This Month in Stocks January: 12/28 - 02/01/2008

[Show-me]

The Week Ahead

Last Update: 28-Dec-07 09:21 ET

The coming week sees the current year draw to a close and the new year begin. In recognition of the latter, the market will be closed Tuesday.

By and large, the Earnings Calendar will be an afterthought in the coming week as there are just a handful of companies slated to report their quarterly results. Monsanto (MON) and Bed Bath & Beyond (BBBY) are the headliners on the short list of reporters.

The Economic Calendar, on the other hand, will be a focal point as several noteworthy reports are on the docket. In particular, there is the November Existing Home Sales report on Monday, the December ISM Index, which is a gauge of national manufacturing activity, on Wednesday, and the December Employment report on Friday.

The minutes from the Dec. 11 FOMC meeting will be released Wednesday afternoon.

As a reminder, the Santa Claus Rally period, which spans the last five trading days of the year and the first two trading days of the new year, has produced an average gain of 1.5% since 1950, according to the Stock Trader's Almanac. Three trading sessions into this period, the S&P 500 is down 0.6%, so Santa still has some work to do.
________________________________________________________________
Monday, December 31:

• Earnings: Piedmont (PNY)
• Economic Data: November Existing Home Sales
• Events: Early close for Treasury market (1:00 PM ET)
• Conferences: No conferences are scheduled at this time
• Fed Speakers: None

Tuesday, January 1: Market Closed

Wednesday, January 2:

• Earnings: No companies have confirmed scheduled announcements at this time
• Economic Data: November Construction Spending, December ISM Index
• Events: Federal Open Market Committee monetary policy meeting minutes released (2:00 PM ET)
• Conferences: No conferences are scheduled at this time
• Fed Speakers: None

Thursday, January 3:

• Earnings:Monsanto (MON), Bed Bath & Beyond (BBBY), Finish Line (FINL), Global Payment (GPN), Sonic (SONC)
• Economic Data: December Auto and Truck Sales, December ADP Employment, Initial Jobless Claims (week ending Dec. 29), November Factory Orders
• Events: None
• Conferences: No conferences are scheduled at this time
• Fed Speakers: None

Friday, January 4:

• Earnings: AZZ, Inc. (AZZ)
• Economic Data: December Employment Report, December ISM Services Index
• Events: None
• Conferences: No conferences are scheduled at this time
• Fed Speakers: Fed Vice Chairman Kohn addresses economists in New Orleans (11:15 AM ET), Fed Monetary Affairs Director Madigan addresses economists in New Orleans (3:30 PM ET)

--Jeffrey Ham, Briefing.com

 

[Spaf]

Re: This Month in Stocks January: 12/28 - 02/01/2007

It's either the Santa Claus Rally or the Grench Pull-back!........:cheesy:

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

New Year Set for a Negative Start

Last Update: 31-Dec-07 16:33 ET

Price level vs. 4 pm ET: Despite some encouraging news on the housing front, the major averages closed lower on Monday, the last day of a difficult year, as overarching concerns about the economy continued to weigh on investor sentiment.

Nine out of ten economic sectors posted losses today.

For 2007, the Dow Jones Industrials average gained 6.4%, while the broader S&P 500 and the tech-heavy Nasdaq Composite gained 3.5% and 9.8%, respectively. The Nasdaq 100 finished 18.7% higher on the year, while the Russell 2000 ended the year down 2.8%.

A slightly negative tone dictates the after hours session. The S&P 500 futures, at 1477.20, are less than a point below fair value, while the Nasdaq 100 futures, at 2104.75, are slightly below fair value.

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

S&P 500 did 3.5% that stinks, but is better than a negative number.

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

http://www.youtube.com/watch?v=eRmRZpjjitw

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

Today: Events: Federal Open Market Committee monetary policy meeting minutes released (2:00 PM ET) and November Construction Spending, December ISM Index.

According to the STA the Jan. 3rd is a strong day.

Good luck!

