This Month in Stocks: 12/1 - 12/28/07

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http://www.briefing.com/GeneralCont...vestor&ArticleId=NS20071130092859LookingAhead

The Week Ahead

Last Update: 30-Nov-07 09:28 ET

December kicks off with several noteworthy economic reports, an OPEC meeting, November same-store sales data, and a handful of earnings releases, providing plenty of build-up ahead of the Federal Open Market Committee's Dec. 11 monetary policy meeting.

Readers can preview the complete list of economic events on our Economic Calendar. The key economic releases for the week will be the ISM Index on Monday and the November Employment Report on Friday.

In an understated week of earnings reporting, some of the more notable companies posting their results will be AutoZone (AZO), Guess (GES), Novell (NOVL), Toll Brothers (TOL), and National Semiconductor (NSM). Briefing.com's Earnings Calendar offers a complete list of companies due to release results.
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Monday, December 3:

• Earnings: Isle of Capri Casinos (ISLE), Phillips-Van Heusen (PVH)
• Economic Data: November ISM Index, November Auto and Truck Sales
• Events: MetLife (MET) Investor's Day, SL Green Realty (SLG) Analyst Meeting, U.S. Treasury Secretary Paulson speaks at housing conference in Washington (10:30 AM ET)
• Conferences: Bear Stearns Real Estate Conference, UBS Global Media Conference
• Fed Speakers: Boston Fed President Rosengren discusses subprime mortgages in Boston (8:00 AM ET), San Francisco Fed President Yellen speaks in Seattle on U.S. outlook and monetary policy (3:30 PM ET)

Tuesday, December 4:

• Earnings: AutoZone (AZO), Sanderson Farms (SAFM), Chico's FAS (CHS), Collective Brands (PSS), Guess (GES)
• Economic Data: None
• Events: None
• Conferences:
• Fed Speakers: None

Wednesday, December 5:

• Earnings: Blyth Industries (BTH), Novell (NOVL)
• Economic Data: Revised Third Quarter Productivity data, October Factory Orders, November ISM Services Index, Weekly Crude Inventory supplies (week ending Nov. 30)
• Events: Bank of England Policy Meeting, OPEC Meeting
• Conferences:
• Fed Speakers: None

Thursday, December 6:

• Earnings:Toll Brothers (TOL), Toro (TTC), National Semiconductor Corp (NSM), Synopsys (SNPS), Korn/Ferry (KFY)
• Economic Data: Weekly Initial Jobless Claims (week ending Dec. 1)
• Events: Bank of England Policy Decision, European Central Bank Policy Decision , November Same-Store Sales Reports
• Conferences:
• Fed Speakers: None

Friday, December 7:

• Earnings: None
• Economic Data: November Employment Report, University of Michigan Preliminary Consumer Sentiment survey for December, October Consumer Credit data
• Events: None
• Conferences:
• Fed Speakers: None

--Jeffrey Ham, Briefing.com

 

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Third test of the 200 dma in four weeks.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p52296275881

 

[ContrarianJeff]

Isn't the third time often the charm? It looked like 1490 served as support from 10/22 to 11/5, but then on the third test (or fourth--depending on how you look at it) on 11/7, it broke through. I think we're going to break through the 1490 resistance this week and go higher. The corresponding mark on the Nasdaq looks like 2700.

 

[Show-me]

Yes, three times is a charm and that 200 dma should be getting weaker. I was hopeing for a retest of the low and then a rocket ride thru it. I may be out of sync.

 

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AP
Five-Year Mortgage Rate Freeze Looms
Wednesday December 5, 3:40 pm ET
By Martin Crutsinger and Alan Zibel, Associated Press Writers

Bush Mortgage Plan Will Freeze Certain Subprime Interest Rates for 5 Years

WASHINGTON (AP) -- The Bush administration has hammered out an agreement with industry to freeze interest rates for certain subprime mortgages for five years in an effort to combat a soaring tide of foreclosures, congressional aides said Wednesday.

