Financial News Blog

No economic data was released in the US today.

noreply@noemail.com (HGH Press) — Monday, February 08, 2010 13:30:00 +0000

No economic data was released in the US today.

On Friday, we suggested that the return of volatility was the key characteristic of this market. Today, the financial press reported that the Dow just had its 10th triple-digit move in 16 trading days.

Rather than worrying that a single, large US financial player may go bankrupt, investors now appear worried entire (European) countries may default. First and foremost, these concerns regard Greece, but other, financially weak constituents of the EU have also been named as further 'problem areas', including Portugal, Spain, and Ireland. Greece's finance minister today announced a boosting of taxes, but the country's unions have announced strikes in retaliation. The main fear is not Greece itself, but a contagion to the rest of the EU.

Perhaps pointing to an upturn in the housing market was today's upgrade of Dow component Home Depot - the world's largest home improvement chain - by Morgan Stanley.

Key economic data for the week starting February 8, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	10:00 AM WHOLESALE INVENTORIES M/M (Dec): 0.5% / 1.5%

Wednesday:
	8:30 AM GOODS & SERVICES TRADE BALANCE (Dec): -$35.5B / -$36.4B 2:00 PM TREASURY BUDGET (Jan): -$70.0B / -$63.5B

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-30: n.a. / 4602K INITIAL CLAIMS Feb-6: n.a. / 480K RETAIL SALES M/M (Jan): 0.3% / -0.3% RETAIL SALES (X-AUTOS) M/M (Jan): 0.4% / -0.2% 10:00 AM BUSINESS INVENTORIES M/M (Dec): 0.4% / 0.4%

Friday:
	8:30 AM MICHIGAN CONSUMER SENTIMENT (Feb P): 74.8 / 74.4

Most noteworthy about recent trading action is

noreply@noemail.com (HGH Press) — Friday, February 05, 2010 13:30:00 +0000

Most noteworthy about recent trading action is the return of volatility. While savvy traders find this productive, long-term investors perhaps care more for a slow-and-steady approach. While recent intraday action has been truly volatile, the weekly picture is not as dramatic (e.g., the S&P 500 is down less than a percent this week). Over the course of the last three weeks, the market has however lost quite a bit of ground and wiped out many weeks of earlier gains very quickly. According to market analysts, recent volatility can be attributed to European (sovereign) debt problems in countries such as Portugal, Spain, and Greece. This has boosted the US dollar and has resulted in commodity and (some) equity weakness. Interestingly, today's 170-point rebound rally off the session low on the Dow was associated with a pullback in the dollar.

Today's key economic report, the January jobs report (US government non-farm payrolls data) was released by the Labor Department and indicated a loss of 20,000 nonfarm jobs lost in January (consensus expectations: a gain of 15,000 jobs). At the same time, the unemployment rate slid slightly, declining from ten to 9.7%.

The Federal Reserve announced today that in December consumer borrowing was down for a record 11th consecutive month. However, whereas a drop in borrowing of $9 billion had been expected by analysts, the actual decline came in at only $1.8 billion. Because of this large difference, economists believe consumer spending might increase, helping to boost the economy. Ironically, for years economists were worried about low savings rates in the US. Now, consumers are being told they are saving too much and that this is detrimental to the economy.

Key economic data for the week starting February 8, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	10:00 AM WHOLESALE INVENTORIES M/M (Dec): 0.5% / 1.5%

Wednesday:
	8:30 AM GOODS & SERVICES TRADE BALANCE (Dec): -$35.5B / -$36.4B 2:00 PM TREASURY BUDGET (Jan): -$70.0B / -$63.5B

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-30: n.a. / 4602K INITIAL CLAIMS Feb-6: n.a. / 480K RETAIL SALES M/M (Jan): 0.3% / -0.3% RETAIL SALES (X-AUTOS) M/M (Jan): 0.4% / -0.2% 10:00 AM BUSINESS INVENTORIES M/M (Dec): 0.4% / 0.4%

Friday:
	8:30 AM MICHIGAN CONSUMER SENTIMENT (Feb P): 74.8 / 74.4

A confluence of negative news items from overseas

noreply@noemail.com (HGH Press) — Thursday, February 04, 2010 13:30:00 +0000

A confluence of negative news items from overseas and from the US led investors and traders to hit the sell button today. For the first time in several months, the Dow dipped down to the key psychological threshold of 10,000 points. The broad market suffered its worst daily loss (on a percentage basis) since April 2009. Key news items that catalyzed the down-move were ongoing fiscal issues in Portugal, Greece, and Spain, as well as disappointing US jobless claims numbers. Acting as a safe-haven currency, the US dollar rose to a six-month high today.

The Labor Department announced that initial jobless claims for the week ended January 30 rose unexpectedly, coming in at 480,000. While continuing claims remained flat in a week-over-week comparison, the total number of 4.60 million claims still exceeds the 4.58 million continuing claims economists had been hoping to see. Today's sell-off preceded what might turn out to be a further volatile - and perhaps bearish - stock event: Tomorrow's 'jobs report', the US non-farm payrolls data (scheduled for release Friday at 8:30 ET.)

Among the most notable earnings reports, Cisco's strong announcement from last night made it the only Dow component to close green today. Visa also exceeded earnings expectations and provided a positive outlook, but its shares ultimately sold down in unison with the broad market.

Given the strong US dollar, commodity weakness was not surprising. Crude oil prices saw their strongest decline since the summer of 2009, losing some 5% today (closing a little above the $73 per barrel mark). Gold prices also suffered strongly, down more than 4%, a decline of a magnitude last seen in December 2009.

Key economic data for the week starting February 1, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Friday:
	8:30 AM NON-FARM PAYROLLS (Jan): 20K / -85K UNEMPLOYMENT RATE (Jan): 10.0% / 10.0% AVERAGE HOURLY EARNINGS M/M (Jan); 0.2% / 0.2% AVERAGE WEEKLY HOURS (Jan): 33.2 / 55.9 3:00 PM CONSUMER CREDIT (Dec): -9.5B / -17.5B

A new report on the US services sector was

noreply@noemail.com (HGH Press) — Wednesday, February 03, 2010 13:30:00 +0000

A new report on the US services sector was disappointing and seen as a key reason for today's pullback on the S&P 500 after a strong two-day rally. According to the Institute for Supply Management, last month brought weaker than expected activity among US service companies, as reflected by the ISM's index of service activity for January. Rising to 50.5 in January from a revised December reading of 49.8, the January reading still fell short of economists' expectations (for a reading of 51). On the index, activities exceeding 50 signal growth.

Private employers in the US cut fewer jobs than anticipated in January. This is the positive news released today by payroll company ADP, in a report that often serves as a proxy for the US government's 'jobs report' (scheduled for release this Friday). According to ADP, employers slashed 22,000 private (and non-farm) jobs last month - representing the best result since February 2008.

In notable earnings, Dow component Pfizer failed to meet Wall Street's consensus estimates; however after the bell, networking company Cisco reported earnings that beat expectations. Cisco's CEO spoke of a 'dramatic business acceleration' as corporate customers started upgrading their networks for growing Internet traffic. Cisco's revenues for the company's second fiscal quarter were up 8% compared to a year ago. It was Cisco's first year-on-year revenue growth since October 2008. Because Cisco's earnings results include much of January 2010, its earnings outlook often serves as an early indicator how well the technology sector is doing (notably in the enterprise spending sector).

Key economic data for the week starting February 1, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-23: n.a. / 4602K INITIAL CLAIMS Jan-30: 460K / 470K NON-FARM PRODUCTIVITY (Q4 P): 5.2% / 8.1% 10:00 AM FACTORY ORDERS M/M (Dec): 0.9% / 1.1%

Friday:
	8:30 AM NON-FARM PAYROLLS (Jan): 20K / -85K UNEMPLOYMENT RATE (Jan): 10.0% / 10.0% AVERAGE HOURLY EARNINGS M/M (Jan); 0.2% / 0.2% AVERAGE WEEKLY HOURS (Jan): 33.2 / 55.9 3:00 PM CONSUMER CREDIT (Dec): -9.5B / -17.5B

We saw a pattern similar to yesterday's session,

noreply@noemail.com (HGH Press) — Tuesday, February 02, 2010 13:30:00 +0000

We saw a pattern similar to yesterday's session, with a market-wide recovery effort taking place and with the Dow scoring a second back-to-back session with gains exceeding 100 points. Particular strength was again seen in commodities and precious metals which have rallied recently on the back of a weaker US dollar. Stocks also benefitted from an encouraging report from the housing front (see below).

