Week in Review
Same time same place next week...
2007 started with a wild day on Wall Street. Early morning economic reports lifted the "Four Sisters" behind stronger factory activity and lower oil. However, the markets were rattled in the afternoon by the Beige Book's concern over a greater than anticipated economic slowdown. "Hard Landing" fears were put to rest later in the week after Friday's strong labor report. The U.S. dollar ticked higher while commodities, namely gold, got hammered. However, we feel this week's selling in the commodities could be exacerbated by liquidity concerns and margin calls.
As the "Four Sisters" face pressure this week, levels of interest on all indices include: DJIA – 12,340; S&P500 – 1406; NDX – 1740; and lastly RUS – 778. These technical areas of interest will be highlighted in the upcoming 'Jo.
If the first week is representative for the month of January, then it will be interesting to see if this volatility continues throughout the year.
Best wishes in '07 and stay tuned for the release of our new website in the coming days.
The Four Sisters Performance
The Labor Department reported a much stronger than anticipated job market for the month of December with 167,000 additions to the payroll. The unemployment rate still remains at a historically low 4.5%. (Fri 5th)
Cell phone maker Motorola (MOT) lowered its 4th quarter outlook sending shares to new 52 week lows. (Fri 5th)
The ISM reported that the service sector grew at a slower than anticipated pace in December relative to November. Moreover, factory orders for November slowed as well. (Thurs 4th)
Home Depot (HD) Chief Executive Officer Bob Nardelli resigned earlier this week amid criticism of the stock's poor performance and his lavish pay. (Wed 3rd)
Saddam Hussein's death sentence was carried out over the weekend. President Bush wishes the execution was performed with more tact and urged the Iraqis to fully investigate what happened during the hanging. (Thurs 4th)
Oil prices briefly dipped below $55 a barrel Friday before recovering. Warm weather in the contributed to high inventory levels of gasoline, heating oil, and diesel fuel. On Thursday alone, the sweet Texas Tea dipped 4.7%, the largest drop in a year and a half. (Fri 5th)
In the face of weak holiday sales for most of the industry, consumer electronics retailer Best Buy (BBY) and Circuit City (CC) reported strong sales in the month of December. (Fri 5th)
Constellation Brands (STZ), the world's largest wine maker, reported a modest 1% increase in quarterly profit. However, this missed estimates and shares were off 11% after the announcement. (Thurs 4th)
Healthways (HWAY) reported a 83% jump in profit for its fiscal first quarter. However, investors focused on the company's timid outlook for the future and sent the stock lower. (Thurs 4th)
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