This Week in Stocks: 9/22 - 9/28/07

[Show-me]

The Week Ahead

Last Update: 21-Sep-07 14:17 ET

The week ahead will pale in comparison to the week that just concluded in terms of significant events. That doesn't mean, however, that it won't be an important week. It will be and the economic calendar is a big reason why.

A number of key reports will be released, starting with the Consumer Confidence and Existing Home Sales reports on Tuesday. The Durable Orders report hits Wednesday, followed by Initial Claims, the Final Q2 GDP report, and New Home Sales on Thursday.

The week will be rounded out with the Personal Income and Spending report which contains the core-PCE index, otherwise known as the Fed's preferred inflation gauge.

Previews of these releases, and others, can be found via the links on our Economic Calendar page.

The earnings calendar will provide only limited interest. The reports of most interest are likely to be those from Bed Bath & Beyond (BBBY), Paychex (PAYX), Lennar (LEN) and fellow homebuilder KB Home (KBH).
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Monday, September 24:

• Earnings: Analogic (ALOG), Synnex (SNX)
• Economic Data: None
• Events: Fed's Board holds public meeting on regulations
• Conferences: JP Morgan Asia Pacific and Emerging Market Equity Conference; UBS Global Life Sciences Conference; Piper Jaffray Solar Power Conference.
• Fed Speakers: Dallas Fed President Fisher speaks in Dallas regarding higher education; Chicago Fed President Evans gives remarks at bank's conference on the role of R&D in Agriculture; Fed Chairman Bernanke speaks at Chamber of Commerce regarding impact of education

Tuesday, September 25:

• Earnings: Lennar (LEN)
• Economic Data: Consumer Confidence; Existing Home Sales
• Events: Lowe's (LOW) Analyst Conference
• Conferences: PSEG Merril Lynch Global Power & Gas Leaders Conference; Biotechnology Industry Organization Mid-America Venture Forum
• Fed Speakers: Philadelphia Fed President Plosser speaks about invention and productivity in the economy in New Jersey

Wednesday, September 26:

• Earnings: Bed Bath Beyond (BBBY), Paychex Inc. (PAYX)
• Economic Data: Durable Goods Orders; Crude Inventories
• Events: None
• Conferences: None
• Fed Speakers: St. Louis Fed President Poole speaks at Forum for Small Business in St. Louis

Thursday, September 27:

• Earnings: KB Home (KBH), Rite Aid (RAD), Accenture (ACN), Jabil Circuit (JBL), McCormick & Co. (MKC)
• Economic Data: Q2 GDP-Final and Chain Deflator; Initial Jobless Claims; New Home Sales
• Events: Fed Chairman Bernanke gives remarks at Domestic Prices Conference in D.C.; Fed Governor Mishkin speaks on globalization, macro performance and monetary policy at Domestic Prices Conference in D.C.
• Conferences: None
• Fed Speakers: Boston Fed President Rosengren gives remarks in Boston; Chicago Fed President Evans gives remarks at Chicago's Globalization Conference

Friday, September 28:

• Earnings: None
• Economic Data: Personal Income and Personal Spending; Core PCE; Chicago PMI; Construction Spending; Revised Univ. Michigan Consumer Sentiment
• Events: None
• Conferences: None
• Fed Speakers: Atlanta Fed President Lockhart speaks at Middle Tennessee State's Economic Outlook Conference; San Francisco Fed President Yellen speaks about behavioral economics at Federal Reserve Bank of Boston; St. Louis Fed President Poole speaks on central banking at Princeton Club in New York; Fed Governor Mishkin gives keynote address at Chicago Fed's Banking Conference

--Jeffrey Ham, Briefing.com

 

[clester]

Looks like S&P futures up so far. +4.07 tonight.

 

[FUTURESTRADER]

where do u see that?..I see -.50 to -.70 pts

 

[Birchtree]

I like it when the Dow opens down and then spends the rest of the day seeking higher ground. Only 180 points to a new all-time high. All we need to do is blind side the bears into a panic and the rocket is off.

 

[James48843]

And the "C" looks like it will continue to outperform "S".

