Weekly Newsletter May 27th - June 2nd

Current Events: The old adage, "sell in May, and go away" has proven to be true once again as the U.S. markets attempt to limp away with only relatively minor losses for the month. The announcement of the unemployment rate on Friday will kick start the month of June and will certainly catch the eyes of many investors looking to determine if the selling onslaught witnessed in May will spill over into June.

What to Look for This Week

With Greek polls signaling a commitment to the euro currency, the chances of more global stimulus in Greece increases. Political polls in Greece show that the conservative New Democracy party is ahead of the anti-bailout, left-wing Syriza. Answers will undoubtedly soon come on whether Greece will stay committed to austerity measures and remain in the euro zone, as the debt-laden nation will hold an election June 17.

News Affecting the Markets

Spain nationalized Bankia (its third-largest bank) will have to find a new path to recapitalize after European Central Bank rejects a proposal to use government debt. Under a proposal, Spain planned sink billions of euros in its bonds into the ailing bank with an eye to swapping them out for cash at the European Central Bank’s three-month refinancing window. Such a plan would have allowed the country to sidestep having to raise the money in the bond markets.

Smart Investing

Look Deeper than a P/E Ratio: Price-to-Earnings (P/E) ratios are a very handy snapshot to gauge whether a stock is cheap or expensive. But they do not tell the whole story, and on occasion can be misleading. If you take a few more steps, you can truly assess a stock's value relative to the profits being generated. This would be free cash flow. Understanding this concept can help you avoid bad investments and target good ones. The P/E ratio came into fashion in the late 1920s as investors had no idea how to value the stocks they were buying. We've come a long way since then, yet the EPS and the P/E ratio still dominate the headlines. Take the extra step and calculate the free cash flow ratio and the free cash flow yield. Stocks that look attractive by these measures will help your portfolio to hold its own in bear markets and appreciate in bull markets.

Earnings for the Week

Monday: No major earnings announcements.

Tuesday: DryShips Inc (DRYS) {After the close}, Perfect World Co Ltd (PWRD) {After the close}

Wednesday: Cosan Limited (CZZ) {After the close}, Lions Gate Entertainment Corp (LGF) {After the close}, Quiksilver Inc (ZQK), TiVo Inc (TIVO) {After the close}

Thursday: Ciena Corp (CIEN), Joy Global Inc (JOY), Vera Bradley Inc (VRA) {After the close}

Friday: Charming Shoppes Inc (CHRS)

* Earnings dates and times are subject to change

Economic Data this Week

Monday
No announcements scheduled.

Tuesday
Consumer Confidence @ 10:00 AM for May (Actual = 64.9)

Wednesday
MBA Mortgage Index @ 7:00 AM for 05/26 (Est. = N/A, Prior = 3.8%)
Pending Home Sales @ 10:00 AM for April (Est. = 0.6% to 2.0%, Prior = 4.1%)

Thursday
Initial Claims @ 8:30 AM for 05/26 (Est. = 365K to 368K, Prior = 370K)
Continuing Claims @ 8:30 AM for 05/19 (Est. = 3,250K, Prior = 3,260K)
Chicago PMI @ 9:45 AM for April (Est. = 55.0 to 57.0, Prior = 56.2)
Crude Oil Inventories @ 11:00 AM for 05/26 (Est. = N/A, Prior = 0.883M)

Friday
Unemployment Rate @ 9:55 AM for May (Est. = 8.0% to 8.1%, Prior = 8.1%)
ISM Index @ 9:55 AM for May (Est. = 53.0 to 54.0, Prior = 54.8)
Construction Spending @ 9:55 AM for May (Est. = 0.0% to 0.5%, Prior = 0.1%)
Auto Sales @ 2:00 PM for May (Prior = 5.0M)
Truck Sales @ 2:00 PM for May (Prior = 6.0M)

Weekly Newsletter May 20th - May 26th

Current Events: The U.S. financial markets struggled the entire week, ultimately incurring hefty losses for the week across all major indexes. The uncertainty about Greece's debt crisis continues to plague the financial markets throughout the world, and was the main contributor to the U.S. stocks worst week of the year. Investors will undoubtedly watch closely as new attempts to resolve euro zone debt crisis in Greece. A favorable resolution to the difficulties experienced in Europe must occur for the U.S. economy to a chance to continue its path to recovery.

What to Look for This Week

While a slew of retailers are set to announce earnings this week, most investors will be focused on the progress of the world-recognized social networking giant Facebook, Inc. as it starts its first full week of trading after going public with its IPO on Friday. The company sold an impressive 421.2 million shares in its IPO, with trading volume at the end of the session reaching about 567 million. The scattered release of housing data throughout the week will also captivate worried investors attempting to gauge the health of the U.S. economy.

