Let's wait a minute for all of the non-investment people to leave the room.  There they go.

Friday, Mr. Market took us for a wild ride, but had been doing so all week.  The tech sector was our sea anchor on Friday as nuts and bolts and durable goods kinda number actually came in quite nice.  We also found out the Italians are closing 11 banks.  Now remember the PIGS, those countries who have exposure to one another due to their sovereign debt.  (Portugal, Italy-or Ireland, Greece, and Spain.)  While the vote in Greece was to the Prime Minister favor it did little to ease the concern of a debt implosion.

Cramer did a piece about the Friday's sell off and he made some good points though he is being a bit Polly-anish.  To his credit he did point out that it is the end of a quarter and some short positions by hedge funds managers and mutual fund managers had to be covered so they had to sell off.  He also pointed out that overall this last quarter corporate earnings are looking relative good.  And his most valid point is that the market is reacting and over-reacting to news we already know.  The supply chain issues regarding Japan, China cooling off a bit (Thursday, they were talking about easing again.) the sovereign debt issues in Europe are all old news yet Mr. Market keep dropping to his knees when ever the obvious is pointed out. 

Any how, the week ended better than we expected though it was down keeping out track record looking impressive.  (I'm impressed.)  We suggested a down close of 1.5% down to 11.824 and it was only down .8% to 11, 934.  Our index the S & P 500 closed at 1,268 versus our guess of 1,252.

Barron's And The Week Ahead

It is a great issue this week as they are trying to make the best of a squishy situation.  It would be easy to focus on all the negativity, but much of this week's content is helpful in putting things in perspective.  Jonathan Laing does a great piece (though it be a bit scary) about the next possible housing bubble defining the precipitous situation concerning the private mortgage insurance industry.  The 700 Billion dollar bubble could be really loud if it pops.  Our suggestion (and Laing's) would be to look at the balance sheets of the likes of MTG, RDN, and PMI and think about what might happen to there ability to survive the onslaught of upside down mortgages and dwindling capital.  SELL SELL SELL.

Jacquiline Doughtery does a great piece positively pimping Interpublic Group.  Dimitra Defotis speaks highly about one of our old time pharm favorites Gilead Sciences.  Jay Palmer explains how Direct TV is invading central and south America profitably.  There is a great interview by Neil Martin of Bob Turner, founder and manager of Turner Investments an equity investment firm with 18.6 billion in assets under control.  "They eat their own cooking", which mean they invest alongside their clients.  Turner explains the virtues of growth stocks.  (keep in mind we boil down our picks in one of two categories growth versus value.  Speculation might be a third.)  Leslie Norton handle the cover piece about the Chinese military build up and gives us a lot to think about.  Oh yeah, there are a couple of equities in the article that might be worth putting on a watch list.

This week is kinda busy.  Monday we have the Personal Income and Outlays which tells us if everyday people are making money and if they are spending it.  The experts are expecting a repeat of last months with a slight drop in consumer spending.  The three segment guesses are income up .4%, spending  0%, and CPI pricing up .4%.  (Pay attention boys and girls if income is up 1% and spending is up 1% and CPI pricing is up 1% we have a wash, get it?  If income is down, spending is down and CPI is up we are loosing ground.)  Our guess is income up .5%, spending is up .2% and cpi up .6%.  Mr. Market won't like the report.  Nike will report and miss the 1.16 a share income also disturbing Mr. Market.  We can assume more Eurozone scares so Mr. Market should be down about 1 point on Monday. 

Tuesday we have our usual weekly retail report and they will be soft.  The consumer confidence report comes out on Tuesday and the experts are looking for a 62. index number up from last month.  We don't see it.  With all of the middle east news and Japanese news and the name calling in Washington, how could consumer confidence go up.  Initial jobless claims for this reporting period are increasing so we are thinking a weak consumer confidence number of 59 and Mr. Market will be down.  As an investor I would watch the State Street Investor confidence report on Tuesday.  It measure empirically where investors are keeping their money.  If they are headed towards equities their confidence is up, bonds and cash their confidence is low.  Look for a drop as more than 7 billion have left the equity market in the last month.  Mr. Market will not be happy.  SHAW, Shaw Group report on Tuesday and this huge multi national industrial firm is good tell as to to the global economy.  While I think they will beat the 68 cnets a share, the forward looking comments by the bosses could help cheer up Mr. Market.  If they express concern or worry, look for a 1.5 down.

Wednesday we have pending home sales and with banks clearing the balance sheets, this number should be up.  Mr. Market is expecting it to be up because he knows it will be a further erosion of home prices.  Wednesday we have KB homes.  Look for a miss of their MINUS 31 cents a share.  We think their loss will be around -35 cents and look for stinky forward looking comments.  Family Dollar will beat the 95 cent expectation, Monsanto should beat the 1.11 look for 1.20.  General Mills is hard to call because we think top lines sales will be up but commodity pressure have to be squeezing their margins.  We will say a close beat.  A flat day in the market.

Thursday will be relatively quiet day.  We have initial jobless claims which should recover from the lousy number last week but still be in the 415 K range.  The experts have the number pegged at 420 so this could lighten the spirits of Mr. Market.  The we have the Chicago PMI report whish is a survey of non-manufacturing business in the Chicago area.  Look for a slightly positive report and Mr. Market heading up and he should have enough intertia to get cans most of the losses for the week.  Look for a 1.5% bounce upwards.

Friday will be a freaky day as we are headed off to a three day weekend and we have some important reports.  Motor vehicle sales will disappoint.  Consumer sentiment will continue to disappoint.  Supply chain uses will be the basis for a poor ISM report, and construction spending is expected to be way down to -.3%.  Again we wonder if they are considering the rebuilding that should be going on.  Look for a positive surprise on this number to 0-.1%.

Mr. Market will take this week and be down about .5% on the week.  That would put the down at 11,874 and the S&P 500 at 1,258.  (If you did the math with me you'll see I am discounting the S&P more than the Dow.

Salve Lucrum