Investor’s first read – Brooksie’s edge before the open
Tuesday, February 7, 2012 9:19 a.m. ET
DJIA: 12,845.13 S&P 500: 1344,33
I think the market expects an agreement out of Greece; what’s going on here now is a “selling process” to the Greek people. While the process has dragged on for years, all eurozone countries have had a chance to begin the process of deleveraging their exposure. However, a year from now, Greece may no longer be part of the eurozone.
IMF chief economist Oliver Blanchard was quoted yesterday while in the U.S. that he believes the only way out for Greece is a reduction in debt, progress on wages, and labor costs and the commitment by the Europeans to extend funds for as long as needed, under these conditions, it’s still a terribly ugly and unpleasant path but it is one which can be tried.
I believe the BIG story in 2012 will, be a huge flow of funds out of Safe havens and into the stock market with stocks edging up in face of earnings growth, the emergence of new leaders and an expansion of price/earnings multiples,
Of course we will awake at times to headlines of another disappointment in Europe, and a few more Mid-Eastern countries will surface as one problem or another.
I suspect Iran will overreach, provoking a reaction that will move its noise to B20 from Page One in the news papers.
There is just too much of a consensus packed into the camp of investors who expect world financial contagion.
I have been in this business long enough to know there is never a “bet the ranch time,” There are just too many balls up in the air that can descend and alter the picture.
But, I see sneaky buying in the charts, buyers who are quietly accumulating shares in stocks that will dominate headlines a year or two out.
The impact of that buying will be magnified when money comes out of safe havens
This week’s economic report are less important.
- ICSC Goldman Store Sales (7:45 a.m.) by major retailers which account for 10% of total store sales.
- Consumer Credit (3:00 p.m.) –Consumer credit jumped $20.4 billion November.
- MBA Purchase Applications (7: 00 a.m.)as a measure of applications at mortgage bankers, this index provides leading indicator of single family home sales and housing construction.
- Jobless Claims (8:30 a,m.) Initial claims dropped 12,000 for the week ending Jan. 28 to 367,000. Obviously “down: is good.
- Wholesale Trade (10:00a.m.) – slowed to 1 0.1 percent gain, Inventory/sales ratio holding at 1.15.
- International Trade (8:30 a.m.) Trade gap widened in Nov. due to jump in oil imports and dip in exports. The index is comprised of merchandise and services
- Consumer Sentiment (9:55 a.m.) Rose in the final week of January, Sentiments have been soaring since July.
Jan 23 DJIA: 12,720 “Europeans Seeking Long-Term Economic Cure“
Jan 25 DJIA: 12,675 “Consolidation, Correction Likely though US Stocks Hold Strong Against EU Turmoil“
Jan. 26 DJIA: 12,756 “Fed Would Raise Interest Rates If Inflation Picks Up“
Jan. 27 DJIA: 12,734 “Warning! Tradable Market Action Lies in Waiting“
Jan. 30 DJIA: 12,660 ““HUGE” Week for Economic Indicators“
Jan. 31 DJIA: 12,653 “All That Is Needed Is a Spark“
Feb. 1 DJIA: 12,632 “Week’s Economic Reports Could Be The Springboard“
Feb. 3 DJIA: 12,862 “Investors Beating the Bullish Tune“
Feb. 6 DJIA: 12,845 “Follow the Money as It Exits Safe Havens“
The writer of Investor’s first read, George Brooks, is not registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.