The administration said that President Bush will speak on the agreement at the White House on Thursday and the Treasury Department announced that Treasury Secretary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson would hold a joint news conference Thursday afternoon with officials of the mortgage industry.

http://biz.yahoo.com/ap/071205/mortgage_crisis.html

 

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AP
Retailers Post Sluggish November Sales
Thursday December 6, 8:06 am ET
By Anne D'Innocenzio, AP Business Writer Retailers Post Sluggish Sales in November Despite Strong Start to the Holiday Season

NEW YORK (AP) -- The holiday shopping season got off to an uncertain start despite a big Thanksgiving weekend as consumers took advantage of big discounts and then pulled back, leaving retailers with sluggish sales results for November.

As retailers reported their sales results Thursday morning, Costco Wholesale Corp. proved to be a big winner, but plenty of stores including Limited Brands Inc. and teen retailer Wet Seal Inc. had disappointing results. Wal-Mart Stores Inc. beat expectations.

"It's still early, but it looks like that while Black Friday was strong, the follow-through the following week doesn't appear strong," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "Consumers are still facing the same old economic headwinds."

According to a tally by Thomson Financial, only four merchants beat sales estimates, while 15 missed expectations. The tally is based on same-store sales or sales at stores opened at least a year. Same-store sales are a key indicator of a retailer's health.

Wal-Mart said its same-store sales rose 1.5 percent in November, beating the 1.2 percent estimate of analysts polled by Thomson Financial.
Costco reported same-store sales rose 9 percent in the November period, fed by double-digit growth in its international segment. Analysts expected a 6.6 percent gain

Limited had a 7 percent decline in same-store sales, worse than the 5 percent analysts projected.

Pacific Sunwear of California Inc. had a same-store sales increase of 2.3 percent, a bit below the 2.8 percent projection. Wet Seal's same-store sales declined 1.7 percent, better than the 5.3 percent forecast

 

[tsptalk]

Huge week for stocks coming up. The big question will be, can they hold on to the recent gains with the obvious "sell the news" potential after the Fed Tuesday?

The 10-day MA of the OEX put/call ratio tells me yes. The new sentiment survey says maybe not.

Gary Smith (technician on Real Money and Bulls and Bears on Fox) is looking for a 5% drop after the Fed, while other well respected analysts are saying we rally thru the end of the year.

Since we are still technically able to trade for now, I may sell Tuesday and buy back after any dip. But this is where I used to get myself in trouble. When I'd miss a rally I tend to sit on the sidelines too long... waiting for a retest of a low, etc. That didn't work from 2003 to early 2007, but with volatility remaining high, patience may pay off again for anyone on the sidelines.

There is still a gap to be filled on the downside, sentiment seems to have risen too quickly, and some are suspicious of the band-aid put on the subprime problem.

Tough call.

 

[Birchtree]

I'm thinking there is eventually going to be some pattern of statistical relevance associated with the double-bottom 10% blink and you missed them corrections. Those shake outs were brutal and now the market may be prepared for a massive move up - no side lines for me.

 

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http://biz.yahoo.com/ap/071210/switzerland_ubs.html

AP
UBS Writes Down $10B From Subprime Losses
Monday December 10, 6:26 am ET UBS Writes Down $10 Billion From Subprime Losses; Will Record a Shareholder Loss for Year

ZURICH, Switzerland (AP) -- Swiss banking giant UBS AG said Monday it will write off a further $10 billion on losses in the U.S. subprime lending market.

UBS will now record a loss for the fourth quarter and a net loss attributable to shareholders for the full year, the bank said.

The bank will borrow around 13 billion Swiss francs ($11.51 billion) from outside investors, sell treasury shares and replace its 2007 cash dividend to shareholders with a stock dividend, bringing in a total of 19.4 billion francs ($17.18 billion) to shore up its capital base, UBS said.

As recently as the middle of November, UBS had predicted a profit for the fourth quarter despite ongoing speculation about its subprime holdings.
"Conditions in the U.S mortgage and housing markets have continued to deteriorate, and we have updated our loss assumptions to the levels implied by the current distressed market for mortgage securities," the company's chief executive, Marcel Rohner, said in a statement.

"In our judgment these writedowns will create maximum clarity on this issue and will have the effect of substantially eliminating speculation," he added.

In October the bank downgraded the value of some assets by over 4 billion francs ($3.4 billion) because of losses linked to the U.S. mortgage crisis.