News Affecting the Markets

On Friday Federal regulators shut down the Alabama Trust Bank in Sylacauga, Alabama. For the U.S., this marks the 24th bank failure of the year in which it has suffered. The FDIC stated late Friday that the Southern States Bank has agreed to buy the bank's $51.6 million in assets and $45.1 million in deposits. The FDIC estimates the cost to its deposit-insurance fund at $8.9 million. While the effects of the failure experienced on Friday are isolated and contained, the rising number of U.S. bank failures further contributes to the uncertainty most investors are feeling. Such a lingering feeling can prove to be dangerous if combined with a major catalyst, like a severing of EU ties to Greece.

Smart Investing

Hedge Fund Type of Investing for the Small Investor: Hedge funds provide critical strategies to hedge against market risks that could benefit every portfolio; everyone could use a little protection against a market meltdown. Aside from minimal regulation and the high minimum investment, hedge funds are similar to mutual funds. It is the strategies they employ that are the main difference. Hedge fund managers have greater flexibility over their funds' investments. A typical mutual fund manager will be limited by set asset allocations (say, 70% stocks and 30% bonds). A hedge fund's investments, on the other hand, are up to the sole discretion of the manager. In recent years many mutual funds have emerged that use similar strategies as that of hedge fund managers. Look out for them and invest cautiously. No more than 10% of your portfolio should invest in any of these off-market strategies, but they are structured to provide stable returns even in a declining market.

Earnings for the Week

Monday: Campbell Soup Co (CPB), Chimera Investment Corp (CIM), Krispy Kreme Doughnuts Inc (KKD), Lowe's Companies Inc (LOW), Tidewater Inc (TDW), Urban Outfitters Inc (URBN) {After the close}

Tuesday: Analog Devices Inc (ADI) {After the close}, Autozone Inc (AZO), Avago Technologies Ltd (AVGO) {After the close}, Best Buy Co Inc (BBY), Collective Brands Inc (PSS) {After the close}, Compuware Corp (CPWR), Dell Inc (DELL), Express Inc (EXPR), GUESS? Inc (GES), Medtronic Inc (MDT), Ralph Lauren Corp (RL), Take-Two Interactive Software Inc (TTWO) {After the close}, Williams Sonoma Inc (WSM)

Wednesday: American Eagle Outfitters Inc (AEO), Big Lots Inc (BIG), Eaton Vance Corp (EV), EverBank Financial Corp (EVER) {After the close}, Hewlett-Packard Co (HPQ), Hormel Foods Corp (HRL), NetApp Inc (NTAP) {After the close}, Pandora Media Inc (P), PVH Corp (PVH) {After the close}, Suntech Power Holdings Co Ltd (STP), Toll Brothers Inc (TOL), Trina Solar Ltd (TSL)

Thursday: Costco Wholesale Corp (COST), H.J. Heinz Co (HNZ), Signet Jewelers Ltd (SIG), Tiffany & Co (TIF), VeriFone Systems Inc (PAY) {After the close}

Friday: Mentor Graphics Corp (MENT)

* Earnings dates and times are subject to change

Economic Data this Week

Monday
No announcements scheduled.

Tuesday

Existing Home Sales @ 10:00 AM for April (Est. = 4.65M to 4.80M, Prior = 4.48M)

Wednesday
MBA Mortgage Index @ 7:00 AM for 05/19 (Est. = N/A, Prior = 1.7%)
New Home Sales @ 10:00 AM for April (Est. = 340K, Prior = 328K)
FHFA Housing Price Index @ 10:00 AM for March (Est. = N/A, Prior = 0.3%)
Crude Oil Inventories @ 10:30 AM for 05/19 (Est. = N/A, Prior = 2.128M)

Thursday
Initial Claims @ 8:30 AM for 05/19 (Est. = 365K, Prior = 367K)
Continuing Claims @ 8:30 AM for 05/12 (Est. = 3,250K, Prior = 3,229K)
Durable Hours @ 8:30 AM for April (Est. = -1.5% to 0.3%, Prior = -3.9%)

Friday
Michigan Sentiment @ 9:55 AM for May (Est. = 77.0 to 77.5, Prior = 77.8)

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.

Weekly Newsletter May 6th - May 12th

Current Events: Friday's tumble following weak jobs data caused all major U.S. markets to surrender to a negative week. Many investors were caught by surprise as earlier in the week many indexes, such as the S&P 500 and the Nasdaq, broke through major resistance levels and technically seemed strong. However, that soon changed once the Friday reports were released.

What to Look for This Week

With crude oil falling nearly 10% last week, many investors will eagerly seek opportunities over the coming days due to the volatility the commodity has seen recently. Friday's big slide caused the commodity to drop to the lowest price it has been per barrel in over three months.

News Affecting the Markets

After poor jobs data was released Friday morning, new concerns about the health of the U.S. economy spread quickly across not only the U.S., but the world. To add to the current uncertainty, European elections were held over the weekend.