The housing index maintained by the National Association of Realtors (which tracks home sale contracts) was up 1% in December 2009. This marks the ninth time in the last 10 months that the index has ticked higher. Coinciding with this data release was an earnings report from homebuilder D.R. Horton. The company reported that in fiscal Q1 Horton had generated its first profit since 2007: While the reported $192 million profit was largely due to a tax gain, revenues were up 36% and orders swelled 45%.

In other news suggesting an economic rebound, Ford Motor Co. released its new vehicle sales data for January today, showing a 24% increase (other US automakers will report their sales later). This was the month where Toyota had issued a massive recall of several of its top-selling vehicles due to faulty accelerator pedals. Ford currently ranks third in the US market, trailing behind Toyota at 17% (in 2009) and behind first-placed GM (at 20% of the US market). Industry observers believe that Toyota is 'wounded' and that its rivals may thus gain market share (at least for the current quarter).

Former Chairman of the Federal Reserve and current Chairman of the President's Economic Recovery Advisory Board Paul Volcker testified before the Senate Banking Committee today. Here, he suggested that commercial banks be subjected to trading limits in order to avoid the use of excessive leverage and to maintain adequate capital and liquidity reserves. The Obama administration is currently contemplating adding such restrictions to their banking legislation. While large banks have voiced concern about the idea, Obama has embraced Volcker's suggestion of prohibiting large financial companies that maintain both commercial and investment functions - such as for instance Goldman Sachs - from engaging in speculative trading. Until 1999, the law did distinguish between commercial and investment banks in the so-called Glass-Steagall Act; this law was however repealed under the Clinton administration.

Key economic data for the week starting February 1, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	8:15 AM ADP EMPLOYMENT CHANGE (Jan): -40K / -84K 10:00 AM ISM - NON-MANUFACTURING (Jan): 51.0 / 50.1

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-23: n.a. / 4602K INITIAL CLAIMS Jan-30: 460K / 470K NON-FARM PRODUCTIVITY (Q4 P): 5.2% / 8.1% 10:00 AM FACTORY ORDERS M/M (Dec): 0.9% / 1.1%

Friday:
	8:30 AM NON-FARM PAYROLLS (Jan): 20K / -85K UNEMPLOYMENT RATE (Jan): 10.0% / 10.0% AVERAGE HOURLY EARNINGS M/M (Jan); 0.2% / 0.2% AVERAGE WEEKLY HOURS (Jan): 33.2 / 55.9 3:00 PM CONSUMER CREDIT (Dec): -9.5B / -17.5B

In contrast to last week's shaky performance,

noreply@noemail.com (HGH Press) — Monday, February 01, 2010 13:30:00 +0000

In contrast to last week's shaky performance, the major indexes today managed to hang on to their intraday gains, closing at session highs. In fact, the rise was sharp enough to produce the market's best one-day advance since the stellar rally that initiated trading in 2010. The press attributes this to a new month beginning, to strong earnings, and to positive manufacturing data. No doubt that a significant amount of short covering also took place today.

A rush back into commodity and precious metal stocks was also seen - gold prices, for instance, rose almost 2% today. These sectors were strongly sold down in late January. A leader in the commodity space was oil giant and Dow component Exxon Mobil. It benefited both from an advance in crude oil prices, as well as from its own, strong earnings report.

Among today's economic data releases, the January reading of the Institute for Supply Management's (ISM) Manufacturing Index came in at a five-year high, reaching its highest level since August 2004. The index showed a reading of 58.4, beating consensus estimates of a value of 55.5. Readings above 50 signals growth. In contrast, December construction spending was however weak, showing a month-over-month decline of 1.2% (consensus: a decline of only 0.5%).

According to the Commerce Department, consumer spending was up for a third straight month, rising 0.2% in December. This data came in slightly below expectations, as a 0.3% increase had been forecast. Meanwhile, personal income in December climbed 0.4%, a slightly bigger increase than economists had been expecting (i.e., they had called for a 0.3% increase).

Key economic data for the week starting February 1, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	9:00 AM NEW VEHICLE SALES (Jan): 11.2M / 11.2M

Wednesday:
	8:15 AM ADP EMPLOYMENT CHANGE (Jan): -40K / -84K 10:00 AM ISM - NON-MANUFACTURING (Jan): 51.0 / 50.1

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-23: n.a. / 4602K INITIAL CLAIMS Jan-30: 460K / 470K NON-FARM PRODUCTIVITY (Q4 P): 5.2% / 8.1% 10:00 AM FACTORY ORDERS M/M (Dec): 0.9% / 1.1%

Friday:
	8:30 AM NON-FARM PAYROLLS (Jan): 20K / -85K UNEMPLOYMENT RATE (Jan): 10.0% / 10.0% AVERAGE HOURLY EARNINGS M/M (Jan); 0.2% / 0.2% AVERAGE WEEKLY HOURS (Jan): 33.2 / 55.9 3:00 PM CONSUMER CREDIT (Dec): -9.5B / -17.5B

Bulls know they are in

noreply@noemail.com (HGH Press) — Friday, January 29, 2010 13:30:00 +0000

Bulls know they are in trouble when the market consistently sells off on good earnings and following positive economic data releases. This has been the case repeatedly since the middle of January, and it was again the case today. In fact, this pattern contributed to January being the worst performing month on the major indexes since March 2009 (from where we saw a huge, multi-month rally). For those who believe in the (historically often proven) pattern called the 'January barometer' (which suggests the market's performance in January sets the tone for the entire year) - this is obviously not bullish.

Today, the Commerce Department reported that the final quarter of 2009 had brought brisk economic growth - the greatest in more than six years - with the US economy expanding at a rate of 5.7% during that time. Economists however warned that such high GDP growth was unsustainable and thus likely to fade. Reasons are persistently high unemployment (currently in the double-digits), low wage gains, corporate inventory rebalancing, and the fact that much of this growth was due to government stimulus. Forecasts for GDP rates are in the 2.5 to 3% range for the current quarter (and 2.5% for 2010 as a whole).

In other economic news items, the Chicago Purchasing Managers Index came in positive, providing some indication that the Midwest manufacturing sector is on the mend. The Chicago PMI was up from a reading of 58.7 in the prior month to a reading of 61.5 in January; economists' expectations had been for a January value of 57.5. The Chicago PMI report is also of relevance as it serves as a precursor to a similar report by the National Institute for Supply Management report scheduled for release on Monday.

Among the topics currently being discussed at the World Economic forum in Davos, Switzerland, Greece's debt problems are front and center. The issue that might impact the Euro (and thus the strength of the US dollar) is whether the country can avoid a bailout by the European Union. Greece's Prime Minister and EU officials have denied that any bailout discussions have taken place, suggesting that Greece must solve its own problems. The market however remains skittish, not only because of a potential default by Greece, but because Spain, Portugal, and Ireland are also struggling with large deficits.

