Sunday, March 13, 2005

Weekly Outlook

There are a number of important economic reports and some significant corporate earnings reports scheduled for release this week. Economic reports for the week include:

Mon. - None of note
Tues. - Empire Manufacturing, Advance Retail Sales, Business Inventories, Net Foreign Security Purchases, NAHB Housing Market Index
Wed. - Current Account Balance, Housing Starts, Industrial Production
Thur. - Initial Jobless Claims, Leading Indicators, Philadelphia Fed.
Fri. - Import Price Index, Preliminary Univ. of Mich. Consumer Confidence

Some of the more noteworthy companies that release quarterly earnings this week are:

Mon. - Comverse Technology(CMVT), Electronics Boutique(ELBO), OfficeMax(OMX)
Tues. - Albertson's(ABS), Lehman Brothers(LEH), Wynn Resorts(WYNN), Liberty Media(L)
Wed. - Bear Stearns(BSC), General Mills(GIS)
Thur. - Adobe Systems(ADBE), AnnTaylor Stores(ANN), Barnes & Noble(BKS), Cintas Corp.(CTAS), EchoStar Communications(DISH), FedEx Corp.(FDX), Goldman Sachs(GS), Morgan Stanley(MWD), Nike Inc.(NKE), Jabil Circuit(JBL)
Fri. - None of note

Other events that have market-moving potential this week include:

Mon. - CSFB Global Services Conference, SG Cowen Health Care Conference, Fed's Yellen speaks
Tue. - SG Cowen Health Care Conference, CSFB Global Services Conference, Merrill Lunch Chemicals Conference, Banc of America Consumer Conference, AG Edwards Energy Conference
Wed. - Banc of America Consumer Conference, SG Cowen Health Care Conference, CSFB Global Services Conference, AG Edwards Energy Conference, Merrill Lynch Chemicals Conference
Thur. - Banc of America Consumer Conference, Semi Book-to-Bill, AG Edwards Energy Conference, SG Cowen Health Care Conference
Fri. - None of note

BOTTOM LINE: I expect US stocks to finish the week modestly lower on continuing worries over higher interest rates and technical deterioration. Investors will likely pay closer attention than usual to the report on Net Foreign Security Purchases due to recent worries over talk of foreign Central Bank "diversification." The Import Price Index on Fri. will also garner attention and is likely to exceed expectations of a .7% increase due to the recent rise in commodities prices. Homebuilding stocks may continue to underperform on worries over rising long-term interest rates and disappointing fundamentals due to one of the wettest winters in US history. I will look to accumulate shares in this group on any substantial pullback from current levels as I view these problems as short-term in nature. Overall, I expect US stocks to trade mixed-to-weaker over the next few weeks until commodity prices and long-term interest rates begin to stabilize. My trading indicators are mostly bearish and the Portfolio is Market Neutral(% Long - % Short=0) heading into the week.

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