With only two days left in Santas officially sanctioned rally, much of that bull has already been put to rest. For the abbreviated and suspect work week, the NASDAQ Composite ($
COMPQ) and S&P500 ($
SPX) saw fit to tack on another .60% thereabouts and onto their existing yearly and not-so-ruff gainers of 10% to 14%.There were no Monday morning marriage agreements this past week, seeing how the home offices were closed for the holiday. However, the market did kick things off on the right foot Tuesday. Handily lower oil prices (
USO) on a discounting of idle supply threats from Iran and mild weather on the east coast [down -2.40% on week] helped traders along with profit-engine leadership from the energy sector. The bulls had further help in a no headlines required situation, as an existing and well-positioned technical bounce and seasonal window were gifts left for Wall Streeters still watching the flickering red and green lights. Wednesday offered up some pleasant surprises with light fare M & A stories from Cenveo (
CVO) and McClatchy (
MNI), continued weakness in crude and the bottom is in cheer on the housing front (
XHB). All told, the fodder was sufficient to keep the bulls happy for a second session of upside seasonal gifts. Call it a case of investor indigestion, schnitzeling or perhaps concern over what really matters in the investment decision: Thursday and Friday saw the few remaining investors, pressuring ever-so-slightly, Santas window of opportunity. In the weeks heaviest dose of economic realities, Thursdays better-than-expected economic reports were also apparently seen as the stronger-than-wanted variety. Call it a Catch-22 situation for market bulls intent on the Fed lowering rates in early 2007. That said, surprises pointing to a steadier economy courtesy of the Chicago PMI, existing home sales, weekly claims and a happy consumer resulted in across-the-board spikes on interest rate instruments and a definitive change of tune towards the possibility of the Fed easing its monetary policy. Speaking of investors changing their tune, closing out the week and a day without one iota of economic news, Apple (
AAPL) received a tune up of sorts with more than a few folks doing more than just listening in. After two sessions of nefarious stock-option headlines that involved the man behind the music, Steve Jobs & Co. reached an agreement with the Feds. Apple announced that while Mr. Jobs did recommend favorable grants for a few key executives back in 2001, that he didnt personally partake in the inflated gratuities. As such, the company agreed to take an $84 million charge linked to the prior accounting mishap and the SEC, for their part, might have to go search for another high-profile whipping boy.
ON TAP THIS WEEK
The abbreviated work week of just three sessions will be a fairly busy one for economic watchdogs. Manufacturing on the national level courtesy of the ISM index will kick off the New Year for investors. With mixed regional reports of late and the index currently at the contraction/expansion level of 50, a reading removed from that key level will have the capacity to induce further rate debates amongst bulls and bears. The most important report however, or at least heralded, will be Fridays jobs data. Both the speed at which the slowdown is occurring, as well as possible wage-based inflation pressures will be the focus of the release and a Street torn as to what might be better for 2007s market-based Drive for Five.
Wednesday Economic: Construction Spend (-.6%), ISM Index (50), Auto / Truck Sales (5.2M, 7.3M) Earnings: Immucor (
BLUD), Sonic (
SONC), Merix (
MERX)
Thursday Economic: Weekly Claims (318K), Factory Orders (1.4%), ISM Services (57) Earnings: Monsanto (
MON), Texas Industries (
TXI), Constellation Brands (
STZ), Healthways (
HWAY), Xyratex (
XRTX)FridayEconomic: Nonfarm (110K), Unemployment (4.5%), Hourly Wages (.3%)Earnings: Shaw Group (
SGR), Global Payment (
GPN)
By Chris Tyler, Optionetics.com
Labels: AAPL, BLUD, CVO, GPN, HWAY, MERX, MNI, MON, SGR, SONC, SPX, STZ, TXI, USO, XHB, XRTX