Monday, April 13, 2009
- 8:30am Earnings Before the Open: TLB.
- 10:30am Fed coupon purchase
- Note that European markets are closed for Easter Monday.
- 4:00pm Earnings After the Close: JBHT, RNOW.
Tuesday, April 14, 2009
- 8:30am Earnings Before the Open: CBSH, FAST, GS, JNJ, GWW.
- 8:30am March PPI (last m/m 0.1%, y/y -1.3%, ex food & energy last m/m 0.2%, y/y 4.0%)
- 8:30am March Advance retail sales (last 0.1%, ex autos last 0.7%)
- 10:00am Feb Business Inventories (last -1.1%)
- 10:30am Fed coupon purchase
- 10:30am Fed’s Evans speaks on risk management for banks.
- ICSC/UBSW Chain Store Sales (7:45, last 0.6%).
- Redbook Retail Sales (8:55, last 0.4%).
- ABC Consumer Confidence (last -50).
- AGL Analyst Meeting.
- SY Shareholders Meeting.
- 4:00pm Earnings After the Close: ADTN, CSX, HCSG, STX, INTC.
- 4:30pm API Crude Oil/Gasoline/Distillate Inventories
- 4:45pm Fed’s Stern speaks on risk management for banks.
Wednesday, April 15, 2009
- 8:30am Earnings Before the Open: ABT, ACGY, ASML, SCHW, INFY, NITE, LUFK, MTOX, BTU, PJC, PGR, WWW.
- 8:30am March CPI (last m/m 0.4%, y/y 0.2%; ex food & energy last m/m 0.2%, y/y 1.8%), March CPI Core Index SA (last 217.670), April Empire Manufacturing (last -38.23)
- 9:00am Feb Net Long-Term TIC Flows (last -$43B), Feb Total Net TIC Flows (last -$148.9B)
- 9:15am March Industrial Production (last -1.5%), March Capacity Utilization (last 70.2%)
- 10:30am DoE Crude Oil/Gasoline/Distillate Inventories
- Infocast Advanced Battery Manufacturing Conference.
- MBA Mortgage Applications (7:00, last 4.7%).
- 1:00pm April NAHB Housing Market Index (last 9)
- 2:00pm Fed’s Beige Book
- 4:00pm Earnings After the Close: ATR, CCK, DTLK, KMP, LSTR, LLTC, PLCM, STLY, UFPI.
- 10:00pm China Q1 GDP.
Thursday, April 16, 2009
- 8:30am Earnings Before the Open: AMFI, APH, ASPM, BAX, BLK, BGG, CY, FCS, GCI, GPC, HOG, ITW, RX, IIIN, JPM, KNL, MMR, VIVO, MTG, NOK, NVR, ORB, PH, PII, SHW, SON, LUV, TITN, UTEK, UMPQ, WSO.
- 8:30am March Housing Starts (last 583K), March Building Permits (last 564K)
- 8:30am Initial Jobless Claims (last 654K), Continuing Claims (last 584M)
- 10:00am April Philadelphia Fed (last -35)
- 10:30am Natural Gas Inventories
- 1:00pm Fed’s Lockhart speaks on the economic crisis in New York.
- Earnings During Trading Hours: ASBC, PPG.
- 4:00pm Earnings After the Close: CYT, ESLR, FII, GOOG, HNI, ICUI, ISIL, ISRG, PBCT, PGI, RLRN, RUSHA, TPX, USAK, VASC, VRTX, WERN.
- 8:00pm Fed’s Yellen speaks on the economic crisis in New York.
Friday, April 17, 2009
- 8:30am Earnings Before the Open: AOS, BBT, C, FHN, GE, IGTE, MAT, MEG, OSTK, PRSP.
- 8:30am Fed’s Hoenig speaks at Fed conference in Washington, DC.
- 9:55am April prelim Univ of Michigan confidence (last 57.3)
- 12:00pm Fed Chairman Bernanke speaks at Fed conference in Washington, DC.
- Sony Ericsson JV earnings.
For those of you that don’t think GS will report good earnnings, consider this.
