Week in Review
Happy Holidays Minyans!
The Four Sisters faced selling pressure for most of the week on renewed concerns of inflation and a tepid outlook on the U.S. economy following FedEx's (FDX) outlook. Large cap stocks continue to outperform small caps during this sell-off as money flows away from speculative issues. The Eldest Sister, the DJIA, and the S&P 500 managed to hold above their respective 20-day moving averages, but the NDX and Russell came down to their 50-day.
As we enter the New Year, with indices close to multi-year highs, my firm remains cautious as to how long equities can keep climbing without some type of correction. One troublesome trend is the divergence between the DJIA as it breaks out to new highs while the Transports fail to confirm the move. The technical breakdown of the Transports is something to watch and could signal a possible retest of the Four Sisters' late summer breakout.
Have a wonderful holiday – best wishes for '07!
The Four Sisters Performance
The Commerce Department reported that consumers picked up their spending in the month of November by the largest amount in four months. Durable goods orders also came in higher than expected after October's steep drop. (Fri 22nd)
Media conglomerate News Corp. (NWS) will swap its controlling stake in satellite TV broadcaster DirecTV Group (DTV) with Liberty Media in return for
U.S. core producer prices, which exclude food and energy, rose by the most in nearly three decades mostly due to vehicle prices. Stripping autos aside, the rise was a moderate 0.2%. Along with this report, housing starts rebounded in November giving homebuilders a temporary sigh of relief. (Tue 19th)
Oil prices were under pressure later in the week over concerns of a slowing U.S. economy and mild winter temperatures. (Fri 22nd)
The nation's largest drugstore chain Walgreens (WAG) reported a steep jump in quarterly profit as prescription sales climbed 19%. (Fri 22nd)
Research in Motion (RIMM), the maker of the Blackberry, impressed investors with subscriber growth and top line sales. (Thurs 21st)
Oracle (ORCL) met profit expectations, but reported sales of new software licenses were less than expected. Shares sank almost 5% on the news. (Tue 19th)
Electronics retailer Circuit City (CC) swung to a 3rd quarter loss as its profit margins were hurt from deep discounts on flat panel TVs and computer hardware. (Tue 19th)
FedEx (FDX) gave a tepid outlook over concerns on a slowing U.S. economy and higher fuel costs. (Wed 20th)
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