 

[tsptalk]

Re: This Month in Stocks January: 12/28 - 02/01/2007

The S&P 500's 1460 gap was just filled. Let's see if we get any support there.

 

[clester]

Re: This Month in Stocks January: 12/28 - 02/01/2007

The S&P 500's 1460 gap was just filled. Let's see if we get any support there.

Blew through that. What's next support 1439 or lower?

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

Nonfarm payroll missed big. Trays in the upright position, turbulence ahead.

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

Wow, what a ride. All gaps are fill and the PPT is getting ready for a save the day maneuver.

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

The Week Ahead

Last Update: 04-Jan-08 09:04 ET

http://www.briefing.com/GeneralCont...vestor&ArticleId=NS20080104090644LookingAhead

Business gets back to usual now that the holidays have passed and the kids are back in school. The key happenings during the week will be the Consumer Electronics show, the same-store sales reports from the retailers, and a speech on the economic outlook from Fed Chairman Bernanke.

Separately, in light of Friday's weaker than expected payrolls report, the weekly initial claims number on Thursday will receive increased attention. Similarly, now that oil prices have pierced the $100 per barrel mark, the weekly inventory report from the Dept. of Energy will remain a focal point. Further details on the economic data can be previewed via the links on our Economic Calendar.

An array of companies are scheduled to report their latest earnings results next week, including Briefing.com Active Portfolio holding Immucor (BLUD). Other companies slated to announce include KB Home (KBH), Mosaic (MOS),and Alcoa (AA). The latter company's report will mark the official start of the fourth quarter earnings reporting season. A complete schedule can be previewed on Briefing.com's Earnings Calendar.
________________________________________________________________
Monday, January 7:

• Earnings: Immucor (BLUD), Lawson Software (LWSN)
• Economic Data: None
• Events: None
• Conferences: JP Morgan Healthcare Conference, Consumer Electronics Assoc. Conference and Show, Credit Suisse Group Investor Reception, JP Morgan Tech Forum
• Fed Speakers: Atlanta Fed President Lockhart speaks on U.S. economic outlook in Atlanta (12:40 PM ET)

Tuesday, January 8:

• Earnings: Acuity Brands (AYI), Constellation Brands (STZ), Family Dollar (FDO), KB Home (KBH), Supervalu (SVU), Apollo Group (APOL)
• Economic Data: November Pending Home Sales, November Consumer Credit
• Events: None
• Conferences: Annual Needham Growth Conference, Consumer Electronics Assoc. Conference and Show, Citigroup Entertainment Conference, JP Morgan Global Energy Day, JP Morgan Healthcare Conference, Pritchard Capital Partners Energize Conference, Raymond James Government Services & Technology Summit
• Fed Speakers: Philadelphia Fed President Plosser speaks on economic outlook in PA (8:20 AM ET), Boston Fed President Rosengren speaks at economic conference in CT (10:50 AM ET)

Wednesday, January 9:

• Earnings: Mosaic(MOS), Alcoa (AA), Ruby Tuesday (RT), Helen of Troy (HELE), WD-40 Co. (WDFC)
• Economic Data: None
• Events: VF Corp. Analyst Meeting
• Conferences: Annual Needham Growth Conference, Consumer Electronics Assoc. Conference and Show, Citigroup Entertainment Conference, JP Morgan Healthcare Conference, Pritchard Capital Partners Energize Conference
• Fed Speakers: St. Louis Fed President Poole discusses U.S. economic activity in St. Louis (9:30 AM ET)

Thursday, January 10:

• Earnings:Shuffle Master (SHFL), IHS Inc. (IHS)
• Economic Data: Initial Jobless Claims (week ending Jan. 5), November Wholesale Inventories, Crude Inventories (week ending Jan. 5)
• Events: Merit Medical Supplies Investor Meeting, December Same-Store Sales
• Conferences: Annual Needham Growth Conference, Consumer Electronics Assoc. Conference and Show, Citigroup Entertainment Conference, JP Morgan Healthcare Conference
• Fed Speakers: Fed Chairman Bernanke speaks on economic outlook (1:00 PM ET), Kansas City Fed President Hoenig speaks in Kansas City regarding U.S. economic outlook (1:00 PM ET)

