Yesterday we reviewed the week that was; Today, we will preview the coming week.
The data for the week: Monday brings Existing Home Sales (and
usually some easily mockable commentary from the National Association
of Realtors); Tuesday is New Home Sales; Wednesday we get Durable
Goods. Thursday we see Corporate Profits, and the Final Q1 2007 GDP;
its the 3rd release, and so barring any surprise (0%?), its old news.
Friday is Personal Income and Outlays, NAPM, Construction Spending and
Beyond the regular data releases, however, 3 issues will dominate the week’s agenda.
Up first: The Federal Reserve meets Wednesday and Thursday. The is now focusing on some clouds in their forecasts, even as core inflation eases. They are widely expected to stand pat, makibng it a full year since they first "paused" in June 2006. Traders should be watching the statement for some hawkish language.
Next: Its Quarter’s end, and that tends to provide some lift. Look for fund manager’s favorites to get marked up as the second quarter goes into the record books.
Last: Friday at 6:00pm is the official launch of the iPhone. You will note that both yesterday and today are devoid of iPhone links, as it would be redundant. Let me instead point you to Apple’s guided tour – a 20 minute video on how to use the iPhone. Warning: Watching this video will generate feelings of geek lust, gadget envy and drool. I wasn’t planning on getting one but — damn! — the thing is the frickin’ future.
And our preview is all about the future: trading tactics, investing strategies, the articles, columns, blog links and video that reference what might be.
Fire up those mice! — its the linkfest preview.
INVESTING & TRADING
• Top performing newsletter more cautious about stock market:
Valueline, one of the top performing newsletters over the last 25 years
for risk-adjusted performance, adopted a more cautious outlook on
equities’ prospects. What makes this noteworthy is that the stock
analysis service has been steadfatedly bullish over the past 5 years.
• Is there ever anything more expensive than reaching for Yield? How Might Subprime Issues Unravel?
• Taking the Short Route:
The higher the market goes, the more people don’t believe it. Or at
least that’s one explanation for the 6% increase in short interest on
the New York Stock Exchange by mid-June, which the Big Board reported
late yesterday (WSJ Marketbeat)
• A Tale of Two Hedge Funds
"Let’s leave, for the moment, the question of the incredibly complex
and opaque layers of leverage, synthetic structures, derivatives swaps,
and mark-to-model valuations that transformed mere commonplace mortgage
loan write-downs into 23% losses of $600MM invested equity in
approximately 9 months on a fund created because its precursor fund,
which had dawdled along for two years or so generating a mere 1.0-1.5%
a month return, we are informed, just wasn’t good enough for the high
rollers who didn’t damn well put their money in hedge funds to earn
12-18% a year. This is really all about a bunch of subprime loans.
• Trade Like a Scientist: Stop relying on gut instinct and emotion, and start using testable trading strategies.
• Long-Term Rate Rise Prompts Strategy Shift
The recent bond market rout is prompting some fixed-income investors
and mortgage shoppers to rethink their strategies. Some investors have
begun buying bonds with longer maturity dates, taking advantage of
yields that moved higher as bond prices fell. Meanwhile, as rates on
30-year mortgages also jumped, some borrowers have begun taking another
look at adjustable-rate mortgages. Bank of America Corp., for instance,
says it’s seeing increased interest in hybrid ARMs that carry a fixed
rate for the first three, five, seven or 10 years and then adjust
annually. (free Wall Street Journal)
• Floyd Norris asks, Could An Underbid Win Dow Jones? (New York Times)
• How to spot retirement hogwash:
Some call it hogwash. Others call it B.S. No matter what it’s called,
those on the verge or already in retirement need to be on the lookout
for it. Older Americans must have their "detector" up when it comes to
the products and services being hawked by those in the so-called
retirement industry. (Marketwatch)
• Based on your emails, nearly all of you agreed with me: How come Home Depot has money for Buybacks, but not for any service?
• China: A clean-tech gold rush? Silicon Valley sees big market:
Silicon Valley companies, which first looked to China to manufacture
PCs and iPods, now see potential profit in its environmental meltdown.
They see opportunities to sell a vast range of clean-tech products and
services. Those include water filtration systems; green building
technologies that reduce energy use; processes to convert waste into
biofuels; better wind turbines; solar power technology; "smart" street
lights; and even software for energy companies to help manage
operations more efficiently. (The San Jose Mercury News)
The Wall of worry grows ever higher:
• A closer look at the LEIs: Is the Economy Poised to Expand?
