Nat Worden
On Tuesday, another long-running tale of economic woe in the U.S. will have its day when General Motors (GM Quote - Cramer on GM - Stock Picks), Ford (F Quote - Cramer on F - Stock Picks) and Chrysler report their sales of cars and trucks for February.
Wednesday is a big economic day, with the release of the Fed's so-called beige book and the ISM due to report February results for its services index. In January, ISM Services shocked the market with a decline into recessionary territory at 44.6. This time around, economists are expecting a higher reading, but still in line with a downturn at 48.5. Also on Wednesday, the government is expected to report that factory orders declined in January by 1.5%, and it will update its fourth-quarter report on U.S. productivity levels, which previously showed a 1.8% uptick. Finally, the Labor Department's weekly initial unemployment claims report on Thursday morning, along with January's data on pending home sales, will set the stage for the all-important employment report the following morning. Throughout the week, a trickle of leftover earnings releases from the fourth-quarter reporting season is also in store from retail chains such as Chico's (CHS Quote - Cramer on CHS - Stock Picks), Staples (SPLS Quote - Cramer on SPLS - Stock Picks), Saks (SKS Quote - Cramer on SKS - Stock Picks), Big Lots (BIG Quote - Cramer on BIG - Stock Picks), BJ's Wholesale Club (BJ Quote - Cramer on BJ - Stock Picks) and Urban Outfitters (URBN Quote - Cramer on URBN - Stock Picks). Meanwhile, the real market action likely will be centered on the fate of bond insurance giant Ambac Financial(ABK Quote - Cramer on ABK - Stock Picks) as it struggles to raise capital and avoid a downgrade from Moody's Investors Service that could rock the already shell-shocked financial system. "Moody's appears to have given Ambac until the end of next week to raise sufficient capital to retain their triple-A credit rating," says Bianco. "If they're downgraded, we'll then see another round of massive losses at financial institutions in first-quarter earnings reports. Longer term, if the bond insurers can't write new business, then their ability to pay their obligations becomes a question mark, and that creates another wave of credit downgrades." Ambac's larger counterpart in bond insurance, MBIA (MBI Quote - Cramer on MBI - Stock Picks), has raised $2.6 billion in new capital, buying it some time, but its outlook remains shaky. "The demand for our product is the lowest it has been, and we are writing very little new business," MBIA said in a Friday filing with the Securities and Exchange Commission. |
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