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The Bunny Hop

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That's a whole heckuva lotta earnings!

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Good morning and welcome back to the critter attack. After a choppy and floppy week for the clan, the Minx ended where it began. We had gaps, earnings and a small dose of Beeks but when the fat lady sang, she had food in her cheeks. Fear not, ye faithful, for the rhyme will have reason as we're ready to start the real earnings season. Deep breath, some coffee and more caffeine still, for it's time to get rockin' for our race through the 'Ville.

It's hard to read too much into last week's holiday shortened session. We had a spate of fundamental appetizers that were good (Yahoo! (YHOO:NASD)), bad (Alcoa (AA:NYSE) and ugly (Nokia (NOK:NYSE). We had some decent economic news that served to embolden the economic recovery camp (despite continued concerns regarding the composition of the "blow out" payroll data) and, of course, we had continued concerns with developments overseas.

Thursday's trading encapsulated a dynamic that should become all too familiar in the months ahead. While that particular session was exacerbated by thinning ranks and pre-bunny terror jitters, the primary trading metrics were vying for investor's attention. Yes, earnings are widely expected to show healthy growth (17%+ year over year) but when increased geopolitical risk premiums are introduced, it makes for a much dicier overall equation.

While we can (but won't) debate the merits of our occupancy in Iraq, the focus (for purposes of the financial education) boils down to a) the presidential election and b) overall investor psychology. While history dictates that the Minx is bi-partisan, Wall Street firms have contributed almost five times as much to the Dubya campaign, a clear sign that the perception is that he's more market friendly. Thus, each "incident"--be it continued violence, international hostage situations or global terrorism--damages, on the margin, his effort. And, of course, from a much broader and more important human perspective, the delicate nature of the human psyche must be recognized and respected (particularly during the sentiment bubble).

Onward and upward, over 200 S&P companies will tell their tale this week and that should help mix the Minxy brew. Novellus (NVLS:NASD) will edge forward tonight, Johnson & Johnson (JNJ:NYSE), Merrill (MER:NYSE), Dow Jones (DJ:NYSE) and Intel (INTC:NASD) (among others) will dance tomorrow and a host of companies, including BankAmerica (BAC:NYSE), Delta (DAL:NYSE), Apple (AAPL:NASD), IBM (IBM:NYSE) and Sandisk (SNDK:NASD) will jump through Wednesday's hoop.

We power up today's ship to find marginally higher stateside futes (after sunny side up Easter eggs), a snoozin' Europe (lucky ducks), a higher Jinx (Nikkei up 1.2%) and better metals. The Minx, meanwhile is within spittin' distance of the all-important S&P 1150-1160 zone and the (relatively) tight corporate bond spreads bode well for an eventual test. For my part, I'm taking it light and tight until some mojo rises and stickin' true to my discipline.

Good luck today.


R.P.
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No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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