Market Observations Week Ending 02/23/07
Last week Home Depot warned... this week, Lowe's, the world's 2nd largest home improvement retailer, reported Q4 profit fell.
Net income dropped 12 percent YOY, sales in the quarter dropped 3.7 %. The company cut its forecasts four times last year as U.S. home sales dropped at the fastest pace since 1991.
Less money for JC Penney (JCP) who followed up record Q4 results with downside Q1 guidance. Q4 earnings fell 13% YOY and management guided Q1 EPS below consensus estimates.
Less money for Domino's Pizza, they reported lower Q4 earnings as the pizza delivery chain's marketing and promotions failed to take off.
Higher costs led several store operators to adopt cost cutting measures, same-store sales, fell 4.4 % in Q4, revenue fell 4.8 %
Many times in the last two years, we have beat the drum on the danger in the debt markets vis a vis derivatives. The media is just now focusing on this issue.
The effects on REIT's, homebuilders, thifts & loans and the overall financial sector cannot be dismissed with the wave of a hand, as trivial.
Aside from homebuilding creating 40% of new jobs since 2000, the "money shuffling" sector accounts for the majority of revenue and profit generation in our "vapor" economy.
What do you mean by "vapor" oh Nattering One? I will beat this drum again, we have become experts at making money "out of thin air" with little investment in capital equipment and no tangible end product.
I refer to this as "money shuffling" through the financial sector, i.e. transaction fees, brokers, electronic services. A meltdown in the debt markets would seriously damage not only our economy, but the global picture as well.
And the band played on...as the 3rd longest bull run in history continues with new multi year and all time highs across the board.
Dollar index still range bound 84-85, crude up from $57 to over $61 as Nigerian rebels, refinery fires and Cheney vs Iran were called into action to spook the herd.
Gold rising from $673 to $690 and headed for $900, as bonds rallied lowering the 10 yr 3 bps to 4.68.
Volatility still low, VIX still range bound 10 to 11.5, keep an eye on any sudden movement up or down, this might indicate an impending peak and precipice.
As predicted last week, "the BOJ meets WEN, a 25 bps raise would drive markets slightly down before the next surge up."
Also, "A retest of 1445 might be in order before the next surge up to 1465 area.... Perhaps a drop when the RUT hits 832, now at 827. Watch it."
This week, the SP500 went into a sideways consolidation, rising to 1461 then dipping to 1448 over the last 2 days AFTER the RUT went up to touch 830 and the BOJ raised 25 bps.
Next week, a swift fall and closing below 1440 for 2 days would signify a change in market direction.
We sense, perhaps the beginning of another 50 or 60 point surge from 1450 to 1500-1520 on the SP500.
Much like rust never sleeps, global hyperliquidity and currency debauchery never rests.
Net income dropped 12 percent YOY, sales in the quarter dropped 3.7 %. The company cut its forecasts four times last year as U.S. home sales dropped at the fastest pace since 1991.
Less money for JC Penney (JCP) who followed up record Q4 results with downside Q1 guidance. Q4 earnings fell 13% YOY and management guided Q1 EPS below consensus estimates.
Less money for Domino's Pizza, they reported lower Q4 earnings as the pizza delivery chain's marketing and promotions failed to take off.
Higher costs led several store operators to adopt cost cutting measures, same-store sales, fell 4.4 % in Q4, revenue fell 4.8 %
Many times in the last two years, we have beat the drum on the danger in the debt markets vis a vis derivatives. The media is just now focusing on this issue.
The effects on REIT's, homebuilders, thifts & loans and the overall financial sector cannot be dismissed with the wave of a hand, as trivial.
Aside from homebuilding creating 40% of new jobs since 2000, the "money shuffling" sector accounts for the majority of revenue and profit generation in our "vapor" economy.
What do you mean by "vapor" oh Nattering One? I will beat this drum again, we have become experts at making money "out of thin air" with little investment in capital equipment and no tangible end product.
I refer to this as "money shuffling" through the financial sector, i.e. transaction fees, brokers, electronic services. A meltdown in the debt markets would seriously damage not only our economy, but the global picture as well.
And the band played on...as the 3rd longest bull run in history continues with new multi year and all time highs across the board.
Dollar index still range bound 84-85, crude up from $57 to over $61 as Nigerian rebels, refinery fires and Cheney vs Iran were called into action to spook the herd.
Gold rising from $673 to $690 and headed for $900, as bonds rallied lowering the 10 yr 3 bps to 4.68.
Volatility still low, VIX still range bound 10 to 11.5, keep an eye on any sudden movement up or down, this might indicate an impending peak and precipice.
As predicted last week, "the BOJ meets WEN, a 25 bps raise would drive markets slightly down before the next surge up."
Also, "A retest of 1445 might be in order before the next surge up to 1465 area.... Perhaps a drop when the RUT hits 832, now at 827. Watch it."
This week, the SP500 went into a sideways consolidation, rising to 1461 then dipping to 1448 over the last 2 days AFTER the RUT went up to touch 830 and the BOJ raised 25 bps.
Next week, a swift fall and closing below 1440 for 2 days would signify a change in market direction.
We sense, perhaps the beginning of another 50 or 60 point surge from 1450 to 1500-1520 on the SP500.
Much like rust never sleeps, global hyperliquidity and currency debauchery never rests.
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