we could see some heavy shit this week

by big_jesus Sun Jan 25, 2009 1:51 pm

long long post about market WOEs

http://money.cnn.com/2009/01/25/markets/sunday_weekahead/index.htm?postversion=2009012508&eref=rss_topstories

Earnings, economy - here comes 'terrible'
The week ahead: Investors gear up for a deluge of weak earnings and the biggest plunge in GDP in 26 years.

NEW YORK (CNNMoney.com) -- Investors this week will face the largest batch of company report cards yet, in what is quickly shaping up to be the worst quarter for corporate profits in a decade.

The earnings avalanche will test the market's mettle. Last week, the Dow fought back after falling below the 8,000 point psychological benchmark for four days in a row. Analysts say if the Dow can hang on to this level in the weeks ahead, that's a good indication that a bottom has been set.

The biggest week for earnings brings reports from 137 S&P 500 companies and 12 Dow components. Standouts include Caterpillar, American Express, McDonald's, Yahoo, Wells Fargo and Exxon Mobil.

Only 10% of the 85 S&P 500 companies that have reported so far have topped forecasts. Another 60% have met estimates and another 30% have missed, according to Thomson Reuters.

"We're in the process of absorbing just how bad the fourth quarter was," said Bernard McGinn, CEO of McGinn Investment Management. "We had a feeling things were terrible, now we're getting proof of it. The question is 'where do we go now?"

This week also brings the latest Fed policy meeting - although it's likely to be less influential than usual since the central bankers are expected to keep interest rates unchanged near zero, said Kenny Landgraf, principal and founder at Kenjol Capital Management

Investors will also digest reports on housing, consumer confidence and leading economic indicators early in the week. The end of the week brings the fourth-quarter gross domestic product (GDP) report. It's expected to have fallen by an annual rate of 5.2%, it biggest plunge in 26 years.

"Everyone is bracing for the GDP number to be pretty terrible, but the bigger surprise could come with the housing numbers, which are also expected to be awful," he said.

Landgraf said that investors are also looking for more concrete news to come from the Obama administration this week regarding the use of the remaining $350 billion of the TARP money and negotiations on the $825 billion stimulus package.

Earnings hit hard: With 15% of the S&P 500 having already reported results, fourth-quarter profits are expected to have fallen 28.1% from a year ago, according to the latest figures from tracker Thomson Reuters.

Typically, the final number is lower than where it stands at this point in the quarter. But even if the final number is no worse than where it stands now, the fourth quarter will still rank as the biggest decline for S&P 500 profits in the 10 years Thomson has been tracking results.

Worse-than-expected reports from big financial companies such as Citigroup and Bank of America have weighed heavily on the results so far.

"It's not how many companies are missing," said John Butters, Thomson Reuters' senior research analyst. "It's the size of the companies missing and the magnitude of the losses."

Financials are currently expected to lose $12.5 billion this year as opposed to their profits of $5 billion a year ago. But financials aren't alone, with 7 of 10 S&P economic sectors due to post declines.

However, not all of the news has been bad. Last week Google, Apple and IBM reported earnings that were better than expected.
On the docket

Monday: December existing home sales are expected to have fallen to a 4.40 million unit annual rate from a 4.49 million unit rate in November.

The December index of leading economic indicators (LEI) is expected to have fallen 0.3% after falling 0.4% in November.

Tuesday: The January consumer confidence index from the Conference Board is expected to hold steady at an all-time low of 38.0, unchanged from December.

Also due Tuesday is the S&P/CaseShiller home index for November, expected to show steep declines.

Wednesday: The Federal Reserve concludes its two-day policy meeting with an announcement on interest rates due at around 2:15 p.m. ET. No change is expected in the fed funds rate: The central bank lowered interest rates to nearly zero in December and hinted it would keep them there for some time.

As always, the statement accompanying the decision will be critical, as it offers the Fed's assessment of the economy, now in its second year of a recession. (Full story)

Also on Wednesday, the World Economic Forum kicks off in Davos, Switzerland. It runs through Sunday.

Thursday: The December durable goods orders report is due before the start of trade. Orders are expected to have dropped 1.8% after dropping 1.5% in November.

December new home sales are due after the start of trading. Sales are expected to have fallen to a 400,000 annual unit rate from a 407,000 annual unit rate in November.

Friday: Fourth-quarter gross domestic product (GDP) is expected to have fallen by an annual rate of 5.2%, after falling by an annual rate of 0.5% in the third quarter. That would be the biggest quarterly decline in roughly 26 years.

The January Chicago PMI, a regional read on manufacturing, is expected to have fallen to 34.2 from 35.1 in December.

