Ceramics (Nasdaq: CCCL), China Education Alliance (NYSE: CEU), China Information Technology (Nasdaq: CNIT), China New Borun (Nasdaq: BORN), China Sky One Medical (Nasdaq: CSKI), Cisco Systems (Nasdaq: CSCO), Computer Sciences (NYSE: CSC), Dillard’s (NYSE: DDS), Euroseas (Nasdaq: ESEA), Fuwei Films (Nasdaq: FFHL), Geomet (Nasdaq: GMET), Gilat Satellite (Nasdaq: GILT), Gold Reserve (AMEX: GRZ), Graymark Healthcare (Nasdaq: GRMH), Harman Int’l (NYSE: HAR), Inuvo (Nasdaq: INUV), Jack in the Box (Nasdaq: JACK), Jiayuan.com (Nasdaq: DATE), Johnson Outdoors (Nasdaq: JOUT), Kid Brands (NYSE: KID), Kips Bay Medical (Nasdaq: KIPS), Learning Tree (Nasdaq: LTRE), Macy’s (NYSE: M), Maidenform Brands (NYSE: MFB), Makemytrip (Nasdaq: MMYT), MBIA (NYSE: MBI), Middleby (Nasdaq: MIDD), News Corp. (Nasdaq: NWSA), PAR Technology (NYSE: PAR), Polo Ralph Lauren (NYSE: RL), Yucheng Technologies (Nasdaq: YTEC) and more.
Thursday
On Thursday, look for the International Trade data at 8:30 AM EDT. Economists see the trade imbalance contracting to -$48.0 billion in June, from $50.2 billion in May. Manufacturing weakness has been domestically driven, but eyes will be on exports in this data. Given the Japanese catastrophe, there could be decline in exports, but those would be offset by the effects of the rebuilding effort in Japan, though it’s hard to take an accurate thumbnail measure of the net impact. Given China’s trade data is due out on Wednesday, fingers will be crossed for continued demand from the Asian empire.
Weekly Jobless Claims reached 400K last week, down from 401K the week before. All signs point to the claims count continuing to offer little economic hope, if the data doesn’t deteriorate as the weeks progress. The consensus range of economists leans toward deterioration, ranging from 397K to 450K for this week.
Bloomberg’s weekly Consumer Comfort Index deteriorated to -47.6 from -46.8 last week, and I would have my money on further decline this week, considering…
The weekly Natural Gas Report is due from the EIA at 10:30 as usual Thursday. Stores increased by 44 Bcf in the latest measure, with inventory remaining below the average for this time of year by 68 Bcf.
Ahead of the Ames, Iowa straw poll, GOP candidates will debate in Iowa Thursday.
The corporate wire includes the DeMatteo Monness speaker series, covering this time the future of Medicaid. Good old boys, Aetna (NYSE: AET) and United HealthCare (NYSE: UNH) will be among presenters.
The EPS schedule includes: 21st Century Holding (Nasdaq: TCHC), ADA-ES (Nasdaq: ADES), Alibaba.com (OTC: ALBCF.PK), Anheuser-Busch InBev (NYSE: BUD), Bacterin Int’l (Nasdaq: BONE), Bally Technologies (NYSE: BYI), Biofuel Energy (Nasdaq: BIOF), Body Central (Nasdaq: BODY), Bottomline Technologies (Nasdaq: EPAY), Briggs & Stratton (NYSE: BGG), Brinker Int’l (NYSE: EAT), Broadridge Financial (NYSE: BR), Ceco (Nasdaq: CECE), China Natural Resources (Nasdaq: CHNR), China Pharma (Nasdaq: CPHI), Cinedigm Digital (Nasdaq: CIDM), Clean Diesel Technologies (Nasdaq: CDTI), Cosi (Nasdaq: COSI), DeVry (NYSE: DV), Digital Ally (Nasdaq: DGLY), Earthstone Energy (Nasdaq: ESTE), eDiets.com (Nasdaq: DIET), Elizabeth Arden (Nasdaq: RDEN), Eltek (Nasdaq: ELTK), Emagin (Nasdaq: EMAN), Gencor (Nasdaq: GENC), Granite City Food (Nasdaq: GCFB), Hoku (Nasdaq: HOKU), Jones Soda (Nasdaq: JSDA), Kohl’s (NYSE: KSS), Molycorp (NYSE: MCP), Nordstrom (NYSE: JWN), Nvidia (Nasdaq: NVDA), Progressive (NYSE: PGR), Quepasa (Nasdaq: QPSA), Red Robin Gourmet (Nasdaq: RRGB), Renren (Nasdaq: RENN), Sapien’s (Nasdaq: SPNS), Sara Lee (NYSE: SLE), Teekay (NYSE: TK), Tim Horton’s (NYSE: THI), Uranium Resources (Nasdaq: URRE), Wendy’s (NYSE: WEN), and more.
