Monday, March 25, 2013

Weekly Newsletter March 24th - March 30th

Current Events:  After a down week, U.S. financial markets are seeking a jolt of positive news to keep near historic levels. Such a boost will likely come early in the week out of Europe as Cyprus has tentatively reached an agreement to receive key financial aid in an effort to avoid a meltdown. Early indications show the euro and U.S. stock-index futures rallying, following a sharp rise in Asian stocks as a result of the bailout.

What to Look for This Week

A ton of housing data is scheduled to be released this week, which will allow investors to gauge the temperature of the housing market. Not much excitement is expected this week from earnings though, as just a few big names are scheduled to announce, including Dollar General, Red Hat, Paychex, and GameStop.

News Affecting the Markets

The European Central Bank, the European Commission and the International Monetary Fund (collectively known as the Troika) came to the rescue Sunday bailing out the tiny island nation of Cyprus by securing 10 billion euros of aid. The proposed deal, which was leaked by European Union officials to Reuters, would include the closure of the country’s second-largest lender, Popular Bank of Cyprus or “Laiki Bank,” with deposits under 100,000 euros to be shifted to the larger Bank of Cyprus, while deposits over that amount would be frozen and used to pay off debts. Additionally, a 40% haircut on Bank of Cyprus depositors holding more than 100,000 euros in their accounts is reportedly also included in the structured deal designed to alleviate the country from its likely financial doom.

Smart Investing

Budget Analysis:  Investing and/or trading should involve the use of disposal income. But getting a hold of disposable income isn't easy for most. Thus, it may be prudent to create and maintain a budget. Start by reviewing your income and expenses. This will be easier if you get in the habit of tracking the money you spend using a paper ledger or with your computer. Remember to account for any debt expenses you may have, such as credit card and loan payments and include changes you anticipate such as a pay raise or a new car payment. Think about ways to maximize your income and minimize expenses. If you need more income, you may decide to work a few extra hours at a part-time job in addition to your current job. Look for ways both large and small to spend less throughout the year. Each income and added savings will quickly contribute to a larger pocket, which will give you a greater opportunity to participate in investments.

Earnings for the Week

Monday: Dollar General Corp (DG)

Tuesday:  No major announcements scheduled.

Wednesday: Paychex Inc (PAYX) {After the Close}, PVH Corp (PVH) {After the Close}, Red Hat Inc (RHT)

Thursday:  Accenture PLC (ACN) {After the Close}, Commercial Metals Co (CMC), GameStop Corp (GME), Mosaic Co (MOS)

Friday:  Excel Maritime Carriers Ltd (EXM)

* Earnings dates and times are subject to change

 

Economic Data this Week
Monday
No scheduled announcements.

Tuesday
Durable Orders @ 8:30 AM for February (Est. = 3.8% to 5.0%, Prior = -4.9%)
Case-Shiller 20-city Index @ 9:00 AM for January (Est. = 7.5%, Prior = 6.8%)
Consumer Confidence @ 10:00 AM for March (Est. = 65.0 to 66.9, Prior = 69.0)
New Home Sales @ 10:00 AM for February (Est. = 400K to 426K, Prior = 437K)

Wednesday
MBA Mortgage Index @ 7:00 AM for 03/23 (Est. = n/a, Prior = n/a)
Pending Home Sales @ 10:00 AM for February (Est. = 2.0%, Prior = 4.5%)
Crude Inventories @ 10:30 AM for 03/23 (Est. = n/a, Prior = -1.314M)

Thursday
Initial Claims @ 8:30 AM for 03/23 (Est. = 335K to 338K, Prior = 336K)
Continuing Claims @ 8:30 AM for 03/23 (Est. = 3040K to 3050K, Prior = 3053K)
Chicago PMI @ 9:45 AM for March (Est. = 55.0 to 56.5, Prior = 56.8)
Natural Gas Inventories @ 10:30 AM for 03/23 (Est. = n/a, Prior = -62)

Friday
Personal Income @ 8:30 AM for February (Est. = 0.8% to 0.9%, Prior = -3.6%)
Personal Spending @ 8:30 AM for February (Est. = 0.6%, Prior = 0.2%)
Michigan Sentiment @ 9:55 AM for March (Est. = 72.0 to 72.4, Prior = 71.8)

 

 

Tuesday, March 19, 2013

Weekly Newsletter March 17th - March 23rd


Current Events:  U.S. indexes reached new highs for the year last week, but recent news out of Europe has caused investors to worry. Highly debated decisions regarding the handling of the financial crisis in Cyprus could now jeopardize the long-term political future for key players in the euro zone. All of which has slowed down, at least for the moment, the steadily rising U.S. market.

What to Look for This Week

Just a few big names report earnings this week as the quarter approaches its end. Famous brands such as Nike, General Mills, and FedEx are set to lead the way. Computer software giants Oracle and Jabil Circuit are also likely to catch attention from investors this relatively quiet earnings week.

