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Greek Workers Strike
Greek workers are striking today as part of a national strike to protest Greece's austerity plans. Greek workers are not pleased with the distance their European Union brethren have put between Greece and EU aid. Nor are Greek laborers happy with EU urged austerity measures that will have the already stressed Greek populace scraping even harder just to get by. I expect to see old flames rekindled today, literally, as a citizenry at its limit takes to the streets. It's a good day to take holiday if you work for a foreign bank in Greece, and foreign embassies would be wise to be on high guard and lock-down.
State-Side Economic Data
Toyoda Faces Fire
Toyota (NYSE: TM) comes under higher scrutiny Wednesday as the company's President, Akio Toyoda, faces a House Committee on Oversight and Government Reform. Mr. Toyoda will have a lot of explaining to do to a hostile herd of politicians. I expect to hear at least one representative utter the words, "when we let you sell cars in our country, we expect you to sell sturdy ones, not lemons." The guys out of Michigan and Ohio should be especially hard on Mr. T., while Alabama, and a few other Southern states where Toyota makes cars can be counted on to be either nice or quiet.
Either way, this Toyota short trade is about through, but not quite yet. The stock is now situated right in the middle of our target range spelled out in the above linked article. However, I see two catalysts giving reason to wait a bit before killing the short position. One of them takes place today, and the other is coming right up as well. If you have not followed our thinking strictly and already unwound, I'll let you know when I would unwind the TM short when the time comes. I would consider taking a portion of the profit on weakness today, but beware the analyst who puts his head out on the chopping block with an early "buy Toyota" call. He's the short's worst enemy right now.
State-side, the Mortgage Bankers Association is due to report on Mortgage Activity for the week ended February 19. In the week ended February 12, the MBA's Market Composite Index of mortgage activity decreased 2.1%. Contracted rates on fixed rate mortgages were unchanged in the period, with 30-year rates at 4.94% and 15-year rates at 4.33% on average. Thus, the Refinance Index only moved slightly in the period, but eased 1.2%. The Purchase Index, measuring mortgage applications for the purchases of homes, fell a more significant 4.0%. However, we suspect weather related factors influenced this activity. Despite seasonal adjustment, blizzards are not typically well accounted for...
New Home Sales
New Home Sales will be reported for the month of January at 10:00 a.m. Wednesday. Economists surveyed by Bloomberg are looking for a pick-up in January sales activity, as the market normalizes against November and December closings that were affected by tax credit timing. Economists forecast an annual sales pace of 360K for January, up from December's rate of 342K. December's sales fell off of November's pace of 370K.
December's softness was mostly driven by the Midwest region of the nation, where sales dipped by 41.1%; however, a 42.9% improvement in the Northeast went far at mitigating a troubling situation. At December's sales pace, new home inventory stood at 8.1 months. One troubling data point that should be noted is that the "median months for sale" figure continued to deteriorate in December, to 13.9, from 13.8 in November. While economists forecast an improvement for January activity, watch out for weather effects for January, and especially for February, which will be due for reporting a month from now.
Humphrey Hawkins or something like that
Well that's what they use to call it. Now-a-days we just call Chairman Bernanke's trip to Capitol Hill his Semiannual Monetary Policy Report to the Congress, before the House Committee on Financial Services, at the U.S. House of Representatives (exhale). Well, Benjamin will likely be asked a good deal about his exit strategy, and what exactly last week's discount rate hike was all about. We told you here that it was much to do about nothing, and we expect Ben will say the same.
The EIA's regular Petroleum Status Report is due for release at its usual 10:30 time slot. Last week's report on the period ending February 12 showed crude oil inventory increased by 3.1 million barrels. Still, oil teased $80 since, partly on dollar strength though. Gasoline stores also increased - by 1.7 million barrels in the latest period. Distillate fuel inventories fell, however, by 2.9 million barrels. Logic tells us that inclimate weather likely intensified heating oil demand, while folks did a lot less driving through the blizzards of the Eastern seaboard. Watch out Easterners, as the propaganda machine known as the local weather news crew says another one is on the way Thursday night through Saturday morning.
Wednesday's earnings schedule includes news from AerCap (NYSE: AER), American Ecology (Nasdaq: ECOL), American Tower (NYSE: AMT), AmSurg (Nasdaq: AMSG), Ashford Hospitality Trust (NYSE: AHT), ASM International (Nasdaq: ASMI), Bio-Rad Laboratories (NYSE: BIO), Brandywine Realty Trust (NYSE: BDN), California Water Service (NYSE: CWT), Cameco (NYSE: CCJ), Chart Industries (Nasdaq: GTLS), Chico's FAS (NYSE: CHS), Clearwire (Nasdaq: CLWR), Daktronics (Nasdaq: DAKT), Dana Holding (NYSE: DAN), Deltic Timber (NYSE: DEL), Dollar Tree (Nasdaq: DLTR), Donaldson (NYSE: DCI), Eaton Vance (NYSE: EV), Express Scripts (Nasdaq: ESRX), FelCor Lodging Trust (NYSE: FCH), First Solar (Nasdaq: FSLR), FirstService (Nasdaq: FSRV), Frontier Communications (NYSE: FTR), Gainsco (AMEX: GAN), Garmin (Nasdaq: GRMN), Gilbraltar Industries (Nasdaq: ROCK), Gladstone Commercial (Nasdaq: GOOD), Goodrich Petroleum (NYSE: GDP), Granite Construction (NYSE: GVA), Greif (NYSE: GEF), Grupo Aeroportuario Del Pacific (NYSE: PAC), Health Care REIT (NYSE: HCN), Helix Energy Solutions (NYSE: HLX), Independent Bank (Nasdaq: IBCP), Insignia Systems (Nasdaq: ISIG), J.M. Smucker (NYSE: SJM), Kaiser Aluminum (Nasdaq: KALU), Lexington Realty Trust (NYSE: LXP), Limited Brands (NYSE: LTD), Lithia Motors (NYSE: LAD), McGrath Rentcorp (Nasdaq: MGRC), MDC Partners (Nasdaq: MDCA), Mobile Mini (Nasdaq: MINI), Northeast Utilities (NYSE: NU), Onyx Pharmaceuticals (Nasdaq: ONXX), PDL BioPharma (Nasdaq: PDLI), PetroHawk Energy (NYSE: HK), Polypore Int'l (NYSE: PPO), ProAssurance Corp. (NYSE: PRA), RailAmerica (NYSE: RA), R.R. Donnelley (Nasdaq: RRD), Sempra Energy (NYSE: SRE), SenoRx (Nasdaq: SENO), South Jersey Industries (NYSE: SJI), Teleflex (NYSE: TFX), Tenaris (NYSE: TS), The TJX Cos. (NYSE: TJX), The Washington Post (NYSE: WPO), Thomson Reuters (NYSE: TRI), TransAlta (NYSE: TAC), Transocean (NYSE: RIG), Trico Marine Services (Nasdaq: TRMA), TriQuint Semiconductor (Nasdaq: TQNT), TTI Telecom (Nasdaq: TTIL), Tyler Technologies (NYSE: TYL), Ultrapar Participacoes S.A. (NYSE: UGP), Weingarten Realty Investors (NYSE: WRI), Whiting Petroleum (NYSE: WLL), Wynn Resorts (Nasdaq: WYNN) and Zale Corp. (NYSE: ZLC).
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