Here is the top that got bailout money. Notice Wachovia (bought by WFC) is on the list. Given the right down of this receiveable in Q4 (.7billion), which was fully realized in Q1, they got a whopping increase over expectations (thanks to the Fed via AIG)
Not look at GS below. GS wrote down the receiveable below in Q4 but then got the full amount in Q1. Wow! GS is going to frickin crush the estimates if I have figured all this out correctly.
The next quarter is still bleak because if you noticed WFC did not report on their ‘Asset Quality Trend’, and don’t expect anyone else to do so either. That is the sleeping giant.
All these banks should show great earnings in Q1, given that these were ‘questionable receivable’ in Q4 when AIG went down……however in Q1 they were paid.
Societe Generale: $4.1 billion
Deutsche Bank: $2.6 billion
Goldman Sachs: $2.5 billion
Merrill Lynch: $1.8 billion
Calyon: $1.1 billion
Barclays: $0.9 billion
UBS: $0.8 billion
DZ Bank: $0.7 billion
Wachovia: $0.7 billion
Rabobank: $0.5 billion
In addtion: The payment above are only schedule A. If you and B and C, then the total for GS is about 13 Billion and about 1.5 for Wachovia. Also, see Merrill Lynch above (bought by BAC). The total for them is about 10 Billion.
So, I take back what I said about BAC going to report bad Q1 earnings.
The real problem is that no one can tell exactly what these banks report as ‘risk loss’ on Q3 and Q4…..and what are they going to report as realized in Q1.
Without a doubt, a cloud of confusion is intentionally establish via AIG and the Maiden Lane allocations. The truth is that insolvency is real due to the decline in Asset Quality but the big money is riding out the wave in quarters.
The banks will report good earnings from now on even if they and the Fed et al
have to lie, fudge, obfuscate etc. about them. The game is rigged and until the sheeple wake up this is what will be.
I agree…I expect all banks to report “surprisingly” good numbers…the real issue of course are write-downs(size of)
Goldman Sach’s earnings are probably going to beat estimates, but their secondary offering is supposedly going to dilute their stock value by as much as 20%. Is this going to drive their price down instead of up?
It’s a chicken and egg question. The higher the “reported” earnings the higher the GS stock price leading to a higher the propensity for a successful secondary offering. I think all banks are engaged in an aggressive window dressing exercise because they realize this is the last chance to raise private capital and avoid government interference as much steeper TARP terms.
…sorry for the typo…I meant “at much steeper TARP terms..
SPG announced a secondary offering a few weeks ago and the stock cratered before rallying to a new intermediate high. In addition to equity, they floated new debt offerings at 11% which will most certainly impact earnings. The debt offering also says loads about how hard it is for top notch companies to raise debt at this time. I realize that SPG is not a bank, but the market has shrugged off the dilutive effect of the offerings for now, so I have no reason to suspect that it wouldn’t be the same with GS.
This from Robert Reich’s blog:
Some of the big banks will claim to be profitable, but don’t bank on it. Neither they nor anyone else knows what their assets are really worth. Besides, the big banks are sitting on over $500 billion over taxpayer equity and loans. Who knows how they’re calculating profits? Most importantly, there’s still a yawning gap between the economy’s productive capacity and what it’s now producing, and absolutely nothing will turn the economy around until that gap begins to close.
I spent the better part of an hour yesterday evening debating Larry Kudlow on his CNBC program, along with Arthur Laffer and two other financial analysts, all of whom were sure that the stock market had hit bottom and was now poised for a major recovery. I admire cockeyed optimism, and I understand why Wall Street and its spokespeople want to see a return of the bull market. Hell, everyone with a stock portfolio wants to see it grow again. But wishing for something is different from getting it. And cockeyed optimism can wreak enormous damage on an economy. Haven’t we already learned this?
the banks really stuck it in our ass last week. But we will live to fight another day.