Key economic data for the week starting February 1, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	8:30 AM PERSONAL INCOME M/M (Dec): 0.3% / 0.4% PERSONAL SPENDING M/M (Dec): 0.3% / 0.5% 10:00 AM ISM - MANUFACTURING (Jan): 55.6 / 55.9

Tuesday:
	9:00 AM NEW VEHICLE SALES (Jan): 11.2M / 11.2M

Wednesday:
	8:15 AM ADP EMPLOYMENT CHANGE (Jan): -40K / -84K 10:00 AM ISM - NON-MANUFACTURING (Jan): 51.0 / 50.1

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-23: n.a. / 4602K INITIAL CLAIMS Jan-30: 460K / 470K NON-FARM PRODUCTIVITY (Q4 P): 5.2% / 8.1% 10:00 AM FACTORY ORDERS M/M (Dec): 0.9% / 1.1%

Friday:
	8:30 AM NON-FARM PAYROLLS (Jan): 20K / -85K UNEMPLOYMENT RATE (Jan): 10.0% / 10.0% AVERAGE HOURLY EARNINGS M/M (Jan); 0.2% / 0.2% AVERAGE WEEKLY HOURS (Jan): 33.2 / 55.9 3:00 PM CONSUMER CREDIT (Dec): -9.5B / -17.5B

In the nick of time - his current appointment

noreply@noemail.com (HGH Press) — Thursday, January 28, 2010 13:30:00 +0000

In the nick of time - his current appointment expires at the end of the month - Federal Reserve Chairman Ben Bernanke was re-confirmed for a second term today by a Senate vote of 70-30. While the reappointment came in at a solid majority, it was in fact 14 votes below the closest previous vote for a Fed Chairman. There has been a fierce political battle over Bernanke's post at the Fed, and today’s Senate vote may thus lift some uncertainty that hung over the market. According to US Treasury Secretary Timothy Geithner,'The Senate did the right thing. Chairman Bernanke will continue to play a vitally important role in guiding the nation's economy.'

Today's weakness on the broad market came once again in spite of better-than-expected earnings. Putting pressure on the tech sector were a number of disappointing earnings outlooks from key technology players, among them Qualcomm and Motorola. Apple, which unveiled its much touted iPad tablet yesterday, was also down sharply. However, some market observers believe tech might get a lift tomorrow, as Amazon and Microsoft both posted impressive earnings after the close today.

Other key contributing factors playing a role in Wall Street's renewed bearishness today was a Standard & Poor's report that suggested Britain's banking system was no longer among those characterized as being the 'most stable and low-risk.' Ongoing concerns about Greece's debt problems also played a role, notably in driving the US dollar higher (and commodities generally lower).

Finally, the economic data release today was also no cause for real celebration. According to the Labor Department, initial jobless claims were down last week, but less so than economists had been predicting. Continuing claims came in slightly worse than consensus estimates, but were down a little from the 4.66 million continuing claims reported for the previous week. According to the Commerce Department, a rise in durable goods orders in December was also not as strong as economists had been expecting.

Key economic data for the week starting January 25, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Friday:
	8:30 AM GDP (annualized) (Q4 A): 4.5% / 2.2% GDP DEFLATOR (annualized) (Q4 A): 1.3% / 0.4% EMPLOYMENT COST INDEX (Q4): 0.4% / 0.4% 9:45 AM CHICAGO PMI (Jan): 57.0 / 60.0 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan): 73.0 / 72.8

In spite of poor housing data (see below),

noreply@noemail.com (HGH Press) — Wednesday, January 27, 2010 13:30:00 +0000

In spite of poor housing data (see below), the broad market was able to rally in the afternoon after the release of the Fed's policy statement. The first meeting of the Fed in 2010 concluded with the central bank providing an unsurprising statement that reiterated that US economic activity continues to strengthen and that the labor market is in less dire shape than previously. Also no surprise, the federal funds rate is to be maintained between zero and 0.25%; it should remain at these exceptionally low levels 'for an extended period of time'. All in all, the Fed thus simply restated that the economy is slowly mending while at the same time maintaining that it is too early to think of raising interest rates.

Market observers point out that the Fed failed to address the housing market in today's policy statement. This was perhaps a deliberate omission, as the newest data on the sales of new homes showed unexpected declines in December. According to the Commerce Department, new home sales tumbled 7.6% that month. The new data fanned fears that the housing market is still not yet ready to turn up. In fact, this industry has been largely propped up by government incentives, but the $1.25 trillion program by the Fed that has held mortgage rates low is scheduled to end by March 31. Tax credits for homebuyers also expire this spring. The withdrawal of these supportive government incentives may leave the housing market in a continuing struggle over the next few months.

With the US dollar showing strength, commodities continued their recent trend of protracted weakness today, with crude oil prices now near a one-month low. In fact, the CRB Commodity Index had its worst single-session percentage slide in two months today; for the week, it is off 2.5%.

Significant short-term market uncertainty remains, with traders / investors looking ahead to tonight's State of the Union address by President Barack Obama, and to a Senate vote later this week which will determine whether Ben Bernanke is given a second term as Chairman of the Federal Reserve (see our report from yesterday for more details). Furthermore, crucial GDP numbers are scheduled for release on Friday.

Key economic data for the week starting January 25, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-16: 4600K / 4599K INITIAL CLAIMS Jan-23: 452K / 482K DURABLE GOODS ORDERS M/M (Dec): 2.0% / 0.2% DURABLE GOODS ORDERS EX-TRANS M/M (Dec): 0.3% / 2.2%

Friday:
	8:30 AM GDP (annualized) (Q4 A): 4.5% / 2.2% GDP DEFLATOR (annualized) (Q4 A): 1.3% / 0.4% EMPLOYMENT COST INDEX (Q4): 0.4% / 0.4% 9:45 AM CHICAGO PMI (Jan): 57.0 / 60.0 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan): 73.0 / 72.8

To put it mildly,

noreply@noemail.com (HGH Press) — Tuesday, January 26, 2010 13:30:00 +0000

To put it mildly, Wednesday could prove to be 'interesting', as potentially three crucial economic news items converge that day: Obama's first State of the Union address, a Fed interest rate announcement, more potential news about whether or not Fed Chairman Ben Bernanke is likely to be reappointed (a Senate vote has been scheduled for Thursday). Add to the mix a much awaited news release by Apple with an unveiling of its new gadget - a computer tablet of sorts.

Regarding the Fed, investors are aware that at some point the central bank will have to start raising rates. The key question is when will this happen, and when will it be announced? Ben Bernanke, whose prospects of getting appointed for another term as Fed Chairman have risen over a weekend of government lobbying, will at some point have to start withdrawing stimulus money. That issue, rather than a raise in interest rates (which few expect at this time), will likely keep Fed policymakers very busy. Investors will be scrutinizing the Fed's policy statement, scheduled for release tomorrow. Will it contain some signal that the Fed will start removing some liquidity, before it can trigger inflation, or will the Fed perhaps raise the discount rate (which would not affect the rate of interest consumers and businesses pay)?

Today's session started on a weak note, with more news that China is raising its reserve requirements at certain banks - a potential signal for an end to 'free money'. In addition, according to Standard & Poor's, Japan's sovereign debt was put on a negative outlook. Both news items strengthened the US dollar, making it harder for US equities to rally.

What got stocks to rally later in the session was a positive reading on consumer confidence, with the Consumer Confidence Index climbing to a January reading of 55.9 (up from a value of 53.6 in December). The January reading beat economists' expectations (of a reading of 53.5); furthermore, it was the best consumer confidence number produced in more than a year.

Key economic data for the week starting January 25, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	10:00 AM NEW HOME SALES SAAR (Dec): 370K / 355K NEW HOME SALES M/M (Dec): 4.2% / -11.3% 2:00 PM FED RATE ANNOUNCEMENT: 0.25% / 0.25%

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-16: 4600K / 4599K INITIAL CLAIMS Jan-23: 452K / 482K DURABLE GOODS ORDERS M/M (Dec): 2.0% / 0.2% DURABLE GOODS ORDERS EX-TRANS M/M (Dec): 0.3% / 2.2%

Friday:
	8:30 AM GDP (annualized) (Q4 A): 4.5% / 2.2% GDP DEFLATOR (annualized) (Q4 A): 1.3% / 0.4% EMPLOYMENT COST INDEX (Q4): 0.4% / 0.4% 9:45 AM CHICAGO PMI (Jan): 57.0 / 60.0 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan): 73.0 / 72.8

After last week's scare,

noreply@noemail.com (HGH Press) — Monday, January 25, 2010 13:30:00 +0000

After last week's scare, it now appears that it is more likely that Ben Bernanke will be confirmed as Chairman of the Federal Reserve, although some uncertainty remains (his mandate runs out at the end of this month). Still, presidential adviser David Axelrod believes Bernanke now has enough votes to be confirmed and the Senate is expected to vote on his reappointment this week. Market observers think it would be better for the major indexes if Bernanke were to be reappointed, as it might lift some uncertainty for traders and investors. Even so, the market is grappling with a great deal of uncertainty at this time, among them President Obama's bank reform plans, and health care issues. Furthermore, Fed policymakers will meet this week to determine their interest-rate policy (rates are expected to stay at record low levels), and President Obama is also scheduled to give his first State of the Union address on Wednesday.

