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Week in Review

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A look back at the week that was...

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Market Update

It was an up and down week on Wall Street as the Bulls and the Bears defended their "lines in the sand" which are 1450 and 1480 respectively. As stated in last week's WIR, the Bulls were on the one-yard line and managed to defend the SPX's 200dma (1450) with a last minute rally Wednesday afternoon.

Soft economic data, namely Friday's non-farm payroll report, was the catalyst for the USD to fall against its major counterparts and give a lift to precious metals. Treasuries rallied on the soft data pushing the yield on the 10-year to nearly a two and half month low.

Earnings still remain fairly good, but they have taken a backseat to the more pressing issue of credit market turmoil. The question still remains if the Bears can apply enough leverage to crack this latest credit cycle and ultimately end the long-term bull market. An important tell will be the VIX and if the Bears can stir up enough panic then the VIX most certainly will explode.


The Four Sisters Performance




ETF Watch


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Top Headlines

The Labor Department reported a 92k rise in new jobs for the month of July, below the consensus estimate of 135k. This reduction in new hires caused the unemployment rate to inch up to 4.6%. (8/3)

Consumer Confidence was reported at 112.6 this week, marking it`s highest level since September 11, 2001. This confidence was fueled by overall improvement in business conditions and the job market. (7/31)

Problems in the sub-prime mortgage market continued this week as Accredited Home Lenders (LEND) reported doubts over it`s ability to survive the recent volatility in the market as their shares plummeted over 40%. American Home Mortgage (AHM) was forced to discontinue most of its operations. (8/2)

The ISM Manufacturing Index dipped in the month of July, but still is in an expansionary phase as orders from overseas remain robust. (8/1)

Core PCE Inflation rose by 0.1% in June for the fourth consecutive month. This put core inflation at 1.9% for the past year, just inside the Fed`s comfort zone. (7/31)


Earnings Snapshot

Sun Microsystems (SUNW) reported a quarterly profit of $329 million as it continues its turnaround story fueled by cuts in operating expenses and component costs.

Verizon (VZ) reported a 4.5% increase in second quarter earnings before the bell on Wednesday. This was due in part to wireless and broadband and local-phone service growth.

Disney (DIS) reported higher than expected third quarter income of $1.18 billion driven by lower production costs and strong sales in their ABC broadcasting division.

General Motors (GM) reported second quarter profits of $891 million in contrast to a loss of $3.4 billion a year ago. This was highlighted by net income of $236 million in Europe , compared to $143 million a year ago.


Market Movers: Winners & Sinners


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No position in stocks mentioned.

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