Friday
July’s Retail Sales are due for release Friday morning at 8:30 AM EDT. Economists are looking for a 0.6% increase for July, following 0.1% gain in June. This seems hopeful, and the range is wide, from 0.1% to 1.5% among economists surveyed. Excluding autos, economists are looking for a 0.3% gain.
The University of Michigan/Reuters Consumer Sentiment data for August is up for release at 9:55 AM ET. Economists see deterioration to a mark of 63.0, down from 63.7 at last check.
Finally, at 10:00 AM, look for June’s Business Trade data. Economists surveyed by Bloomberg see an inventory increase of 0.6%, against the 1.0% increase in May. Again, like with the Wholesale data, it’s important to take note if sales continue to track short of inventory gains, which is a bad result for the economy in a downturn.
The New York Fed’s Bill Dudley is due to speak on Friday and may add some insight into the latest Fed decision from Tuesday.
The day’s EPS schedule includes news from: Advanced Battery Technologies (Nasdaq: ABAT), Ascent Solar (Nasdaq: ASTI), Bitauto (Nasdaq: BITA), CDC Software (Nasdaq: CDCS), Century Casinos (Nasdaq: CNTY), China Finance Online (Nasdaq: JRJC), China Shengda Packaging (Nasdaq: CPGI), China TransInfo Technology (Nasdaq: CTFO), Citizens and Northern (Nasdaq: CZNC), Command Security (AMEX: MOC), Conmed Healthcare (Nasdaq: CONM), CTI Industries (Nasdaq: CTIB), Cumulus Media (Nasdaq: CMLS), Derma Sciences (Nasdaq: DSCI), Dynasil Corp. (Nasdaq: DYSL), ECA Marcellus Trust (NYSE: ECT), Empire Resorts (Nasdaq: NYNY), First Financial Service (Nasdaq: FFKY), Harris and Harris (Nasdaq: TINY), Harris Interactive (Nasdaq: HPOL), HKN (AMEX: HKN), Hooper Holmes (AMEX: HH), Icagen (Nasdaq: ICGN), Idera Pharmaceuticals (Nasdaq: IDRA), International Bancshares (Nasdaq: IBOC), J.C. Penney (NYSE: JCP), Jacksonville Bancorp (Nasdaq: JAXB), Kearny Financial (Nasdaq: KRNY), Mentor Graphics (Nasdaq: MENT), MER Telemanagement Solutions (Nasdaq: MTSL), MSB Financial (Nasdaq: MSBF), NASB Financial (Nasdaq: NASB), Nexxus Lighting (Nasdaq: NEXS), Ohio Legacy (Nasdaq: OLCB), Opexa Therapeutics (Nasdaq: OPXA), Primeenergy (Nasdaq: PNRG), Rodman and Renshaw Capital (Nasdaq: RODM), Seaboard (AMEX: SEB), Servidyne (Nasdaq: SERV), Sinovac Biotech (Nasdaq: SVA), Suffolk Bancorp (Nasdaq: SUBK), Sutor Technology (Nasdaq: SUTR), TAT Technologies (Nasdaq: TATT), Telvent (Nasdaq: TLVT), Tootsie Roll (NYSE: TR), Tree.com (Nasdaq: TREE), Tri Tech (Nasdaq: TRIT), Trunkbow (Nasdaq: TBOW), Tufco (Nasdaq: TFCO), UMH Properties (AMEX: UMH), United Guardian (Nasdaq: UG), Zoo Entertainment (Nasdaq: ZOOG), Zoom Technologies (Nasdaq: ZOOM) and more.
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Labels: Economy, Editors_Picks, Rating-Agencies, Week-Ahead
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