Ahead of the presidential State of the Union address, Obama went on the offensive today, announcing a new plan to help the middle class. The plan consists of a number of economic initiatives that might bolster tax credits, adjust / cap federal college loan repayments, increase child care benefits, make direct-deposit IRAs available, and support people financially who provide care for their elderly parents. More details are expected in Wednesday's State of the Union address. Obama did not talk about the potential costs of the program today.

In notable earnings news, Apple reported its most profitable quarter in the company's history (achieving earnings of $3.4 billion) after the bell today, boosted by strong iPhone sales which profited from a rollout in several new markets, including China and South Korea. During that quarter, Apple sold 8.7 million iPhones; sales of Macintosh computers were up 33%. Adding to the suspense, Apple is expected to unveil what is believed to be a tablet-style computer on Wednesday. According to Apple's CEO, 'The new products we are planning to release this year are very strong, starting this week with a major new product that we're really excited about'.

In economic news released today, December existing home sales likely disappointed investors as the newest home sales data came in very weak, showing a decline of 16.7% in December (month-over-month) to an annualized rate of 5.45 million units. Economists had been expecting an annualized rate of 5.9 million units.

Key economic data for the week starting January 25, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	9:00 AM S&P CASE SHILLER INDEX (Nov): n.a. / 146.58 S&P CASE SHILLER Y/Y (Nov): -5.0% / -7.3% 10:00 AM CONF.BOARD CONSUMER CONFIDENCE (Jan): 53.5 / 52.9 HOUSE PRICE INDEX M/M (Nov): n.a. / 0.6%

Wednesday:
	10:00 AM NEW HOME SALES SAAR (Dec): 370K / 355K NEW HOME SALES M/M (Dec): 4.2% / -11.3% 2:00 PM FED RATE ANNOUNCEMENT: 0.25% / 0.25%

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-16: 4600K / 4599K INITIAL CLAIMS Jan-23: 452K / 482K DURABLE GOODS ORDERS M/M (Dec): 2.0% / 0.2% DURABLE GOODS ORDERS EX-TRANS M/M (Dec): 0.3% / 2.2%

Friday:
	8:30 AM GDP (annualized) (Q4 A): 4.5% / 2.2% GDP DEFLATOR (annualized) (Q4 A): 1.3% / 0.4% EMPLOYMENT COST INDEX (Q4): 0.4% / 0.4% 9:45 AM CHICAGO PMI (Jan): 57.0 / 60.0 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan): 73.0 / 72.8

Market weakness prevailed for a third day today,

noreply@noemail.com (HGH Press) — Friday, January 22, 2010 13:30:00 +0000

Market weakness prevailed for a third day today, with selling pressure intensifying in the afternoon. The press appears to put much of the blame for the sudden bearishness on President Barack Obama's plans to restrict big banks (see our commentary from yesterday for details). However, it must be noted that over the past week or so we have been seeing a clear sell-the-news mentality among investors; even in the face of strong earnings releases (the most recent examples include Google, Advanced Micro Devices, Capital One, and American Express). Even today's early strength in Dow components General Electric and McDonald's - both companies beat earnings expectations today - saw early gains sold off by the close. Market observers comment by saying that much of the positive news had already been priced into the major indexes.

Also playing a role is a possible shift to less risky assets, prompted by China's move to cool its economy by increasing regulatory oversight of its banking system, and by reducing liquidity. In addition, next week will bring not only more earnings, but also a meeting of the Fed to determine interest rates.

Perhaps adding fuel to the recent sell-off was the realization that Federal Reserve Chairman Ben Bernanke's nomination for a second term at the Fed - until recently considered a done deal - may now be in jeopardy. In fact, online betting platform In-trade now suggests just a 68% chance Bernanke will be re-confirmed; a few days ago, the odds were at 95%. The reason: Two additional Senate Democrats announced today they would vote against Bernanke's reappointment. Political observers note that the vote may now be very close. The US Fed, and its chairman in particular, have come under considerable pressure during this recession, and vote-hungry politicians may look to appease voters, as public opinion suggests the Fed has failed to prevent the worst financial crisis since the Great Depression (and has supported bailouts that favored a few select players at the expense of ordinary citizens). An economist was quoted as commenting that 'The unthinkable has become a very real possibility - risks are rising that the Senate will unseat (him) [Bernanke]'.

Key economic data for the week starting January 25, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	10:00 AM EXISTING HOME SALES SAAR (Dec): 6.00M / 6.54M EXISTING HOME SALES M/M (Dec): -8.3% / 7.4%

Tuesday:
	9:00 AM S&P CASE SHILLER INDEX (Nov): n.a. / 146.58 S&P CASE SHILLER Y/Y (Nov): -5.0% / -7.3% 10:00 AM CONF.BOARD CONSUMER CONFIDENCE (Jan): 53.5 / 52.9 HOUSE PRICE INDEX M/M (Nov): n.a. / 0.6%

Wednesday:
	10:00 AM NEW HOME SALES SAAR (Dec): 370K / 355K NEW HOME SALES M/M (Dec): 4.2% / -11.3% 2:00 PM FED RATE ANNOUNCEMENT: 0.25% / 0.25%

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-16: 4600K / 4599K INITIAL CLAIMS Jan-23: 452K / 482K DURABLE GOODS ORDERS M/M (Dec): 2.0% / 0.2% DURABLE GOODS ORDERS EX-TRANS M/M (Dec): 0.3% / 2.2%

Friday:
	8:30 AM GDP (annualized) (Q4 A): 4.5% / 2.2% GDP DEFLATOR (annualized) (Q4 A): 1.3% / 0.4% EMPLOYMENT COST INDEX (Q4): 0.4% / 0.4% 9:45 AM CHICAGO PMI (Jan): 57.0 / 60.0 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan): 73.0 / 72.8

Market analysts note that today's bearish action

noreply@noemail.com (HGH Press) — Thursday, January 21, 2010 13:30:00 +0000

Market analysts note that today's bearish action resulted in some key trendline breaks, breaching long-standing uptrend lines on some of the major indexes that have been in place (and tested several times) since the March 2009 lows. Today's bearish session may thus bring a challenge to the dominant uptrend that has been firmly entrenched since March of last year. Often, the market will however initially retrace back up to a broken trendline and test it from below. Some market commentators however see the possibility the 10-month bull run could run into trouble here.

According to the finance press, today's slide had several catalysts, chief among them President Barack Obama's proposed limits on how large banks may become. Investors are afraid, the recent skirmishes between Washington and Wall Street could result in greater - some say, too much - government control over banks and thus reduce their potential for profits. Only last week, Obama had proposed a $90 billion tax (spread over 10 years) on the largest financial institutions in the US, with the intent of recovering TARP funds. Today's new proposal was seen as an attempt to clamp down on speculation by commercial banks, putting limits on their size and potentially forcing some of the largest US banks to break into smaller companies.

In notable earnings news today, Goldman Sachs reported record profits of $4.79 billion for the last quarter of 2009. In 2009, the company paid out more than $16 billion in salaries and bonuses, up nearly 50% from 2008, but below analysts' expectations. After the bell, Google reported strong earnings, including a fivefold jump in fourth-quarter profits and double-digit revenue growth; however, shares sold off in after-hours trading.

The second largest railroad operator in the US - Burlington Northern Santa Fe - also reported earnings today and announced it expected to see a further, but gradual improvement in the US economy. Railroads earnings shed light on the country's economic health because they ship so many consumer and industrial goods used every day. The company, to be acquired by Warren Buffett's Berkshire Hathaway, announced a profit 13% below that seen in 2008 period. Revenues fell to $3.68 billion from $4.37 billion the year before.

The broad market today saw its worst loss in over

noreply@noemail.com (HGH Press) — Wednesday, January 20, 2010 13:30:00 +0000

The broad market today saw its worst loss in over two months, a dramatic reversal from the slow and steady rise we have been seeing, notably over the first week and a half of 2010. The sudden ups and downs and twists and turns the market has been exhibiting over the past few sessions has been unnerving and has served to trap both bullish and bearish investors - likely catching everyone off guard except the most versatile of traders. Bearish market observers point out that this type of choppy, volatile behavior is often found near market tops. Bullish observers see it as just another bear trap, with a new Bank of America survey of fund managers showing a great majority are more bullish than they have been in some four years.

Some of today's downside is being attributed to news from China where authorities are making attempts to tighten monetary policy, for instance by telling banks to curb lending. The release of that country's fourth quarter GDP numbers is imminent and some observers infer from the news about a forced slowdown that GDP numbers will show a very strong reading.

As discussed yesterday, while key earnings thus far have been good, there has been a distinct sell-the-news reaction, for instance to IBM's release last night. Today's weakness was exacerbated by poor earnings from Morgan Stanley and Bank of America. In the airlines sector, American Airlines (AMR Corp.) said it lost $344 million in the fourth quarter of 2009 and close to $1.5 billion last year. In contrast, eBay and Starbucks both released positive earnings after the bell today and beat the Street; their stocks rose sharply in after-hours trading.

Amid the economic data released today, December housing starts pulled back to an annualized 557,000, below the expected rate of 572,000 units. The December number was also weaker than that seen in November, where 580,000 new units were built. On the other hand, the number of building permits came in higher than expected (annualized number: 653,000 in December as opposed to the consensus estimate of 580,000 permits); it also came in higher than in November where 589,000 permits had been issued. Meanwhile, the December Producer Price Index was up 0.2% month-over-month, above what economists had been expecting.

Key economic data for the week starting January 18, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-09: n.a. / 4596K INITIAL CLAIMS Jan-16 (H) 440K 444K 10:00 AM PHILADELPHIA FED (Jan): 18.0 / 22.5 LEADING INDICATORS M/M (Dec) (M): 0.7% / 0.9%

Today's quick bounce to marginal new 52-week

noreply@noemail.com (HGH Press) — Tuesday, January 19, 2010 13:30:00 +0000

Today's quick bounce to marginal new 52-week highs after last Friday's sell-off illustrates that a 'buy-the-dip' mentality continues to embolden the bulls. The rally was broad-based with approximately 90% of all stocks listed on the S&P 500 closing green today. Health care issues were particularly strong, driven by speculation that a Republican election (for a Massachusetts Senate seat) might either potentially stall or upset the Obama's administration current health care reform package.

At the same time, we are however seeing a 'sell-the-news' mentality, even for strong earnings announcements, such as for IBM's report today (which came out after the bell). The tech sector rose 1.6% ahead of IBM's earnings release after the market close today, with many tech issues reaching fresh new 52-week highs. After the close, IBM reported good earnings and boosted its profit outlook for 2010; at the same time, some profit taking took the stock down close to 2% in after-hours trading. Analysts comment that the shares are up some 60% over the past year and that investors may not be able to expect a repeat of the stellar performance seen in 2009. On the positive side, commentators use IBM's earnings as further evidence that corporate spending on technology is coming back, as was already seen with Intel.

Citigroup shares were initially sold off on its earnings release today, but they bounced back to close up more than 3% on the day, in spite of the company reporting a loss of $7.6 billion for the fourth quarter of 2009. Similarly to JPMorgan's earnings release, Citigroup also addressed the still very significant consumer credit problems that caused the company large losses, forcing it to set aside more than $8 billion. Citigroup has now also repaid $20 billion in government bailout money (TARP funds). A contentious issue is that in spite of being the hardest hit among the large US banks, Citigroup still plans to give big bonuses to its top employees.

Merger and acquisition activity, as well as rumors regarding takeovers, contributed strongly to today's up-session on the broad market. Confectioner Cadbury has now agreed to be taken over by food giant Kraft (a Dow component) for $19.44 billion in cash and stock. Tyco will pay $2.0 billion for Brink's Home Security Holdings. Among the many M&A rumors, household products maker Newell Rubbermaid may be of interest to Proctor & Gamble, sources say.

Key economic data for the week starting January 18, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	8:30 AM HOUSING STARTS SAAR (Dec): 574K / 574K BUILDING PERMITS SAAR (Dec): 580K / 589K PPI M/M (Dec): 0.0% / 1.8% PPI M/M (core) (Dec): 0.1% / 0.5% PPI Y/Y (Dec): 4.6% / 2.4% PPI Y/Y (core) (Dec): 1.0% / 1.2%

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-09: n.a. / 4596K INITIAL CLAIMS Jan-16 (H) 440K 444K 10:00 AM PHILADELPHIA FED (Jan): 18.0 / 22.5 LEADING INDICATORS M/M (Dec) (M): 0.7% / 0.9%

The broad market saw its strongest down-session

noreply@noemail.com (HGH Press) — Friday, January 15, 2010 13:30:00 +0000

The broad market saw its strongest down-session in about a month today as investors 'sold-the-news' on last night's strong earnings from Intel and on this morning's earnings announcement from JPMorgan, which the press also qualified as being 'better-than-expected'. While volume was high today (exceeding 1.4 billion shares on the NYSE), market observers note due to January options expiration, the number may not truly reflect the degree of (bearish) conviction associated with the market move. Selling pressure was exacerbated by US dollar strength (with the greenback acting as a safe-haven currency on the heels of Greece's pronounced financial troubles), putting pressure on the entire commodities sector.

A principal reason JPMorgan (JPM) stock suffered a setback today was seen in the bank's still high consumer credit loss provisions. Given that JMP is considered one of the very strongest banks around, the fact that consumer loan defaults remain a key issue for the bank caused some consternation that spread to the entire financial sector, as it implies the economic recovery might still be at risk due to consumers struggling to pay off loans. In fact, weakness was most pronounced today in the financials, with the KBW Bank Index losing 2.2%.

Speaking of economic recovery, today's economic data releases did not inspire much confidence: While the Consumer Price Index data (up 0.1% in December) and December industrial production numbers (up 0.6%) came in generally in-line with expectations, the University of Michigan's preliminary Consumer Sentiment Survey for January produced readings below expectations (it came in at 72.8 rather than the anticipated 74.0).

Furthermore, new data showing a 1.6% decline in average weekly earnings for nonsupervisory workers was also a cause for concern, as this was the worst yearly performance since late 1990. Adjusted for inflation, worker pay has declined in the US for five of the last seven years. Lower pay and higher inflation is putting significant pressures on many households, made even worse by high unemployment.

Key economic data for the week starting January 18, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	US markets closed in observance of Martin Luther King Jr. Day.

Tuesday:
	8:30 AM NET CAPITAL INFLOWS (TICS) (Nov): $30.0B / $20.7B 1:00PM NAHB HOUSING INDEX (Jan); 17 / 16

Wednesday:
	8:30 AM HOUSING STARTS SAAR (Dec): 574K / 574K BUILDING PERMITS SAAR (Dec): 580K / 589K PPI M/M (Dec): 0.0% / 1.8% PPI M/M (core) (Dec): 0.1% / 0.5% PPI Y/Y (Dec): 4.6% / 2.4% PPI Y/Y (core) (Dec): 1.0% / 1.2%

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-09: n.a. / 4596K INITIAL CLAIMS Jan-16 (H) 440K 444K 10:00 AM PHILADELPHIA FED (Jan): 18.0 / 22.5 LEADING INDICATORS M/M (Dec) (M): 0.7% / 0.9%

The market continues to drift higher,

noreply@noemail.com (HGH Press) — Thursday, January 14, 2010 13:30:00 +0000

The market continues to drift higher, regardless of positive or negative economic news. The major indexes today advanced very modestly, with market participants apparently brushing off an unexpected decline in December retail sales data. Measured on a yearly basis, retail sales in fact declined by the biggest amount on record. Details: According to the Commerce Department, December retail sales were off 0.3% as compared to November (consensus estimate had been for a rise of half a percent). Excluding automobile sales, the retail sales numbers showed a loss of 0.2% in December (consensus estimate: a rise of 0.3%). The yearly decline was 6.2%, the largest on records dating back to 1992. In contrast: The second largest retail sales loss - a decline of 0.5% - was seen in 2008

The market also rose in spite of another disappointing economic report that indicated a larger than expected increase in the number of newly laid-off workers filing for unemployment benefits. Details: The Labor Department announced 11,000 more new claims for unemployment insurance, which rose to a seasonally adjusted 444,000. Economists had been expecting an increase of only 3,000 new unemployment claims. The rise was partly explained by seasonal layoffs in retail, manufacturing, and construction. Economists continue to stress that the US economy cannot see a truly sustainable recovery until jobs numbers improve significantly, as well as consistently; unemployed consumers cannot spend freely, and consumer spending may account for up to 70% of total economic activity in the US.

