Market Summary: Wed. Feb. 20, 2008

Two big events moved the markets today: the January CPI number that came in stronger than expected and the release of the Fed minutes from their January 30^th meeting. The CPI (consumer price index) rose 0.4% while the core CPI (excluding food and energy) increased 0.3%. The market was looking for a 0.3% increase in the CPI and a 0.2% increase in the core CPI. These numbers aren’t outrageously high, but they do throw up a red flag for the Fed when assessing if they should cut rates again. It’s not surprising to see the numbers come in a little stronger than expected given that oil was between $90-100 all of last month. The CPI level is up 4.3% over the last 12 months and the core CPI is up 2.5% - both above the Fed’s “comfort zone” of 2% (Source: finance.yahoo.com). This economic report coupled with moderate declines in the Asian and European markets caused the Dow to be down 60-100 points all morning. The Nasdaq was the relative out-performer thanks to Hewlett-Packard’s strong earnings report after yesterday’s close. HPQ closed the day up 8%. Bonds sold off slightly on this inflation news for the second straight day.

Right at 11am we had a mini 100 point rally right before the Fed minutes were reported. Here are some excerpts (Source: Bloomberg.com):

“With no signs of stabilization in the housing sector and with financial conditions not yet stabilized, the committee agreed that downside risks to growth would remain even after this action (50 bp cut).”

“Demand-pull inflation pressures from emerging-market economies abroad appeared to be continuing, and anecdotal reports from business contracts suggested greater willingness domestically to pass rising costs through to prices.”

“A relatively low real federal funds rate now appeared appropriate for a time…and the availability of credit to consumers and businesses appeared to be tightening, likely adding to restraint on economic growth.”

“Strains remained evident in a number of other financial markets, and credit conditions had become generally more restrictive. Against this backdrop, participants expected economic growth to remain weak in the first half of this year before picking up in the second half, aided in part by a more accommodative stance of monetary policy and by likely fiscal stimulus.”

The Fed also adjusted their expectations for three key economic measurements in 2008. They lowered their GDP outlook to 1.3-2.0% from their Nov. ’07 prediction of 1.8-2.5%.

They raised their unemployment estimate to 5.2-5.3% from November’s prediction of 4.8-4.9%. They also raised their core PCE estimate (consumer inflation number) to 2.0-2.2% from 1.7-1.9%. What I got from the Fed minutes…They see the economy continuing to slow and more rate cuts may be necessary to stimulate growth. However, it seemed like these rate cuts will be short-lived. Once growth returns (and some stability comes to the financial system), they will immediately raise rates to counter rising commodity costs.

After the Fed minutes were released, stocks rose on the hopes of more rate cuts will be coming soon. Also helping the rally was a great earnings report from Transocean, the world’s largest offshore driller. RIG reported quarterly earnings of $3.40/share while analysts’ were only looking for $2.54/share. Their revenues increased 75% (year-over-year), but they fell short of the $2.3B analysts estimated by $0.2B (Source: Briefing.com).

Energy stocks were also leading the market higher as oil finished the day at $100.74, up 73 cents. Gold also hit another all-time high amidst inflation talk and a slowing economy. There was also talk by Bill Ackman, a very powerful activist investor, of breaking up the bond insurers, Ambac and MBIA.

The major telecom stocks, Verizon and AT&T, were downgraded by Credit Suisse today. The analyst mentioned concerns of a “potential wireless price war and macroeconomic weakness.” Earnings estimates for Verizon, AT&T, and Sprint Nextel were also cut for 2008 (Source: CNN Money). These stocks were all down big in the morning, but they recovered nicely by the close.

Check out the new "Market Recap"

I'll update this info as soon as the bell rings everyday. Right now, the data is in HTML form (yeah CS105) and my hope is to soon have it linked to Yahoo! Finance or some other website so it will continually update throughout the day. For now, ENJOY!

Market Summary: Tues. Feb. 19, 2008

We started the day off on a positive note from Wal-Mart, the world’s largest retailer, thanks to their strong earnings report – their Q4 numbers beat analysts’ expectations. This was taken as a very positive sign that the consumer was still spending. However, their full-year guidance of $3.43/share fell slightly short of analysts’ estimates. WMT was up 22 cents on the day. (Source: CNBC TV)

Oil was leading the market higher as crude prices touched $100. Oil and energy stocks, as well as many of the commodity-related stocks (agriculture, metals & mining, alternative energy) were up huge today. According to Bloomberg.com, “March crude oil rose $4.51, or 4.7 percent, to settle at $100.01 a barrel, a record closing price…Gasoline for March delivery climbed 4.4 percent to close at a record $2.6031 a gallon after an explosion shut down Alon USA Energy Inc.'s Big Spring, Texas, refinery. Natural gas advanced to the highest levels in 15 months on forecasts that colder weather in the eastern half of the U.S. will spur demand.” On CNBC today, an analyst was cautious about the huge run-up in crude prices saying that there are “supply concerns,” but also lots of “fund buying and speculation.” Gold, copper, and silver prices were also up big.

