Weekend Reading: Rates, Earnings Share Center Stage
Good Sunday morning. Here are some articles and papers worthreading. First, however, a look back at the week that just finished,and a look forward at the week ahead.
The major markets wobbled last week. While they ended relatively strong, that wasn't enough to turn in a positive week. The
Dow
and the
S&P 500
lost 0.3%; the
Nasdaq Composite
dropped a stiffer 0.7%.
Click here for the weekly performance.
Next week will probably see more of the same, albeit with thisweek's slight loss turned into a slight gain. Investors are nervouslyre-entering equities, post Katrina. And with next week's
Fed
meetingout of the way -- and almost certainly including a rate increase --people can return to their regularly scheduled programming, which willbe third-quarter earnings.
Turning to the economic week ahead, it centers on the FederalReserve meeting on Tuesday. We should see a quarter-point rateincrease to 3.75%, the eleventh such increase in the last 15 months. Investors will, however, parse the FOMC release closely to seewhether Greenspan & Co. think that the economy is still trundlingalong satisfactorily. Any hint otherwise will be met with realunhappiness -- and, more importantly, selling of stocks.
Over on earnings, there a few companies reporting worth watching.Among those, we will have
Circuit City
TheStreet Recommends
(CC)
,
Goldman Sachs
(GS)
,
FedEx
(FDX)
and
Nike
(NKE)
.
Finally, here are some articles and papers worth reading:
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- Jettisoningpensions at places like Delphi is saving companies, butdangerously loading the Pension Benefit Guarantee Corporation (New York Times)
- Onlineadvertising is set to explode further over next 12 months(IDD)
- ACat 3 hurricane hitting Manhattan could create one-millionevacuees (Financial Observer)
- Anew hurricane has a bead on the Gulf (NOAA)
- Books: Fascinatingstory of a scientific system that has beaten casinos and WallStreet (Amazon)
- Skepticismabounds about Microsoft's new growth spurt (BusinessWeek)
- HurricaneKatrina has highlighted free-spending government ways(Bloomberg/Baum)
- Bushis only veto-less president in modern era (CS Monitor)
- Barron's tipssolar power, Corinthian Colleges and PMC-Sierra (Barron's)
- Skype/eBayis a reminder that all phone calls will eventually be free(Economist)
- Isit finally gold's time? (Economist)
- Speculatingabout what Google will do with its $7b cash pile, from WiFi, tofiber optics, to buying AOL (?!) (TheDeal)
- Reuters'Contrarian Opportunities screen has whupped the major markets(San Francisco Chronicle)
- Chinacould overtake U.S. and Germany to become world's largest exporterby 2010 (OECD)
- Applied'sCEO sees a decline in semiconductor capex (EETimes)
- Domesticstock fund inflows are up tenfold over the prior week(Institutional Investor)
- Research: Thecross-listing effect when trading on a U.S. exchange (SSRN)
- Research: NewIMF report on global financial stability highlights U.S. autocompanies (IMF)
Dr. Paul Kedrosky is a former highly ranked sell-side technology equity analyst, and he currently runs a technology finance institute at the University of California, San Diego. He is also a venture partner with Ventures West, an institutional venture capital firm with more than $400-million under management. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Kedrosky cannot provide investment advice or recommendations, he welcomes your feedback and invites you to send your comments to
pkedrosky@thestreet.com.
