Weekly Newsletter May 13th - May 19th

Current Events: For the eighth session out of nine, the U.S. stock markets close down for the day. The current slide has the U.S. markets at more than three-month lows as feared investors worry about Greece’s potential exit from the euro zone. Those investors who remain bullish are eagerly looking towards the plethora of retail earnings scheduled for release this week to give the U.S. markets the surge needed to break out of the current downtrend.

What to Look for This Week

The Stoxx Europe 600 index fell about 2% Monday as fears grow that Greece could soon be ousted from the euro zone. The failure of Greek party leaders to reach an agreement to form a unity government stirred fresh carnage across financial markets as euro-zone finance ministers meet in Brussels. The likely confrontation Greece faces with its international creditors has investors watching every move. The chances for a last-minute deal for a coalition government look increasingly remote. With investors aggressively discarding their possession of banking and resource shares the financial markets around the world experienced the aftermath. This could mark just the beginning if confirmation of an ousting is announced.

News Affecting the Markets

The J.P. Morgan Chase & Co. chief investment officer, Ina Drew has decided to retire after working more than 30 years with the bank. The resignation comes after the world-renowned bank incurred a trading loss of more than $2 billion. She has become the first high-ranking casualty involved in the scandal that has dented the bank’s reputation and prompted fresh calls for tighter financial regulation. CEO Jamie Dimon now looks to convince shareholders and the world that the company was duped by a rogue and reckless team, and the overly-aggressive acts of those involved do not represent the common practice of the blue chip. Thus far, investors appear timid and have shied away from the banking stock as dipped each day since the catastrophic, yet captivating financial news was released.

Smart Investing

Manage Your Broker: It is no surprise that the investment industry is plagued with awkward and seemingly unsolvable conflicts of interest. But what brings in the most money for the broker is not always what is best for investors - or what they really want. The temptation is to sell risky products because they are more lucrative than the low-risk alternatives. Everybody has to make a living, brokers and investment advisors included, and everyone knows that; however, deliberate attempts to confuse or miss-sell in any way are not only unethical, they may come back to trouble the broker in the form of soured relationships or even claims for damages. There are evident things a broker should avoid: lying, misrepresenting and hard-sell tactics; however, some unethical behavior is more subtle, but no more acceptable. All entail some combination of poor or inadequate communication, a tendency to mislead investors or simply not bothering to do a good job. Much has to do with taking advantage of the informational asymmetry between buyer and seller. Even though you have a professional managing your portfolio, you should make sure to manage the professional. Equity Scholar can help educate and inform you of what to look for to ensure best practices are being followed by those involved with your financial future.

Earnings for the Week

Monday: Agilent Technologies Inc (A) {After the close}, Millennial Media Inc (MM) {After the close}

Tuesday: Dick's Sporting Goods Inc (DKS), Home Depot Inc (HD), J C Penney Company Inc (JCP) {After the close}, Saks Inc (SKS), TJX Companies Inc (TJX), VimpelCom Ltd (VIP)

Wednesday: Abercrombie & Fitch Co (ANF), Deere & Co (DE), Limited Brands Inc (LTD) {After the close}, Target Corp (TGT)

Thursday: Advance Auto Parts Inc (AAP), Aeropostale Inc (ARO) {After the close}, Applied Materials Inc (AMAT), Autodesk Inc (ADSK), Brocade Communications Systems Inc (BCRD) {After the close}, Computer Sciences Corp (CSC), GameStop Corp (GME), Gap Inc (GPS) {After the close}, Intuit Inc (INTU) {After the close}, Marvell Technology Group Ltd (MRVL), Ross Stores Inc (ROST), Salesforce.com Inc (CRM) {After the close}, Sears Holdings Corp (SHLD), Wal-Mart Stores Inc (WMT), Youku Inc (YOKU) {After the close}

Friday: ANN INC (ANN), Chimera Investment Corp (CIM), Foot Locker Inc (FL), Progressive Corp (PGR)
* Earnings dates and times are subject to change

Economic Data this Week

Monday
No announcements scheduled
.
Tuesday
Retail Sales @ 8:30 AM for April (Est. = 0.2%, Prior = 0.8%)
CPI @ 8:30 AM for April (Est. = 0.0%, Prior = 0.3%)
Empire Manufacturing @ 8:30 AM for May (Est. = 8.0 to 8.4, Prior = 6.6)
Business Inventories @ 10:00 AM for March (Est. = 0.3%, Prior = 0.6%)
NHAB Housing Market Index @ 10:00 AM for May (Est. = 26, Prior = 25)

Wednesday
MBA Mortgage Index @ 7:00 AM for 05/12 (Est. = N/A, Prior = 1.7%)
Housing Starts @ 8:30 AM for April (Est. = 675K to 680K, Prior = 654K)
Building Permits @ 8:30 AM for April (Est. = 725K to 730K, Prior = 747K)
Industrial Production @ 9:15 AM for April (Est. = 0.4% to 0.5%, Prior = 0.0%)
Capacity Utilization @ 9:15 AM for April (Est. = 78.9% to 79.0%, Prior = 78.6%)
Crude Oil Inventories @ 10:30 AM for 05/12 (Est. = N/A, Prior = 3.652M)
FOMC Minutes @ 2:00 PM for 04/25

Thursday
Initial Claims @ 8:30 AM for 05/12 (Est. = 365K, Prior = 367K)
Continuing Claims @ 8:30 AM for 05/05 (Est. = 3,250K, Prior = 3,229K)
Philadelphia Fed @ 10:00 AM for May (Est. = 8.8 to 10.0, Prior = 8.5)
Leading Indicators @ 10:00 AM for April (Est. = 0.1% to 0.2%, Prior = 0.3%)

Friday
No announcements scheduled.