The banks got what is coming to them. created structures that blew up the market, and now are without structures to replaces that ability to extend/create leveraged credit = CDOs. they don’t have the leverage/juice/structures to loan like they used to…
they are f’ed
must you be so crude…there are other ways to blog without being offensive…
there is nothing offensive about that post alan
get your mind out of the gutter
This article gives a good explanation on the trickery. Keep in mind the true Wells Fargo numbers will not be available for scrutiny until April 22:
http://www.housingwire.com/2009/04/09/credit-cost-smoke-at-mirrors-at-wells-fargo/
These banks are no better than Enron and the they and the Fed are helping in the coverup. Until the sheeple wake up and somebody goes to prison this will continue.
Hello fellow stocktockers. Long time listener, first time caller. I guess I have not contributed because I didn’t think I had much to offer as a rookie trader. However, I have learned a lot over the past 8 months or so. Aparently I have not learned enough though because I find myself in the same position as many here with FAZ. Now I just wanted to hear some opinions of what to do now.
I have averaged down to 29 (i know you should never average down) with 75% of my roll and im in a world of hurt and regret. I’m thinking that these are my options:
1. wait for s&p to hit around 770, sell FAZ and then get back in when it is around 5.
2. go all in now to average down to 19, then sell everything at 770 s&p.
3. Wait till xlf is below 5 day moving average then go all in until it pops back above the 5 day average. Brian Shannon from Alphatrends.net gave me this idea in his latest video.
4. just wait because it could go much lower and average in around 5 bucks.
These are just ideas. I thought it would be good to have a plan this time…and all times in the future. I realize that FAZ doesn’t follow these indexes but they are benchmarks that I know. I also realize that this will probably not play out as I plan. Any other ideas would be greatly appreciated. And I’m sure there are others that would like to know also. Thanks
Edub
Two of your options are based on the S&P getting back down to 770. However, what if it does not get back down to that area anytime soon (or ever)? To be clear, I think we will have a pullback at some point, but I’m not trading it until it actually happens and I know that there is no guarantee of reaching any particular target.
This is what got people in trouble with FAZ. People kept predicting big pullbacks during this run up and others piled in short based on these predictions using leveraged bear ETFs like FAZ. Then, when the pullback didn’t happen, they held the position in the hopes that the pullback was just around the corner (although stops should have closed the positions out).
Now, the market could turn downward next week and FAZ could have a big run. Alternatively, the banks could rally on good GS news and FAZ could get crushed even more. I think the latter scenario is more likely and I own a position in FAS (not a big one though, 1000 shares) in anticipation of this. I have placed a stop in case my thinking is wrong.
What I can say for sure is that if you hold these Direxion 3X ETFs while the market is moving against your position, the decay will kick you in one shin while the leverage kicks you in the other shin. My general advice is to use these 3X ETFs once the short-term trend becomes apparent. The 3X leverage helps to make up for not catching the whole move up or down.
I think FAZ is going to be crushed even further next week. This is my opinion and I have no charts to back it up. If I were you, I would cut my losses in FAZ and move the capital to a trade that is making money for you. Again, I could be completely wrong and you should devise your own trading plan.
If you want to keep holding the position, I would not suggest averaging down. I would treat it as a new position and ignore the fact that you bought in higher. Decide what your sell target is. Decide what you are willing to lose on the trade and place the appropriate stop loss.
Remember, the only thing worse than losing one dollar is losing any amount more than one dollar. Happy Easter and good luck to all next week!
Listen to Morris he is a sage trader…and whatever you decide to do…please…don’t average down. You can win another day.
Edub, I’m kinda in the same boat as you are. I invested heavily in FAZ several times and each time it reversed and took my money. The difference between you and me is I “tried” to stick to my rules and get out at my stops, although several times I convinced myself that it was going to reverse and I held it too long. I really dodged the bullet last week when WFC reported before the bell. I was convinced that they were going to report badly and I bought at 8:00am pre-market @ $17.20, a few minutes later they released all that “great” news and I dumped all my shares @ $15.11
As far as what I would do? First of all I would never go all in. These markets right now are just too risky and FAZ moves too quickly. You could be up 50% go to the bathroom and come back down 50% I hate to say it because I don’t believe it myself but I think these markets are going higher. I’d hold the FAZ you have right now and hope for a reversal some day. You know the minute you sell it FAZ is going to go up. I’d take the other money and I’d find something else thats more stable. Getting your money back isn’t going to happen as quickly as you lost it, its going to take time, its a process. If you bet the ranch you will surely lose everything you have. If anything, if you want to get risky and take a chance you might want to buy some FAS and try to make a few bucks on the other side until this passes.
