Weekly Newsletter February 24th - March 2nd

Current Events:  A strong Friday helped the U.S. markets rebound from a poor two-day stretch that left the Nasdaq and S&P 500 Index slightly down on the week, while the Dow Jones Industrial Index managed to escape slightly positive.

What to Look for This Week

 Retailers of all types will be the talk this week as a long list of famous stores and brands announce earnings, including Home Depot, Macy's, Barnes & Noble, Gap, and Target. These announcements, coupled with home and vehicle sales, will provide investors with key insight on past and future trends of consumers.

News Affecting the Markets

Congress returns to session on Monday, but much is to be done as the White House and legislators face a deadline that is now just 5 days a way, which would trigger automatic federal spending cuts beginning on Friday. This deadline was initially set to trigger on January 1st of 2013, but was pushed back to March 1st as lawmakers could not agree to a deal.

Smart Investing

Buying Straddles Prior to Earnings:  Buying straddles is a great way to play earnings. Many a times, stock prices gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected greater results. The strategy when anticipating such a case is to buy a straddle two weeks or so ahead of earnings. A straddle will allow you to capitalize on the movement of the stock regardless of the direction. Note that significant price movement is necessary for a straddle to make money and thus is a common strategy during earnings and key announcements. Ensure that you do your homework and identify stocks that have a history of gap movements.

Earnings for the Week

Monday: 3D Systems Corp (DDD), Big Lots Inc (BIG), Firstenergy Corp (FE), General Cable Corp (BGC), Health Care REIT Inc (HCN) {After the Close}, Hecla Mining Co (HL), Hertz Global Holdings Inc (HTZ), Lowe's Companies Inc (LOW), Quicksilver Resources Inc (KWK)

Tuesday:  American Tower Corp (AMT), Autozone Inc (AZO), DreamWorks Animation SKG Inc (DWA) {After the Close}, Ecolab Inc (ECL), Edison International (EIX) ({After the Close}, GrafTech International Ltd (GTI), Gran Tierra Energy Inc (GTE), Home Depot Inc (HD), iStar Financial Inc (SFI), Macy's Inc (M), MetroPCS Communications Inc (PCS), R.R. Donnelley & Sons Co (RRD), RadioShack Corp (RSH), Range Resources Corp (RRC) {After the Close}, Saks Inc (SKS), Sempra Energy (SRE), Superior Energy Services Inc (SPN) {After the Close}, Tenet Healthcare Corp (THC), TiVo Inc (TIVO) {After the Close}, Trina Solar Ltd (TSL), Vornado Realty Trust (VNO) {After the Close}, Weatherford International Ltd (WFT) {After the Close}

Wednesday: Assured Guaranty Ltd (AGO) {After the Close}, Chicago Bridge & Iron Company NV (CBI) {After the Close}, Cincinnati Bell Inc (CBB), J C Penney Company Inc (JCP) {After the Close}, Limited Brands Inc (LTD) {After the Close}, MBIA Inc (MBI) {After the Close}, Mylan Inc (MYL) {After the Close}, NRG Energy Inc (NRG), Stillwater Mining Co (SWC), Strategic Hotels and Resorts Inc (BEE) {After the Close}, Target Corp (TGT), TJX Companies Inc (TJX), Whiting Petroleum Corp (WLL) {After the Close}, {After the Close}, {After the Close}

Thursday:  Barnes & Noble Inc (BKS), Best Buy Co Inc (BBY), Cablevision Systems Corp (CVC), Chico's FAS Inc (CHS), Deckers Outdoor Corp (DECK) {After the Close}, Gap Inc (GPS) {After the Close}, Iron Mountain Inc (IRM), McDermott International Inc (MDR) {After the Close}, MGIC Investment Corp (MTG), Molycorp Inc (MCP) {After the Close}, Progressive Corp (PGR), Salesforce.com Inc (CRM) {After the Close}, SandRidge Energy Inc (SD) {After the Close}, Seadrill Ltd (SDRL), Sears Holdings Corp (SHLD), Sotheby's (BID), The Wendy's Co (WEN)

Friday:  No major announcements scheduled.

* Earnings dates and times are subject to change

 Economic Data this Week

Monday
No announcements scheduled.

Tuesday
Case-Shiller 20-city Index @ 9:00 AM for December (Est. = 6.0% to 6.5%, Prior = 5.5%)
FHFA Housing Price Index @ 9:00 AM for December (Est. = n/a, Prior = 0.6%)
New Home Sales @ 10:00 AM for January (Est. = 375K to 385K, Prior = 369K)
Consumer Confidence @ 10:00 AM for February (Est. = 62.0 to 62.5, Prior = 58.6)

Wednesday

MBA Mortgage Index @ 7:00 AM for 02/23 (Est. = n/a, Prior = -1.7%)
Durable Orders @ 8:30 AM for January (Est. = -0.5% to 0.2%, Prior = 1.0%)
Pending Home Sales @ 10:00 AM for January (Est. = 1.0%, Prior = -4.3%)
Crude Inventories @ 10:30 AM for 02/23 (Est. = n/a, Prior = 4.143M)

Thursday

Initial Claims @ 8:30 AM for 02/23 (Est. = 360K to 365K, Prior = 362K)

Continuing Claims @ 8:30 AM for 02/16 (Est. = 3150K, Prior = 3148K)
Chicago PMI @ 9:45 AM for February (Est. = 54.0, Prior = 55.6)
Natural Gas Inventories @ 10:30 AM for 02/23 (Est. = n/a, Prior = -127)

Friday

Personal Income @ 8:30 AM for January (Est. = -2.4%, Prior = 2.6%)
Personal Spending @ 8:30 AM for January (Est. = 0.1% to 0.2%, Prior = 0.2%)
Michigan Sentiment @ 9:55 AM for February (Est. = 75.0 to 76.3, Prior = 76.3)
ISM Index @ 10:00 AM for February (Est. = 52.0 to 52.4, Prior = 53.1)
Construction Spending @ 10:00 AM for January (Est. = 0.2% to 0.5%, Prior = 0.9%)
Auto Sales @ 2:00 PM for February (Est. = n/a, Prior = 5.6M)
Truck Sales @ 2:00 PM for February (Est. = n/a, Prior = 6.5M)