Weekly Outlook

Click here for the Wall St. Week Ahead by Reuters.

Click here for Stocks in Focus for Monday by MarketWatch.com.

There are a few economic reports of note and some significant corporate earnings reports scheduled for release this week.

Economic reports for the week include:

Mon. – None of note

Tues. – Weekly retail sales reports, IDB/TIPP Economic Optimism Index, Monthly Budget Statement, Pending Home Sales

Wed. – Weekly EIA energy inventory report, weekly MBA Mortgage Applications report, Producer Price Index, Advance Retail Sales, Business Inventories

Thur. – Consumer Price Index, Empire Manufacturing, Initial Jobless Claims, Philly Fed

Fri. – Net Long-term TIC Flows, Industrial Production, Capacity Utilization

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

Mon. – Tyson Foods(TSN), Blackstone Group(BX), Bob Evans Farms(BOBE), Echo Star Communications(DISH)

Tues. – Fossil Inc.(FOSL), Home Depot(HD), Wal-Mart Stores(WMT), Sears Holdings(SHLD), Pilgrim’s Pride(PPC), PEP Boys(PBY), Big Lots(BIG), TJX Cos(TJX)

Wed. – Network Appliance(NTAP), Sina Corp.(SINA), Applied Materials(AMAT), Macy’s Inc.(M), Hilton Hotels(HLT), First Data(FDC), Long Drug Stores(LDG)

Thur. – Tyco International(TYC), Nuance Communications(NUAN), Suntech Power(STP), Williams-Sonoma(WSM), Green Mountain Coffee(GMCR), Hillenbrand Industries(HB), Intuit(INTU), PetSmart(PETM), Autodesk(ADSK), Salesforce.com(CRM), Kohl’s Corp.(KSS), LDK Solar(LDK), Agilent Technologies(A), JC Penney(JCP), Shaw Group(SGR), Starbucks(SBUX), BEA Systems(BEAS)

Fri. – JM Smucker(SJM), AnnTaylor Stores(ANN), Beazer Homes(BZH), Jack in the Box(JBX)

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

Mon. – (CWST) analyst day, (TSN) analyst meeting, (SIMG) analyst meeting, (UFI) investor meeting, Citigroup Biotech Conference, Oppenheimer Digital Media Conference, Deutsche Bank Gaming Forum, Piper Jaffray Industrial Growth/Business Services Symposium

Tue. – (TSS) analyst presentation, (MCD) analyst meeting, (AMP) analyst meeting, (ITT) analyst day, CSFB Healthcare Conference, Piper Jaffary Global Internet Summit, Deutsche Bank Gaming Investment Forum, Morgan Stanley Global Consumer & Retail Conference, Piper Jaffray Industrial Growth/Business Services Symposium, UBS Global Tech and Services Conference, Goldman Sachs Global Shipping Conference, Bear Stearns SMid Cap Conference, Merrill Lynch Banking & Financial Conference

Wed. – (SE) analyst meeting, (SMOD) analyst meeting, (TLM) analyst meeting, (LEG) analyst meeting, (LXK) analyst day, (PCL) analyst day, (QCOM) analyst meeting, (UFI) investor meeting, (SE) analyst meeting, (GWW) analyst meeting, (CSAR) analyst meeting, Morgan Stanley Global Consumer & Retail Conference, CSFB Insurance & Asset Management Conference, Merrill Lynch Banking & Financial Services Investor Conference, CSFB Healthcare Conference, Stephens Investment Conference, Bear Stearns SMid Cap Conference, Piper Jaffray, UBS Global Tech & Services Conference

Thur. – (IWOV) analyst meeting, (SRDX) analyst meeting, (HAS) analyst meeting, (SCHW) business update, Morgan Stanley Global Consumer & Retail Conference, UBS Global Tech & Services Conference, CSFB Insurance & Asset Management Conference, Bank of America Energy Conference, CSFB Healthcare Conference, Merrill Lynch Banking & Financial Services Conference, Stephens Investment Conference

Fri. – Bank of America Energy Conference, CSFB Insurance & Asset Management Conference, (GIB) investor day

BOTTOM LINE: I expect US stocks to finish the week mixed as bargain-hunting and short-covering offset mixed economic data and earnings reports. My trading indicators are giving mostly bearish signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

S&P 500 1,453.70 -3.6%*

Click here for the Weekly Wrap by Briefing.com.

Weekly Scoreboard*

Indices
S&P 500 1,453.70 -3.6%
DJIA 13,042.74 -4.01%
NASDAQ 2,627.94 -6.41%
Russell 2000 772.38 -3.34%
Wilshire 5000 14,645.14 -3.59%
Russell 1000 Growth 601.40 -4.38%
Russell 1000 Value 796.58 -2.79%
Morgan Stanley Consumer 729.57 -1.03%
Morgan Stanley Cyclical 995.16 -4.65%
Morgan Stanley Technology 616.64 -8.35%
Transports 4,603.92 -4.01%
Utilities 524.27 -.12%
MSCI Emerging Markets 155.43 -3.28%

Sentiment/Internals
NYSE Cumulative A/D Line 65,194 -5.6%
Bloomberg New Highs-Lows Index -823 -317.77%
Bloomberg Crude Oil % Bulls 36.7 -38.3%
CFTC Oil Large Speculative Longs 251,944 +2.3%
Total Put/Call 1.08 -6.09%
NYSE Arms .86 -22.52%
Volatility(VIX) 28.50 +23.86%
ISE Sentiment 118.0 -13.24%
AAII % Bulls 36.19 -19.06%
AAII % Bears 51.43 +41.02%

Futures Spot Prices
Crude Oil 96.20 +.62%
Reformulated Gasoline 245.60 +.93%
Natural Gas 7.88 -6.31%
Heating Oil 261.25 +1.93%
Gold 834.0 +3.22%
Base Metals 238.19 -3.11%
Copper 314.60 -5.71%

Economy
10-year US Treasury Yield 4.21% -10 basis points
4-Wk MA of Jobless Claims 329,800 +.6%
Average 30-year Mortgage Rate 6.24% -2 basis points
Weekly Mortgage Applications 670.60 -1.63%
Weekly Retail Sales +2.1%
Nationwide Gas $3.08/gallon +.14/gallon
US Heating Demand Next 7 Days 27% below normal
ECRI Weekly Leading Economic Index 140.10 +.5%
US Dollar Index 75.39 -1.23%
CRB Index 354.54 +.27%

Best Performing Style
Small-cap Value -2.34%

Worst Performing Style
Large-cap Growth -4.4%

Leading Sectors
Hospitals +1.93%
HMOs +.43%
Utilities -.29%
Gaming -1.11%
Alternative Energy -1.29%

Lagging Sectors
Networking -7.06%
Internet -8.01%
Software -8.02%
Computer Hardware -9.4%
Airlines -11.7%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Lower into Final Hour Despite Gains in Financial Shares

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Software longs, Internet longs and Computer longs. I have not traded today, thus leaving the Portfolio 75% net long. The overall tone of the market is negative today as the advance/decline line is lower, most sectors are falling and volume is heavy. Investor anxiety is above-average. Money market funds reported net inflows soared by $63.1 billion, bringing assets in the sector to $2.97 trillion. According to Intrade.com, the odds of a U.S. recession next year are down to 41.7% vs. 58.9% in September. Copper is falling another 2% today and has been moving almost straight down for a month. The metal remains at extremely speculative levels due to the explosion in hedge and commodity funds, and its decline does not indicate a recession is forthcoming, in my opinion. Fed fund futures now imply a 96% chance for another 25-basis-point cut at the December meeting vs. 90% yesterday and 68% one week ago. The S&P 500 is back near session highs, boosted by the financials heading into positive territory. The (XLF), which is the second most-heavily shorted security on the AMEX, is now 1.4% higher on the day. There are rumors that HUD may make a statement that would benefit (CFC), and the stock is surging 5.5% to session highs. Nasdaq breadth is -700, which isn't bad at all considering the 35-point loss in the index. I expect the bears to try and bring us back down over the next 20 minutes. If they are unable to gain traction, we should see some broad market short-covering into the close. I expect US stocks to trade modestly higher into the close from current levels on bargain-hunting and short-covering.

Trade Deficit Shrinks Again as Exports Soar to Another Record, Import Prices Boosted by Oil, Confidence Low

- The Trade Deficit for September shrank to -$56.5 billion versus estimates of -$58.5 billion and -$56.8 billion in August.

- The Import Price Index for October rose 1.8% versus estimates of a 1.2% gain and a downwardly revised .8% increase in September.

- The Preliminary Univ. of Mich. Consumer Confidence Index for November fell to 75.0 versus estimates of 80.0 and a reading of 80.9 in October.

BOTTOM LINE: The US trade deficit unexpectedly narrowed in September as exports soared to another record, Bloomberg reported. Exports boomed to new record highs for the seventh consecutive month. Exports rose to $140.1 billion as almost all major categories, including foods, raw materials, automobiles and consumer goods registered gains. The trade deficit will likely continue to improve over the intermediate-term.

Prices for goods imported into the US jumped more than forecast in October as oil prices neared a record, Bloomberg reported. Prices excluding petroleum, which still includes nat gas, food and metals, rose .5%. Excluding petroleum, prices rose 3.2% over the last 12 months. The cost of imported capital goods fell .1% versus unch. the prior month. Costs for consumer goods excluding autos rose .1%. I expect import price increases to subside over the coming months and move back to below-average levels over the intermediate-term.

Confidence among US consumers fell more than expected in November, Bloomberg reported. The Expectations component fell to 64.7 versus 70.1 the prior month. The Current Conditions component fell to 91 versus 97.6 the prior month. Consumers expect inflation to rise a below average 2.9% over the next five years. I still expect Consumer Confidence to head back near cycle highs over the intermediate-term as housing fears subside, stocks make new record highs, unemployment remains historically low, wages continue to substantially outpace inflation, gas prices fall, the dollar firms and inflation decelerates further.