The writedown meant UBS posted a net loss of 830 million francs ($712 million) in the period ending Sept. 30, the first quarter in nine years in which it suffered an operating loss. UBS shares gained 2.4 percent to 58.55 francs ($51.90) in Zurich.

 

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http://www.bloomberg.com/apps/news?pid=20601103&sid=aNUz6NmbYZCQ&refer=us

Washington Mutual to Take Writedown, Slash Dividend (Update2)

By Elizabeth Hester

Dec. 10 (Bloomberg) -- Washington Mutual Inc., the biggest U.S. savings and loan, will write down the value of its home lending unit by $1.6 billion in the fourth quarter and cut about 6 percent of its workforce as mortgage-market losses increase.

Washington Mutual, led by Chief Executive Officer Kerry Killinger, also slashed its quarterly dividend to 15 cents a share from 56 cents and forecast a loss for the quarter, according to a statement today from the Seattle-based bank. Provisions for loan losses will be $1.5 billion to $1.6 billion, more than the $1.3 billion the company previously predicted. It plans to shutter 190 of 336 home loan centers.

The bank has lost 56 percent of its value this year, the worst performance in the 24-member KBW Bank index, amid declining U.S. housing prices and record mortgage delinquencies. Rival Countrywide Financial Corp., which has dropped 71 percent, moved to bolster its finances in August by selling $2 billion in preferred stock to Bank of America Corp. Washington Mutual, known as WaMu, said today it will sell $2.5 billion of convertible stock.

``They're clearly concerned the industry will stay in a negative mode for an extended period,'' said Richard Bove, an analyst at Punk Ziegel & Co. in Lutz, Florida. ``The fact they're laying off so many people indicates they're concerned this is not just a one-time event.'' He rates the stock ``market perform.''

2010 Recovery

Fitch Ratings downgraded the firm's credit rating to ``A-'' from ``A,'' citing ``worsening asset quality,'' and ``extremely challenging conditions in the U.S. residential mortgage market.'' Moody's Investors Service Inc. also cut its rating.

``Credit losses from WaMu's mortgage operations will be noticeably higher than previously estimated,'' and the company's profitability won't ``begin to recover'' until 2010, Moody's said in a statement.

 

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AP
H&R Block 2Q Losses Soar
Tuesday December 11, 7:24 am ET H&R Block 2Q Loss Soars on Mortgage Meltdown; Final Results Delayed Until Friday

KANSAS CITY, Mo. (AP) -- H&R Block Inc., the nation's largest tax preparer, said in a preliminary earnings report Tuesday that it expected a huge second-quarter loss as it continued to wrestle with its disintegrating mortgage arm.

The company said it was filing its quarterly report late, blaming the decision earlier this fall to change accounting firms.

But it said it expected a net loss of $502.3 million, or $1.55 per share, for the quarter ending Oct. 31, compared with a loss of $156.5 million, or 49 cents per share, during the same period a year ago.

Of that loss, $366.2 million, or $1.13 per share, came from discontinued operations, including much of its Option One Mortgage Corp., which has suffered as an increase in borrower defaults and a drying up of credit markets caused dozens of lenders to disappear.

http://biz.yahoo.com/ap/071211/earns_h_r_block.html

 

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http://money.cnn.com/2007/12/11/news/economy/cnn_mortgage_poll/index.htm

Americans split on mortgage bailout

Only a slight majority of Americans want to see special treatment for those at risk of default; most blame borrowers for woes.

By Chris Isidore, CNNMoney.com senior writer
December 11 2007: 6:19 AM EST

Americans are nearly evenly divided on who is to blame, and what should be done, for millions of home borrowers at risk of losing their home from the current mortgage crisis.

NEW YORK (CNNMoney.com) -- Americans are nearly equally divided on whether those facing defaults on their mortgages should get special help, with most believing the borrowers are to blame for their own problems.
A poll conducted for CNN by Opinion Research Corp. found that 51 percent of Americans surveyed believed that those at risk of defaulting on their mortgages and losing their homes "should receive special treatment." But 46 percent said there should not be any special treatment afforded to those in trouble.

In addition, when asked which statement comes closer to their feelings on the topic, 51 percent agreed they felt sorry for those whose homes are at risk, but that those borrowers willingly entered into those agreements and have no one to blame but themselves. The survey found 46 percent agreed that they think the borrowers are the victims of bad lending policies by the banks who provided mortgages to them.

