Weekly Newsletter December 9th - December 15th

Current Events: With hopes of a diverted fiscal cliff growing on Wall Street, the Dow Jones and S&P 500 reach levels not seen since Election Day. While it is just speculation, investors are growing confident that lawmakers will do what it takes to avoid a New Year catastrophe which would bring on widespread tax increases and spending cuts.

What to Look for This Week

Thursday's Retail Sales numbers are sure to catch the attention of many this time of the year as savvy investors seek to gauge the pulse of U.S. consumers this holiday season. The health of the American buying spirit will be on display and lead many to speculate as to what the rest of the winter season has in store.

News Affecting the Markets
The costly and unfruitful $182 billion U.S. government bailout of AIG appears to have come full circle as the U.S. Treasury announced its plans on Monday to sell the remaining 16% of its shares in a public offering. Many top financial companies, such as Goldman Sachs and J.P. Morgan, have been retained as join book-runners during the offering.

Smart Investing

A Word from the Wise of Value Investing: Warren Buffet states that any company that enjoys a sustainable competitive advantage is likely to invest a nominal amount into research and development and new plant and equipment. This would free up cash for other investing purposes such as expansion that would allow the business to increase its sales and profitability. The accessibility of cash is also likely to thwart the company from taking on debt and incurring the cost associated with servicing of debt. A company that enjoys a durable competitive advantage is likely to have high amounts of free cash flow which could be passed on to shareholders.

Earnings for the Week

Monday: No major announcements scheduled.

Tuesday: Dollar General Corp (DG)

Wednesday: Joy Global Inc (JOY)

Thursday: Adobe Systems Inc (ADBE) {after the close}, Ciena Corp (CIEN), Hovnanian Enterprises Inc (HOV), Pier 1 Imports Inc (PIR), Quiksilver Inc (ZQK), VeriFone Systems Inc (PAY)

Friday: No major announcements scheduled.
* Earnings dates and times are subject to change

Economic Data this Week

Monday
No scheduled announcements.

Tuesday
Trade Balance @ 8:30 AM for October (Est. = -$42.8B to -$43.0B, Prior = -$41.5B)
Wholesale Inventories @ 10:00 AM for October (Est. = 0.3% to 0.4%, Prior = 1.1%)

Wednesday
MBA Mortgage Index @ 7:00 AM for 12/08 (Est. = n/a, Prior = 4.5%)
Crude Oil Inventories @ 10:30 AM for 12/08 (Est. = n/a, Prior = -2.357M)
FOMC Rate Decision @ 12:30 PM for December (Est. = 0.25%, Prior = 0.25%)
Treasury Budget @ 2:00 PM for November (Est. = -$113.0B, Prior = -$137.3B)

Thursday
Initial Claims @ 8:30 AM for 12/08 (Est. = 375K, Prior = 370K)
Continuing Claims @ 8:30 AM for 12/01 (Est. = 3200K to 3250K, Prior = 3205K)
Retail Sales @ 8:30 AM for November (Est. = 0.4% to 0.6%, Prior = -0.3%)
PPI @ 8:30 AM for November (Est. = -0.5%, Prior = -0.2%)
Business Inventories @ 10:00 AM for October (Est. = 0.3% to 0.4%, Prior = 0.7%)

Friday
CPI @ 8:30 AM for November (Est. = -0.2%, Prior = 0.1%)
Industrial Production @ 9:15 AM for November (Est. = 0.3% to 0.5%, Prior = -0.4%)
Capacity Utilization @ 9:15 AM for November (Est. = 78.0%, Prior = 77.8%)