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)