Sunday, June 18, 2006

Market week preview

Last week I guessed that the market would break up or down around Wednesday and once again that was spot on. Wed morning I said to get back in and if you followed that you made several percent over the market in a couple days. After getting out before a 4% decline by calling “move to cash” on Sunday, June 4th I have to take a moment to strut. Thank you for indulging me, an analyst rarely gets such instantaneous feedback from the market.

Okay, the bragging is done. This week is very light on economic reports and news. We have some housing information Monday and some Jobless claims and Durable Goods Orders numbers later in the week but as long as they are within reasonable ranges none of these numbers should really change the market direction. I am hopeful that the market will maintain from last week, and if the earnings reports hold up we could see a continued market build.

Monday, June 19th

  • Earnings reports: KMX, CC, CWST

Tuesday, June 20th

  • Building permits for May are reported 8:30am EST and are expected to be weaker than previous (previous 1.97million, projected 1.96 million). This reduction might provoke a few articles (especially since we’re heading into summer which makes this unusual) but it really isn’t a surprise.
  • Housing Starts for May report at 8:30am EST. The predictions are for a slight rise from previous 1.85 million to 1.86-1.9 million range. Since we are headed into the prime summer building season one would expect an increase and any weakening would be significant. The housing sector is slowing down, though, so I wouldn’t be surprised to see unpleasant news here. To be honest, though, I don’t try to project this number because the data collection has so many tweaks and details that there is a lot of noise in this number.
Wednesday, June 21st

  • Weekly Crude inventories reports at 10:30am EST. Previous numbers showed inventories down about 1 million barrels. Anything within the range of plus or minus a million won’t make a mark in the market.
  • Earnings reports: COGN, XRTX, JBL
Thursday, June 22nd

  • Initial jobless claims report at 8:30am EST. Previous numbers were 295,000 and expected is up at 315,000. If this number is extremely high it may prompt concerns of a downturn.
  • Leading Indicators report at 10:30am EST for May. Previous numbers were down 0.1%, expectations for this report are down 0.4% to 0.6%. Recent changes in the calculation of the index throw off my predictions but I don’t know that it will be as bad as expected. I am not going on record with a prediction for this one, though – I’d rather keep my good record going with my correct inflation calls recently.
  • Earnings reports: GTK, MU, INTV, SNX, SMOD, SLR, EGLS, ORCL, TEK, QTWW

Friday, June 23nd

  • Durable Orders for May report at 8:30am EST. Previous growth was down a depressing -4.4%. Expected value for this report is -0.5%, although a lot of that is because Boeing is a large part of this number and they had a really amazing sales year last year. I expect that without transportation the number will be 0.6% or higher (that’s actual growth versus a forecast of shrinking, yup)! I think this number may be baked into the market already though. I wouldn’t worry even if this number looks bad, the run-up in defense and transport in the last couple years make it almost impossible for this number to look strong. The good news is that many of those orders from the last few years won’t be delivered until this year or next, so the cash is still coming in.
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Anonymous Anonymous said...


Hope all is well.

You might find a long (4 part) post about asset allocation and sector rotation I put up on the Yahoo Dow Message board of interest. It's four messages long as a chain plus an addendum. It starts as Msg 38143, the addendum is Msg 38150. Here's a link for ease.

Cheers !

2:20 PM  

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