Obama's Financial Regulation, Google (Nasdaq), GE (NYSE: GE), McDonald's (NYSE: MCD)

Morning Coffee

Obama's regulatory attack on Wall Street has got the market buzzing this morning, but a few big earnings reports deserve some attention as well. News from Google (Nasdaq: GOOG), General Electric (NYSE: GE) and McDonald's (NYSE: MCD) serve as a good barometer for the economy.

Visit the front page of Wall Street Greek to see our current coverage of Wall Street, economic reports and global financial markets.

(Mentioned Tickers: Nasdaq: GOOG, NYSE: MCD, NYSE: HSY, NYSE: GE, NYSE: BAC, NYSE: JPM, NYSE: C, NYSE: GS, NYSE: XLF, NYSE: AGU, NYSE: CF, NYSE: APD, NYSE: ACO, NYSE: AVX, NYSE: BBT, NYSE: EXC, NYSE: HOG, Nasdaq: HBAN, NYSE: JCI, NYSE: KMB, Nasdaq: MBFI, Nasdaq: PRSP, NYSE: SLB, Nasdaq: SCMF, Nasdaq: STBC, NYSE: STI, Nasdaq: ERIC, NYSE: WBS, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD)

Obama's Financial Regulation & Google, GE and McDonald's

The world is abuzz about President' Obama's nascent onslaught of the US financial sector. Yours truly wrote about this in an article that never made these pages last week, as it was sold to another publisher. We will publish a reconstituted work on the same premise here today. While we do our best to publish our top work here on the blog first, we need your suppport in order to ensure you the provision of our most prescient work on a timely basis. You could have been ahead of the curve on financials, if we could afford to publish here alone. Please consider a donation to help us make that possible.

Obama's War on Wall Street

The Dow Jones Industrial Average sank 2% Thursday, after falling 1.1% the day before, greatly due to the rumors of and the release of the President's latest whipping of Wall Street. Obama is showing his ugly side, the one every Republican and Independent who voted for him worried about. We suggest you take your profits NOW, because this has trouble written all over it; and IF the bill can pass OR if the Administration takes on China next, read that "big trouble."

With the late Edward Kennedy's Senate seat in Massachusetts falling to the reds, it seems the Democratic majority is adopting a new strategy based on really scary stuff. What's going on is a positioning in order to gain bargaining power for the important (to the Democrats) work. The Dems are playing on Main Street ire, and there's quite enough fuel for that fire given high unemployment and a general feeling on the street of being duped by the big boys on Wall Street.

In the meantime, stocks are tanking, with the financials leading the way. The Financial Select Sector SPDR (NYSE: XLF) fell 2.8% yesterday led by big drops at Bank of America (NYSE: BAC) -6.2%; Goldman Sachs (NYSE: GS) -4.1%; J.P. Morgan Chase (NYSE: JPM) -6.6%; and Citigroup (NYSE: C) -5.5%. An analyst at a Wall Street firm today estimated the economic costs of the President's regulation for these firms would be significant, justifying the value destruction seen (that will likely continue today).

In our yet-to-be-seen-here article, we mentioned that we doubted Obama's economic gurus were on board with the new regulatory effort against Wall Street. Today, many in the mainstream media are questioning the same, especially with regard to the position of Treasury Secretary Geithner. If the President goes too far, perhaps we will see some resignations.

All this concern about the economic leadership skill of the President has got the dollar down as well. Such a shame, just when the Greek debt crisis and questions about European unity had shaken the euro... Look for our detailed work on this regulation campaign later today. We assure you, it's still worth reading.

Speaking of...

The House Financial Services Committee takes up executive compensation today. President Obama will meet with small business representatives to discuss the economy and the small business situation. Hiring in the small business sector is said to be "gun shy" due to concerns about legislation and the surety of economic recovery. Funny that in a recent Bloomberg poll, a rather timely one mind you, President Obama is seen as anti-business by 77% of US investors. Gee, I thought you all thought he was the anti-Christ, not the Anti-Businessman!

In other government meddling (how soon we forgot the crisis and corporate improprieties huh?), the Chief Investment Officer of the TARP program, Jim Lambright, gives a speech in New York today.

Corporate News Drivers

We see good news in the three of these economic barometers. Between Google, GE and McDonald's, we've got a good read on the overall economy, and from a global perspective. Advertising recovery at Google reflects growth in an economically sensitive sector. Improved sales in December for McDonald's speaks of growing consumer spending. Rising orders for GE's goods offers sign that demand for equipment and infrastructure is up.

Google

Google (Nasdaq: GOOG) reported strong earnings results last night, but the stock is off today. GOOG's EPS line beat the analysts' consensus, posting $6.79 when excluding special items, compared to the consensus estimate for $6.48, based on Thomson Reuters data. However, revenue was reportedly only in line, and the market was apparently looking for a beat on the top line.

Google representatives said the US market was outpacing Europe in recovery, and the situation did not seem recession like anymore. Google pointed toward an upturn in Internet advertising, clearly critical to the company's business, as the driver behind the gain. I would look for a turnaround in GOOG shares from the down start, but if Obama spits on the entire market (don't forget I like the guy generally), you might get a better entry point for your long-term play down the road. The Greek has been a fan of Yahoo! (Nasdaq: YHOO) since its drop to mid-single digits (and we still like it), but we love Internet all around, as you might expect... and Google is king. Keep an eye on valuation though...

General Electric

General Electric (NYSE: GE) reported Q4 EPS results this morning as well. GE's shares were up 3.3%, despite reporting lower revenue and earnings. While revenue fell 10% and EPS (from continuing operations) dropped 22%, the market found reason to rally. GE's EPS result of $0.28 still beat the analysts' view for $0.26, according to Bloomberg. Also, some kind words from the GE crew on order growth offered investors some hope.

GE's better than expected results came mostly from cost cuts (read jobs shed), and also on a tax gain. Still, GE's order backlog increased, offering investors a sign that revenue erosion may finally cease. Its Equipment and Services backlog improved a billion to $175 billion, and Infrastructure orders rose $3.7 billion.

Still, concerns remain about GE Capital. The segment is writing fewer loans and raising reserves, while conspicuously refraining from significant write-downs. The company added $700 million to reserves, and noted its real estate segment had about $7.0 billion in unrealized losses, with another 13% value decline seen this year. Still, with the aid of its historic dividend cut, GE was able to generate $16.6 billion in cash in 2009.

The most important takeaway for global economy followers is that order backlog is stabilized and increasing in the businesses where GE makes things.

McDonald's

McDonald's (NYSE: MCD) shares are up today, after the company reported EPS ($1.03) a penny ahead of the analysts' consensus, based on Thomson Reuters. The company also noted an important 1% same-store sales rise in December, versus decreases in the prior two months. Revenues also beat analysts views, and the three of these factors are key to analyzing MCD's outlook and economic recovery. The company noted its international operations and growth continued to pick up its weaker US business, where stiff competition in tough times has discounting hurting all (especially chickens confined to a tight space for their entire lives so you can eat that $1 McNugget pack).

Other Corporate News

Agrium's (NYSE: AGU) offer to buy CF Industries (NYSE: CF) is due to expire Friday. The earnings slate includes news from Air Products & Chemicals (NYSE: APD), AMCOL International (NYSE: ACO), AVX Corp. (NYSE: AVX), BB&T Corp. (NYSE: BBT), Exelon (NYSE: EXC), Harley-Davidson (NYSE: HOG), Huntington Bancshares (Nasdaq: HBAN), Johnson Controls (NYSE: JCI), Kimberly-Clark (NYSE: KMB), MB Financial (Nasdaq: MBFI), McDonald's (NYSE: MCD), Prosperity Bancshares (Nasdaq: PRSP), Schlumberger (NYSE: SLB), Southern Community Financial (Nasdaq: SCMF), State Bancorp (Nasdaq: STBC), SunTrust (NYSE: STI), Telefon AB Ericsson (Nasdaq: ERIC) and Webster Financial (NYSE: WBS).