Thanks Birch last week for your observation about "C" containing 30% financials, and that lower interest rates bode better for financials, so therefore you believed "C" would perform better this and next month. That was an observation I hadn't thought about, and is proving to be another very valuable datapoint in the thought process.

You learn something new every day here in TSPTALK.

 

[Birchtree]

Currently 69% of stocks are above their 50-DMA, pushing the previous peak >80% in April '07.

 

[Show-me]

Looks like the markets are leaning Bearish today.

NEW YORK (CNNMoney.com) -- U.S. stock futures fell Tuesday as signs that consumers may be cutting back fanned recession worries.
Two major retailers warned late Monday about a slowdown in sales. Target cut its forecast for September same-store sales growth, while Lowe's said softer-than-expected sales would pressure its profit for the full year.

Shares of Target (Charts, Fortune 500) fell nearly 4 percent in Frankfurt, while Lowe's (Charts, Fortune 500) stock sank about 7 percent.

The dim outlook raised concerns about the resilience of consumers. A significant pullback in consumer spending, which accounts for more than two-thirds of the nation's economic activity, could raise the threat of recession.


Investors will get a closer look at the health of the American consumer at 10 a.m. ET, when a report on September consumer confidence is due to be released. Also due out at 10 a.m. is a report on August existing home sales from the National Association of Realtors.

Economists surveyed by Briefing.com forecast that the consumer confidence reading from research group The Conference Board will slip to 104.5 from the 105.0 reading in August.

Meanwhile, the pace of sales of existing homes is expected to post a further decline, with economists looking for a slowdown to an annual pace of 5.5 million homes in August from 5.8 million in July. Home prices could also take a hit as problems in mortgage and credit markets limited buyers' ability to get financing.

In a further sign of trouble for the battered housing and home building markets, Lennar (Charts, Fortune 500), the nation's No. 1 home builder by revenue, posted a much bigger-than-expected loss Tuesday for its fiscal third quarter. Lennar reported steep drops in deliveries and new orders and rising cancelations, and said it has already slashed staff and plans further cuts.

In other corporate news, Microsoft (Charts, Fortune 500) may be considering buying up to a 5 percent stake in social networking site Facebook for $300 to $500 million, according to a report in the Wall Street Journal.

Talks between the United Auto Workers union and General Motors (Charts, Fortune 500) were expected to resume Tuesday. The UAW launched a strike against GM on Monday, with 73,000 UAW members walking off the job, after the two sides failed to reach a labor contract. The impact of the strike could start to spread to GM suppliers as soon as Tuesday.

Power producer NRG Energy (Charts, Fortune 500) is expected Tuesday to submit the first application for a new nuclear reactor in the United States since the Three Mile Island accident in 1979.

In global trade, most Asian markets finished the session higher, while European stocks declined in morning trading.

The dollar was highter against the euro but lower versus the yen in early trading. Meanwhile, oil prices fell in early trading, as the price of a barrel of U.S. crude for November delivery lost 78 cents to $80.19 a barrel in electronic trading.

 

[Show-me]

Lennar loss bigger than expected

No. 1 home builder in terms of revenue sees sharp drop in new orders, deliveries, as it cuts staff and plans more layoffs.

September 25 2007: 6:34 AM EDT


NEW YORK (CNNMoney.com) -- In a further sign of trouble for the battered housing and home building markets, Lennar posted a much bigger-than-expected loss Tuesday for its fiscal third quarter, saying it has already slashed staff and plans further cuts.

The nation's No. 1 builder in terms of revenue, Lennar posted a net loss of $513.9 million, or $3.25 per diluted share, down from the net earnings of $206.7 million, or $1.30 per diluted share, in the year-earlier period. Analysts surveyed by earnings tracker First Call had forecast a loss of 55 cents in the period.

Lennar (Charts, Fortune 500) said that it delivered 7,636 homes in the period, down 41 percent from a year earlier, while new orders plunged 48 percent to 5,804. It also saw its cancellation rate rise to 32 percent of orders.

As a result of the downturn, the company announced that it had cut its work force to date by approximately 35 percent and expected continued reductions in the fourth quarter. The staff cut was mostly sales and support personnel, as the builders generally use contractors and subcontractors to actually build its homes.