 

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Retail Sales and PPI in the morning.

 

[Show-me]

Tom's comments this morning sum up how I feel so I will post them here. Another Bernanke put.

"I'm not sure what the Fed was thinking, but to disappoint one day (interest rates) knowing you would be poring massive liquidity into the system the next, and not mentioning it, is either suspicious, our very thoughtless."

 

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November PPI Jumps, Retail Sales Up

Last Update: 13-Dec-07 08:49 ET


November PPI jumped 3.2% as energy prices surged 14.1%. This was well above the expected 1.5% gain, but the energy surge could prove temporary and even reverse some next month. Nevertheless, it reflects the inflation issues that the Fed noted in their policy statement on Tuesday.

The core PPI was up 0.4% after a 0.0% change in October. This was above the expected 0.2% increase. PPI can be volatile and after an unchanged number a single month of a pop in the core rate does not signify a trend, but this will not be well received given current market conditions.

Better news comes from the November retail sales report. Total sales were up a very strong 1.2%. Excluding autos, the increase was 1.8%. Excluding gasoline sales, total retail sales were up only 0.6%. Gasoline sales had a big impact on the total gain. Nevertheless, the data show good consumer spending trends and are very far from indicating a recession even with the isolated 0.6% increase that excludes gasoline sales.

Further good news on the economy comes from the drop in new claims for unemployment for the week ended Dec. 8 to 333,000 from 340,000 the week prior. The jump to 353,000 the week of Nov. 24 now appears totally aberrant. At 333,000, claims are running at a level well below what would indicate recessionary trends. The level is consistent with steady, moderate gains in nonfarm payrolls of about 100,000 per month.

The data in sum thus counter claims of recession, but also raise some inflation concerns. Tomorrow's CPI data will be a better indicator of inflation trends and now takes on added importance.
--Dick Green, Briefing.com

http://www.briefing.com/GeneralCont...vestor&ArticleId=NS20071213085008HeadlineHits

 

[350zCommTech]

Tom's comments this morning sum up how I feel so I will post them here. Another Bernanke put.

"I'm not sure what the Fed was thinking, but to disappoint one day (interest rates) knowing you would be poring massive liquidity into the system the next, and not mentioning it, is either suspicious, our very thoughtless."

He likes to screw the shorts.

 

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Odds of a Recessions Are Rising, Economic Growth Is Getting Close to 'Stall Speed'

AP
Greenspan: Odds Rising for a Recession
Thursday December 13, 7:00 pm ET
By Jeannine Aversa, AP Economics Writer

Greenspan: Odds of a Recessions Are Rising, Economic Growth Is Getting Close to 'Stall Speed'

WASHINGTON (AP) -- Former Federal Reserve Chairman Alan Greenspan says the odds the U.S. will fall into a recession are "clearly rising" and he believes economic growth is "getting close to stall speed."

Greenspan, who ran the central bank for 18 1/2 years, until early 2006, offered his views on the economy in an interview on NPR News' Morning Edition that will air on Friday. Excerpts of the interview were released on Thursday

http://biz.yahoo.com/ap/071213/greenspan_economy.html

 

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http://www.forbes.com/markets/feeds/afx/2007/12/13/afx4439821.html

Japanese business confidence falls in fourth quarter on cost fears
12.13.07, 8:35 PM ET

TOKYO (Thomson Financial) - Corporate Japan, which has supported the economic recovery of the world's second-largest economy in recent years, suffered a broad-based deterioration in business confidence in the fourth quarter, dented by emerging concerns about rising procurement and labour costs.
The sentiment index for large manufacturers fell to plus 19 in December from plus 23 in September, the first fall in three quarters, the central bank said.
This was worse than the market's consensus forecast of plus 21. In the previous Tankan survey, large manufacturers had forecast that the headline diffusion index of confidence would be plus 19 in December.
Continuing uncertainties about the US economy, one of Japan's biggest trading partners, and global financial markets due to troubled subprime loans also depressed sentiment, the quarterly central bank survey showed.

 

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CPI came in HOT!

0.8% CPI Expected 0.6%

0.3% Core Expected 0.2%

 

[Show-me]

Very interesting position from Oscar, thanks Robo.