The University of Michigan releases its revised January consumer sentiment index, which is expected to hold steady at 61.9.
Earnings to watch

Monday: Before the start of trade, heavy-equipment maker Caterpillar (CAT, Fortune 500), a Dow component, is expected to report earnings of $1.31 per share versus $1.50 a year ago, according to a consensus of analysts surveyed by Thomson Reuters.

Fellow Dow component McDonald's (MCD, Fortune 500) is expected to report earnings of 83 cents per share versus 73 cents a year ago.

After the market close, Dow component American Express (AXP, Fortune 500) is expected to report earnings of 22 cents per share versus 71 cents a year ago.

Also after the close, biotech Amgen (AMGN, Fortune 500) is expected to report a profit of $1.07 per share versus $1 a year ago.

Tuesday: Dow component DuPont (DD, Fortune 500) is set to report results before the start of trading. The chemical maker is expected to have lost 24 cents per share, after having earned 57 cents per share a year ago.

Verizon Communications (VZ, Fortune 500), also a Dow component, is expected to report earnings of 62 cents per share, the same as it did a year ago.

After the market close, Yahoo (YHOO, Fortune 500) is expected to report earnings of 13 cents per share versus 15 cents a year ago.

Wednesday: AT&T (T, Fortune 500) reports results before the start of trade. The Dow component is expected to report earnings of 65 cents per share versus 71 cents a year ago.

Also in the morning, Wells Fargo (WFC, Fortune 500) is expected to report earnings of 33 cents per share, versus 41 cents a year ago. Wells Fargo is perceived as having held up better than a number of other banks.

Thursday: 3M (MMM, Fortune 500), due to report results before the start of trade, is expected to have earned 93 cents per share versus $1.19 a year ago. The Dow component is often seen as a proxy for the economy because of the breadth of its businesses.

After the market close, Amazon.com (AMZN, Fortune 500) is expected to report earnings of 39 cents per share versus 48 cents a year ago.

Friday: A pair of oil companies report results before the start of trade. Chevron (CVX, Fortune 500) is expected to have earned $1.81 per share versus $2.32 a year ago. Exxon Mobil (XOM, Fortune 500), a Dow component, is expected to report earnings of $1.47 per share versus $2.16 a year ago.

Also before the open, Dow component Honeywell (HON, Fortune 500) is expected to have earned 97 cents per share, versus 91 cents a share a year ago.

Procter & Gamble (PG, Fortune 500) is expected to have earned $1.58 per share versus 98 cents a year ago.

by millertime Sun Jan 25, 2009 2:26 pm

Looks like it is finally time to do some research, crack out the spreadsheets and start buying businesses in a month or two.

by Aristotle Sun Jan 25, 2009 2:31 pm

we're fucked. i got my face smashed in by the banks last week, because i tried to get cute.

california has about 2-months of cash left to pay debt, before they're bankrupt. their unemployment is around 10%. new york, facing budget shortfalls, is trying to pass a 'fat tax'. yes a fat tax. http://www.telegraph.co.uk/health/3793719/New-York-planning-fat-tax-on-drinks.html

by millertime Sun Jan 25, 2009 3:11 pm

Aristotle wrote:we're fucked. i got my face smashed in by the banks last week, because i tried to get cute.

california has about 2-months of cash left to pay debt, before they're bankrupt. their unemployment is around 10%. new york, facing budget shortfalls, is trying to pass a 'fat tax'. yes a fat tax. http://www.telegraph.co.uk/health/3793719/New-York-planning-fat-tax-on-drinks.html

What are you worried about? You arn't even 40 yet. You got lots of time to catch the next train.

by Pennzoil GT-R Sun Jan 25, 2009 7:00 pm

im happy that public perception cant really get any worse...and the public is fucking driving this recession just as much as any profit warnings. most of the banks have already released their losses and they are the ones that have taken the big hits...so fingers crossed we are at or near the bottom now

by Swerve Sun Jan 25, 2009 10:57 pm

So far we're following the trend of all the major crashes. The market falls sharply in September-October, rallies slightly over the next few months and completely collapses around the Feb-March profit forecast period.

I got just about everything right, except for getting out of the bank stocks. One because it never managed to exceed my purchase price and one because it only managed a 1 or 2% gain three months after I bought, only to drop sharply last week.

by millertime Sun Jan 25, 2009 11:46 pm

I would say I lost about 20% of what I had in my portfolio back in May 2008.