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.

IMF Forecast & John Paulson

Today's Coffee

Our daily take of the most market-moving events includes coverage of economic reports, government actions and corporate activity. Today's Coffee covers the IMF Global Economic Forecast, John Paulson's efforts to keep capital in place, and the regular Mortgage Activity and Petroleum Status Reports.

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

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

IMF Forecast & John Paulson Key

The market took off in a decidedly positive direction to start the day, thanks to the IMF's upward adjustment to global growth prospects for this year. Solid earnings reports from Apple (Nasdaq: AAPL), Morgan Stanley (NYSE: MS), and United Technologies (NYSE: UTX) helped the cause as well, but less enthusiasm followed the reports of McDonalds (NYSE: MCD), Wells Fargo (NYSE: WFC) and AT&T (NYSE: T). NYU Professor Nouriel Roubini warned that sovereign debt crises threatened to spread, and stocks took to second guessing direction by midday. Also in the ruckus, hedge fund maven John Paulson took to defending himself, after his good name was dirtied up a bit on the SEC's charge of Goldman Sachs (NYSE: GS). So, despite the slow economic data day, we have quite enough to discuss here.

IMF Global Economic Outlook

Let's cover the most positive news first, and perhaps the greatest weight holding down paper profits today. The International Monetary Fund, the same organization now engaged in the salvation of Greek relics, publish its Global Economic Outlook this morning and offered jolly good news for American investors and Chinese and Indian industrialists. As for Europe, well at least it's got a place to hide now, with its head in the clouds (of ash).

To be quite honest, the IMF's report seems to simply restate the statements of central bankers and sovereign directors across the world. I find little insight in the organization's report, but it's worth a read in case you've forgotten everything Ben Bernanke, Jean-Claude Trichet and Chinese leaders have addressed over the past few months. Out-of-work American strategists who have recently been discovered as knowledge deficient might try to get a job there as well (I always try to be helpful). In any event, their charts are awfully colorful.

Basically, the most important information for market participants is the growth breakout to the left here. The IMF has raised its global growth forecast by three-tenths of a percentage point, to 4.2%; and within that change, the US economy has been boosted 0.4 percentage points. The United States economy is now seen growing by 3.1% in 2010, better than developed world peers Japan (+1.9%), Europe (+1.0%) and the UK (+1.3%). Still, the best news is for China and India, where growth is seen at 10% and 8.8%, respectively. India received the best news of all, as its revision was up by 1.1 percentage points. Italy, Germany and the ex-Soviet states excluding Russia were only the sad markets where decline is seen. Brazil looks hotter than its national soccer team, with its 2010 growth forecast up 0.8%, to 5.5% in 2010.

US Economic Data

Mortgage activity finally came to life last week. This followed two weeks of decline that occurred during a period in which most were expecting mortgage activity to benefit from the typical spring seasonal upswing and the First-Time Homebuyer Tax Credit.

The Mortgage Bankers Association published its Mortgage Activity Report for the week ended April 16 this morning in the premarket. The Market Composite Index of mortgage activity gained 13.6%. Let's not forget that this represents a recovery of ground lost in recent measurement periods and not an environment of robust activity. Still, we were pleased to at least see movement in the right direction.

Contracted rates on fixed rate mortgages of 30-year and 15-year duration fell during the period to 5.04% (from 5.17%) and 4.34% (4.45%), respectively. This helped the Refinance Index recover 15.8% versus the prior week's doldrums. Purchase activity gained ground as well in the latest reported period, as the Purchase Index improved by 10.1%. There's thought that Easter's absence in this latest week helped activity as well. It seems the MBA tailors its reasoning to fit the data, as last week it told us that a hike in FHA mortgage insurance premiums killed activity. Well, we are assuming that those premiums stuck another week, so what gives? It is possible that the initial reaction of prospective buyers who were perhaps unaware of the pending premium hike were paralyzed for a short time, and have moved forward now with the long-term investment of home purchase. It's a long-term investment again, in case you missed the memo.

Petroleum Storage

The EIA reports petroleum storage activity like clockwork every Wednesday morning, except after a three-day weekend. Given that the New York City Greek Independence Day Parade did not qualify as a national holiday (nor the after party), the EIA came back to the table again today. We are currently in a favorable seasonal period for petroleum buyers, as storage tends to build ahead of the start of the summer driving season. For that matter, it is also a favorable secular period for petroleum storage, ahead of war with Iran. Hey though, the strategic petroleum reserve has been full for a good year now; I think we're just letting China fill up its spare tanks at this point.

In any event, oil storage continued to build, with stocks rising by 1.9 million barrels this time. Gasoline storage also grew by 3.6 million barrels, and both oil and gasoline stocks were measured above the upper limit of the average range for this time of year.

Paulson Stands Up

A hedge fund lives and dies by its investment capital flows. Investment returns simply reinforce the stability of captive capital and help to draw new funds. So, when you are mentioned as part of the reason the SEC is charging Goldman Sachs (NYSE: GS) and one of its employees with fraud, that's not good for business. Faced with the possibility that his investors might start looking for the door while their profits were still intact, John Paulson had to consult his PR people and get active.

Paulson held a conference call with 100 investors late Monday in order to prevent an exodus. Investors are worried that another shoe might drop though, and that the investigation might turn up more information detrimental to Paulson & Co. There's also the risk that an international organization might not prove as kind as the US in not including Paulson in with the Goldman charge. Since a German organization was hurt by the dealing, folks are looking toward Angela Merkel for something like this. Word is that Germany might do any business with Goldman until everything is sorted out (if then). Holding Goldman shares seems silly here, and I do not care how much ground it's given back. If the EU stops doing business altogether...

Paulson also sent a letter out to investors Tuesday evening that focused attention to the fund manager's relatively unknown status before making a killing on the housing downturn. He reminded his financial supporters that there was more than enough smart money willing to bet against him in those days, and they gladly took counterparty position. Still, a sort of prisoner's dilemma might put the whole lot in the poor house. This Friday will prove critical to Paulson & Company, as it marks the deadline to make capital withdrawal requests for June 30 receipt.

Corporate News Drivers

We will cover notable earnings reports in a follow up article on the day's most active stocks.