Friday, January 11:

• Earnings: Infosys(INFY)
• Economic Data: December Import and Export Prices, November Trade Balance, December Treasury Budget
• Events: Merit Medical Supplies Investor Meeting
• Conferences: Annual Needham Growth Conference
• Fed Speakers: Fed Governor Mishkin on monetary policy flexibility, risk management and financial disruptions (12:45 ET), Boston Fed President Rosengren speaks at an economic outlook conference in VT (1:00 PM ET)

--Jeffrey Ham, Briefing.com

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

Pluge Protection Team (PPT)

http://biz.yahoo.com/ap/080105/bush_economy.html

AP
White House Considering Stimulus Package
Saturday January 5, 7:26 am ET
By Martin Crutsinger, AP Economics Writer Bush Administration Considering a Possible Economic Stimulus Package to Ward Off Recession

WASHINGTON (AP) -- The Bush administration, faced with a deteriorating economy and a big jump in unemployment, said Friday it was considering an economic stimulus package that might include tax cuts to ward off a recession.

Officials stressed that President Bush has not decided yet to offer a proposal but was looking at a variety of options with a plan possibly being unveiled around the time of his Jan. 28 State of the Union address.
"The president is always looking at options ... always talking to people and looking at data," Commerce Secretary Carlos Gutierrez said in an interview with The Associated Press.

Bush met Friday with top economic officials including Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, who are part of the president's working group on financial markets, a group formed after the 1987 stock market crash to monitor markets.

The president was given an assessment of how the economy is behaving and how financial markets are performing after the severe credit squeeze that hit in August. A number of big financial institutions have declared multibillon-dollar losses because of rising defaults in the subprime mortgage market. White House spokesman Tony Fratto said tax cuts were an option being considered.

More at link.

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

"Plunge Protection Team"

One theory regarding the Working Group refers to it as the Plunge Protection Team. This theory claims that the Working Group is a scheme to manipulate U.S. stock markets in the event of a market crash by using government funds to buy stocks, or other instruments such as stock index futures.

The term "Plunge Protection Team" was originally the headline for an article in The Washington Post by staff writer Brett D. Fromson, published on Sunday, February 23, 1997.[2] He did not invent the term. It was added later by a copy desk editor as a sensational nickname for the Working Group.[3]

http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

I'll take the $500! I don't think it will work, but I will invest the $500 in my Roth using a UltraShort ETF. lol

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

http://biz.yahoo.com/ap/080105/wall_main.html

AP
Investors May See Dividends Disappear
Saturday January 5, 4:24 am ET
By Stephen Bernard, AP Business Writer

Dividends in Financial Services Sector Likely to Be Casualties of Tightening Credit Markets

NEW YORK (AP) -- With credit markets continuing their downward spiral, investors could see their dividends disappearing in 2008.

Dividend cuts or suspensions will continue to pick up among financial services firms in 2008, said Howard Silverblatt, a senior index analyst at Standard & Poor's. In 2007, fewer companies increased dividends, according to Standard & Poor's, while more companies in 2007 than in 2006 actually cut or suspended dividends.

Many investors rely on dividend payments as a source of income, and financial institutions in particular have been rich sources of large payouts. Their need to raise capital in the face of rising loan defaults, though, has made their dividends one of the first places they look to save money.

Diane Merdian at Keefe Bruyette & Woods noted that banks, in general, are offering a dividend yield that is near an all-time high when measured against the dividend yield on the S&P 500. Yields are based on a company's full year of dividends compared to the current share price.

Higher yields indicate the company might be distributing more cash to investors than it can afford. Drastic dividends cuts or outright suspensions are likely steps if companies are struggling with earnings or other cash needs.

Since early July, credit markets have been in a free fall, mostly due to rising defaults on mortgages, especially subprime loans given to customers with poor credit history.

As a result of the rising defaults, investors have shied away from purchasing bonds and debt backed by the loans because of fears of mounting losses. As investors stopped buying the debt, banks and other holders of the bonds have been forced to write down their value. The writedowns -- which eclipsed $100 billion in 2007 -- have strained earnings, forcing companies to look for new ways to raise capital and preserve cash.

More at link.

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

http://www.briefing.com/GeneralCont...Investor&ArticleId=NS20080104123538MarketView

2008 Market View

Last Update: 04-Jan-08 12:33 ET

The Big Picture column on Jan. 3 presented our 2008 outlook for the stock market. It was the most cautious forecast since our first yearly forecast for 2003. It called for a 2% to 4% gain in the S&P 500 index for the year.

The column also noted that long-term trends in profit margins and likely moderate economic growth suggest that the "stock market may underperform historical trends the next few years."

Because we are forecasting a gain for 2008, it is not appropriate to take a bearish stance in our Market View. Indeed, we believe the current pessimism over the economic outlook is overdone and that the downside risk to the stock market is limited by the fact that valuations are reasonable. This is not 2001 all over again.

Nevertheless, that doesn't change the reality that the stock market outlook at present is uninspiring, both for the first quarter of 2008 and for the full year.

The table below lists the key factors affecting stock prices.

Tables at link.

Recent Developments

The stock market has been battered by recession fears. There is no doubt that economic growth will be weak in the first quarter. However, the data still do not indicate recession is on the way. Our view is that economic growth will be very sluggish, but will remain positive. Still, the market is understandably concerned about the economic outlook and the implications for earnings growth.

Real GDP in the fourth quarter will be over 2%. The question is whether business investment holds up in 2008. Consumer spending is tracking for modest growth but there are concerns that general pessimism will cause businesses to pull back on hiring and investing.

Earnings growth is being hammered by the losses caused by the write-offs at financial firms related to mortgage securities. Earnings fell about 3% in the third quarter, and another decline in the fourth quarter is likely. The underlying trend in earnings apart from financials is reasonably good, but will slow in 2008 due to sluggish economic growth. The earnings outlook longer-term will be constrained by falling profit margins, as wage gains relative to GDP pick up (for more on this, see the February 26, 2007 Big Picture column).

Inflation is not nearly the problem commonly presented. The core PCE is up at just a 2.2% rate over the past year. That hardly warrants talk of "high inflation." The total rate has been pressured by energy prices, but total inflation at a bit over 3% is still not a disaster and won't prevent the Fed from easing. Core inflation will moderate in 2008 due to sluggish demand.

The 10-year note yield has dropped to 3.82% on recession fears. This is very supportive to stocks from a relative valuation standpoint.

Valuation remains very reasonable. The P/E on the S&P 500 is now just 16.0, even with a decline in third quarter earnings. It will rise to about 16.5 with a fourth quarter earnings decline, but that is still very reasonable for current interest rate levels.

Valuation Metric: There is a theory that the 10-year yield should approximately equal the forward earnings yield. (The earnings yield is the inverse of the P/E.) This is not a good basis for valuating stocks, but it is a good starting point. The expected operating earnings yield for the next four quarters is about 6.5%. With the 10-year note currently at under 4%, this simple model suggests that stocks are undervalued by over 40%. This is not a foundation on which to make investment decisions, but at least the comparison suggests that stocks are reasonably valued at worst.

The best news here is that there is not a lot of room for stocks to fall so long as earnings do not decline in 2008. The P/E in 2001 before the market crash was 26.5. The much lower level now reduces the downside potential for stocks.

Bottom Line

The stock market outlook for 2008 is not particularly good--and we have a more favorable view of the economy than most. Even without a recession, however, the earnings outlook is unimpressive.

It may well be that the stock market underperforms historical averages for a period of years as profit margins fall back to the long-term trends and as the economy works off the debt overload from recent years.

