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Week in Review: September 28, 2007


A look back at the week that was...


Market Recap

The Four Sisters digested its gains after last week's Fed fueled rally. Markets were range bound with the SPX trading in between 1507 and 1532. As mentioned in last week's WIR, the bulls have the upper-hand to finish the year on a strong note. For this sentiment to change, the SPX would need to break its short-term support level of 1505 and cause panic to return to the markets. Given the improvement in the credit markets and financial names catching bids the probabilities remain low for this to happen. Nonetheless, the 1505 level is important in regards to a change in sentiment.

The US dollar continued its record slide this week as commodities continued their climb. Gold set a new 27 year high hitting an intraday high of $752.50 an ounce. As more investors begin to question the true purchasing power of the US dollar, gold will become a more attractive asset. Any pullbacks should be used as buying opportunities.

The Four Sisters Performance

ETF Watch

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Top Headlines

Consumer Confidence dropped sharply this month as it fell to 99.8, down from an August number of 105.6. This level marks the lowest Consumer Confidence since November 2005. (9/25)

Durable Goods orders fell 4.9% in the month of August as airplanes and other transports dropped 11.2% for the month. The market reacted to the upside after the report due the possibility of further Fed rate cuts on indications of slowing economic growth and subsequent lowered inflation pressure. (9/26)

General Motors (GM) found itself in turmoil as 74,000 United Auto Workers left GM plants in protest on Monday. After two days of strike the automaker and UAW reached an agreement. (9/26)

The housing market took another hit as New Home Sales plunged 8.3% in August. A 21.2% drop in sales over the past year has put the housing market at its slowest sales rate since June 2000. (9/27)

Consumer Spending reported its fastest gain in two years as the figure rose 0.6% for the month of August. Another key economic indicator, core consumer price inflation, was up 0.1% in August. This puts core inflation at 1.8% for the year, marking its lowest level since 2004. (9/28)

Earnings Snapshot

Lennar (LEN) saw 3Q revenues fall 44% in their earnings release this week. Despite the slowing housing market, the company plans to adjust pricing to satisfy the current market conditions. (9/26)

Bed Bath & Beyond (BBBY) saw its EPS climb to 55 cents for the 2Q, compared to 51 cents a year ago. This earnings increase was accompanied by a 10% increase in sales for the quarter. (9/26)

Rite Aid (RAD) lowered its guidance after reporting a net loss of $69.6 mln for the 2Q. Despite a 53.9% increase in revenues, shares tumbled after the report on Thursday morning. (9/27)

Accenture (ACN) reported record 4Q results this week. Along with a 29% increase in revenue for the quarter, the company announced that it will declare a 42 cent per share dividend, a 20% increase over their previous dividend. (9/27)

Market Movers: Winners & Sinners

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