Walter Energy (NYSE: WLT) held a shareholders meeting today, while earnings news was due from Abbott Labs (NYSE: ABT), Affymetrix (Nasdaq: AFFX), AirTran (NYSE: AAI), Alliance Data (NYSE: ADS), Altria Group (NYSE: MO), AMB Property (NYSE: AMB), AmeriCredit (NYSE: ACF), Amgen (Nasdaq: AMGN), AMR Corp. (NYSE: AMR), Astoria Fin'l (NYSE: AF), AT&T (NYSE: T), ATMI (Nasdaq: ATMI), Banner (Nasdaq: BANR), Berkshire Hills Bancorp (Nasdaq: BHLB), Chipotle Mexican Grill (NYSE: CMG), Citrix Systems (Nasdaq: CTXS), CNH Global (NYSE: CNH), Cohen & Steers (NYSE: CNS), Cohu (Nasdaq: COHU), Comerica (NYSE: CMA), Community Health (NYSE: CYH), CoStar Group (Nasdaq: CSGP), Covanta (NYSE: CVA), Covidien (NYSE: COV), CyberOptics (Nasdaq: CYBE), DST Systems (NYSE: DST), E*Trade Financial (Nasdaq: ETFC), eBay (Nasdaq: EBAY), Elan (NYSE: ELN), EMC Corp. (NYSE: EMC), EnCana (NYSE: ECA), Equinix (Nasdaq: EQIX), Exponent (Nasdaq: EXPO), F5 Networks (Nasdaq: FFIV), FBR Capital Markets (Nasdaq: FBCM), Fidelity National Financial (NYSE: FNF), First Cash (Nasdaq: FCFS), First Commonwealth (NYSE: FCF), First Midwest Bancorp (Nasdaq: FMBI), Forward Air (Nasdaq: FWRD), Freeport-McMoRan Copper & Gold (NYSE: FCX), Genzyme (Nasdaq: GENZ), Graco (NYSE: GGG), Gulf Island Fabrication (Nasdaq: GIFI), Hanesbrands (NYSE: HBI), Health Grades (Nasdaq: HGRD), Hub Group (Nasdaq: HUBG), Hudson City Bancorp (Nasdaq: HCBK), Huntington Bancshares (Nasdaq: HBAN), Intersil (Nasdaq: ISIL), KeyCorp (NYSE: KEY), Kinder Morgan Energy (NYSE: KMP), Knight Capital (Nasdaq: NITE), Knight Transportation (NYSE: KNX), Laboratory Corp. (NYSE: LH), Lam Research (Nasdaq: LRCX), LaSalle Hotel Properties (NYSE: LHO), Leggett & Platt (NYSE: LEG), LG Display (NYSE: LPL), Lockheed Martin (NYSE: LMT), Lufkin Industries (Nasdaq: LUFK), Manpower (NYSE: MAN), Massey Energy (NYSE: MEE), Mattson Technology (Nasdaq: MTSN), McDonald's (NYSE: MCD), Media General (NYSE: MEG), Mellanox Technologies (Nasdaq: MLNX), Moody's (NYSE: MCO), Morgan Stanley (NYSE: MS), Netflix (Nasdaq: NFLX), Netgear (Nasdaq: NTGR), New York Community Bancorp (NYSE: NYB), NewMarket (NYSE: NEU), Noble Corp. (NYSE: NE), NovaGold Resources (AMEX: NG), Novellus Systems (Nasdaq: NVLS), NVR, Inc. (NYSE: NVR), Pactiv (NYSE: PTV), Pick 'n Pay Stores (Nasdaq: PIKJ), Piper Jaffray (NYSE: PJC), Platinum Underwriters (NYSE: PTP), Polaris Industries (NYSE: PII), Polycom (Nasdaq: PLCM), Qualcomm (Nasdaq: QCOM), Quest Diagnostics (NYSE: DGX), RC2 Corp. (Nasdaq: RCRC), Ryder System (NYSE: R), SanDisk (Nasdaq: SNDK), Select Comfort (Nasdaq: SCSS), SLM Corp. (NYSE: SLM), St. Jude Medical (NYSE: STJ), StanCorp Financial (NYSE: SFG), Starbucks (Nasdaq: SBUX), SunTrust (NYSE: STI), Temple-Inland (NYSE: TIN), Teradyne (NYSE: TER), Terex (NYSE: TEX), Texas Capital Bancshares (Nasdaq: TCBI), The Boeing Co. (NYSE: BA), Theravance (Nasdaq: THRX), Thomas & Betts (NYSE: TNB), Tractor Supply (Nasdaq: TSCO), TrueBlue (NYSE: TBI), Tupperware (NYSE: TUP), Union Bankshares (NYSE: UNB), United Community Bankshares (Nasdaq: UCFC), United Development Co. (Nasdaq: UDCD), United Rentals (NYSE: URI), United Technologies (NYSE: UTX), Vertex Pharmaceuticals (Nasdaq: VRTX), Vitamin Shoppe (NYSE: VSI), Washington Trust (Nasdaq: WASH), Wells Fargo (NYSE: WFC), Westwood Holdings (NYSE: WHG) and Zenith National Insurance (NYSE: ZNT).


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.

Free Cup of Coffee for National Coffee Day

This article is all about getting you your free cup of coffee for National Coffee Day. You'll find the important information on how to get that free coffee down the page, and so go get your cuppa jo!

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

(Tickers: Nasdaq: PEET, Nasdaq: GMCR, Nasdaq: SBUX, NYSE: MCD, Nasdaq: JAVA, NYSE: THI, Nasdaq: HAIN, Nasdaq: JMBA, Nasdaq: JSDA, NYSE: JVA, Nasdaq: JAVO, NYSE: UN, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ)

Free Cup of Coffee for National Coffee Day

The stock market is open on National Coffee Day, in case you were wondering or were like Kramer from Seinfeld and thought you should have off on Arbor Day and such. Well, since it is National Coffee Day, and because we have a column we like to call "Today's Coffee," and given the dearth of economic reports today, we thought we would give you a special Coffee article, and directions to where to get that free cup of Jo today.

It's true, by the way. It really is National Coffee Day, a day in which we honor coffee, and drink it up manicly like usual of course. I drink at least four cups a day, after cutting back due to hallucinations.

Unfortunately, there will be no coffee shop hop today, like the annual bar hopping fun that occurs in my Upper East Side neighborhood every St. Patrick's Day, but there are a few retailers offering special deals and even free cups of coffee for the hooked on this very special holiday. Take advantage of it dear friends, and get some of your hard earned money back from the servers of our addiction.

The most important thing about National Coffee Day is that you can score yourself a free cup across the country if you are smart. I would look for more if I were you, but here are the free coffee deals we found for today:

• LaMars Donuts and Coffee – Get a free 12 ounce coffee on September 29th when presenting this free printable coupon at participating locations.


• Dunkin' Donuts – Stop by participating Dunkin' Donuts and receive a free cup of coffee. The company will also donate a portion of their sales to Special Olympic groups.


• Boca Java – Boca Java is offering free shipping today in honor of the holiday. Come on! You can do better than that!


• Java Café – Java Café will offer drinks at a 50 percent discount from 7 A.M. – 12:00 P.M. on the 29th.


• Starbucks – Nada! No! You won't get a free cup from Starbucks today according to every source I checked, including their website (Nasdaq: SBUX).


• McDonald's – No free deal from McDonald's either! Talk about missing an opportunity! I'm a little p'd at McDonalds these days, after they tried to charge me $1.40 for a cup the other night, even though I ordered food. Come on McDonald's. We want Greek friendly service. (NYSE: MCD)


• Tim Horton's - No Deal!!! (NYSE: THI)


• Peet's Coffee & Tea (Nasdaq: PEET): Saw no special deals!!!


• Green Mountain Coffee Roasters – No deal as far as we can see, and the company is in trouble with the SEC today too; the shares are down some 14%. Yikes!

Not all locations will be participating in the free or discounted offer. Call ahead or check the website for details.

The Mayo Clinic published this bit of relevant information for coffee lovers who care about how much caffeine their cuppa joe (Canadian editorial - we employ all sorts) contains:

1. Dunkin' Donuts, brewed, 16 oz (480 mL) 143-206
2. Generic brewed, 8 oz (240 mL) 95-200
3. Generic brewed, decaffeinated, 8 oz (240 mL) 2-12
4. Generic instant, 8 oz (240 mL) 27-173
5. Generic instant, decaffeinated, 8 oz (240 mL) 2-12
6. Starbucks Espresso, 1 oz (30 mL) 58-75
7. Starbucks Vanilla Latte, 16 oz (480 mL) 150

So that's why I like Dunkin' Donuts coffee so much! (will accept money from DD for this, or coffee I guess). By the way, The Greek has yet to decide on his favorite brand of Greek Coffee... Send Coffee!



