Monday, December 21, 2009

BAGAKOAA Dec 20, 2009 The week ahead


Dec 20, 2009 The week ahead

Tomorrow we get the GDP report and the consensus is 2.7% growth. Surprise numbers would be below 2.5 or over 2.9. This should not have an impact on the equity market unless we get a surprise. It is interesting to see the bump in the market today after the boost it got from third Friday quadruple witching figures as a lot of positions were closed in the options market. Some upgrades today of INTC and AA helped the market early this morning.

Tomorrow, existing homes sales report with an anticipated 6.25 million units, up from the 6.10 million last month. That was a nice surprise last month and it will be interesting to see if the momentum can continue. Personally I don’t see it much above the 6.10 million but it would take a drop to 5.20 million to make people worried.

On Wednesday look for a slight bump up in personal income to a 5% increase. And look for the Core Price inflation to stay relatively flat maybe up.1%.

New home sales also reports on Wednesday. The experts say we should see continued growth, be it weak growth, to 440 thousand units.

On Christmas Eve we will get durable goods order which are expected to be back in positive territory after the -0.6% drop last month. The consensus number is a positive .5%. Durable goods are somewhat tied to new home sales as new home usually means washers, dryers, refrigerators aka durable goods.

And the last relevant report prior to Christmas would be intial jobless claims which should continue to improve to about 470,000 down from 480 last week. There is a narrow window of expectations there so there could be a positive or negative pop if the number does not come in as expected.

No exciting earning reports coming out this week. I just checked the upgrade lists and quite few folk must have read the article on manure and phosphates this weekend in Barons as Potash (POT) got a could of nice upgrades by Goldman and Credit Suisse. I played POT earlier this year and got stopped out, but I did like the fundamentals. You might read the article in Baron’s and do some homework. I am going to revisit the stock this week.



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