Monday, March 12, 2007

Tuesday Curtain Raiser

Very brief as I have been struggling with a stomach virus over the last several hours.

Two key events tomorrow morning are Goldman Sachs (GS) earnings and outlook, as well as Retail Sales. Goldman Sachs earnings are expected at $4.90 according to consensus estimates, but everyone knows they'll beat by a mile. And since everyone knows they'll beat by a mile, the beat is likely to be anti climatic. It's the GS spin/outlook that will count the most.

Retail Sales are expected to rise .3%.

8 comments:

jill said...

Not just a subprime issue anymore. This is getting downright scary.


"Mortgage Liquidity du Jour: Underestimated No More", Ivy Zelman, et. al. at Credit Suisse wrote:

"we surveyed our private homebuilders and their mortgage lenders to asses the new home market’s exposure ... and ... it’s not just a subprime issue. ...

We believe that 40% of the market ... is at risk of significant fallout from tightening credit and increased regulatory scrutiny. In particular, we believe the most pressing areas of concern should be stated income (49% of originations), high CLTV/piggyback (39%), and interest only/negative amortizing loans (23%)....

We remind investors that the headwinds from deteriorating credit will impact supply and pricing conditions, as well as incremental demand. With delinquency and foreclosure rates continuing to rise, we believe this will result in more supply hitting the market throughout the year. In addition, we estimate that current inventory figures released by the NAR could ultimately be 20% higher when homes currently in the foreclosure pipeline hit the resale market. Finally, we believe that tightening liquidity and more stringent appraisals puts current builder backlogs at considerable risk for fallout, which should lead to another surge in cancellations and additional spec inventory on the market. As such, we believe the impact of these headwinds will be felt throughout the entire market (regardless of builder price point), and will likely contribute to the next tranche down in pricing ...

http://calculatedrisk.blogspot.com/2007/03/tanta-credit-suisse-not-drinking-kool.html

http://www.billcara.com/archives/2007/03/the_why_and_how_america_is_in.html#more

brettmm said...

I am now convinced that tuesday March 13 will see the dow ramp 100 points in the first hour. Call me crazy, but here is my premise. Go to CNBC.com and scroll down to markets diary scroll further down to 8:45a.m. then scroll down to 5:45p.m. What happened last time President Bush gave his address? Dow up 100+ points, Bush visits NYSE up another almost 100 points, Paulson speaks up 95 points, paulson speaks from china, up 85 points. M3 money is jacking up the market all day, only don't stop at a 100, take it up 200 the FED has the never ending resource of freshly printed fiat money. And when the powers at be speak, they make sure we hear them loud and clear.

brettmm said...

I am now convinced that tuesday March 13 will see the dow ramp 100 points in the first hour. Call me crazy, but here is my premise. Go to CNBC.com and scroll down to markets diary scroll further down to 8:45a.m. then scroll down to 5:45p.m. What happened last time President Bush gave his address? Dow up 100+ points, Bush visits NYSE up another almost 100 points, Paulson speaks up 95 points, paulson speaks from china, up 85 points. M3 money is jacking up the market all day, only don't stop at a 100, take it up 200 the FED has the never ending resource of freshly printed fiat money. And when the powers at be speak, they make sure we hear them loud and clear.

65Trader said...

If this is true about the fed propping up the market, its only going to fall harder when fear returns.

Mike Truong said...

I hope you feel better today. I hate getting those bugs. Whenever i have them I have to drink ton of electrolytes ie (gatorade, etc) to calm my stomach. You deserve as much rest as possible.

el said...
This comment has been removed by the author.
el said...

not seeing anything surprising with GS this morning.

LEND, on the other hand, is down 45% overnight!

Jim K said...

Thanks Mike.. feeling better today!