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The markets shrugged off their midweek dip with a strong finish to the week. The
Dow Jones Industrial Average
tacked on 0.4%, while the
gained 0.6%. The
was the big winner this week, adding 0.8%, with the Russell 2000 a close No. 2, with its 0.7% increase.
In the coming week, earnings season ramps up.
says "investors have been primed for pain: the first quarter of -- gasp -- single-digit profit growth after a seeming eternity of double-digit gains." But if investors are truly prepped for the worst, it won't take much to surprise to the upside.
The economic highlight this week is likely to be the consumer price index, scheduled for release on Tuesday.
And an interesting aside about this week's Linkfest: The market articles are nearly all upbeat, while the economic and housing links are almost uniformly negative. What gives? I guess that's just the way the links crumble.
It's time to get clicking...
INVESTING & TRADING¿ Stocks Are Back on Their Feet As Investors Applaud Profits: "Upbeat inflation news and optimism about earlycorporate-profit reports are taking investors' minds off broadereconomic weakness." ( The Wall Street Journal) ¿ Investors Need Not Be Bearish to Hedge Risk. (Hussman Funds) ¿ Profits May Be Fickle Oracles This Quarter: "Wall Street is about to get information on one of the stock market's biggest drivers -- and one investors haven't focused on lately: corporate profits. Whether, and how, the profit news surprises investors is likely to be the main determinant of the market's direction in the next few weeks." (free WSJ) ¿ Short Sellers Target Small-Company Shares as U.S. Growth Slows. ( Bloomberg) What? There are short sellers left? ¿ Contrarian Play: Why Investors Should Consider Real Estate. "With housing prices softening and subprime lenders tanking, investors have been running from anything that smells of real estate. But they may be bailing too quickly, as some parts of the sector are still doing well." ( WSJ) ¿ Why China Need Not Fear U.S. Economic Slowdown. (free WSJ) ¿ Technically speaking, Stock Market Running on Empty? "The stock market has put on a nice show with the Dow Jones Industrial Average rising some 5.5% off its March 14 intraday low. Along the way, it has ignored several technical barriers and even saw one major index, the NYSE comp set a new closing high. But from the start of the rally through this week's action, trading volume has been conspicuous by its absence. Without volume, the market will soon run out of fuel, and under such conditions we cannot expect it to run much longer." ( Barron's) ¿ His Fund Was Phony, But the Bars Are Real: Forget 2 & 20 -- this guy charged 100%... ( Trader Magazine) ¿ Fascinating look at Commodity Prices in Babylon 385 - 61 BC. The Wall of Worry now looks like the Great Wall of China:¿ All this week, I debated Don Luskin about the economy: The Capital Commerce Debate. ( U.S. News & World Report) ¿ Happy Tax Day! How to caclulate your Tax Freedom Day. ( Barron's) See also: Why U.S. tax policy makes saving a sucker's game. (Henry Blodget in Slate) ¿ Economy Enemy No. 1: Soft Capital Spending. Housing worries are giving way to concerns about weak business spending as the biggest cloud hanging over the U.S. economy, a WSJ.com survey found. Still, economists again cut forecasts for home prices. (free WSJ) ¿ Fed Says What It Means -- No Interest Rate Cut. ¿ The Coming Tax Crash: "Speculation" based taxes have been are large portion of the Federal government's tax rise; meanwhile, states are seeing sales based tax revenue fall. Slate's Dan Gross asks: Are federal tax revenues on the brink of collapse?¿ Current recovery great for profits, poor by most other measures (Economic Policy Institute) ¿ IT LOOKED LIKE A JOB BOOM, BUT IT REALLY ISN'T: "So why was the March jobs number so strong? Give credit to the birth/death model. In March the Labor Department added 128,000 jobs to its count that the government thinks were created by newly formed companies. So this estimate accounted for much of the month's 180,000 gain. And the optimism -- as well as the confusion -- will only grow when the April job figures come out." ( NYPost) ¿ 2007 called awful year for boat market: "While there are many factors at play, we believe softness in the housing market, especially the Florida market, is the largest factor influencing consumer purchase behavior." ( Boating Industry) ¿ Defaults Rise in Next Level of Mortgages: "Some of the problems afflicting mortgages sold to borrowers with weak,or subprime, credit increasingly appear to be cropping up in loans madeto homeowners who were thought to be less risky." ( The New York Times) ¿ Buy vs. Rent?