Article interests investors in Nasdaq: PEET, Nasdaq: GMCR, Nasdaq: SBUX, NYSE: MCD, Nasdaq: JAVA, NYSE: THI, Nasdaq: HAIN, Nasdaq: JMBA, Nasdaq: JSDA, NYSE: JVA, Nasdaq: JAVO, NYSE: UN, NYSE: PEP, NYSE: GIS, NYSE: KO, NYSE: K, NYSE: CPB, NYSE: MJN, NYSE: CAG, NYSE: SLE, NYSE: SJM, NYSE: MKC, NYSE: RAH, NYSE: CPO, NYSE: DLM, NYSE: FLO, NYSE: DHS, NYSE: THS, Nasdaq: DMND, NYSE: GMK, Nasdaq: JJSF, Nasdaq: LNCE, NYSE: BGS, Nasdaq: FARM, Nasdaq: SMBL, Nasdaq: CMFO, Nasdaq: MGPI, Nasdaq: JBSS, Nasdaq: FEED, Nasdaq: CNGL, NYSE: OME, NYSE: ALN, NYSE: OFI, Nasdaq: KTEC, Nasdaq: SNAK, Nasdaq: TSTY, NYSE: FRZ, Nasdaq: GLDC, NYSE: NWD.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Apple Pay is Catching On – Catalyst for P/E Expansion

Apple (Nasdaq: AAPL) announced last Tuesday that the list of companies working with Apple Pay has expanded to now cover a significant portion of the nation’s transaction volume. While it still has a ways to go to completely reach every possible transaction at every store, reports indicate that it is being adopted at a fast pace. In my opinion, Apple Pay is the main reason why Apple’s shares have recently run higher, and for good reason. I expect the business to make an important contribution to the company’s growing operational results. I also believe it is allowing the previously stale P/E ratio some room to grow, which means Apple shareholders are in for some special gains in the next few years.

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.

Apple Pay just added several more financial institutions to its list of payments partners, including SunTrust Banks (NYSE: STI) and others, according to one of my resources for this report. From the consumer perspective, Apple Pay now supports 90% of all potential credit card transactions in the United States. The company is also seeking arrangements with providers of debit cards, prepaid cards, co-branded cards, small business credit and debit cards and corporate cards.

Apple (Nasdaq: AAPL) must also win the support of retailers and all companies that accept payments for goods and services. Early signees include McDonald’s (NYSE: MCD) and Whole Foods Market (Nasdaq: WFM) and recent signees include Staples (Nasdaq: SPLS) and others. Given the degree of Apple iPhone penetration, it behooves retailers and restaurants to accept Apple Pay in order to best serve customers. So this is something retailers are likely asking Apple about in many instances before Apple even approaches them.

Not only is the service becoming available though; it is being used by Americans. McDonalds indicated that 50% of its tap-to-pay transactions were through Apple Pay in November. It is being adopted because it simplifies the transaction process for customers and is a value-add for Apple’s partners. According to the New York Times, the NBA’s Orlando Magic basketball franchise expects it to speed service at its concession stands. Since lines at ballparks and stadiums are limiting to sales, as many fans hate missing the action, if Apple Pay can speed transactions it will help these partners sell more food and beverages and other goods. That is a value-add to sales and earnings, and all the more reason for companies to partner with Apple on this.

In the past, similar services provided by Google (Nasdaq: GOOGL) and others have failed where Apple seems to be succeeding. I think that is because of Apple’s broad iPhone penetration; big PR voice that got the message across clearly to a broad swath of America when it introduced the service; and because of today’s tech savvy population, which has gotten much better at picking up new technology. People want to try it out and are willing to spend some time to learn how to use it.

Some retailers are making their own app, including a consortium headed up by Wal-Mart (NYSE: WMT), but I’m not sure people are going to want to join up for more than one payment app. I suppose the consortium may be able to better compete with Google’s Android platform, but Google (Nasdaq: GOOGL) is likely stepping up its game to help support its platform partners.

While Apple has not offered much information on how successful Apple Pay has been, its partners have been talking. On CNBC Tuesday, I watched a SunTrust representative as he said the service was showing good progress. Obviously, as a newly won business partner, this SunTrust representative was supplied with the figures we have not yet seen. We do know that over 1 million cards were registered with Apple Pay within the first 72 hours of operation, according to Tim Cook.

But there is also circumstantial evidence. This weekend (12-20-14), I saw evidence that banks are using Apple Pay as a draw for their businesses, with commercials for Bank of America (NYSE: BAC) and J.P. Morgan Chase (NYSE: JPM) both flashing partnerships with Apple Pay. They would not be doing this if they did not see strong penetration and consumer interest in the application. Basically, the banks are riding the coattails of the highly popular Apple brand and its newest and greatest thing.

Over the last few years, I’ve often proposed that Apple’s low PEG ratio was reflecting investor concern that Apple could not keep growing and might even see some erosion of market share. We have been looking for the company to expand its efforts into television sets and other gear, and it has entered the wearables market with its Apple Watch. But I think it is Apple Pay that is most exciting investors today, and the reason for the stock’s gains since its introduction.

1-Year Chartof AAPL at Seeking Alpha

Apple’s P/E ratio is now 13.8X the analysts’ consensus EPS estimate for FY 15 (Sep). The company’s valuation metrics have been expanding, but the forward P/E ratio here still shows room for further expansion in my opinion. I expect that as the data is reported and investors begin to better see the potential for Apple Pay and Apple Watch, the P/E and PEG ratios will expand further. Given analysts’ expectations for 20% growth in FY 15, the current PEG on these figures is 0.7x. That’s cheap. Looking at the long-term growth estimate, I expect it will be revised upward from the current 11.5% estimate once data for Apple Pay and Apple Watch start rolling in. But even so, the company’s PEG ratio using this figure is a still modest 1.2X, and fails to incorporate the dividend yield Apple offers of 1.7% today. Reiterating and concluding, as data comes in and estimates are revised, I expect we’ll also see P/E expansion, so shareholders of AAPL will get extra lift to their investment return. Thus, I still love AAPL here. I cover AAPL semi-regularly, so readers may want to follow my blog and my column at SA.

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.

Nothing Has Changed, Unfortunately

The day after the day after was likely affected by its predecessor, as investors shopped for bargains in the early going, following yesterday’s post election slide. Wednesday’s losses amounted to -2.3% on the SPDR S&P 500 (NYSE: SPY), -2.1% on the SPDR Dow Jones Industrial Average (NYSE: DIA) and -2.4% on the PowerShares QQQ (Nasdaq: QQQ). Stocks sank, I suppose as a slew of Republicans shed risk on every fiscal and economic concern raised over the last two years of campaigning. Most of the day’s other data was benign, leaving investors to realize that while it’s true that nothing has changed, nothing truly has changed… Heading into the close, losses are once again mounting.

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.

International Markets

EUROPE	ASIA
EURO STOXX 50: Unch.	Hang Seng: -2.4%
FTSE 100: -0.3%	Nikkei: -1.5%
German DAX: -0.4%	S&P / ASX 200: -0.7%

Greece’s Parliament followed its prescribed path, passing new austerity measures despite the protests burning across Athens this week. For as long as Greece can keep European and IMF funding support without falling into complete anarchy, order can be maintained in Europe and in global shares; but it’s not the only way.

Despite after seeing economic forecasts for Europe slashed on Wednesday, the European Central Bank (ECB) kept interest rates steady Thursday. However, ECB Chief Mario Draghi raised concerns with his always frank discussion. Draghi said the economies of Europe continue to show very weak activity extending through the fourth quarter. Growth momentum is expected to remain weak next year as well, according to Draghi. In the U.K., the Bank of England (BOE) likewise left rates unchanged. That said, the ECB’s most recent plan to purchase the debt of distressed sovereigns in a sterile manner was quite reassuring to markets, and was reiterated and reassured today.

Just a couple days after the U.S. democratic process determined President Obama would remain in office for another four years, the communists in China simply reshuffled their leadership unchallenged. Needless to say, markets were on edge, especially given the military exercises taking place between U.S. and Japanese naval forces in China’s backyard. Of course, it wasn’t either of these two important factors that drove Asian shares downward Thursday, but instead it was the lead of U.S. markets the day before.

