Wow, we had a fun weekend!
There was a very spirited debate on my Inflation Nation articlewhich went into a whole minimum wage debate where we attempted to solve many of this country’s problems – I really enjoyed the debate…
Also over the weekned I put up an extensive watch list with a fairly positive market bias which I hope will be justified this week. I’m expecting sideways but upward trading into Thursdsay when we have a slew of data and earnings that should make the markets break one way or the other.
We get an early indication tomorrow with WMT, TGT, HD and SPLS all reporting on the same day as Fed minutes, a speech by William Poole, the October PPI (-.6% expected) and October retail sales (-.4%).
Wednesday we will get the BOE inflation report along with the Milken Institute’s report on China’s economy, which should be very interesting on an oil inventory day.
Thursday if full of earnings (see weekend picks) but also brings us the CPI (-.3% expected) Industrial Production (.3%), Capacity Utilization (82%) as well as the market moving Philly Fed survey at noon. Also on Thursday, the BOJ and the ECB meet on rates while 3 Fed Governors speak about the deficit!
Options expire on Friday so be prepared for wildness this week.
No wonder Bush is fleeing the country – it could be ugly if things go south there!
Asian markets started their week to the downside as it looks like growth is decelerating over there. Hong Kong property markets are starting to cool off and this will be interesting as State Streetis just about to launch a REIT ETF this week.
Heavy machinery orders were down 7.4% in Japan and tomorrow is their Q3 GDP report which will include that decline for the world’s second biggest economy. On the bright side (for today) the Nikkei held 16,000 and Pakistan finally stopped falling with a .04% gain!
Not going down at all is my 1/30 pick for Market of the Year – India, which came in at another record, just one point shy of 13,400 and up 35% since my pick!
My biggest concern in Asia this morning is very large drops in shipbuilder stocks – indications a major slowdown is seen in the global economy.
Europe is taking a sell-off in commodities fairly well. DT made a big gain with a new CEO and France’s Alstom (infrastructure) has been on a tearsince MS downgraded them on the 8th.
The Dow took most of its damage last week from JNJ, MRK, PFE, WMT and VZ – none of which were a particularly negative comment on the overall health of the economy. This week we hope to hold that 12,100 mark through Thursday where we are really going to need some strong numbers to get up and over 12,300. I’m in too good of a mood today to discuss the alternative!
The S&P put in a stronger performance but may have a hard time holding 1,380 if commodities sell off today but it can be quickly rescued by good data tomorrow as long as we can hold 1,375 today.
The rarely discussed NYSE should lead the way as they are far less dependant on commodities to make gains. The 8,800 line held up all week and it would be a tragic shame to break it now!
I was so ready to party when the Nasdaq broke 2,400 on Thursdaybut they forgot their SOX and there was no hope to sustain a barefoot rally.
The SOX took a bounce off the 50 dmaas we head into a tightening squeeze that should play out just around Thursday (although option expirations may hold things down until next week). The transports, like the NYSE, held their line all week and hopefully will be solid above the 2,600 mark. Sub $59 oil should give us a good start to the week!
Despite OPEC’s “cutbacks” they have built their own crude inventories up by 1.2M barrels a day for the quarter and now sit on 2.76B unsold barrels – the most since 1998 when oil fell all the way from $20 to $10. Wait a minute! Did we say 1.2M barrels a day? Where have we heard that number before?
The only reason OPEC is seeking to cut 1.2M barrels a day of crude production is because they are out of room to store the 1.2M barrels a day they are overproducing!
Storage is expensive you know!
We are hoping $59.89 (the dollar adjusted $57.15) makes a ceiling and gives us a good reason to test $58.39 on the way down to $56.89 (5%).
Let’s keep an eye on gold to see how real oil’s moves are. At this level, every dollar drop in gold (assuming it’s just dollar movement) should translate into a dime drop in oil, anything more than this is the real demand-driven picture.
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Just keeping an eye on the watch list today for the most part.
I’m hoping TM comes in some more so I can buy some!
ISIS has just completed a study that gives the best cholesterol reducing effects every! This is huge and will be a game changer but we missed it!
Bruce Karatz, CEO of KBH, is stepping downover the options scandal at that company. 130 companies remain under investigation but damage has really been minimal for the most part. Mr. Karatz will pay back $13M worth of options that were blatantly backdated but will keep the other $150M he made last year. Look for KBH’s stock to rise as they jettison an employee who made 15% of the profits!
There’s that reason to buy GE I was looking for! They are teaming up with Hitachito build nuclear reactors around the world. Other global nuke alliances formed this year have been Toshiba/Westinghouse and Mitsubishi/Areva – the wheel of long-term demand destruction keeps on turning for OPEC!
You never have to twist my arm with GE and the Jun $35s are just $1.80 with a stop at $34.50.
I’m much more excited about the pebble bed reactors being developed by privately held General Atomics as a real solution to our energy needs.
If ATVI plays out I’ll be watching GME too but I might grab some BBY Jan $52.50s for $3 if I can.
NVS will drop fast but that news is out on a delay on a diabetes drug.