Bottom line is this. You probably will never see all of your money again from FAZ. The way it decays you might have already dropped below the point of returning to your purchase price especially if it continues to drop to $5.00 like you mentioned.
Thanks Morris and T. Good advice. This is what convinces me that Stocktock is the best place for great advice and support. I am paying the price now for not following good TA and discipline with stops. I thought the 3x etfs move so fast that I would almost always get stopped out. The lesson is, play with smaller amounts. I know that if I get out now the market will turn but I still have a chance to make it all back with a little grinding over the next few months. Thats hard to do with a family and job. Oh well. Again thanks to everyone on Stocktock!
You make a good point about playing with smaller amounts. I have been very hesitant to move all of my capital back into the market during this volatile period. I have kept almost 60% of my portfolio in cash and about 20% in fixed income ETFs over the past 6 months (TLT at the end of 2008 and JNK since then) while using the other 20% to trade using the leveraged ETFs from Proshares and Direxion.
Lately, I have been using TNA, ERX, and FAS for long positions and SDS for short positions (although I sometimes use SRS for scalps). I closed some of my longs on Thursday at the close and I go into tomorrow with 500 TNA, 200 ERX, and 1000 FAS (along with my 1000 JNK that is a longer term position).
I’ll probably start building a position in SDS while closing out the rest of the longs (except for JNK) here at the beginning of the week.
Good luck to all tomorrow!
The Consumer Confidence Index is 25.
“When consumers were predominately pessimistic and the survey number declined to below 66, the stock market rose on average 27.3% per annum”.
Paul Krugman in today’s NYT Opinion piece says:
Meanwhile, about those great numbers from Wells Fargo: remember, reported profits aren’t a hard number; they involve a lot of assumptions. And at least some analysts are saying that the Wells assumptions about loan losses look, um, odd. Maybe, maybe not; but you do have to say that it would be awfully convenient for banks to sound the all clear right now, just when the question of how tough the Obama administration will really get is hanging in the balance.
3min – I don’t disagree per say, but lets say they do have good earnings. I normally hate this question but how much is already priced in due to wfc. All the banks had a big day friday, do people really expect a 10%+ rally in xlf with each bank reporting. The point is, a little (or lot?) of it is priced in or only wfc would have gone up on friday. Instead each bank rallied on the expectation that they will all do as well. So if they do, its not a surprise beat, its already expected.
It is very possible the GS report will be so big the it will blow everyone away even the bulls.
What about the political ramifications? Don’t you think people will be hopping mad that companies needing billions in taxpayer dollars almost immediately turn around and report record profits?
3min, do you know when Goldman’s proposed stock sale is set to take place?
Sure people will be hopping mad, more so than already. When has that ever made a difference to what the scumbags in Washington do ?
True and true.
The media is missing the true story so far. Wait for the media to catch on and that will be the beginning of the complete lack of trust. For now all is made intentionally unclear.
We know you’re all in for GS 3Min, but posting it repeatedly doesn’t make it a more likely outcome. It could very well be priced in at this point. They could also miss. That’s why we trust the charts, not rumors, especially not rumors that get repeated again and again and again and again and again and again.
Anyone that follows me, knows that I would never buy GS. They are evil and I am I hate how they control our country. I hate seeing bears get burned so I study their manipulation.
I’ve tried my hardest to sort this out – using TA, Elliot Wave, paying attention the news, etc, etc. I’ve been just as guilty of looking just around the corner for a reversal, a reversal that really never happened (looks to be a few consolidations but nothing more).
Perhaps I’ve been underestimating a few things:
1) The power of public bias – we only see what we want to see, and right now we are seeing Bullish news for the most part. There is still so much doubt/negative facts out there, but everytime the market has bad news, it just seems to be spun in a different way.
2) The government support may create a moral hazard, but I’ve seen many economists point to research that fast and constant flow of support is necessary for a recovery. This is going to continue – this is government policy, and they have deep pockets.
