Yesterday we looked at the week that was. Today, we preview the upcoming pre-holiday week.
Its a relatively light week in terms of earnings or economics releases: Same Store Sales on Tuesday, Mortgage Apps on Wednesday. Thursday brings Durable Goods, Jobless Claims, and New Home Sales, with Existing Home Sales following on Friday. Anecdotally, we hear from many R/E agents that the Spring selling season has been a dissappointment. Expectations remain muted for any improvement in Housing or Durable Goods data.
A few noteworthy speeches this week: Fed Chair Ben Bernanke speaks on Capitol Hill Tuesday — since there is no Q&A, there is less of a chance of any market moving surprises. Earlier that day, Treasury Secretary Henry Paulson hosts a meeting of the U.S.-China Strategic Economic Dialogue, with China Vice Minister Wu Yi, also in Washington D.C.
The post expiration, pre-holiday week is likely to see decreasing trading volumes — especially as we get closer to the 3 day weekend. Many traders scoot off early to get a jump on the traffic, sun and surf. The Bond Market closes early on Friday.
Today’s fascinating collection of forward looking articles will help you get ready for the coming week. Start clicking:
INVESTING & TRADING
• Next stop: Dow 21,000: In the next four years, well before the 2012 presidential election, it would
not surprise many professionals, including this one, to see the famed market
gauge advance as much as 60% higher, to 21,000. (MSN Money)
(No, I haven’t turned into a raving bull — that excerpt is the voice of Jon Markman, not me!)
• A Street Pioneer Fears a Blowup: Like many pessimistic observers, Richard Bookstaber thinks financial
derivatives, Wall Street innovation and hedge funds will lead to a
financial meltdown. What sets Mr. Bookstaber apart is that he has spent
his career designing derivatives, working on Wall Street and running a
hedge fund. (free Wall Street Journal)
• The Investor’s Guide to Global Warming (Marketwatch)
• How To Beat The Stock Market: Buy Companies With High Customer Satisfaction Scores. Perhap’s this explains what happened to Dell’s share price.
• Too funny: Michael Kinsley on the M&A history of Avis
• The Value of the Dollar: Barron’s discusses a reort on the ever-falling greenback, which notes "vigorous monetary
inflation manifest in the 30% decline in the value of the dollar in the
foreign-exchange markets since 2002 is seeping inexorably into the
economy: ‘Prices paid in the U.S. for goods, services, financial
assets, real-estate assets and natural resources have risen in recent
years significantly more than population growth and organic demand.’ (If no Barron’s, go here)
•CNN Money looks at the recent M&A activity:
• 5 Companies Microsoft Should Buy:
it can’t be easy sitting around with $28 billion in cash burning a hole
in your pocket. So what can Microsoft do? Here’s a list of five
companies worth its money — none of them may make perfect sense, but
they all make a lot more sense than buying Yahoo!. (TheStreet.com)
• Fund managers expect bear to growl, not bite:
While stocks may still have room to run, several top mutual-fund
managers say they’re preparing for a market slowdown but aren’t bracing
for lows seen in 2002. (Marketwatch)
• Did Merrill, Morgan Stanley Overpay? Some of Wall Street’s biggest players bet heavily on the subprime
mortgage sector last year just as it started to head south. Now,
investors are questioning whether the firms overpaid to get into a
sector that has become less profitable. (Wall Street Journal)
The Wall of worry continues to build:
• Easter Bonnets Turn Retail Sales Inside Out: Every piece of news suggesting the
U.S. economy is weak gets dissected, parsed, interpreted and
spun as a positive. Business inventories probably fell in the first quarter, or
else they rose at a slower pace than the prior one, lopping
about 1 percentage point off growth. Not to worry: Inventories will go up in the current
quarter. What if final demand stays soft? There are hints that the
American consumer is finally cutting back on his spending.
Retail sales fell in April for the first time in seven months.
Chain stores had their worst month in at least 27 years. (Bloomberg)
• How We Learned to Stop Worrying (so much) and Love “Da Bomb”
Bill Gross writes: "The ascendance and dominance of capital vs. labor.
Add a billion or so potential workers to the global labor force, blend
in a technology S curve acceleration, combine these with deregulation,
lower taxes, and free trade, and you have a recipe for accelerating
returns to capital and diminishing returns to labor." (PIMCO)
• Pressure on Home Prices ? The next leg down in housing prices is just beginning.
• The Forgotten Resets: via Credit Suisse, comes this ARM reset schedule covering the next 5 years. Fascinating.
• Generational Tensions: The sons and daughters of some iconic Republicans (Ike! T.R.!) are contemplating crossing the aisle. Not the typical politics-as-usual.
TECHNOLOGY & SCIENCE
• Online retail has years to grow, survey says:
E-commerce is moving "full steam ahead" and is years away from
saturation, with double-digit growth expected for several years,
according to an online-retail industry report published Sunday. (C/Net)
• How to Be a Star in a YouTube World:
There are millions of people trying to get noticed on the Web. And
success in the new-media world depends on a lot of the same things as
in the old-media universe. Just as in Hollywood, becoming a hit on the
Web takes talent, effort, timing and some luck. Sex appeal is valuable,
getting noticed by the "mainstream" press helps, but most important is
the way Internet stars exploit the power of the Web. (free Wall Street
• The Truth In Ad Sales Given all of the online advertising takeovers, we bring you this week’s very cheeky take on the advertising biz. (YouTube)
To an Anglophile music lover, how could I not be looking forward to checking out HBO’s Flight of the Conchords! Enjoy the rest of your weekend.