Weekend Reading: Recessionary Headwinds

Welcome to another edition of Weekend Reading. First a look back at the week that just finished, then a look forward to the week ahead, and finally some articles and papers worth reading.

It was a poor week on the major markets, but it could have been much worse. It felt as if recession news, deepening credit problems and a general sense of malaise had us teetering on a market edge. The week ended with the Dow and S&P 500 down 3.0% and 2.8%, respectively, while the Nasdaq lost 2.6%.

Next week will see more recessionary headwinds. Without a doubt, data will increasingly show that we already are in a recession, which won't put investors in an upbeat mood. Then again, while such news isn't pleasant, it does remove a source of economic uncertainty and move the recession-related questions to "how bad" and "how long." That's a kind of progress, at least in market terms. At the same time, expectations are growing that we will see a 50-basis-point rate cut, perhaps as early as next week.

Turning to economic news, we'll see international trade data Tuesday, the February retail sales report Thursday and the February consumer price index on Friday. Also Friday, Reuters and the University of Michigan plan to release their consumer sentiment survey.

As for earnings, it will be a light week. Among the relatively few companies reporting is American Eagle OutfittersAEO.

Finally, here are some articles and papers worth reading:

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• Hedge fund return statistics 1994-2005. (Journal of Investing)
• Barron's picks CemexCX and pans Fannie Mae. (Barron's)
• Solar energy firms leave waste behind in China. (The Washington Post)
• There is no credit crunch. (Forbes/Fisher)
• Beware of gold's speculative run. (The Economist)
• Oil demand is drying up -- slightly. (San Francisco Chronicle)
• Barney Frank -- The Case for a Housing Rescue. (The Washington Post)
• Modeling the future of U.S. petroleum use. (EIA)
• Wilbur Ross and others are jumping into muni lending. (New York Post)
• Britain shivers as U.S. hits recession. (Times of London)
• The death of a hedge fund. (Fortune)
• Bill Miller is betting on CountrywideCFC and Yahoo!YHOO. (Fortune)
• LogitechLOGI says any MicrosoftMSFT bid makes no sense. (Reuters)
• Attempts at beating the market costing investors $100 billion. (The New York Times)
• U.S. economy has less impact on oil prices now: Iran. (Reuters)
• Seeing an End to the Good Times (Such as They Were). (The New York Times)
• TIPS' time in the sun? (IDD)
• Goldman Sachs'GS foray into wealth management. (Bloomberg)
• Protectionist pandering is a strategy for losers. (Bloomberg)
• A modest forecast for 2008 national ad spending. (Advertising Age)
• In search of the perfect battery. (The Economist)
• Surging costs of groceries hit home. (The Boston Globe)
• Countrywide Said to Be Subject of Federal Criminal Inquiry. (The New York Times)
• Doom and gloom at Bloomberg. (New York Post)

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