• Debating the Reasons Behind Recent Jump in Bond Yields: The WSJ.com invited James D. Hamilton, an economics professor at the University of California, San Diego, and Mark Zandi, chief economist at Moody’s Economy.com, to discuss their takes on bonds and what hints about the economic future their yields may yield.
• Teen Behavior Offers Clue To Why Jobless Rate Stays Low Despite Slowing Growth: Teenagers have been falling out of the nation’s labor
force for years. Now, a particularly sharp drop in the number of
teenage job hunters may help explain an economic mystery: why the U.S.
unemployment rate has remained so low despite a sharp slowdown in
At last count, about seven million of the 17 million
Americans between 16 and 19 years old were working or looking for work.
That’s 41%, down from 43.5% a year earlier and well below more than 55%
two decades ago. Teens account for just 5% of the nation’s workers, but
the decline in their participation in the labor force has reduced the
number of people looking for work — helping to keep the unemployment
rate a low 4.5%. (free Wall Street Journal)
• Land Boom Resounds in Manhattan
The insatiable demand to acquire any parcel in Manhattan for
development has been supported by worldwide attention from many
different first-time purchasers from abroad," he went on. "Firms from
Dubai, Spain, Ireland, Great Britain, Italy, Israel, China, and
numerous other countries have come to this great city of ours and show
confidence that this local melting pot continues to be the best market
in the world to invest in."
• China Tops World In CO2 Emissions
China has overtaken the United States as the world’s top producer of
carbon dioxide emissions _ the biggest man-made contributor to global
warming _ based on the latest widely accepted energy consumption data,
a Dutch research group says. (AP)
• Call it Malthus’s Revenge! World oil supplies are set to run out faster than expected, warn scientists
Global demand for food and energy, AKA the necessities of life, could
outstrip global production in the not-too-distant future. “Scientists
have criticised a major review of the world’s remaining oil
reserves, warning that the end of oil is coming sooner than governments
and oil companies are prepared to admit.” (The Independent)
TECHNOLOGY & SCIENCE
• Haggling 2.0: For all its advances, the Internet has also given a
boost to a practice more commonly associated with flea markets:
Haggling for bargains. In the past, only avid shoppers would bother to
comparison shop four or five brick-and-mortar stores before buying an
outfit, and even today, matching competitors’ price discounts is mostly
relegated to the world of electronics. But now, search engines and
fashion sites listing retailer discount codes make it easier than ever
for consumers to work the system. See also How to Cash In On 0% Offers For Credit Cards (free Wall Street Journal)
• Beyond the Prius: There is disagreement about where hybrid technology is heading. Hybrid SUVs from Ford and General Motors (GM) have been slow sellers. And last week Honda said it would
no longer offer its bestselling Accord in a hybrid option, but would instead
introduce a low-emission diesel version in 2009. Honda reckons hybrid technology
is better suited to small cars, such as its Civic, used for short trips. (Economist)
The case of the disappearing Great Lake
Lake Superior, the world’s largest freshwater lake, has dropped to its
lowest level in 81 years. The water is 20 inches below average and a
foot lower than just a year ago. (USA Today)
MUSIC BOOKS MOVIES TV FUN!
• More Sex Please, We’re Economists: Freakonomics blog does a Q&A With economist Steve Landsburg. The Slate columnist is the author of More Sex Is Safer Sex: The Unconventional Wisdom of Economics; It received a lovely review from the Financial Times.
• A Rat With a Whisk and a Dream: Throughout the Pixar film Ratatouille, the characters work on dishes like steamed pike
with butter, braised fennel and heirloom potatoes or grilled petit
filet mignon with oxtail and baby onion ragout topped with truffled
bordelaise and shaved Perigord truffle. The idea was to create food so
authentic that people would leave the theater with an urge to cook and
eat. But it turns out that computer-generated food can look much
scarier than a computer-generated bug or car. (New York Times)
• Hysterical: Triumph the Insult Comic Dog at the Tony Awards: (it was on Conan, so it is marginally safe for work)
It looks like a lovely weekend in the Northast, where I am off to the beach for a few days to get prepared for the FOMC meeting.