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Weekend Reading

Paul Kedrosky

Good Sunday morning, and welcome to Weekend Reading. As always, here are some articles and papers worth reading. First, however, a look back at the week that just finished, and a look forward to the week ahead.

The major U.S. indices had another up week, making it three in a row on the positive side. The Dow and the S&P 500 ended the week up 0.5% and 0.1%, respectively, while the tech-heavy Nasdaq gained 1.1%. On the back of the best September for the S&P 500 since 1998, indices are once again approaching all-time highs.

Looking forward to the week ahead, investors are going to be focused on economic data. There will be plenty of releases to peruse, but the main event will be the September nonfarm payrolls report, due out Friday. It could presage further economic weakness, or show that fears of recession are overdone.

Other economic reports include the Institute for Supply Management's manufacturing and service-sector surveys, scheduled for Monday and Wednesday, respectively; U.S. car and truck sales for October, due Tuesday; and August factory orders, on Thursday.

Turning to earnings, it's another quiet week, although the following big companies report: Walgreen(WAG Quote), Constellation Brands(STZ Quote), Pepsi Bottling(PBG Quote) and Marriott(MAR Quote).

Finally, here are some articles, papers, and books worth reading:

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• It may be 2009 until lumber/housing recover. (Reuters)
• Housing market worsened badly in August. (The New York Times)
• M&A deals fell 40% in the third quarter. (FT)
• Barron's picks AMR(AMR Quote) and Nordson(NDSN Quote), and reviews hedge fund manager performance. (Barron's)
• There is no credit crunch. (Forbes/Fisher)
• China's groundwater crisis. (The New York Times)
• Spreadsheets are the real risk in London. (Arxiv)
• Microsoft(MSFT Quote) postpones mothballing XP as Vista underperforms. (InfoWorld)
• U.S. bank collapse is largest in 14 years. (Times)
• What might cause gas prices to stop here? (EIA)
• Why does the government pretend prices aren't rising? (Slate)
• ECN commissions so bad that one ECN is moving into investment banking. (Investment Dealers' Digest)
• Warren Buffett has been wrongly named as an acquirer seven times this year, and five of those stocks are now lower. (Bloomberg)
• Finding the correct parallel for the current rate-cutting cycle. (The Economist)
• Lengthy interview with Wells Fargo(WFC Quote) CEO John Stumpf. (San Francisco Chronicle)
• Emerging-markets advocates are moving on to Latvia and Bangladesh. (The Washington Post)
• Bill Miller's Legg Mason is moving heavily into large-cap stocks. (The Washington Post)
• BusinessWeek's list of the most influential people in sports. (BusinessWeek)
• Dissecting the quant meltdown. (Andrew Lo)
• Falling dollar has led to new currency bets. (The New York Times)
• Stephen Colbert on the rise of the Canadian dollar. (Colbert Report)
• Why municipal wireless networks have been such a flop. (Slate)
• Research: Housing is the business cycle. (NBER)
• Research: Which short-sellers are informed? (Journal of Finance)
• Research: Correlated trading and returns. (Journal of Finance)

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting