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Week in Review

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A look back at the week that was...

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Market Recap

The Four Sisters took a pause this week after an impressive two and half month run. Both the DJIA and S&P 500 were able to hold their respective 20 day moving averages after Greenspan's warning and Thursday's reversal. New home sales for April surged by an unexpected 16%, further giving evidence to the Fed's belief that the U.S. economy will pick up steam as we go into the second half of the year. However, markets reversed on this housing data because it now appears the Fed will not be cutting interest rates in the near future as many market pundits believed.

I believe for another leg higher to occur, the financial sector must take out its old highs. As stated two weeks ago, "The banks and broker/dealers still remain underwater and we believe for this market to undertake another sustained advance, the financial complex must confirm this move higher by taking out their old highs." With brokers reporting their earnings in three weeks, the financials may stay in check for the short term. Enjoy the holiday weekend and be safe.


The Four Sisters Performance




ETF Watch




Top Headlines

Alcan's (AL) board unanimously recommended that shareholders reject the $27 billion bid from Alcoa (AA) sending both stocks higher on thoughts that either could receive a bid from another company. (5/22)

Stocks sold off on Wednesday following former Federal Reserve Chairman Alan Greenspan's comment that he was feared a "drastic correction" in the Chinese stock market. (5/23)

The Commerce Department reported that new order for durable goods rose 0.6% during April helped by strong demand for metals and capital equipment. (5/24)

New-home sales rose an unexpected 16% during April to a seasonally adjusted annual rate of 981,000 homes compared to the expected pace of 865,000. (5/24)

Jobless claims rose for the first time in six weeks but the four-week average dropped to their lowest level since February 2006. (5/24)

Alltel (AT) agreed to be taken private by TPG Capital and GS Capital Partners in a deal worth $27.5 bln. The deal is the largest buyout in the history of the U.S. telecommunications industry. (5/21)


Earnings Snapshot

Lowe`s (LOW) reported a first-quarter profit down 12% on a weak housing market despite gaining market share during the quarter. (5/21)

Staples (SPLS) reported 12% growth in first-quarter earnings on strong international sales despite poor domestic performance. The company issued earnings guidance to the low end of previous estimates. (5/22)

Toll Brothers (TOL) reported quarterly net income of 22 cents versus consensus estimates of 25 cents on a $72.9 mln write-down. The company refused to provide guidance due to their uncertainty about the direction of the housing market. (5/4)


Market Movers: Winners & Sinners

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No positions in stocks mentioned.

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