3) In this environment, it seems much riskier to bet on the downside than the upside.
=============================
Maybe the fallout will be that the public will begin to see the facts in a “new light” (ie. seeing all the really negative facts) when the market turns, hence only fueling the fall down?
We’ll see, for now though, I am going to be much more diligent in reducing risk in my portfolio – and looking for trends that develop.
Looking forward to GS earnings – that should help us determine what is going on.
TIME Magazine: “The Banking Crisis is Over”
http://www.time.com/time/business/article/0,8599,1890560,00.html?imw=Y
This is Zero Hedge’s reply to the TIME article:
http://zerohedge.blogspot.com/2009/04/imminent-disinformation-schism.html
This is the second time I’ve seen a post about Time magazine. Tanya, are you using Time as an indicator of public sentiment because I’ve read your other comments and you’re way too good to be using it as a financial indicator. Just curious, because this is the 2nd or 3rd post I’ve seen on Time from various posters. I use magazine covers as a gauge of general sentiment, which is usually wrong. As far as anything meaningful to my trading goes though, I think the odds of finding something I can use are higher from Mad magazine than Time magazine.
It’s a contrarian indicator, IMO. If TIME magazine says it’s so, then it ain’t.
Does anyone know when they will start releasing the results of the bank stress tests? I know they were going to delay the results until after earnings but did they give the specific dates yet?
Thanks
By end of April…the latest is that they will not be bank specific rather some metrics for the entire group. Don’t expect much from stress tests. Those banks needing the capital infusion will not be publicized but they will have 6 months to come up with private funding or accept TARP money w/ conditions.
The stress test consist of this:
They offer the CEO $100 billion and if he keeps a straight face, they pass.
Good news for Gannfann fans… he’s back… will start posting again tomorrow.
http://gannfann.typepad.com/
Thanks for posting this. I like the conciseness of his daily posts.
According to UK’s Guardian, GS will try raising $6 Bil.:
The precise value of the cash call has not yet been decided but it is understood to be considering raising about $6bn.
Goldman insiders insist that the bank never wanted to accept the government’s handout under the Troubled Asset Relief Program (Tarp), but had no choice as the Treasury wanted to keep an even playing field among surviving banks.
The Tarp payments were made to improve confidence in the banking system in the wake of the collapse of Bear Sterns and Lehman Brothers. While Goldman is in possession of the government funds it must abide by strict regulations on executive pay and certain operations imposed by the US Treasury, the Federal Reserve and other regulators.
Elizabeth Warren, a Harvard Law professor charged with overseeing the Tarp program on behalf of the US Congress said in an interview with The Observer last week that she strongly believed the banking system would not recover fully until the management of all banks receiving help were replaced and shareholders were “wiped out”.
Once the Tarp cash is paid back Goldman executives will be free to enjoy the big paydays of old.
But Goldman, like all its counterparts with Tarp funds in their coffers, is forbidden from paying back the government until they have undergone a top secret “stress test” designed by the US Treasury. Goldman is forbidden from talking about the test but it is expected to be complete by the end of this month or the first week of May.Goldman is understood to be confident that it will pass the stress test and is therefore keen to get the $6bn rights issue out of the way as quickly as possible so as to be in position to pay back the government at the earliest time.
Sources close to the bank insisted that Goldman has ample liquidity to pay back the Tarp loan but would rather maintain its cash cushion at or near current levels of about $111bn.
Analysts expect Goldman, which declined to comment about the cash call, to report a profit in the first quarter of the year, compared to the loss in December, its first since becoming a public company in 1999.
I’m not so sure how long this party can last if we are still in the 4th sub wave of the 5th wave of P1 wave down; especially with news like this buried out there…
“The Federal government is still AAA, but every municipal debt issuer is now suspect and shaky according to Moody’s.”
USA downgraded by Moody’s (negative outlook)
http://newsusa.myfeedportal.com/viewarticle.php?articleid=296
Sub wave 4 of this 5th wave down of P1 will have to end soon and we can look at news and events all we want, but what will happen will happen and we likely will start heading back down to new lows, with 770-740 being a tricky period (April 17th. looks to be a date when things should really get cooking.). This, imvho, is still possible with a healthy pull-back Monday. Yes, we may have broken out of the channel to the upside, but if only for one day, that becomes a mute point.
