Ahead of Wall Street for Feb. 16 - Ahead of Wall Street
February 16 2012 - 4:17AM
Zacks
Thursday, February 16, 2012
The Greeks scrambled to put together a deal to beat the March 20
deadline when they will be faced with a substantial refunding need.
But now that they have a deal among themselves and agreed to pretty
much all of the pre-conditions for a fresh bailout, the Europeans
seem be in no hurry to discuss it with them.
A meeting of the Euro-zone finance ministers is tentatively
scheduled for Monday, but there is also talk that the actual deal
may get pushed to after the Greek elections in April. Some have
started wondering if the Europeans are thinking of pushing the
Greeks out of the common currency club. I don’t think that is
likely, but the continued delay in closing the deal is adding to
market uncertainty.
Greece-related concerns aside, today’s trading action will also
reflect Moody’s ratings warning to a number of major banking
institutions, including J.P. Morgan (JPM),
Goldman Sachs (GS) and Morgan
Stanley (MS). Offsetting these headwinds are this
morning’s favorable economic readings on Jobless Claims, Housing
Starts and wholesale inflation fronts.
Initial Jobless Claims dropped a better than expected 13K last week
to 348K. This is the lowest initial Jobless Claims level since
March 2008. The four-week average, which smooths out the
week-to-week fluctuation, dropped by 1.8K to 365.3K, maintaining
its downtrend of recent weeks. This key data series witnessed some
sharp volatility in recent weeks, but appears to be back on its
downtrend.
We also have a better-than-expected Housing Starts numbers this
morning, while Permits were inline with expectations. With respect
to Producer Price Index (PPI), the headline number came in better
than expected, but the ‘core’ number was a tad on the hotter
side.
On the earnings front, General Motors (GM) earned
record annual profits in 2011, but its fourth quarter results came
short of expectations on weakness in Europe and Latin America.
CBS (CBS) beat on EPS, but came short of
revenue expectations after the close on Wednesday. CF
Industries (CF) missed on EPS, but matched revenue. Online
jeweler Blue Nile (NILE) also came short of
expectations.
Tension between positive domestic economic readings and continued
Greece-centric anxieties will push stocks in opposite directions
today. My feeling is that the overall bias will remain to the
downside.
Sheraz Mian
Director of Research
CBS CORP (CBS): Free Stock Analysis Report
CF INDUS HLDGS (CF): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
BLUE NILE INC (NILE): Free Stock Analysis Report
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