U.S. Economic Data
New International Trade data was reported Thursday morning for the month of September. Economists expected the trade gap to expand to $45.4 billion, from $43.8 billion (revised from $44.2 billion) in August. Instead, it narrowed to $41.5 billion, as export growth outpaced imports. The best news is that each grew through the month, as close inspection of the trends shows that both export and import growth was near stalling on a year-to-year basis. This report provides some solid good news to the contrary.

Weekly Initial Jobless Claims for the week ending November 3 was expected to show significant disruption caused by Hurricane Sandy. Claims declined by 8,000 last week, to 355K, which was far short of the economists’ consensus for 370K. However, the report showed the four-week moving average for claims increased by 3,250, to 370,500, probably due to the lapping of that suspect report of several weeks ago.

The Bloomberg Consumer Comfort Index improved slightly week-to-week, to -34.4, from -34.7. I expect consumer confidence to deteriorate post the re-election of President Obama, because of my view that confidence had improved due to some hope for a change. The shares of retailers have traded tumultuously since the election, and are down again this afternoon. Wal-Mart (NYSE: WMT) for one is off 0.5% at this hour.

The EIA reported that natural gas inventory in storage increased by 21 Bcf in the period ending November 2nd, to a level 244 Bcf more than the 5-year average for this time of year. Natural gas stocks have been taking a hit on the Obama victory and the harder case against fracking and fossil fuel (over alternative energy) development that is a likely result. The shares of Chesapeake Energy (NYSE: CHK) are down another 1.7% late Thursday.

Corporate Drivers

The Day’s Most Actives

UPSIDE	DOWNSIDE
DUSA Pharmaceuticals (Nasdaq: DUCA) +38%	Catalyst Pharmaceutical (Nasdaq: CPRX) -68%
Rosetta Stone (NYSE: RST) +22%	BioCryst Pharmaceuticals (Nasdaq: BCRX) -40%
FalconStor Software (Nasdaq: FALC) +24%	Progenics (Nasdaq: PGNX) -25%
Exetor Resource (NYSE: XRA) +23%	Cobra Electronics (Nasdaq: COBR) -26%
Intermune (Nasdaq: ITMN) +17%	Kingtone Wirelessinfo (Nasdaq: KONE) -23%

McDonalds (NYSE: MCD) posted its first global monthly sales decline in nine years. Same-store sales fell 1.8% in October, and the company’s shares are down 1.7% in late trading Thursday.

Companies meeting with analysts and investors today included Kellogg (NYSE: K), 3M (NYSE: MMM), Tenneco (NYSE: TEN) and Netgear (Nasdaq: NTGR). The earnings wire highlighted CareFusion (NYSE: CFN), Dean Foods (NYSE: DF), Duke Energy (NYSE: DUK), FirstEnergy (NYSE: FE), International Game Technology (NYSE: IGT), Kohl’s (NYSE: KSS), Microchip Technology (Nasdaq: MCHP), Molycorp (NYSE: MCP), Nordstrom (NYSE: JWN), NVIDIA (Nasdaq: NVDA), PPL Corp. (NYSE: PPL), Vulcan Materials (NYSE: VMC), Walt Disney (NYSE: DIS), Windstream (NYSE: WIN), Advance Auto Parts (NYSE: AAP), Aeroflex (NYSE: ARX), Apollo Investment (Nasdaq: AINV), Autobytel (Nasdaq: ABTL), Capstone Turbine (Nasdaq: CPST), Caribou Coffee (Nasdaq: CBOU), Cowen Group (Nasdaq: COWN), Energizer (NYSE: ENR), FLY Leasing (NYSE: FLY), FTI Consulting (NYSE: FCN), Great Plains Energy (NYSE: GXP), Hawaiian Telcom (Nasdaq: HCOM), Jazz Pharmaceuticals (Nasdaq: JAZZ), Lifetime Brands (Nasdaq: LCUT), Lions Gate (NYSE: LGF), Markel (NYSE: MKL), Meridian Bioscience (Nasdaq: VIVO), Molycorp (NYSE: MCP), PC Mall (Nasdaq: MALL), SandRidge Energy (NYSE: SD), Wendy’s (NYSE: WEN), TheStreet (NYSE: TST) 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.

Astounding Retail Sales Justify Fed Taper

Retail sales were reported for the month of November Thursday and they were astounding. It reflects a very strong start to the holiday shopping season, and shows all around better consumer spending activity. It also offers the Fed all the more reason to begin tapering back asset purchases, but it justifies it as well, so it should make Fed action easier to swallow. Let’s take a closer look at this stellar economic report. Visit our blog for more like this.

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.

Retail Sales

Upward Revision to October

The prior month’s sales data was revised higher, and the revisions extended across the board. This is not always good news, because it could lead to a slower growth rate for the reported month, since the base that growth is calculated upon is raised. However, that was not the case Thursday, as the prior month’s upward revision joined the current month’s positive surprise in uplifting hope.

	Revised Oct. Change	Initial October Data
Retail Sales M/M Change	+0.6%	+0.4%
Retail Sales Less Autos	+0.5%	+0.2%
Retail Sales Less Autos & Gas	+0.6%	+0.3%

As you can see, previously reported headline retail sales were increased two-tenths to +0.6% for October. When we exclude automobile and gasoline sales, growth shows up even better, improved by three-tenths of a percentage point. So this is good news about the pre-holiday period. It’s even more impressive if we recall the federal fiscal chaos that enveloped the headlines in early October as the government shut down and the debt ceiling debate threatened to derail the American economy. Those key factors did have a detrimental impact upon reported consumer sentiment trends through the month. Yet, as Thursday’s data shows, real spending came through okay.

November’s Good News

	November Change	Economists’ Consensus
Retail Sales M/M Change	+0.7%	+0.6%
Retail Sales Less Autos	+0.4%	+0.3%
Retail Sales Less Autos & Gas	+0.6%	+0.2%

Despite the upward revisions to October’s data, growth exceeded economists’ expectations across the board in November. The numbers were more than just better than expectations; they were strong in absolute terms as well. November retail sales growth of 0.7% beat the economists’ very positive outlook, but when excluding strong auto sales and gasoline, they blew away the economists’ consensus and remained robust in absolute terms at +0.6%.

I caught a so-called expert criticize the report on financial television Thursday. He expressed his view that retail sales are strong, but retailers’ individual earnings have been poor. He vaguely suggested that this was because of necessary discounting and reflected a generally poor retail environment. While I agree that the retail store capacity of the United States has typically been oversaturated over the last decade, I cannot find much fault with the latest retail sales report. And it is well-established now that American consumers are deal seekers.

I do believe that the earlier discounting of retailers may have helped pull forward a larger portion of seasonal sales than usual though. Opening on Thanksgiving like Wal-Mart (NYSE: WMT) and Target (NYSE: TGT) did and the beginning of discounting even earlier than that, along with ongoing daily deals from the likes of Best Buy (NYSE: BBY) and others, have certainly helped frontload seasonal sales. I think you can see that in the year-to-year comparisons. Sales were 4.7% greater in this year’s November versus last year, and they were up 4.1% for the September through November period.

Looking at the retail segments, autos were especially strong, with those sales up 1.8% in November and 10.9% against the prior year period. The strong November was already noted by Ford (NYSE: F) shares though because of the monthly motor vehicle sales data reported earlier this month, so auto stocks hardly reacted to the news Thursday.

Gasoline stations posted a 1.1% decline in sales for the month and a 3.3% drop from the prior year period. This activity is always dictated by the volatile price of the commodity. We can see that the auto and gasoline sales trends offset one another, and so the headline comparisons nearly matched the change in the adjusted figure that excludes these two important retail segments.

