Current Events: With the infamous fiscal cliff just two
weeks away, the financial world looks to lawmakers to save the economy from a
disaster. If an agreement is not made by leaders before the first of the New
Year the U.S. economy will undoubtedly suffer and negatively impact the U.S.
markets.
What to Look for This Week
Scattered throughout this week set to announce earnings are
some popular household names such as FedEx, General Mills, Oracle, and Nike.
Along with earnings, interest will surround the multitude of economic data on
housing as investors gauge the health of the sector and its attempt to rebound.
However, the major focus this week will be on Washington as investors seek
progress from politicians on structuring a deal that will aid the U.S. in
avoiding a fiscal cliff.
News Affecting the Markets
Japan's Nikkei Stock Average surpasses the 10,000 level for
the first time in over 8 months. Japanese giants, Nissan, Cannon, Honda, and
Sony have all witnessed strength as of late in large part due to a weakening
yen which have lead many to expect further easing by the Bank of Japan in the
near future.
Smart Investing
Leveraged ETFs: A
leveraged ETF generally will invest in a variety of instruments to amplify the
exposure to an underlying index. In addition to equities, leveraged ETFs may use
derivatives to gain exposure. Futures allow investors to gain exposure to a
benchmark without direct ownership. These products are standardized contracts
between two parties that agree to buy or sell an underlying index at a future
date. Leveraged funds are often used to help manage risks in other investments
and allow investors to hedge their exposure to sectors they are overweight in.
They are also often used to capture returns while eliminating market or sector
exposure or to overweight a particular sector by using minimal amounts of cash.
Remember, you can never lose more than your initial investment when using
leveraged funds. This is in stark contrast to buying on margin or selling
stocks short, a process that can cause investors to lose far more than their
initial investment.
Earnings for the Week
Monday: No major announcements scheduled.Tuesday: Jefferies Group Inc (JEF), Oracle Corp (ORCL) {after the close}
Wednesday: Accenture PLC (ACN) {after the close}, FedEx Corp
(FDX), General Mills Inc (GIS), Jabil Circuit Inc (JBL) {after the close},
Navistar International Corp (NAV)
Thursday: Carmax Inc (KMX), Carnival Corp (CCL), ConAgra
Foods Inc (CAG), Darden Restaurants Inc (DRI), Discover Financial Services
(DFS), KB Home (KBH), Micron Technology Inc (MU), Nike Inc (NKE) {after the
close}, Red Hat Inc (RHT), Rite Aid Corp (RAD), The Shaw Group Inc (SHAW)
Friday: Walgreen Co (WAG)
* Earnings dates and times are subject to change
Economic Data this Week
MondayEmpire Manufacturing @ 8:30 AM for December (Act. = -8.1, Est. = 2.0, Prior = -5.2)
Tuesday
NAHB Housing Market Index @ 10:00 AM for December (Act. =
47, Est. = 47, Prior = 45)
Wednesday
MBA Mortgage Index @ 7:00 AM for 12/15 (Est. = n/a, Prior =
6.2%)
Housing Starts @ 8:30 AM for November (Est. = 850K to 875K,
Prior = 894K)
Building Permits @ 8:30 AM for November (Est. = 870K to
876K, Prior = 866K)
Crude Oil Inventories @ 10:30 AM for 12/15 (Est. = n/a,
Prior = 0.843M)Thursday
Initial Claims @ 8:30 AM for 12/15 (Est. = 345K to 365K,
Prior = 343K)
Continuing Claims @ 8:30 AM for 12/08 (Est. = 3192K to
3200K, Prior = 3198K)Existing Home Sales @ 10:00 AM for November (Est. = 4.90M, Prior = 4.79M)
Philadelphia Fed @ 10:00 AM for December (Est. = -1.3 to 2.0, Prior = -10.7)
Leading Indicators @ 10:00 AM for November (Est. = -0.3% to 0.2%, Prior = 0.2%)
FHFA Housing Price Index @ 10:00 AM for October (Est. = n/a, Prior = 0.2%)
Natural Gas Inventories @ 10:30 AM for 12/15 (Est. = n/a, Prior = 2)
Friday
Personal Income @ 8:30 AM for November (Est. = 0.3%, Prior = 0.0%)
Personal Spending @ 8:30 AM for November (Est. = 0.3% to 0.4%, Prior = -0.2%)
Durable Orders @ 8:30 AM for November (Est. = -0.2% to 0.2%, Prior = 0.5%)
Michigan Sentiment @ 9:55 AM for December (Est. = 72.0 to 74.8, Prior = 74.5)
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