Some market observers believe that today's rise in spite of the weak economic data was precipitated by the expectation that Intel might show strong earnings after the close today, and that investors believe that business spending, rather than consumer spending, will propel the US into an economic recovery. After the bell, Intel in fact reported strong fourth-quarter profits, indicating it was seeing a rebound in the PC market. The company also suggested the current quarter might bring better than expected revenue and profit margins - the stock rose roughly one percent in after-hours trading.

In other news, President Barack Obama proposed and clarified a new tax / fee payable by major US financial companies to recoup money spent on bank bailouts. Obama stuck a populist tone and remarked that 'We want our money back'; he also criticized the latest round of bank bonuses sharply, calling them 'obscene.' The new tax will require congressional approval and would be in effect for 10 years. According to the Obama administration, it is expected to raise some $90 billion.

Key economic data for the week starting January 11, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Friday:
	8:30 AM CPI M/M (Dec): 0.2% /0.4% CPI M/M (core) (Dec): 0.1% / 0.0% CPI Y/Y (Dec): 2.8% / 1.8% CPI Y/Y (core) (Dec): 1.8% / 1.7% NEW YORK FED (EMPIRE) (Jan): 11.0 / 2.6 9:15 AM INDUSTRIAL PRODUCTION M/M (Dec): 0.6% / 0.8% CAPACITY UTILIZATION (Dec): 71.7% / 71.3% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan P): 73.7 / 72.5

Yesterday's earnings shortfalls (Alcoa,

noreply@noemail.com (HGH Press) — Wednesday, January 13, 2010 13:30:00 +0000

Yesterday's earnings shortfalls (Alcoa, Chevron, Electronic Arts) were completely forgotten today, as the market resumed its bullish ways, with the major indexes approaching / making new 52-week highs. Commentators note however that today's recovery move failed to attract much volume, with less than 1 billion shares traded on the NYSE (1.1 billion shares is a rough recent average). Early in the session, there was a modicum of weakness in the tech space, with Google (and other large-cap tech stocks) faltering. Google made headlines, suggesting it may pull out of China because of censorship and computer-security disputes.

Executives from major financial players such as Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Bank of American appeared before the Financial Crisis Inquiry Commission, a bipartisan panel charged with the investigating of the financial crisis form the fall of 2008. In spite of the fact that financial executives of the largest banks in the US are currently testifying on Capitol Hill in regards to the causes of the 2008 financial crisis, the financial sector was a market leader today, gaining 1.3% (the banking sector even advanced by 1.8%).

In a related matter, President Barack Obama is expected to announce tomorrow exactly how the government will proceed to collect money from a number of major US financial firms, to recoup up to $120 billion of taxpayer-funded bailout (TARP) funds. Obama is seen as being pressured by high unemployment and widespread public outrage about banker bonuses on the heels of the global financial crisis that necessitated these huge financial bailouts. Some potential exceptions are being discussed for automakers, and perhaps for insurer AIG.

According to the Treasury Department, in December the US federal budget deficit reached an all-time high, exacerbated by the deep recession and severe financial crisis. The deficit in December 2009 alone amounted to $91.85 billion. Furthermore, over the first three months of the current budget year (i.e., as of Oct. 1, 2009), the deficit exceeded $388.5 billion, coming in at more than 16% above the deficit seen during the same period a year earlier. The total deficit for 2009 was calculated at $1.42 trillion, three times as high as that seen in 2008. For 2010, the Obama Administration is projecting a deficit exceeding $1.5 trillion.

Key economic data for the week starting January 11, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-02: 4950K / 4802K INITIAL CLAIMS Jan-09: 438K / 434K RETAIL SALES M/M (Dec): 0.4% / 1.3% RETAIL SALES (X-AUTOS) M/M (Dec): 0.3% / 1.2% IMPORT PRICE INDEX M/M (Dec): -0.1% / 1.7% 10:00 AM BUSINESS INVENTORIES M/M (Nov): 0.0% / 0.2%

Friday:
	8:30 AM CPI M/M (Dec): 0.2% /0.4% CPI M/M (core) (Dec): 0.1% / 0.0% CPI Y/Y (Dec): 2.8% / 1.8% CPI Y/Y (core) (Dec): 1.8% / 1.7% NEW YORK FED (EMPIRE) (Jan): 11.0 / 2.6 9:15 AM INDUSTRIAL PRODUCTION M/M (Dec): 0.6% / 0.8% CAPACITY UTILIZATION (Dec): 71.7% / 71.3% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan P): 73.7 / 72.5

Last night's earnings release by Alcoa which fell

noreply@noemail.com (HGH Press) — Tuesday, January 12, 2010 13:30:00 +0000

Last night's earnings release by Alcoa which fell short of consensus estimates provided perhaps some excuse to take profits; after all, the S&P 500 had been on a six-session winning streak thus far in 2010. Today's losses were strong in the commodities sector, where the CRB Commodity Index suffered its strongest single-session loss in over a month (it was down 1.7% today). Notably, gold and silver futures markets were down sharply, likely prompted by a tightening of monetary action by Chinese authorities designed to slow growth (in order to avoid new asset bubbles). Specifically, China increased the amount of money banks must hold in reserve.

Crude oil futures were also off. The sector had its own poor earnings release - Chevron warned on Monday about thin profit margins that will cut into its earnings.

The revelation that the US government is planning to impose some kind of new fee on banks in order to assist in the recovery of TARP funds put significant pressure on financial stocks today. Specifically, Washington plans to impose a levy to recoup public money lent to financial companies in 2008 and 2009. Banks criticized the move, saying that some of them had been forced to accept bailout money, were then told to boost lending, and now face a new levy which they maintain will endanger the economic recovery.

Key economic data for the week starting January 11, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	2:00 PM TREASURY BUDGET (Dec): -$78.5B / -$120.3B FED'S BEIGE BOOK

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-02: 4950K / 4802K INITIAL CLAIMS Jan-09: 438K / 434K RETAIL SALES M/M (Dec): 0.4% / 1.3% RETAIL SALES (X-AUTOS) M/M (Dec): 0.3% / 1.2% IMPORT PRICE INDEX M/M (Dec): -0.1% / 1.7% 10:00 AM BUSINESS INVENTORIES M/M (Nov): 0.0% / 0.2%

Friday:
	8:30 AM CPI M/M (Dec): 0.2% /0.4% CPI M/M (core) (Dec): 0.1% / 0.0% CPI Y/Y (Dec): 2.8% / 1.8% CPI Y/Y (core) (Dec): 1.8% / 1.7% NEW YORK FED (EMPIRE) (Jan): 11.0 / 2.6 9:15 AM INDUSTRIAL PRODUCTION M/M (Dec): 0.6% / 0.8% CAPACITY UTILIZATION (Dec): 71.7% / 71.3% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan P): 73.7 / 72.5

Even though the S&P

noreply@noemail.com (HGH Press) — Monday, January 11, 2010 13:30:00 +0000

Even though the S&P 500 extended its winning streak to six straight sessions (and has thus not seen a down-day yet this year), the major indexes traded in lackluster fashion today, showing little upside momentum. This is likely a pause before earnings season, which started today, as investors adopt a wait-and-see attitude to determine whether the incredibly strong rally off the March 2009 lows still has legs. Stocks have very frequently been up on Mondays since March 2009, and today was no exception, but today's 'mutual fund Monday' surge appeared to have less conviction.

Early strength on the US indexes appeared to be catalyzed by news from China: It was reported that in December China had seen its first increase in exports in over a year. Exports in fact surged 18% in December; this increase came on the heels of 13 consecutive months of export declines. Analysts spoke of a 'healing world economy'. Other than this overseas report, it was a slow day for news flow. In addition, the Nasdaq Composite failed to gain ground in today's session and suffered from weakness in the large-cap technology space.

After the bell, aluminum maker (and Dow component) Alcoa reported earnings, unofficially kicking off a new earnings season. The company failed to impress investors (at least in after-hours trading where its stock lost about 5%): While reporting a smaller net loss for the fourth quarter, Alcoa's revenue was down. Higher metal prices were offset by weakness in the company's aerospace, construction and gas turbines businesses. On a positive note, the company announced it was able to generate cash-flow from its operations and did not rely solely on cost-cutting measures.

In other notable earnings released today, video game publisher Electronic Arts also disappointed. The company spoke of weak demand in Europe and reduced its earnings outlook for 2010, cutting quarterly and even full-year guidance.

Key economic data for the week starting January 11, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	8:30 AM GOODS & SERVICES TRADE BALANCE (Nov): -$34.8B / -$32.9B

Wednesday:
	2:00 PM TREASURY BUDGET (Dec): -$78.5B / -$120.3B FED'S BEIGE BOOK

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-02: 4950K / 4802K INITIAL CLAIMS Jan-09: 438K / 434K RETAIL SALES M/M (Dec): 0.4% / 1.3% RETAIL SALES (X-AUTOS) M/M (Dec): 0.3% / 1.2% IMPORT PRICE INDEX M/M (Dec): -0.1% / 1.7% 10:00 AM BUSINESS INVENTORIES M/M (Nov): 0.0% / 0.2%

Friday:
	8:30 AM CPI M/M (Dec): 0.2% /0.4% CPI M/M (core) (Dec): 0.1% / 0.0% CPI Y/Y (Dec): 2.8% / 1.8% CPI Y/Y (core) (Dec): 1.8% / 1.7% NEW YORK FED (EMPIRE) (Jan): 11.0 / 2.6 9:15 AM INDUSTRIAL PRODUCTION M/M (Dec): 0.6% / 0.8% CAPACITY UTILIZATION (Dec): 71.7% / 71.3% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan P): 73.7 / 72.5

Even though the much anticipated US government

noreply@noemail.com (HGH Press) — Friday, January 08, 2010 13:30:00 +0000

Even though the much anticipated US government December non-farm payroll report (the 'jobs report') was clearly disappointing, it did not lead to widespread weakness on the major indexes today. The Dow and the S&P 500 traded only slightly in the red for most of today's session, and they staged a push into the green over the last half hour. This is quite remarkable, as the consensus had been for a potential gain of as many as 40,000 new jobs. The results were however sobering: 85,000 jobs were lost last month. Meanwhile, the official unemployment rate held steady at 10%, as economists had anticipated. The press explains the reason why the market brushed off the poor jobs data: The earlier reported November jobs report was revised upward and in retrospect produced some 4,000 jobs - the first job gains in nearly two years.

The US government labor market data has its critics. For instance, the official data does not fully account for those who involuntarily work only part-time, those who have given up in their job hunt, and other aspects of what has been called 'shadow unemployment'. To underscore the extent of the problem, it has also been suggested that even if the US were to add 250,000 new jobs each month, a return to a jobless rate of 5% (as opposed to the current official unemployment rate of 10%) would take a full five years! Given these issues, market commentators remarked that the Obama administration will have to devote much more (creative) energy to labor market issues.

According to new data released today by the Federal Reserve, consumers have become more cautious with credit - Americans borrowed far less in November. In fact, total credit and borrowing on credit cards was down for a 10th straight month, declining by the largest amounts on records for nearly seven decades. The fact that consumers are cutting back on their spending to such an extent is seen as a threat to a potential economic rebound. Total borrowing in November declined by $17.5 billion, far exceeding estimates for a decline of $5 billion.

In other economic news released today, the Commerce Department reported an unexpectedly strong gain in wholesale inventories for November. Inventories were up 1.5% rather than declining by 0.2%, as expected by economists. Meanwhile, sales were up 3.3%, beating expectations of an increase of 0.9%. Economists say that sustained sales increases will encourage businesses to begin the restocking process, which will prompt larger orders to factories.

Key economic data for the week starting January 11, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	8:30 AM GOODS & SERVICES TRADE BALANCE (Nov): -$34.8B / -$32.9B

Wednesday:
	2:00 PM TREASURY BUDGET (Dec): -$78.5B / -$120.3B FED'S BEIGE BOOK

Thursday:
	8:30 AM CONTINUING CLAIMS Jan-02: 4950K / 4802K INITIAL CLAIMS Jan-09: 438K / 434K RETAIL SALES M/M (Dec): 0.4% / 1.3% RETAIL SALES (X-AUTOS) M/M (Dec): 0.3% / 1.2% IMPORT PRICE INDEX M/M (Dec): -0.1% / 1.7% 10:00 AM BUSINESS INVENTORIES M/M (Nov): 0.0% / 0.2%

Friday:
	8:30 AM CPI M/M (Dec): 0.2% /0.4% CPI M/M (core) (Dec): 0.1% / 0.0% CPI Y/Y (Dec): 2.8% / 1.8% CPI Y/Y (core) (Dec): 1.8% / 1.7% NEW YORK FED (EMPIRE) (Jan): 11.0 / 2.6 9:15 AM INDUSTRIAL PRODUCTION M/M (Dec): 0.6% / 0.8% CAPACITY UTILIZATION (Dec): 71.7% / 71.3% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Jan P): 73.7 / 72.5

Tomorrow is likely the week's key day for

noreply@noemail.com (HGH Press) — Thursday, January 07, 2010 13:30:00 +0000

Tomorrow is likely the week's key day for economic news, as the pivotal 'jobs report' (the non-farm payrolls data) is released. Bullish commentators believe this day could trigger a huge wave of buying in the market as sidelined money is 'put to work' in the event of positive news from the labor market. Other analysts however conclude that positive labor market trends have already been priced into the market.

In fact, they argue that highly bullish employment news could in fact be detrimental to the major equities as a potentially rapidly improving labor market might trigger fears the Fed would start taking an interest in raising interest rates sooner than later. Very positive news would also likely spark a renewed rally in the US dollar which would put commodities (and gold) under pressure. A jobs report that is 'not too hot and not too cold' would thus be the ideal scenario for the bulls. A government report today showed that the number of layoffs might be easing and that the US economy might be on track to showing its first monthly jobs gain in two years.

Positive news from the retail sector helped push the S&P 500 higher today: 2009 brought a better retail performance over the holidays than that seen in 2008 (where holiday sales declined by the largest amount in some 40 years or more). Today, a number of retailers in fact raised their fourth-quarter profit outlooks, among them Macy's, Kohl's, and Limited Brands. According to the International Council of Shopping Centers, compared to a year prior 2009 sales were up 2.8% in December. The president of RetailMetrics, a company that tracks earnings for more than 120 retailers, suggested the retail industry might post at least a 30% increase in fourth-quarter profits. While the news for December was bullish, not all retail analysts are so positive about the near-term: One economist does not believe January sales would be up by more than 1%.

While the S&P 500 and the Dow have been drifting higher, large-cap tech and the Nasdaq 100 have been struggling lately. The stocks of key tech players (Wall Street darlings) such as Google, Amazon, Research in Motion, and Apple have all been weak so far this year.