If we stay above the channel, then we could easily see the 900′s (top round 944) on the S&P before a healthy pull-back. Market manipulation? Anyone who has learned about the “Law of Attraction” and the simple fact that once matter is observed in a controlled setting, it appears to be able to change the way it behaves, just because it is being watched. Therefore if the market has been wrongly manipulated upward, it similarly to matter, will one way or another, correct itself downward. As a swing trader, this can be important. As a day trader, this worries you less.
Oh, yes, also wanted to add this very detailed blog post I came across on the dangers of liquidity within this stock market…
The Incredibly Shrinking Market Liquidity, Or The Upcoming Black Swan Of Black Swans
http://zerohedge.blogspot.com/2009/04/incredibly-shrinking-market-liquidity.html
“So when will all this occur? The quant trader I spoke to would not commit himself to any specific time frame but noted that a date as early as next Monday could be a veritable D-day. His advice on a list of possible harbingers: continued deleveraging in quant funds as per the charts noted above, significant pre-market volatility swings as quants rebalance their end of day positions, increasing principal program trading by Goldman Sachs on decreasing relative overall trading volumes, ongoing index VWAP dislocations. One thing is for certain: the longer the divergence between real volume trading/liquidity and absolute market changes persists, the more memorable the ensuing market liquidity event will be. At the end of the day, despite the pronouncements by the administration and more and more sell-side analysts that the market is merely chasing the rebound in fundamentals in what has all of a sudden become a V-shaped recovery, the “rally” could simply be explained by technical factor driven capital-liquidity aberrations, which will continue at most for mere weeks if not days.”
I dont credit these rating agencies a bit anymore.
These are the ones who rated CDSs as highly rated in the first place.
They are more reactive than anything else.
Yes, generally I have to agree. Yet, when you do some further research you may learn some scary things. NY, CA and other states on the verge of bankruptcy, schools being closed (23 in Detroit alone last week) and tax dollars coming into these states and cities at all time lows (and likely going lower).
Peak oil at 150 a barrel had gas prices at all time highs. The tax income from that for states was huge. Now, at only 40 or 50 a barrel, gas prices have effectively crashed in just a couple years, meaning the money stream was cut-off and not likely to come on again anytime soon. Basically with the high gas prices the states got suckered into higher budgets which have now placed many in a precarious situation.
Here is a sobering summary…
46 Of 50 States Could File Bankruptcy In 2009-2010
http://freedomarizona.org/2009/01/30/46-of-50-states-could-file-bankruptcy-in-2009-2010/
follow the link in the article to the official site here http://www.cbpp.org/cms/?fa=view&id=711
Uhhhh, here in Texas the tax is 38.5 cents a GALLON, it matters not the overall price of gasoline, the revenue remains the same as long as the consumption remains the same.
So that sorta kinda kills your states getting suckered theory which tied revenue (budgets) to gas prices…….
About the financial institutions, I for one work with wells fargo and do marketing for a subprime product, and the things are no better than the last 3 months since the crash happened to the stock prices, as a matter of fact things are pretty scary from the jobs perspective.
However having said that, I also know that FHA mortgage product has blown all the expectations, and they have been outsourcing to meet the demand.
One thing one has to understand that with all these FHA mortgage products, the banks are undergoing a drastic change in their business models. At this point, the origination and application fees are supposed to be home run, and am sure are the major component of their earnings (supposedly >3Bn) . So for this quarter or till the time we see a pent up demand, they will have a great oppty. to make a boat load of money for no risk.
Later on I assume we will see the asset pricing start recovering (assuming economy starts turning around). So I think there is not much downside to the banks from here other than profit taking.
Just my thoughts based on what i see onsite.
Banks will be forced to sell their prized assets after the government turns off the funding taps, says Meredith Whitney. The Treasury has little to nothing to show for the $350-billion in TARP money used to inject capital into the banks, and equity investors should avoid the banks at all cost.