Online sales are of great interest to us, given their growing importance and the rising prominence of players in the market like Amazon.com (Nasdaq: AMZN). The sales of “nonstore retailers,” which also include exclusive catalog sellers but are mostly driven by online retailers these days, increased 2.2% in November and were up 9.4% against the prior year. The faster pace of growth reflects the still increasing importance of Internet retailers and their steady market share gains. That trend is driven by the ease of online shopping and the often better pricing of goods online.

Another positive sign for consumer spending was evident in the 1.3% higher sales of food services and drinking places in November, and 5.2% year-to-year increase. The outsized gain in sales for this segment is important, as we believe it offers evidence of casual dining gains. Eating at Darden Restaurants’ (NYSE: DRI) Olive Garden is relatively inexpensive, but it’s probably still more expensive than eating in. Eating at McDonalds (NYSE: MCD) is another story, thanks to its expanding dollar menu. I think the growth in this segment more likely reflects a return of consumer spending following improving labor trends.

Real estate enthusiasts will be happy to note the 1.8% month-to-month and 5.3% year-to-year sales growth in building materials stores. Add to that the 1.2% and 9.7% sales growth at furniture and home furnishings stores and we have real reason to celebrate. Not only are home sales increasing, but people are actually furnishing and repairing them.

Chart at Yahoo Finance

The retail sales data on Thursday hardly lifted stocks, which were on the decline of late due to rising concern about Fed tapering and next week’s meeting of the U.S. central bank. Still, the slide in the SPDR S&P 500 (NYSE: SPY) did stall on the day, and that might have been because of the especially positive retail sales result. It is yet another data point offering evidence that the Fed might be justified in tapering back asset purchases now, and that the economy can stand on its own even so.

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.

Week Ahead - Busy Housing and EPS Schedule

The week ahead is chock full of housing data, with several reports due measuring the mood of homebuilders, new home construction starts, real estate prices and existing home sales. Of course, the European debt crisis and the United States’ debt ceiling debacle will overwhelm the wire. Still, we’ll receive data on economic leading indicators, regional manufacturing activity, the weekly consumer take and a slew of earnings reports as EPS season kicks into high gear.

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.

Week Ahead - Busy Housing and EPS Schedule

Monday

You will surely enjoy your coffee Monday morning, as the two economic reports scheduled for release probably will dip well. Before the bell rings, we’ll receive the latest Treasury International Capital (TIC) data. Given that U.S. Treasury Securities could soon suffer a sharp discount, we doubt there’s been active interest. However, this report covers the month of May, when people still thought some sense existed in the U.S. Congress. April’s report showed a net improvement in foreign investment in long-term U.S. securities, to net inflow of $30.6 billion.

Follow up that dough-nut with a bagel, when the National Association of Home Builders (NAHB) reports its Housing Market Index at 10:00 AM EDT. The NAHB/Wells Fargo Housing Market Index is a measure of builder confidence, and it has been quite lacking in that for some time now. Last month’s report showed the HMI dropped 3 points in June to a mark of 13, a level it hadn’t seen since September of 2010. By the way, the breakpoint between a positive view and negative is 50, so you get the point.

Overseas, markets will be closed in Japan. German and Russian bankers are meeting, I suppose so the Russians can learn more about the vulnerabilities of Europe.

The corporate wire has the Global Hunter Securities Energy Conference running. The EPS schedule has news from Halliburton (NYSE: HAL), Gannett (NYSE: GCI), Hasbro (NYSE: HAS), Wynn Resorts (Nasdaq: WYNN), Stanley Black & Decker (NYSE: SWK), IBM (NYSE: IBM), Aetrium (Nasdaq: ATRM), American National Bankshares (Nasdaq: AMBN), American River Bankshares (Nasdaq: AMRB), Anadys Pharmaceuticals (Nasdaq: ANDS), AspenBio Pharma (Nasdaq: APPY), B&H Ocean Carriers (AMEX: BHO), BCSB Bancorp (Nasdaq: BCSB), Bridge Bancorp (Nasdaq: BDGE), Brown & Brown (NYSE: BRO), Carolina Trust Bank (Nasdaq: CART), Cass Information Systems (Nasdaq: CASS), CenterState Banks (Nasdaq: CSFL), Charles Schwabb (Nasdaq: SCHW), Check Point Software (Nasdaq: CHKP), Chicopee Bancorp (Nasdaq: CBNK), China HGS Real Estate (Nasdaq: HGSH), Citizens & Northern (Nasdaq: CZNC), Citizens First (Nasdaq: CZFC), Codorus Valley Bancorp (Nasdaq: CVLY), Colony Bankcorp (Nasdaq: CBAN), Community West Bancshares (Nasdaq: CWBC), Consolidated-Tomoka Land (AMEX: CTO), CoreSite Realty (NYSE: COR), Covenant Transportation (Nasdaq: CVTI), Dearborn Bancorp (Nasdaq: DEAR), Dehaier Medical Systems (Nasdaq: DHRM), Delta Air Lines (NYSE: DAL), DXP Enterprises (Nasdaq: DXPE), ECB Bancorp (Nasdaq: ECBE), Enteromedics (Nasdaq: ETRM), Equity Lifestyle Properties (NYSE: ELS), ESB Financial (Nasdaq: ESBF), Farmer’s Capital Bank (Nasdaq: FFKT), Fidelity Bancorp (Nasdaq: FSBI), First Bancorp (Nasdaq: FNLC), First Community (Nasdaq: FFCO), First Financial (Nasdaq: THFF), First Financial Northwest (Nasdaq: FFNW), GSI Group (Nasdaq: GSIG), Harleysville Savings (Nasdaq: HARL), Heartland Express (Nasdaq: HTLD), Heritage Commerce (Nasdaq: HTBK), Hingham Institution (Nasdaq: HIFS), Horizon Bancorp (Nasdaq: HBNC), Horizon Lines (NYSE: HRZ), Hudson City Bancorp (Nasdaq: HCBK), ICU Medical (Nasdaq: ICUI), Immucor (Nasdaq: BLUD), InsWeb (Nasdaq: INSW), IBM (NYSE: IBM), Jefferson Bancshares (Nasdaq: JFBI), Lincare (Nasdaq: LNCR), Mattson Technology (Nasdaq: MTSN), Meta Financial (Nasdaq: CASH), Metro Bancorp (Nasdaq: METR), MGIC Investment (NYSE: MTG), Miller Energy (Nasdaq: MILL), Mosaic (NYSE: MOS), NASB Financial (Nasdaq: NASB), NetGear (Nasdaq: NTGR), New Century Bancorp (Nasdaq: NCBC), New England Bancshares (Nasdaq: NEBS), New Oriental Education & Technology (NYSE: EDU), Newbridge Bancorp (Nasdaq: NBBC), Newport Bancorp (Nasdaq: NFSB), Oak Valley Bancorp (Nasdaq: OVLY), Omega Flex (Nasdaq: OFLX), Oneida Financial (Nasdaq: ONFC), Orrstown Financial (Nasdaq: ORRF), Packaging Corp. of America (NYSE: PKG), Pacwest Bancorp (Nasdaq: PACW), Park National (AMEX: PRK), Peoples Federal (Nasdaq: PEOP), Petmed Express (Nasdaq: PETS), Phazer (Nasdaq: ANTP), Porter Bancorp (Nasdaq: PBIB), Premierwest Bancorp (Nasdaq: PRWT), Provident Community Bancshares (Nasdaq: PCBS), Pure Cycle (Nasdaq: PCYO), Republic First Bancorp (Nasdaq: FRBK), River Valley Bancorp (Nasdaq: RIVR), Roma Financial (Nasdaq: ROMA), Savannah Bancorp (Nasdaq: SAVB), SEACOR (NYSE: CKH), Southcoast Financial (Nasdaq: SOCB), Southern National Bank of Virgina (Nasdaq: SONA), Southside Bancshares (Nasdaq: SBSI), Stanley Black & Decker (NYSE: SWK), State Bancorp (Nasdaq: STBC), Steel Dynamics (Nasdaq: STLD), Teche (AMEX: TSH), Union Bankshares (NYSE: UNB), Union First Market Bankshares (Nasdaq: UBSH), Unity Bancorp (Nasdaq: UNTY), Wayne Savings Bancshares (Nasdaq: WAYN), Weis Markets (NYSE: WMK) and Zions Bancorporation (Nasdaq: ZION).