¿ Housing Boom Tied To Sham Mortgages: "Many experts have concluded that the nation's real estate boom of recent years was fueled in part by weakened lending standards that sparked excessive demand and drove up prices. Now, some are worried that the looser standards may have permitted a boom of another kind -- a big expansion of mortgage fraud." ( The Washington Post) ¿ Realtors Forecast Falling Home Prices: The National Association of Realtors, which has long proclaimed that U.S. home prices haven't declined on a nationwide basis since the Great Depression, now says they are likely to do just that this year. ( WSJ) ¿ Heebner Says Home Prices May Fall 20% Amid Bad Loans: "Kenneth Heebner, manager of the top-performing real-estate fund over the past decade, said U.S. home prices may plunge as much as 20 percent because of rising defaults on riskier mortgages." ( Bloomberg) ¿ Builder tells subs to cut prices mid-contract: "Home builder Lennar Corp. has sent letters to its subcontractors in Southern California, Nevada and other states, telling them to cut their prices by as much as 20% and resubmit invoices for work not yet paid for. The letters said the subcontractors have a choice of either cutting their invoice prices or being shut out of bidding on Lennar projects for the next six months. In some cases the work has already been completed." ( Contractor Mag.com) ¿ BrokerUniverse: Real-life tales of desperate brokers seeking lenders for their "nontraditional" borrowers. ¿ Reversal of Fortune: "The formula for human well-being used to be simple: Make money, get happy. So why is the old axiom suddenly turning on us?" ( Mother Jones) ¿ Most Americans See Recession in the Next 12 Months: "Most Americans expect a recession within a year and disapprove of President George W. Bush's handling of the economy even though the unemployment rate is at a five-year low, a new Bloomberg/Los Angeles Times poll found. Six in 10 who were surveyed predicted a recession, similar to the 64 percent who anticipated the economy would contract in aDecember 2000 poll by the Los Angeles Times three months before the last decline." ( Bloomberg) ¿ How to scare bank robbers? Try smiling: "What's the best way to make a bank robber turn around and walk out the door empty-handed? Try a handshake and a smile. Excessive friendliness is the key to the 'Safecatch' system created by FBI Special Agent Larry Carr. The premise is that an overdose of courtesy will unnerve would-be robbers and get them to rethink the crime." ( AP) ¿ Behind the Fall of Imus, A Digital Brush Fire: "This time it was different. The target was a sympathetic team of young athletes. In the ensuing furor, the lucrative and often vulgar business of talk radio found itself running into new limits, as the Internet sent Mr. Imus to millions of PC screens, driving executives, advertisers and employees to distance themselves from his racist words."(free WSJ) ¿ Google maps the Darfur crisis. ¿ Apple (AAPL) - Get ReportShares Down Slightly On Leopard Delay; Analysts Largely Unconcerned. ( Barron's Tech Trader Daily) Also, increasing Pressure to launch iTunes monthly fee. ( Telegraph) ¿ Earth to Bloomberg: the Gold Fields bid story is a hoax: The wire service gets punk'd. (The original article is here.) ¿ Revolution, flashmobs, and brain chips. A grim vision of the future from Britain's Minister of Defence. ( Guardian) ¿ The NYTimes Has Gone Blog Crazy!¿ Always Expect the Unexpected: Interview with Nassim Nicholas Taleb in Wired. Taleb's follow up to Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets will be out this week. It's titled: The Black Swan: The Impact of the Highly Improbable. (No answer as to why there have been no reviews out yet.) ¿ To those of us who grew up in a certain era, Kurt Vonnegut was one the most interesting satirical novelists of the time. If you haven't read Cat's Cradle or Slaughterhouse Five, you've got some homework to do... ¿ What happens when one of the world's top violinists plays in a subway station as an anonymous street musician? An absolutely lovely story. Long version here. ( Washington Post) ¿ Southern California running low on servants. ¿ The New Yorker has a fascinating story on David Belle, the inventor of parkour. He demonstrates his sport in this 11-minute video. Astounding. ¿ Hysterical Kodak commercial. (Wait for the second half.) ¿ The little-known transcontinental burrito tunnel, linking San Francisco and NYC. "By the time they reach Cleveland the burritos are fully heated through and traveling uphill at about twice the speed of sound." (via kottke)
TECHNOLOGY & SCIENCE
MUSIC, BOOKS, MOVIES, TV, FUN!
This Linkfest was powered by
. Believe it or not, we are expecting a nor'easter this weekend and
in the Northeast, where Old Man Winter refuses to go quietly.
At the time of publication, Ritholtz had no positions in stocks mentioned, although holdings can change at any time. Barry Ritholtz is the chief market strategist for Ritholtz Research, an independent institutional research firm, specializing in the analysis of macroeconomic trends and the capital markets. The firm's variant perspectives are applied to the fixed income, equity and commodity markets, both domestically and internationally. Other areas of research coverage also include consumer, real estate, geopolitics, technology and digital media. Ritholtz is also president of Ritholtz Capital Partners (RCP), a New York based hedge fund. RCP is driven by the analysis performed by Ritholtz Research. Ritholtz appreciates your feedback;
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