We don't see a long-term downtrend because a recession is unlikely. The Fed rate cuts will eventually boost the economy. The decline in mortgage backed securities prices has already stopped (as of this writing) for two months.

Time happens. Change happens. The economy will get through just fine, and so will the market. But that doesn't mean we are pounding the tables for stocks as we were back in 2003. We will continue to argue that the current pessimism is overdone, but that doesn't mean we are making a strong bullish argument. It may be tough sledding for a while.
--Dick Green, Briefing.com

 

[Show-me]

From the STA:

From the STA:

January Barometer predicts years course with .754 batting average.

Every down January on the S&P since 1950, without exception, preceded a new or extended bear market, or a flat market.

S&P gains January's first five days preceded full-year gains 86.1% of the time, in election years, only years 1988 and 1956 have been wrong.

Things that make you go hummm.

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

AP
Wall Street Eyes Housing, 4Q Earns Data
Sunday January 6, 1:53 pm ET
By Madlen Read, AP Business Writer Wall Street Eyes Housing, 4Q Earnings Data This Week for Further Signs of Recession

NEW YORK (AP) -- The start of 2008 has brought a harsh reality to Wall Street: The U.S. may indeed be headed toward recession. So, after suffering punishing losses the first three trading days of the year, the stock market will be seizing on any data or forecast in the coming weeks that can help investors determine if their worst fears are coming to pass. And earnings are now part of the equation, with results from Alcoa Inc., the first of the 30 Dow Jones industrials to report fourth-quarter results, opening earnings season on Tuesday.

http://biz.yahoo.com/ap/080106/wall_street_week_ahead.html?printer=1

 

[Show-me]

Re: This Month in Stocks January: 12/28 - 02/01/2007

Stocks set to take off

Wall Street eyes a rebound after last week's brutal selloff; oil prices slide below $98.

January 7 2008: 7:06 AM EST
LONDON (CNNMoney.com) -- U.S. stock futures rose early Monday as investors eyed a comeback from the previous session's brutal selloff and crude prices extended their declines.

At 6:06 a.m. ET, Nasdaq and S&P futures were narrowly higher, suggesting gains at the start for Wall Street.

Stocks tanked on Friday, sending the blue-chip Dow lower about 2 percent, after a surge in the unemployment rate and weak jobs data fueled anxiety about a recession in the U.S.

At the same time, the prospect of a U.S. downturn also raised hopes the Federal Reserve will aggressively cut rates when it meets later this month.
Lower oil prices helped provide some positive sentiment. U.S. light crude slid below $98 a barrel in electronic trading early Monday after crossing the $100 a barrel threshold last week.

On the economic calendar, President Bush is due to speak about the economy. His speech comes amid word the White House is considering new measures to boost the economy.

Treasury Secretary Hank Paulson is also speaking. He will discuss the capital markets and the economy in New York.

In global trade, anxiety about the U.S. economy roiled stocks in Asia, where markets slumped. European stocks were flat in the early going.
The tech sector is in focus with the kickoff of the Consumer Electronics Show in Las Vegas. Microsoft (MSFT, Fortune 500) opened the gadget show by announcing a string of movie and TV deals. Napster (NAPS) also said it would start selling music downloads as unprotected MP3 files.

http://cnnmoney.printthis.clickabil.../markets/stockswatch/index.htm&partnerID=2200

 

[Birchtree]

Re: This Month in Stocks January: 12/28 - 02/01/2007

One way for President Bush to stimulate the economy and markets would be to make any dividend reinvestments tax free for a year. This was done back in the late 1970s with the utility stocks. I even received a notice from my friends at the IRS wondering why I had failed to report my utility dividend income - I didn't need to because all the income was tax free because of dividend reinvestments. That was the beginning of a long term warm relationship. By the way, I had a portfolio of 30 utility stocks back then and still have a good number of them in the oceanic portfolio. Most of those utility stocks were yielding upwards of 10%. Be right and sit tight.