Tuesday

More real estate data reaches wire Tuesday, as the Housing Starts tally is reported for June at 8:30 AM ET. Starts measure the beginning of construction, and last month’s report marked a 3.5% increase in May Starts, to an annual pace of 560K. Permits authorized for construction in May jumped 8.7% over April, to an annual rate of 612K. Permits were also up against the prior year rate of 582K.

Last week’s same-store sales data covered the week ending July 9. The holiday inclusive period saw same-store sales gain, but just 0.4% against the immediately preceding period. On a year-to-year basis, sales rose 5.5%; Redbook had yearly sales up 5.4% for the same period. The latest data will be available before the bell on Tuesday.

The House of Representatives is expected to vote on some form of cut to the budget deficit, the raising of the debt ceiling and an amendment to the Constitution that requires a balanced federal budget. The GOP-led extreme measures will not likely get through Congress, but perhaps act as progressive step towards agreement.

The Commodity Futures Trading Commission (CFTC) is due to finalize additional financial reform regulations. Overseas, a task force assigned by the Nuclear Regulatory Commission issues a report and briefs the public on the Japanese nuclear crisis.

The corporate schedule has an FDA panel review of new diabetes drug applications by Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN). News Corp. (NYSE: NWS, Nasdaq: NWSA) execs testify before the U.K. Parliament with regard to their subsidiary’s alleged phone hacking. A hearing is scheduled over Google’s (Nasdaq: GOOG) settlement with authors on e-books. Skullcandy, a headphone maker, is expected to price its IPO within a range of $17 to $19 a share.

The day’s EPS schedule highlights data from Goldman Sachs (NYSE: GS), Apple (Nasdaq: AAPL), Bank of America (NYSE: BAC), Altera (Nasdaq: ALTR), Coca Cola (NYSE: KO), Intuitive Surgical (Nasdaq: ISRG), Forest Laboratories (NYSE: FRX), State Street (NYSE: STT), A.O. Smith (NYSE: AOS), Ameriserv (Nasdaq: ASRV), Bancfirst (Nasdaq: BANF), Bank of New York Mellon (NYSE: BK), Beneficial Mutual (Nasdaq: BNCL), China Technology and Development (Nasdaq: CDTC), Chipotle Mexican Grill (NYSE: CMG), Cintas (Nasdaq: CTAS), Comerica (NYSE: CMA), Crown Holdings (NYSE: CCK), CSX (NYSE: CSX), Harley Davidson (NYSE: HOG), Johnson & Johnson (NYSE: JNJ), Keycorp (NYSE: KEY), Knoll (NYSE: KNL), Life Partners (Nasdaq: LPHI), Manhattan Associates (Nasdaq: MANH), Marten Transport (Nasdaq: MRTN), McMoran Exploration (NYSE: MMR), Mercantile Bank (Nasdaq: MBWM), Mueller Industries (NYSE: MLI), Omnicom (NYSE: OMC), Peabody Energy (NYSE: BTU), Pinnacle Financial Partners (Nasdaq: PNFP), Platinum Underwriters (NYSE: PTP), Polaris Industries (NYSE: PII), Pulaski Financial (Nasdaq: PULB), Qiao Xing Mobile (NYSE: QXM), Renasant (Nasdaq: RNST), Riverbed Technology (Nasdaq: RVBD), Sterling Bancshares (Nasdaq: SBIB), Stryker (NYSE: SYK), Taubman Centers (NYSE: TCO), TD Ameritrade (Nasdaq: AMTD), Tessco (Nasdaq: TESS), United Rentals (NYSE: URI), UnitedHealth (NYSE: UNH), VMware (NYSE: VMW), W.W. Grainger (NYSE: GWW), Waste Connections (NYSE: WCN), Wells Fargo (NYSE: WFC), Westamerica Bancorp (Nasdaq: WABC) and Yahoo (Nasdaq: YHOO).

Wednesday

The marquee report for the day is without question the Existing Home Sales Report for June, due at 10:00 AM ET. Economists are looking for the annual pace of sales to reach 4.9 million, which would mark increase from May’s 4.81 million rate. We should start to see important year-over-year housing sales growth through the second half of the year.

The Mortgage Bankers Association (MBA) precedes this data with the Weekly Applications Survey. The MBA’s measure of mortgage application flow showed a likely holiday impacted decline last week, as the Market Composite Index fell 5.1%, despite mortgage rate improvement.

At 10:30 AM ET, look for the EIA’s Petroleum Status Report. Last week’s data covering the period ending July 8 showed a 3.1 million barrel decrease in oil inventory and a 0.8 million decrease in total motor gasoline stores. Crude oil stocks remain above the upper limit of the average range for this time of year, while gasoline inventory is within the lower range for the season.

The World Trade Organization (WTO) issues its World Trade Report Wednesday.

The Los Angeles Dodgers will request permission of a bankruptcy court to continue borrowing on hedge fund manager Highbridge Principal’s loan.

BHP Billiton (NYSE: BHP) is expected to publish its June quarter exploration and production report. The EPS schedule includes news from EMC Corp. (NYSE: EMC), American Express (NYSE: AXP), Xilinx (Nasdaq: XLNX), Abbott Labs (NYSE: ABT), Quest Diagnostics (NYSE: DGX), St. Jude Medical (NYSE: STJ), Access National (Nasdaq: ANCX), Altria (NYSE: MO), Amphenol (NYSE: APH), AMR (NYSE: AMR), Astoria Financial (NYSE: AF), Badger Meter (NYSE: BMI), Banner (Nasdaq: BANR), Blackrock (NYSE: BLK), Cardinal Financial (Nasdaq: CFNL), Cheesecake Factory (Nasdaq: CAKE), Cohu (Nasdaq: COHU), Covanta (NYSE: CVA), Datalink (Nasdaq: DTLK), E*Trade (Nasdaq: ETFC), East West Bancorp (Nasdaq: EWBC), eBay (Nasdaq: EBAY), First Cash Financial (Nasdaq: FCFS), Forward Air (Nasdaq: FWRD), Gramercy Capital (NYSE: GKK), Hanesbrands (NYSE: HBI), Host Hotels and Resorts (NYSE: HST), Intel (Nasdaq: INTC), JAKKS Pacific (Nasdaq: JAKK), Johnson Controls (NYSE: JCI), Kinder Morgan Energy Partners (NYSE: KMP), Kinder Morgan Management (NYSE: KMR), Knight Capital (NYSE: KCG), L&L Energy (Nasdaq: LLEN), Lufkin (Nasdaq: LUFK), M&T Bank (NYSE: MTB), Media General (NYSE: MEG), Mellanox (Nasdaq: MLNX), MKS Instruments (Nasdaq: MKSI), Monarch Casino and Resort (Nasdaq: MCRI), Noble (NYSE: NE), Northern Trust (Nasdaq: NTRS), NVE (Nasdaq: NVEC), Pacific Continental (Nasdaq: PCBK), Penson Worldwide (Nasdaq: PNSN), Piper Jaffray (NYSE: PJC), Plexus (Nasdaq: PLXS), PNC Financial (NYSE: PNC), Popular INC (Nasdaq: BPOP), Qualcomm (Nasdaq: QCOM), Raymond James (NYSE: RJF), Saba Software (Nasdaq: SABA), Select Comfort (Nasdaq: SCSS), SLM (NYSE: SLM), TASER (Nasdaq: TASR), Tractor Supply (Nasdaq: TSCO), Umpqua (Nasdaq: UMPQ), United Technologies (NYSE: UTX), US Bancorp (NYSE: USB), Werner (Nasdaq: WERN), Westell (Nasdaq: WSTL) and Zhone Technologies (Nasdaq: ZHNE).