The problems in home building are not unique to Lennar. No. 5 KB Home (Charts, Fortune 500) is forecast to report a loss on Thursday. No. 2 home builder D.R. Horton (Charts, Fortune 500) and No. 3 Centex (Charts, Fortune 500) both reported losses far bigger than Wall Street had expected, while No. 6 Pulte Homes (Charts, Fortune 500) and Hovnanian Enterprises (Charts, Fortune 500) have reported losses for the last two quarters and analysts project losses for at least the next year.

 

[Oldcoin]

http://www.bloomberg.com/apps/news?pid=20601087&sid=afqDuxhGSYag&refer=home


U.S. Consumer Confidence Falls to 99.8 in September From 105.6

By Shobhana Chandra

Sept. 25 (Bloomberg) -- Consumer confidence in September fell more than forecast to the lowest level in almost two years, as falling home values, a deteriorating labor market and tougher borrowing standards took a toll on Americans' spirits.

The Conference Board's index of confidence plunged to 99.8, from a revised 105.6 in August and workers were less optimistic about job prospects, the New York-based group said today.

The report raises concern that the prolonged housing recession and tougher credit standards will put a brake on consumer spending, which accounts for more than two-thirds of the economy. The Federal Reserve cut interest rates by half a percentage point last week to forestall the risk of a broader economic slump.

``The risks to the economy have definitely escalated, and that'll affect consumers as well as businesses,'' Ellen Zentner, an economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. ``We've already worked lower consumer spending numbers into our forecast.''

The consumer confidence index was the lowest since November 2005. The reading was forecast to fall to 104.3, from an originally reported August reading of 105, according to the median estimate in a Bloomberg News survey of 71 economists. Projections ranged from 100 to 107.

 

[vectorman]

Looks like the market is setting up for a big move soon, perhaps tomorrow, direction unknown. The VIX has tested support twice breaking through both times and now sits right above it. There is also talk of some of the indexes forming a 'Cup and Handle' pattern ( look at post below). If liqiudity keeps coming in there is a strong case for an upside move in the markets. The VIX retested 20 this morning and has moved back below it. If support holds there may be some more downside to the market, but if there is a break below support today or tomorrow it will become resistence and the market will move higher. Tough call.

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:support_and_resistance

For those who don't understand the VIX.
http://stockcharts.com/school/doku....ors:introduction_to_mark#volatility_index_vix

View attachment 2175

 

[vectorman]

SPX, in the process of forming a Cup and Handle pattern?

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:cup_with_handle

View attachment 2176

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=SP500

 

[Wolverine]

Thanks for the VIX info.

I am trying to understand this end of things better.

 

[vectorman]

Thanks for the VIX info.

I am trying to understand this end of things better.

Your welcome, always learning myself. Look at the two charts above on the same page, see how they kind of mirror one another.

 

[nnuut]

Your welcome, always learning myself. Look at the two charts above on the same page, see how they kind of mirror one another.

You mean like this?
Yes I do!!
View attachment 2177

 

[Show-me]

This is feeling like a set up for tomorrows Durable Goods numbers. The expected is -3.5% and this feels like a set up so that the numbers can beat expectation. Seems like the market is waiting even with the horrible data, earnings, and news that came out today.

 

[fedgolfer]

This is feeling like a set up for tomorrows Durable Goods numbers.

With all these econ reports that confirm where we have been (on the road to a housing recession) help add credence to the fact that we're due more rate cutting... good for strong international stocks w/ a falling dollar, and select swing trades on NYSE/Nasdaq stocks. All these current reports w/ "bad news" should really just be setting us up for buys, imho.

 

[Show-me]

I can see that, but when does bad news really mean it is bad? I can understand that the market wants lower rates to operate on. How much more bad news can the market take and still go higher?

Makes for interesting action. GL

 

[Show-me]

Looks like everything hinges on the hope of a poor Durable Goods number that would justify a future rate cut. :worried:

 

[Show-me]

-4.9% Durable Goods. Much worse than expected!

 

[nnuut]

-4.9% Durable Goods. Much worse than expected!

Oh MY!:worried: