Weekly Outlook

Click here for The Week Ahead by Reuters
Click here for Stocks in Focus for Monday by MarketWatch

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

Economic reports for the week include:

Mon. - None of note

Tues. - Durable Goods Orders, Consumer Confidence, Richmond Fed Manufacturing, Existing Home Sales, weekly retail sales

Wed. - MBA Mortgage Applications, Preliminary 4Q GDP, Preliminary 4Q Personal Consumption, Preliminary GDP Price Index, Preliminary 4Q Core PCE, Chicago Purchasing Manager, New Home Sales, EIA energy inventory data

Thur. - Challenger Job Cuts, Personal Income, Personal Spending, PCE Core, Initial Jobless Claims, ISM Manufacturing, ISM Prices Paid, Construction Spending, Total Vehicle Sales

Fri. - Univ. of Mich. Consumer Confidence

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

Mon. - Marvel Entertainment(MVL), GlobalSantaFe(GSF), Forest Oil(FST), Nordstrom(JWN), Brocade Communications(BRCD), Marvel Tech(MRVL), Netease.com(NTES), XM Satellite Radio(XMSR)

Tues. - Papa Johns(PZZA), Human Genome Sciences(HGSI), Deckers Outdoor(DECK), Federated Dept. Stores(FD), Sirius Satellite(SIRI), El Paso Corp.(EP), Dynegy Inc.(DYN), Kenneth Cole Productions(KCP), Hansen Natural(HANS), Conseco(CNO), CBRL Group(CBRL), Target Corp.(TGT), AutoZone(AZO), AutoDeck(ADSK), American Power Conversion(APCC), Cablevision SystemsCVC), Rowan Companies(RDC), Harrah’s Entertainment(HET), Vornado Realty Trust(VNO), Public Storage(PSA), TXU Corp.(TXU), Radio Shack(RSH), HJ Heinz(HNZ)

Wed. - Dollar Tree Stores(DLTR), Dress Barn(DBRN), Eaton Vance(EV), Forest Oil(FST), Liz Claiborne(LIZ), Ltd Brands(LTD), Martha Stewart(MSO), PetSmart(PETM), Sprint Nextel(S), SPX Corp.(SPW), Station Casinos(STN)

Thur. - Ciena Corp.(CIEN), Del Monte Foods(DLM), Dell Inc.(DELL), EchoStar Communications(DISH), First American Corp.(FAF), Flour Corp.(FLR), Gap Inc.(GPS), General Motors(GM), Hovnanian Enterprises(HOV), Kohl’s Corp.(KSS), Mastec Inc.(MTZ), McDermott Intl.(MDR), Omnivision Tech(OVTI), Pall Corp.(PLL), Revlon Inc.(REV), Smithfield Foods(SFD), Sotheby’s(BID), Staples(SPLS), Viacom Inc.(VIA/B), Wild Oats(OATS)

Fri. - Genesco Inc.(GCO), Novell Inc.(NOVL), Trex Co(TWP)

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

Mon. - JPMorgan SMID Cap Conference, (HON) Investor Conference, (BAC) Investor Day, (SNDK) Analyst Meeting, Fed’s Bies speaking

Tue. - Goldman Sachs Tech Symposium, Merrill Lynch Communications Forum, CSFB Networking/Comm. Equipment & Opticals Conference, Bear Stearns Healthcare Conference, Bear Stearns Retail/Restaurants/Consumer Conference

Wed. - Merrill Lynch Communications Forum, Keefe Bruyette & Woods Regional Bank Conference, UBS Nat Gas & Utilities Conference, Goldman Sachs Tech Symposium, Robert Baird Business Solutions Conference, Jeffries Internet Conference, Bear Stearns Retail/Restaurants/Consumer Conference, (NVLS) Mid-quarter Update, (UTX) Analyst Meeting, (HD) Analyst Meeting, Fed’s Geithner speaking

Thur. - CIBC Israeli Tech Equities Conference, UBS Nat Gas & Utilities Conference, CSFB Truck Builders Conference, Robert Baird Business Solutions Conference, Bear Stearns Retail/Restaurants/Consumers Conference, Wachovia Homebuilding Conference, CE Unterberg Towbin Healthcare & Tech Days, Needham Displays & Emerging Electronics Conference, Goldman Sachs Tech Symposium, Keefe Bruyette & Woods Regional Bank Conference, (COF) Annual Investor Conference

Fri. - CE Unterberg Towbin Healcare & Tech Days, Wachovia Homebuilding Conference, Fed’s Bernanke speaking

BOTTOM LINE: I expect US stocks to finish the week modestly higher on mostly positive earnings reports, buyout speculation, lower energy prices, short-covering and stable long-term rates. My trading indicators are still giving bullish signals and the Portfolio is 100% net long heading into the week.

Market Week in Review

S&P 500 1,451.19 -.39%*



Click here for the Weekly Wrap by Briefing.com.

*5-day % Change

Weekly Scoreboard*

Indices
S&P 500 1,451.19 -.39%
DJIA 12,647.48 -.92%
NASDAQ 2,515.10 +.72%
Russell 2000 826.64 +1.37%
Wilshire 5000 14,667.34 -.07%
Russell 1000 Growth 574.74 -.04%
Russell 1000 Value 835.61 -.48%
Morgan Stanley Consumer 709.24 -.70%
Morgan Stanley Cyclical 970.76 +.58%
Morgan Stanley Technology 588.78 +.33%
Transports 5,158.93 +1.16%
Utilities 481.06 +1.27%
MSCI Emerging Markets 117.98 +.61%

Sentiment/Internals
NYSE Cumulative A/D Line 67,281 +1.0%
Bloomberg Crude Oil % Bulls 44.0 +84.8%
CFTC Oil Large Speculative Longs 168.334 -2.0%
Total Put/Call 1.42 +86.8%
NYSE Arms 1.31 +16.96%
Volatility(VIX) 10.58 +3.52%
ISE Sentiment 101.0 -19.20%
AAII % Bulls 53.85 +13.2%
AAII % Bears 22.31 -28.2%

Futures Spot Prices
Crude Oil 61.14 +4.0%
Reformulated Gasoline 176.31 +9.96%
Natural Gas 7.75 +4.97%
Heating Oil 175.05 +7.22%
Gold 685.70 +1.82%
Base Metals 241.40 +3.8%
Copper 285.10 +6.6%

Economy
10-year US Treasury Yield 4.67% -2 basis points
4-Wk MA of Jobless Claims 328,000 +.4%
Average 30-year Mortgage Rate 6.22% -8 basis points
Weekly Mortgage Applications -5.2%
Weekly Retail Sales +2.7%
Nationwide Gas $2.30/gallon +.05
US Heating Demand Next 7 Days 4.0% above normal
ECRI Weekly Leading Economic Index 139.30 +.29%
US Dollar Index 84.05 unch.
CRB Index 314.63 +3.56%

Leading Sectors
Semis +3.08%
Oil Service +2.51%
Disk Drives +2.03%
Steel +1.96%
Networking +1.40%

Lagging Sectors
I-Banks -1.55%
Drugs -1.56%
Airlines -2.0%
REITs -2.04%
Homebuilders -2.19%

One-Week High-Volume Gainers
One-Week High-Volume Losers

*5-Day Change

Stocks Continue Healthy Consolidation, Slightly Lower into Final Hour

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, most sectors are declining and volume is about average. The last seven trading days have seen the major averages make their daily lows early in the day and then surge modestly into the close. This is healthy consolidating action. My intraday gauge of investor angst has been elevated all day, considering the mild losses in the broad market. Given a stabilizing 10-year and a reversal lower in oil, I wouldn't be surprised to see day No. 8 of this type of action. I continue to believe cyclicals, which have been this years' best performers, will underperform for a few months as gains are digested, 4Q economic growth is revised lower and 1Q growth comes in below average rates. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, lower long-term rates, stable energy prices and more optimism in the technology sector.

Today's Headlines

Bloomberg:
- Home prices are likely to remain around current levels rather than drop, according to Morgan Stanley economists.
- US Treasuries are rising, pushing the benchmark 10-year note’s yield to a five-week low.
- Motorola’s(MOT) biggest shareholders increased their stakes in recent months, signaling confidence in a company that is grappling with the exit of its mobile-phone unit head and demands by activist Carl Icahn.
- Goldcorp. Inc.(GG), the world’s third-largest gold producer by market value, said gold production in 2007 will rise 54% to 2.6 million ounces.

Wall Street Journal:
- Nymex Holdings(NMX), which operates the NY Merc, palns a share sale that might raise more than $1 billion for its owners.
- A growing number of US doctors are using computer software and getting rid of nurses, receptionists and waiting rooms to curtail costs to maintain basic traditional practices on their own.
- Global terrorism has added legal tactics to its armory to gain an edge in national and international courts and a moral advantage over opponents, David Rivkin and Lee Casey wrote. An al-Qaeda training manual instructs detained fighters to claim torture or abuse, a tactic used by detainees at Guantanamo Bay to generate demands from European and other officials to close the camp and release the inmates. So-called “lawfare” is also being used to discredit the legality of US military action and undermine domestic support for the war on terror, Rivkin and Casey wrote.
- Vietnam’s stock market index rose 145% in 2006 and it’s up another 44% so far this year, bringing the total market value of quoted companies in the Southeast Asian country to more than $15 billion. That’s still not much, but it’s been enough to attract the attention of a swarm of hedge funds. The funds have been buying into Vietnam-oriented closed-end funds, pushing some premiums above 50%. Vietnam’s stock boom is, however, showing signs of a bubble and foreign purchases of stocks in Vietnam last month exceeded those in Taiwan.
- Some mutual fund companies are hunting for leveraged buyout candidates, a practice which lets small investors profit from the private-equity boom.

NY Times:
- Air conditioners in India and southern China, which use refrigerants banned in Europe and being phased out in the US, are causing the ozone hole to remain larger than it otherwise would.

Washington Post:
- US Democrats want to ask the Senate next week to repeal the 2002 resolution authorizing the ousting of dictator Saddam Hussein and use of force in Iraq.
- Former US President Bill Clinton got paid $40 million in speaking fees during the past six years, citing financial disclosure statements.

NY Daily News:
- Crime in NYC has declined 10% this month, which may make it the safest February since monthly tracking began 13 years ago, citing Police Commissioner Raymond Kelly.

Times-Picayune:
- Marathon Oil(MRO) announced the contractors who will expand its Garyville, Louisiana, refinery’s capacity by 180,000 barrels a day to 425,000 barrels a day.

Economic Releases

- None of note