Key economic data for the week starting January 4, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Friday:
	8:30 AM NON-FARM PAYROLLS (Dec): 0K / -11K UNEMPLOYMENT RATE (Dec): 8.5% / 8.5% UNEMPLOYMENT RATE (Dec): 10.0% / 10.0% AVERAGE HOURLY EARNINGS M/M (Dec): 0.2% / 0.1% AVERAGE WEEKLY HOURS (Dec): 33.2 / 33.2 MANUFACTURING PAYROLLS (Dec): -35K / -41K 10:00 AM WHOLESALE INVENTORIES M/M (Nov): -0.5% / 0.3% 3:00 PM CONSUMER CREDIT (Nov):-5.0B / -3.5B

The recent flat trading on the Dow and the

noreply@noemail.com (HGH Press) — Wednesday, January 06, 2010 13:30:00 +0000

The recent flat trading on the Dow and the S&P 500 is perhaps the result of traders and investors waiting for the pivotal 'jobs report' (the non-farm payrolls data) on Friday. Large traders may be reluctant to place significant best ahead of this crucial report by the Labor Department which could potentially be the first such report in months to show actual job growth. Today, market players were given some insight into the jobs situation in the private sector with the release of the latest ADP Employment Services report. It indicated a loss of 84,000 private sector jobs as compared to an expected loss of 73,000 jobs.

The economic news data released thus far in 2010 has not been able to provide clear signals one way or another as to which direction the economy (and the market) is headed. Some reports show economic improvement, but others remind investors that sectors of the economy remain weak. There is also the aspect of investors selling some of their winning positions from last year. Delaying the selling of winning positions from last year until early 2010 defers taxes, but this also puts a damper on the major indexes.

Somewhat more inspiring was the release of new data on the US services sector. The Institute for Supply Management reported that the services sector index had increased from a reading of 48.7 in November to a value of 50.1 in December. Since readings on the index above 50 signal expansion, it appears the US service sector was showing some signs of growth in December.

The minutes from the Fed's December meeting were released today and indicated that the Fed remains worried about the weak labor market. Also, in regard to the $1.25 trillion program to buy mortgages (i.e., a Federal program that seeks to drive down mortgage rates and boost the housing market), the minutes suggested some Federal Reserve officials believed it might be desirable to expand asset purchases of mortgage securities from Fannie Mae and Freddie Mac rather than to phase out the program by March 31. The minutes show that the Fed ultimately decided not to make any changes to the program.

Key economic data for the week starting January 4, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-26: 5170K / 5186K INITIAL CLAIMS Jan-02: 470K / 480K

Friday:
	8:30 AM NON-FARM PAYROLLS (Dec): 0K / -11K UNEMPLOYMENT RATE (Dec): 8.5% / 8.5% UNEMPLOYMENT RATE (Dec): 10.0% / 10.0% AVERAGE HOURLY EARNINGS M/M (Dec): 0.2% / 0.1% AVERAGE WEEKLY HOURS (Dec): 33.2 / 33.2 MANUFACTURING PAYROLLS (Dec): -35K / -41K 10:00 AM WHOLESALE INVENTORIES M/M (Nov): -0.5% / 0.3% 3:00 PM CONSUMER CREDIT (Nov):-5.0B / -3.5B

New economic data provided mixed messages and

noreply@noemail.com (HGH Press) — Tuesday, January 05, 2010 13:30:00 +0000

New economic data provided mixed messages and some headwinds for equity investors today, one factor being crude oil prices which are now up for a ninth straight session. On the positive side, according to the Commerce Department, US factory orders were up strongly in November, coming in with a gain of 1.1% rather than the plus 0.5% forecast by analysts.

Momentum in the housing market was however lacking: The index of pending home sales maintained by the National Association of Realtors was off strongly, falling 16%, representing the first decline after nine months of gains. Many market observers doubt that the US housing market can currently perform strongly on its own, without government tax credits, and will continue to languish for some time. Overall, investors may be cautious at this juncture, as key economic data will be reported later this week, among them the pivotal jobs report and the index of activity in the service industry.

Automakers reported sales data for December (and for 2009 as a whole). Many suggest positive momentum going into 2010, among them Ford which announced its December sales had surged by more than 30%, far exceeding expectations of a rise of 13%.

Key economic data for the week starting January 4, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	8:15 AM ADP EMPLOYMENT CHANGE (Dec): -75K -/ 169K 10:00 AM ISM - NON-MANUFACTURING (Dec): 50.0 / 48.7 2:00 PM FED MEETING MINUTES

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-26: 5170K / 5186K INITIAL CLAIMS Jan-02: 470K / 480K

Friday:
	8:30 AM NON-FARM PAYROLLS (Dec): 0K / -11K UNEMPLOYMENT RATE (Dec): 8.5% / 8.5% UNEMPLOYMENT RATE (Dec): 10.0% / 10.0% AVERAGE HOURLY EARNINGS M/M (Dec): 0.2% / 0.1% AVERAGE WEEKLY HOURS (Dec): 33.2 / 33.2 MANUFACTURING PAYROLLS (Dec): -35K / -41K 10:00 AM WHOLESALE INVENTORIES M/M (Nov): -0.5% / 0.3% 3:00 PM CONSUMER CREDIT (Nov):-5.0B / -3.5B

2010 was ushered in with

noreply@noemail.com (HGH Press) — Monday, January 04, 2010 13:30:00 +0000

2010 was ushered in with high expectations, with every equity sector and with commodities like gold and oil surging (only the US dollar faltered). It is interesting to note that crude oil began trading at more than 80 dollars a barrel today, roughly double the price that was seen at the start of last year - and this in spite of lower demand for the commodity! While the US is using less crude, demand in other areas of the world has however been growing / recovering, such as for instance in China. Despite this, some market analyst believe energy prices are rallying ahead of fundamentals, with the US job recovery for instance still very weak. Others comment that rallying oil prices might in fact serve to crimp the economic recovery in the US.

Predictably, many investors and market analysts are trying to determine whether today's strong start could translate into a good year for stocks. There is some historical support for this notion, as since 1973, a strong first trading day has frequently been followed by a bullish rest of the year. According to one source, the S&P 500 has finished the year higher 86% of the time when the index surged by more than one percent on its first session of the year. But even the most bullish observers do not believe 2010 would be as stellar as 2009, where the S&P 500 gained close to 65% over the last nine months (and was up 23.5% for the year as a whole).

Economic data released today was supportive for the bulls: In December 2009, China's manufacturing industry grew at its fastest pace in 20 months. Furthermore, the US Institute for Supply Management reported that its index of manufacturing activity improved from a reading of 53.6 in November to a value of 55.9 in December 2009.

One sector that will be absolutely crucial to a strong 2010 is the US labor market. One analyst has called employment the 'crucial last checkmark on the clipboard of economic recovery '. Persistently high unemployment, currently hovering around 10 percent, will crimp consumer spending, which is crucial to a sustainable economic recovery. Friday's 'jobs report' will therefore be a critical day; some market observers believe it might even set the tone for 2010.

Key economic data for the week starting January 4, 2010. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	NEW VEHICLE SALES (Dec): 11.0M / 10.9M 10:00 AM FACTORY ORDERS M/M (Nov): 0.5% / 0.6% PENDING HOME SALES M/M (Nov): -2.0% / 3.7%

Wednesday:
	8:15 AM ADP EMPLOYMENT CHANGE (Dec): -75K -/ 169K 10:00 AM ISM - NON-MANUFACTURING (Dec): 50.0 / 48.7 2:00 PM FED MEETING MINUTES

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-26: 5170K / 5186K INITIAL CLAIMS Jan-02: 470K / 480K

Friday:
	8:30 AM NON-FARM PAYROLLS (Dec): 0K / -11K UNEMPLOYMENT RATE (Dec): 8.5% / 8.5% UNEMPLOYMENT RATE (Dec): 10.0% / 10.0% AVERAGE HOURLY EARNINGS M/M (Dec): 0.2% / 0.1% AVERAGE WEEKLY HOURS (Dec): 33.2 / 33.2 MANUFACTURING PAYROLLS (Dec): -35K / -41K 10:00 AM WHOLESALE INVENTORIES M/M (Nov): -0.5% / 0.3% 3:00 PM CONSUMER CREDIT (Nov):-5.0B / -3.5B