On the brightside I make 2-3 thousand more than I spend every month so now my losses look like peanuts compared to by overall assets. My biggest financial problem is I dont know what to spend all my money on.

by Swerve Sun Jan 25, 2009 11:59 pm

My biggest financial problem is working out how long I can survive in Thailand before my money runs out.

by Aristotle Mon Jan 26, 2009 12:36 am

Pennzoil GT-R wrote:im happy that public perception cant really get any worse...and the public is fucking driving this recession just as much as any profit warnings. most of the banks have already released their losses and they are the ones that have taken the big hits...so fingers crossed we are at or near the bottom now

i'd like that to be the case, but the banks all have billions of level 3 garbage that's hidden. that combined with the surge in gold and continued bubble in treasuries is bad. real bad. if the treasury bubble bursts in favor of gold, the only things i will be buying are canned goods and guns.

by Pete.Z Mon Jan 26, 2009 3:08 am

A lot of people are making so much money now......

by Pennzoil GT-R Mon Jan 26, 2009 5:51 pm

i literally almost doubled my money today....

i really fucking hope it doesnt bounce back down again tomorrow. sense tells me to sell and buy back lower, but then sense has no place in this market. sod's law does however and tells me if i sell it will just rocket further

by big_jesus Mon Jan 26, 2009 6:34 pm

what's up with GE? would it be a good idea to get in there?

by millertime Mon Jan 26, 2009 11:04 pm

big_jesus wrote:what's up with GE? would it be a good idea to get in there?

Its on my buy list.

by dunnas Tue Jan 27, 2009 2:09 am

millertime wrote:I would say I lost about 20% of what I had in my portfolio back in May 2008.

On the brightside I make 2-3 thousand more than I spend every month so now my losses look like peanuts compared to by overall assets. My biggest financial problem is I dont know what to spend all my money on.

Fuck you. Fuck you right up the ass. :curses:

by Aristotle Tue Jan 27, 2009 3:02 am

a good point being mentioned is that if all the dow banks went to zero right now, we would be only about 200 points down, if all the other companies stayed flat.

also, remember GE is a bank as much as it is an industrial company. they're levered at over 100 to 1. that basically means the equity is worthless at the moment, save for the dividend, which the market believes is going to be cut. that doesn't matter from a trading perspective, as you can witness with the airlines, but tread lightly.

any real rally is going to require some closure to the bank mess.

by Aristotle Tue Jan 27, 2009 3:07 am

Pennzoil GT-R wrote:i literally almost doubled my money today....

i really fucking hope it doesnt bounce back down again tomorrow. sense tells me to sell and buy back lower, but then sense has no place in this market. sod's law does however and tells me if i sell it will just rocket further

whenever i practice disciplined trading, whatever i owned rockets upward after i sell and take my profits. whenever i 'let it ride', i get murdered in the time it takes to go get something to eat.

by Pennzoil GT-R Tue Jan 27, 2009 3:14 am

Aristotle wrote:a good point being mentioned is that if all the dow banks went to zero right now, we would be only about 200 points down, if all the other companies stayed flat.

also, remember GE is a bank as much as it is an industrial company. they're levered at over 100 to 1. that basically means the equity is worthless at the moment, save for the dividend, which the market believes is going to be cut. that doesn't matter from a trading perspective, as you can witness with the airlines, but tread lightly.

any real rally is going to require some closure to the bank mess.

all id say is make damn well sure you scale in over a period of weeks with GE and dont just dump everything in it in one go. like you say aris its one of the few tied directly to what the banks do. some people think we just saw rock bottom and maybe we did but i dont think its the last time we'll see it either.

by Pennzoil GT-R Tue Jan 27, 2009 3:18 am

dont know an awful lot about ge though

by Aristotle Tue Jan 27, 2009 3:23 am

GE is a mess. that's about the jist of it. they're too big, and they couldn't grow the industrial side of their business, so they started fucking around with banking and derivatives.

steel companies reporting tomorrow. should be dismal, but it seems like the market is buying bad news.

jobs number on friday could be bad, though. real bad.

by Swerve Tue Jan 27, 2009 7:49 am

Aristotle wrote:GE is a mess. that's about the jist of it. they're too big, and they couldn't grow the industrial side of their business, so they started fucking around with banking and derivatives.

steel companies reporting tomorrow. should be dismal, but it seems like the market is buying bad news.

jobs number on friday could be bad, though. real bad.

I was surprised to see RIO up 10% today. It's really hard to say if the market has factored in the renegotiated price for iron ore we have coming in March, or if expectations are still that it will be higher than the predicted 86% reduction.

RIO would be a great buy if it didn't have so much debt and assets that are worthless in this economy. I'm still probably going to buy big next time it hits 35-36 and put in an immediate sell order for 42.

by big_jesus Tue Jan 27, 2009 12:24 pm

Companhia Vale Do Rio Doce?

by big_jesus Tue Jan 27, 2009 12:25 pm

that's what i get when i look up RIO.

by Aristotle Tue Jan 27, 2009 1:10 pm

there are two 'RIOs' big j.

one is CVRD in south america (the one you found); the other is rio tinto, which is RIO on the ASX.

by Aristotle Tue Jan 27, 2009 1:12 pm

Swerve wrote:
Aristotle wrote:GE is a mess. that's about the jist of it. they're too big, and they couldn't grow the industrial side of their business, so they started fucking around with banking and derivatives.

steel companies reporting tomorrow. should be dismal, but it seems like the market is buying bad news.

jobs number on friday could be bad, though. real bad.