Smart Investing

Invest Now, Even Small Amounts Add up over Time: Regardless of your age you are or even your level of employment or economic position, it may be a good idea to start preparing now, even in a paltry way, for eventual financial security. Some people feel they need every dollar they make to get by from one paycheck to the next. While this may be true for some, there are others who squander significant sums on insignificant things. They could be socking that money away into an investment account that, over time, could lead to huge savings and a comfortable retirement. It isn't hard to get started. All you need is $100 to $500 to open an account, and anywhere from $20 to $100 monthly to continue building your stock or mutual fund portfolio. In fact, a young person aged 20 could deposit $2,500 and then not another dime. In forty years he or she might have tens of thousands of dollars. Every little bit that you can stash away for your investments will make your retirement that much stronger. Give yourself the peace of mind of knowing you are preparing for the future.

Earnings for the Week

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Monday: Avis Budget Group Inc (CAR), Chimera Investment Corp (CIM), Clean Energy Fuels Corp (CLNE) {After the close}, Coeur d'Alene Mines Corp (CDE), Dendreon Corp (DNDB) {After the close}, DISH Network Corp (DISH), Electronic Arts Inc (EA) {After the close}, Frontier Communications Corp (FTR), Goodrich Petroleum Corp (GDP) {After the close}, Louisiana Pacific Corp (LPX), Mindray Medical International Ltd (MR) {After the close}, Northern Oil and Gas Inc (NOG), Oasis Petroleum Inc (OAS) {After the close}, Rackspace Hosting Inc (RAX), Sysco Corp (SYY), Tyson Foods Inc (TSN), Vornado Realty Trust (VNO), WYNN Resorts Ltd (WYNN) {After the close}

Tuesday: Carrizo Oil & Gas, Inc. (CRZO), DIRECTV (DTV), Energy Transfer Equity LP (ETE) {After the close}, Energy Transfer Partners LP (ETP) {After the close}, Hecla Mining Co (HL), Invesco Mortgage Capital Inc (IVR), Jazz Pharmaceuticals Inc (JAZZ), Medicis Pharmaceutical Corp (MRX) {After the close}, Molson Coors Brewing Co (TAP), OfficeMax Inc (OMX), Patriot Coal Corp (PCX), Quicksilver Resources Inc (KWK), Scotts Miracle-Gro Co (SMG), Tenet Healthcare Corp (THC), Walt Disney Co (DIS) {After the close}, Weingarten Realty Investors (WRI) {After the close}, XL Group PLC (XL) {After the close}, Youku Inc (YOKU)

Wednesday: Activision Blizzard Inc (ATVI) {After the close}, AOL Inc (AOL), BMC Software Inc (BMC), CenturyLink Inc (CTL) {After the close}, Cisco Systems Inc (CSCO) {After the close}, Dean Foods Co (DF), Dollar Thrifty Automotive Group Inc (DTG) {After the close}, EOG Resources Inc (EOG), Flotek Industries Inc (FTK) {After the close}, Kronos Worldwide Inc (KRO), Macy's Inc (M), Mannkind Corp (MNKD) {After the close}, MEMC Electronic Materials Inc (WFR), Priceline.com Inc (PCLN) {After the close}, Sodastream International Ltd (SODA), Westar Energy Inc (WR) {After the close}

Thursday: ACCO Brands Corp (ACCO), Assured Guaranty Ltd (AGO) {After the close}, BPZ Resources Inc (BPZ), CA Inc (CA) {After the close}, Career Education Corp (CECO) {After the close}, Kohl's Corp (KSS), MBIA Inc (MBI) {After the close}, McDermott International Inc (MDR) {After the close}, Medical Properties Trust Inc (MPW), Molycorp Inc (MCP) {After the close}, Newcastle Investment Corp (NCT), Nordstrom Inc (JWN) {After the close}, Nuance Communications Inc (NUAN) {After the close}, Sotheby's (BID) {After the close}, Windstream Corp (WIN)

Friday: NVIDIA Corp (NVDA), Progressive Corp (PGR), Rentech Inc (RTK)

* Earnings dates and times are subject to change

Economic Data this Week

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Monday
Consumer Credit @ 3:00 PM for March (Est. = $10.0B to $11.0B, Prior = $8.7B)

Tuesday
No announcements schedules.

Wednesday
MBA Mortgage Index @ 7:00 AM for 05/05 (Est. = N/A, Prior = 0.9%)

Wholesale Inventories @ 10:00 AM for March (Est. = 0.6%, Prior = 0.9%)

Crude Oil Inventories @ 10:30 AM for 05/05 (Est. = N/A, Prior = 2.840M)

Thursday
Initial Claims @ 8:30 AM for 05/05 (Est. = 365K, Prior = 365K)

Continuing Claims @ 8:30 AM for 04/28 (Est. = 3,288K to 3,300K, Prior = 3,276K)

Trade Balance @ 8:30 AM for March (Est. = -$49.5B to -$49.9B, Prior = -$46.0B)

Treasury Budget @ 2:00 PM for April (Est. = N/A, Prior = -$40.4B)

Friday
PPI @ 8:30 AM for April (Est. = 0.0% to 0.1%, Prior = 0.0%)

Michigan Sentiment @ 9:55 AM for May (Est. = 75.0 to 76.2, Prior = 76.4)