Thursday

Thursday will certainly be the busiest day of the week, with six economic reports scheduled. The only premarket data will arrive from the Department of Labor. Weekly Jobless Claims, due at 8:30, are seen rising to 415K, from 405K reported last week. We discussed the possibility that last week’s economic data were depressed by the lackadaisical days that follow holiday weekends.

After the bell, at 9:45 AM EDT, look for Bloomberg’s Consumer Comfort Index. The weekly measure improved a bit last period, but remained sour at -43.9, from negative 45.5 the week before. Both domestic and international uncertainty should keep consumers cautious.

The Philadelphia Fed Survey follows last week’s disappointing news from New York State. Manufacturing in the Empire State kept in the negative, marking contraction for the sector. Economists are looking for the Philadelphia metric to move into positive territory, to 5.0, from negative 7.7 last month. This time at least the range includes some negative forecasts, with economists varying in their index forecasts from -4.8 to 10.0, based on Bloomberg’s tally.

Also at 10:00 AM ET, look for the latest Leading Indicators Index from the Conference Board. Economists are forecasting a 0.3% increase for June’s take, which would compare to the 0.8% rebound in May (following April’s 0.4% decline). I’m not as confident as the economists surveyed, looking for somewhere around no change in the LEI.

Also at 10:00 AM ET, see the FHFA House Price Index data for May. April’s data showed a 0.8% month-over-month price increase, while prices remained lower, down 5.7% against the prior year. As this data nears June, it will begin to better match and I posit even surpass prior year home pricing (seen more so in S&P Case Shiller and Existing Home Sales data).

At 10:30 AM ET, catch the EIA’s Natural Gas Inventory data. Last week’s report covering the period ending July 8 showed an 84 Bcf increase in natural gas inventory. Stores were 218 Bcf less than last year, and 52 Bcf below the five-year average.

Federal Reserve Chairman Bernanke testifies with other officials before a Senate panel on financial regulatory reform one year post. Meanwhile, the Consumer Financial Protection Board gets its full regulatory powers. Chicago Federal Reserve President Charles Evans holds a news conference.

Eurozone leaders are scheduled to meet to discuss the regional debt and economic crisis.

The NFL and players’ union may have an agreement ratified Thursday at their annual meeting, just in time for the Hall of Fame Game.

An FDA committee reviews menthol cigarettes, and another FDA panel will consider Centocor’s Remicade treatment for pediatric colitis.

The EPS schedule highlights news from Advanced Micro Devices (NYSE: AMD), Sandisk (Nasdaq: SNDK), Pepsico (NYSE: PEP), Safeway (NYSE: SWY), Fifth Third Bancorp (Nasdaq: FITB), Lab Corp. (NYSE: LH), Alaska Air (NYSE: ALK), Amsurg (Nasdaq: AMSG), Associated Banc (Nasdaq: ASBC), AT&T (NYSE: T), Athenahealth (Nasdaq: ATHN), Autoliv (NYSE: ALV), Baxter Int’l (NYSE: BAX), BB&T (NYSE: BBT), BJS Restaurants (Nasdaq: BJSI), Blackstone (NYSE: BX), Britton & Koontz Capital (Nasdaq: BKBK), Builders Firstsource (Nasdaq: BLDR), C.R. Bard (NYSE: BCR), Cash America (NYSE: CSH), Celanese (NYSE: CE), Cepheid (Nasdaq: CPHD), Chicago Bridge and Iron (NYSE: CBI), China Natural Resources (Nasdaq: CHNR), Chubb (NYSE: CB), Cirrus Logic (Nasdaq: CRUS), CoBiz Financial (Nasdaq: COBZ), Compuware (Nasdaq: CPWR), Cooper Industries (NYSE: CBE), Cypress Semi (NYSE: CY), Danaher (NYSE: DHR), Diamond Offshore (NYSE: DO), Electronics for Imaging (Nasdaq: EFII), Eli Lilly (NYSE: LLY), Encana (NYSE: ECA), Freeport McMoRan (NYSE: FCX), Global Payments (NYSE: GPN), Goodrich (NYSE: GR), Gulfmark Offshore (NYSE: GLF), Healthstream (Nasdaq: HSTM), Human Genome Sciences (Nasdaq: HGSI), Interactive Brokers (Nasdaq: IBKR), Janus Capital (NYSE: JNS), Kansas City Southern (NYSE: KSU), Lacrosse Footwear (Nasdaq: BOOT), Landstar (Nasdaq: LSTR), Lattice Semiconductor (Nasdaq: LSCC), Matthews (Nasdaq: MATW), Medco Health (NYSE: MHS), Microsoft (Nasdaq: MSFT), Morgan Stanley (NYSE: MS), NCR (NYSE: NCR), Nucor (NYSE: NUE), Penn National Gaming (Nasdaq: PENN), Philip Morris (NYSE: PM), PMC Sierra (Nasdaq: PMCS), Pool Corp. (Nasdaq: POOL), Rambus (Nasdaq: RMBS), Renaissance Learning (Nasdaq: RLRN), Ruby Tuesday (NYSE: RT), SEI Investments (Nasdaq: SEIC), SNAP On (NYSE: SNA), Taylor Capital (Nasdaq: TAYC), Temple Inland (NYSE: TIN), Travelzoo (Nasdaq: TZOO), US Airways (NYSE: LCC), USA Truck (Nasdaq: USAK), Value Line (Nasdaq: VALU), VF Corp. (NYSE: VFC), Western Digital (NYSE: WDC), Whirlpool (NYSE: WHR) and Young Innovations (Nasdaq: YDNT).

Friday

The EU’s Economic Council’s budget meeting convenes.

In the U.S., monthly state jobs data are reported.

Lehman Brothers and a past partner meet in court to determine whether 19 real estate projects will be allowed to come out of bankruptcy. Charles Schwab (Nasdaq: SCHW) offers its summer business review.

The EPS schedule includes news from Honeywell (NYSE: HON), Schlumberger (NYSE: SLB), Xerox (NYSE: XRX), Suntrust Banks (NYSE: STI), Dover (NYSE: DOV), Rockwell Collins (NYSE: COL), Caterpillar (NYSE: CAT), Columbus McKinnon (Nasdaq: CMCO), Complete Production (NYSE: CPX), Digimarc (Nasdaq: DMRC), DNB Financial (Nasdaq: DNBF), FLIR Systems (Nasdaq: FLIR), General Electric (NYSE: GE), Idexx Laboratories (Nasdaq: IDXX), MainSource Financial (Nasdaq: MSFG), McDonalds (NYSE: MCD), Mosys (Nasdaq: MOSY), Northwest Bancshares (Nasdaq: NWBI), Old Line Bancshares (Nasdaq: OLBK), Oriental Financial (NYSE: OFG), Pathfinder Bancorp (Nasdaq: PBHC), Prosperity Bancshares (Nasdaq: PRSP), Rand Capital (Nasdaq: RAND), Reynolds American (NYSE: RAI), Sensient Technologies (NYSE: SXT), Somerset Hills Bancorp (Nasdaq: SOMH), Tower Financial (Nasdaq: TOFC), United Financial Bancorp (Nasdaq: UBNK), USG (NYSE: USG), Verizon Communications (NYSE: VZ) and Yadkin Valley Financial (Nasdaq: YAVY).

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