I was surprised to see RIO up 10% today. It's really hard to say if the market has factored in the renegotiated price for iron ore we have coming in March, or if expectations are still that it will be higher than the predicted 86% reduction.

RIO would be a great buy if it didn't have so much debt and assets that are worthless in this economy. I'm still probably going to buy big next time it hits 35-36 and put in an immediate sell order for 42.

people are trying to play the reflation/stimulus trade, i think. they're buying on dips just as much as selling on rips. buy the dips until it doesn't work. keep your eye on key support/trend lines, so you'll have tight stops.

by Aristotle Tue Jan 27, 2009 1:16 pm

also, here's what i bought today:

WFC
FCX
DUG

WFC is an earnings gamble. small position. they report tomorrow. if they aren't as bad as people think, it's going to rally. otherwise, i get my face ripped off.

FCX has bottomed around $20, in my opinion. i was a little late, but they reported yesterday, and i didn't want to get in before that. copper is down today, yet FCX is still trading up a bit. an unusual disconnect.

DUG is my hedge. it's an ETF that shorts oil-related companies like XOM, RIG, NOV, etc. XOM is such a huge part of the s&p 500 that if the market tanks XOM should head south, sending DUG up.

that's the plan. let's see if i get burned.

by Pennzoil GT-R Tue Jan 27, 2009 6:09 pm

does somebody know something about breweries that i dont? they are consistently heading north everytime i seem to look at them. maybe the economy is driving more people to drink?

by big_jesus Tue Jan 27, 2009 6:16 pm

vice always climbs in economic downtimes.

there's a vice fund, actually. you need $10k to get in, and it's all guns, porn, booze, and smokes.

by Aristotle Tue Jan 27, 2009 6:49 pm

yeah, booze is a safe haven. tobacco was for a while, but it's been sketchy ever since phillip morris got fucked over by the govt.

they just leaked news of a possible treasury plan to buy bad bank assets, so my WFC is holding up in the afterhours. i think DUG is plotting to rape my face, however, so i may have to kick that out tomorrow morning after the COP earnings. if COP says, 'hey we're fucked' and people bid it up, i'm going to have to remove that hedge and try to ride WFC and FCX for a little while.

by thewalrus Tue Jan 27, 2009 7:24 pm

big_jesus wrote:vice always climbs in economic downtimes.

there's a vice fund, actually. you need $10k to get in, and it's all guns, porn, booze, and smokes.

haha that's awesome.

by Aristotle Tue Jan 27, 2009 8:12 pm

dumped my DUG. s&p futures are up, and i don't feel like sweating it out.

by millertime Tue Jan 27, 2009 11:53 pm

fuck it. I just cant be bothered to do hours of research after working all day. fucking interest rate in the bank is fuck all. I have no intention of buying a house in the next two years (mostly because I'll probably continue to bounce around western canada for at least another 3 years). The stock market is a fucking roller coaster.

Im fucked.

by Aristotle Wed Jan 28, 2009 3:26 am

cash is king.

by fish Wed Jan 28, 2009 5:01 am

actually big jay

porn is fucked the adult entertainment industry is seeking a 5-9 billion dollar bail out

its only booze and smokes that are safe but congress OBAMAAAAAAAa is prolly gonna take all the fun out of booze and smokes taxing them 90% and ruin it for everyone

by fish Wed Jan 28, 2009 5:02 am

also aris is it good to mabe get into pfizer even though they laid off like a billion people they just did a 68 billion dollar take over while posting loses of like 80-90%

by Aristotle Wed Jan 28, 2009 5:32 am

camaro used to work for pfizer...

by Swerve Wed Jan 28, 2009 9:14 am

Beer sales down 10% for the quarter in England.

by fish Wed Jan 28, 2009 8:00 pm

camaro is the reason the economy collapsed his car was so slamming wall street brokers gave up they could never compete

by Aristotle Wed Jan 28, 2009 10:09 pm

dude used his mental edge to stack niggas up

by millertime Wed Jan 28, 2009 10:14 pm

Aristotle wrote:cash is king.

yes and no.

by Aristotle Wed Jan 28, 2009 10:49 pm

the only thing i'd invest in is a CD that's insured by the gov't. other than that, i'd put it in a box and bury it in the backyard.

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