News Affecting the Markets

The latest shoe to drop in the euro-zone saga is Cyprus. The little known land has become the epicenter of the euro-zone financial crisis mostly in large part to recent proposals to rectify the issue at hand. Under a rescue deal announced Saturday, international creditors agreed to provide 10 billion euros to the Cyprus. In return, the country has plans to sell government assets, raise corporate-tax rates and impose a tax on interest earned in its banks. But most controversially, the aid package also requires a one-off levy on deposits in all banks in Cyprus.

Smart Investing

 Tape Reading:  Following price action can be very confusing. One of the main ways to follow price action is to examine the price compared to an indicated point. Many traders use pivot points because it has shown consistent results for those experienced. This is the simplest way to tell if your position is approaching or moving further away from a specific point. This lends itself to the trader getting a feel for what’s happening in the market once their position is initiated. The indicated point more than likely is your entry price. Some points have more importance such as opening price, new highs, or new lows. So when examining price action, you want to acknowledge how fast it’s moving and how much it’s gone up or down. To evaluate this you need two points: your indicated point and the price it’s trading at the time.

Earnings for the Week

Monday: No major announcements.

Tuesday:  Williams-Sonoma Inc (WSM) {After the Close}

Wednesday: FedEx Corp (FDX), General Mills Inc (GIS), GUESS? Inc (GES), Jabil Circuit Inc (JBL), Oracle Corp (ORCL) {After the Close}

Thursday:  KB Home (KBH), Micron Technology Inc (MU) {After the Close}, Nike Inc (NKE) {After the Close}

Friday:  Darden Restaurants Inc (DRI), Tiffany & Co (TIF)
* Earnings dates and times are subject to change

 
Economic Data this Week

Monday
NAHB Housing Market Index @ 10:00 AM for March (Act. = 44, Prior = 46)

Tuesday
Housing Starts @ 8:30 AM for February (Est. = 905K to 911K, Prior = 890K)
Building Permits @ 8:30 AM for February (Est. = 915K to 925K, Prior = 904K)

 Wednesday
MBA Mortgage Index @ 7:00 AM for 03/16 (Est. = n/a, Prior = -4.7%)
Crude Inventories @ 10:30 AM for 03/16 (Est. = n/a, Prior = 2.624M)
FOMC Rate Decision @ 2:00 PM for March (Est. = 0.25%, Prior = 0.25%)

Thursday
Initial Claims @ 8:30 AM for 03/16 (Est. = 345K, Prior = 322K)
Continuing Claims @ 8:30 AM for 03/09 (Est. = 3065K to 3100K, Prior = 3024K)
FHFA Housing Price Index @ 9:00 AM for January (Est. = n/a, Prior = 0.6%)
Existing Home Sales @ 10:00 AM for February (Est. = 5.00M, Prior = 4.92M)
Philadelphia Fed @ 10:00 AM for March (Est. = -3.0 to 2.0, Prior = -12.5)
Leading Indicators @ 10:00 AM for February (Est. = 0.5%, Prior = 0.2%)
Natural Gas Inventories @ 10:30 AM for 03/16 (Est. = n/a, Prior = -145)

Friday
No scheduled announcements.

Monday, March 11, 2013

Weekly Newsletter March 10th - March 16th

Current Events:  Last week the U.S. markets recorded another very strong week in which new highs and new levels were hit. This week will shed light on the consumer pulse with various retails sales data scheduled for announcement. Such data will provide key insight on whether consumers are content enough with current stock and housing prices to confidently open up their wallets in ways not seen since 2008.

What to Look for This Week

A handful of retailers, including Aeropostale and Dick's Sporting Goods, are the majority of what is left to report earnings this quarter. Though it is a light weak from an earnings perspective, investors will be very interested how the week unfolds as record-breaking market highs are on the line each day.

News Affecting the Markets

Infamous economist Nouriel Roubini, credited for predicting the global financial crisis in 2006, has once again publicly predicted a market correction. According to Roubini, higher taxes and spending cuts will hinder U.S. economic growth this year leading to major market correction in the second half of 2013.
Smart Investing

Short-term vs. Long-term:  In a statement attributed to Warren Buffett, he describes the stock market as a voting machine in the short term and a weighing machine in the long term. So in the immediate term, the machine just makes a whole lot of noise. Most of the time, you should not really pay attention to stock prices. Over the long run, though, the price of a stock does get established. So you want to keep your eye on the stock for a much longer period of time. Great products and terrific sales precede great company reports. But since earnings reports are only done quarterly, most investors wait for the reports and then buy or sell the shares of the company. Smart investors watch what consumers buy, and then jump in during that lag time before the reports are released. Over the long run, one thing is certain: Good companies produce good products. And if those companies are run well and their products are bought and enjoyed by consumers, their stock prices will go up. So keep an eye out for great companies with terrific products and you're going to find a few winners.

Earnings for the Week

Monday: Dick's Sporting Goods Inc (DKS)

Tuesday:  No major announcements.

Wednesday: GUESS? Inc (GES), Men's Wearhouse Inc (MW) {After the Close}

Thursday:  Aeropostale Inc (ARO), Ulta Salon Cosmetics and Fragrance Inc (ULTA) {After the Close}

Friday:  No major announcements.

