Sunday, January 28, 2007

Evening State of Play

First a thanks to the Mortgage Lender Implode-O-Meter for the shout out tonight on the note I wrote over the weekend about the growing subprime problem that is spooking the overall bond market, which has in turn sent rate jitters through the stock market. Implode's site is interesting:

Crude oil is up again this evening - a rise of 40-cents in the March contract. A combination of factors are at work: from the new contango play following the SPR announcement, the colder weather, and the heating up of tensions in the Middle East. The Wall Street Journal is reporting that Iran will install 3,000 centrifuges that will be used to enrich uranium. Nat gas is flat.

Gold is catching a modest bid as well. The EuroFX is down 2 points, while stock futures are drifting lower.

There is a barrage of economic data that will be thrown at the wall next week and it will be interesting to see how it will stick. The dollar seems to want to cross the 200 day moving average in the worst way, and perhaps some of these numbers will give it the push it needs. Here's a rundown:

Monday: no major data.

Tuesday: 10 a.m. release of consumer confidence figures from the Conference Board. A reading of 110 is expected. At noon Fed policy makers start their 2-day meeting.

Wednesday: 7 AM MBA mortgage data release. 8:15 ADP employment index is released. 8:30 4th qtr GDP expected to show 3.1% annualized growth with a 1.5% deflator. Employment Cost Index also due at 8:30 forecast to show 1% gain. 10:00 Construction Spending forecast to show December gain of .5%. Chicago PMI also due at 10 forecast at 52.

2:15 ET Wednesday Fed announces rate decision by FOMC.

Thursday: 8:30 Jobless claims, Personal Income and Spending

Friday: 8:30 Employment data forecast to show 160k rise in non farm payrolls, unemployment of 4.5%. 10:00 Factory Orders expected to rise 1.9% in Deceber.

There will also be a barrage of earnings reports (source: The most notable companies reporting earnings for the week, starting on Monday 1/26: PD, SGP, VZ, CAJ and TSN. Tuesday 1/27: AFL, CL, CME, K, MMM, MRK, PG, SNDK, SNE, UPS, WYE and X. Wednesday 1/19: BA, D, EK, HLT, IR, LLY, GOOG, MO, SBUX and TWX. Thursday 2/1: ADM, AMZN, BUD, BSX, CA, CMCSA, CVS, ERTS, HOT, MNST, RTN and XOM. Friday 2/2: CVX, ITT and WEN. For the latest breaking news, listen to Fly Radio (which I do).

I mentioned Google Friday night. I had toyed with a directional long play, but will stay away. If you can be disciplined enough to play your 10 day moving averages well enough with Google, there are plenty of plays without having to mess around with the stock before earnings.

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