Friday, February 16, 2007

Quick Morning Market Comment

Limited today has I prep for my trip to head South.

Macro economic data will get under the skin of investors today. Housing starts plunge 14% is a headline that won't be ignored, though I have to tell you, things like the outflows in the TIC report yesterday which was largely ignored is what really will bite the rumps of many out there if such things continue. But this housing starts plunge, along with building permits slump stinks to high heaven. Worse yet, you've no doubt heard voices in recent weeks saying the housing market has bottomed. When you hear those voices again, and I will name names later this afternoon or evening when I have time, your mind should automatically shut them off. #1 voice, Alan Greenspan - just the other day talking about a bottoming housing market... simply a disgrace.

By the way, the pundits who were gleefully cheering a bottom in the housing market recently were pointing to data indicating inventories were coming down. They should have come out of their ivory towers to understand that the For Sale signs that came down in many neighborhoods in recents months were a good chunk of sellers throwing in the towel during the winter months. I have access to MLS data in the Hudson Valley and there are price drops every day and contracts with seller's agents that are simply left to expire on the system after six months of no sales. Those same sellers will be back this Spring to flood the market all over again.

At least there were no nasty (on the surface anyway) inflation surprises: January core PPI's on target, up 0.2%.

The BEST boys are out with an interesting report on Google (GOOG) this morning. The say the search engine's new algorithm, due in 2 weeks, will help GOOG to rake in more money from advertsiers with a better ad bidding system. BEST maintains an Outperform.

Citi also reiterated a buy on GOOG with a $600 price target.

Microsoft will be a drag on the Nasdaq today after CEO Ballmer said some estimates on Vista sales are too high. This interesting entry from

"Microsoft-MSFT concerns over Vista confirmed-Hold@STFG
Steve Ballmer's comments at the analyst briefing suggested some estimates for Vista 2008 revenue were too high, citing ASP challenging and piracy in emerging markets. Stanford has a $55.9B revenue estimate for 2008, slightly below the consensus of $56.5 billion. :theflyonthewall"

On some days this week, Yahoo! (YHOO) has actually provided some leadership in the Nasdaq. Today RCBM reiterated an Outperform and upped its price target to $34 citing Panama.

The Broadcom options probe gets more intense by the minute as the Chairman refuses to cooperate.

Is AMR a takeover candidate? Analysts quoted in BusinessWeek think so, but Pru this morning says its doubtful Goldman and British Airway (BAB) would put together a deal. First Boston also says "we'll believe it when we see it."

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