* Earnings dates and times are subject to change

 Economic Data this Week

 Monday
No announcements scheduled.

Tuesday
Treasury Budget @ 2:00 PM for February (Est. = -$205.0B, Prior = -$237.7B)

Wednesday
MBA Mortgage Index @ 7:00 AM for 03/09 (Est. = n/a, Prior = 14.8%)
Retail Sales @ 8:30 AM for February (Est. = 0.2% to 0.5%, Prior = 0.1%)

Business Inventories @ 10:00 AM for January (Est. = 0.4% to 0.6%, Prior = 0.1%)
Crude Inventories @ 10:30 AM for 03/09 (Est. = n/a, Prior = 3.833M)

Thursday
Initial Claims @ 8:30 AM for 03/09 (Est. = 350K, Prior = 340K)
Continuing Claims @ 8:30 AM for 03/02 (Est. = 3100K to 3103K, Prior = 3094K)
PPI @ 8:30 AM for February (Est. = 0.7% to 0.8%, Prior = 0.2%)
Natural Gas Inventories @ 10:30 AM for 03/09 (Est. = n/a, Prior = -146)

Friday
CPI @ 8:30 AM for February (Est. = 0.5% to 0.6%, Prior = 0.0%)
Empire Manufacturing @ 8:30 AM for March (Est. = 5.0 to 6.5, Prior = 10.0)
Michigan Sentiment @ 9:55 AM for March (Est. = 77.8 to 79.0, Prior = 77.6)

Monday, March 4, 2013

Weekly Newsletter March 3rd - March 9th

Current Events:  Though lackluster news has been plentiful of late, little has slowed down U.S. equity markets as indexes tease with record setting highs. The unemployment rate to be released on Friday will be the next scheduled test for the resilient market.

What to Look for This Week

A quite week is expected from an earnings perspective as the quarter approaches its end. Most of the pillars across all industries have reported this season and just a few key remaining announcements remain. Some popular household names reported this week include Internet favorite Pandora and grocery store chain Kroger.

News Affecting the Markets
Worries of a real-estate bubble in China has weighed very little on the U.S. stock markets as the Dow Jones Industrial Average closed at its second-highest level ever on Monday. To combat China's bubble fears authorities late on Friday announced new property-buying restrictions, including higher down payments and mortgage rates on second homes in cities that have seen steep increases in property prices.

Smart Investing
Entering on Pullbacks:  Most of the time entry and exit points are derived from support or resistance levels in an individual stock that you are trading or, more broadly, in the market itself. Another approach to entering a position is to be patient and wait for a pullback in the market or the stock that is currently trending up. Inversely, if the market, or your stock, is trending down, wait for an adjustment. These corrections occur because the market and the stocks within it do not just go straight up or down. As a result, there are many insignificant pullbacks and adjustments that present good entry points. Therefore, determine if the situation in front of you is a pullback/adjustment, or has the trend simply come to an end.

Earnings for the Week
Monday: Boyd Gaming Corp (BYD), Transocean Ltd (RIG)

Tuesday:  Navistar International Corp (NAV), Suntech Power Holdings Co Ltd (STP), VeriFone Systems Inc (PAY) {After the Close}
Wednesday: Big Lots Inc (BIG), DryShips Inc (DRYS) {After the Close}, Hovnanian Enterprises Inc (HOV), Williams-Sonoma Inc (WSM)

Thursday:  Ciena Corp (CIEN), H & R Block Inc (HRB) {After the Close}, Kroger Co (KR), Pandora Media Inc (P) {After the Close}, Smithfield Foods Inc (SFD)

Friday:  Ann Inc (ANN), Foot Locker Inc (FL)
* Earnings dates and times are subject to change

 Economic Data this Week

Monday
No announcements scheduled.

Tuesday
ISM Services @ 10:00 AM for February (Est. = 55.4 to 56.0, Prior = 55.2)

Wednesday
MBA Mortgage Index @ 7:00 AM for 03/02 (Est. = n/a, Prior = -3.8%)
ADP Employment Change @ 8:15 AM for February (Est. = 150K, Prior = 192K)
Factory Orders @ 10:00 AM for January (Est. = -2.2% to -3.0%, Prior = 1.8%)
Crude Inventories @ 10:30 AM for 03/02 (Est. = n/a, Prior = 1.130M)
Fed's Beige Book @ 2:00 PM for March

Thursday
Initial Claims @ 8:30 AM for 03/02 (Est. = 350K to 355K, Prior = 344K)
Continuing Claims @ 8:30 AM for 02/23 (Est. = 3100K, Prior = 3074K)
Natural Gas Inventories @ 10:30 AM for 03/02 (Est. = n/a, Prior = -171)
Consumer Credit @ 3:00 PM for January (Est. = $10.0B to $12.8B, Prior = $14.6B)

Friday
Non-farm Payrolls @ 8:30 AM for February (Est. = 165K to 170K, Prior = 157K)
Unemployment Rate @ 8:30 AM for February (Est. = 7.9%, Prior = 7.9%)
Wholesale Inventories @ 10:00 AM for January (Est. = 0.2%, Prior = -0.1%)