The inflation story is back once again. The story is two-fold: there is a growing world-wide demand for commodities (especially in China, India, Brazil, and Russia) and there are talks of supply shortages for many of these goods, specifically oil (Source: CNBC TV). If prices continue to rise the Fed will be forced to keep rates at 3.0% in order to keep inflation under control. Many of the financial stocks were down because of the possibility of no more rate cuts. The CPI number comes out tomorrow, and although it is from last month, will be a very telling indicator of what the Fed can or can’t do to stimulate economic growth at its next meeting. The rising commodity prices caused bonds to sell off (yields up).

The market turned in the afternoon, led by a downturn in tech stocks. According to Bloomberg.com, Apple “cut the price of its least-expensive iPod, the Shuffle, to $49 after sales of its media players slowed last quarter.” Also, Google had an alarming note in their recently filed 10K report. “As you'll recall, one reason Google gave for its light revenue in Q4 was the reduction of “accidental clicks.” Based on the language in the 10K, it appears this impact may continue in Q1 and beyond.” Google also stated that they “may continue to take steps to reduce the number of accidental clicks…and these steps could negatively affect our near-term advertising revenues” (Source: finance.yahoo.com). Google shares were down $21 on the day.

In other news, MBIA CEO resigned and will be replaced by the former CEO. Credit Suisse was down 5% after announcing “they had overvalued their holdings in asset-backed securities by $3B” (Source: Bloomberg.com).

Are more write-downs on the way? According Oppenheimer & Co., financial companies “may have to record $70B of additional costs if the bond insurers fail” (Source: Bloomberg.com).

After the bell, Hewlett-Packard reported strong earnings. They recorded Q4 EPS of 86 cents vs. analysts’ estimates of 81 cents. They had a 13% increase in revenue growth and a 38% increase in income. Shares are up 4.5% in after-hours trading. Also, Crocs was slaughtered in after-hours trading after giving lower guidance for ’08 and much higher than expected inventories. Medco Health Solutions was up 5% after they raised guidance and beat analysts’ expectations from Q4 (Source: CNBC.com).

The Future of Music

I have a particular interest in the music industry - an interest which only partially comes from the actual content.

The music industry right now is an incredible crossroads of business, technological innovation, the concept of property, and, least we forget, artistry.

Obviously, the biggest concern, and the reason for the big four (Sony BMG, EMI, Universal, and Time Warner) hemorrhaging money is the illegal downloading of music. They've tried to stop the world - with DRM, with the threat of lawsuits, with the shutting down of P2P sites, but this has never seemed to be a real solution.

So how are people making money today? The big example has been Yael Naim's "New Soul" which sold like digital hot-cakes on the itunes store after it received heavy ad-exposure from the MacBook Air commercials.

O'Reiely Radar explains here that

Until the 1980s, record companies looked to radio to break new artists. Until five years ago, the place to launch new performers was music video. For most of this decade, the breakdown of traditional music channels has led to new songs being noticed via video games, television shows, and -- most of all -- commercials. Whoever is programming the music for Apple's television commercials may be, right now, the most powerful talent scout in the record industry.

But this is essentially the same formula as the 90s coming through a different medium: Find a hit, put it on heavy rotation, this time through advertising instead of radio. How can artists still make enough money? There have recently been a few innovations discussed here.

How relevant are all of the extra parties in the music industry? David Byrne, one of my personal favorites, discusses in Wired magazine, the future of the music industry. Admittedly, he held pretty lofty expectations, and he gave a few concessions on his own personal blog here and here.

Low cost of recording and the demise of the big 4 is certainly a good - but the big issue has always been exposure. Record companies have always been the best possible means of marketing to he largest public. Some artists have gained exposure the old-fashioned way - touring. Dispatch toured heavily, and promoted file sharing of their songs to gain popularity. By the time they approached a big record label, their own indie record had sold very well. Prince released his entire CD in a British newspaper for free, and continued to sell out an 21 show tour. Radiohead released their entire album In Rainbows essentially for free on their website, and when their CD hit stores in January, reached #1 on Billboard. Aerosmith is releasing a Guitar Hero: Aerosmith game this summer.

How successful, or, more importantly, repeatable will these innovations be? The jury is still out. I personally believe that Chris Anderson's Long Tail (by the way READ THIS ARTICLE) describes not only the future of music, but all other forms of digital (or potentially digital) entertainment. I'll write about it in a later post.

What to Watch for This Week

Economic Data:
Wednesday:
January CPI - up 0.4% (market was looking for 0.3%)
January Core CPI (excluding food and energy) - up 0.3% (market was looking for 0.2%)
January Housing Starts - 1012K, up from 1004K last month (market was looking for 1015K = essentially an "in-line" report)
January Building Permits - 1048K, down from 1080K last month (market was looking for 1040K)

Thursday: Initial Jobless Claims (last week = 348K; market expects 345K tomorrow)Earnings Reports:
Tuesday: Crocs, Hewlett-Packard, Medco Health Solutions, Medtronic, Office Max, Ultra Petroleum, Wal-Mart, Whole Foods, and Zix (this one's for you, Rod)
Wednesday: Garmin, Inverness Medical Innovations (Jim Cramer loves this one), and Transocean
Thursday: Barrick Gold, JCPenney, and Newmont Mining
Friday: Calgon Carbon and Nicor Gas

Market Summary: Fri. Feb. 15, 2008

I would say Friday’s performance was good (even though the markets ended the day slightly down) given the negative news that hit the market in the morning. One thing to take note was the low volume. This was because the markets will be closed Monday for Presidents’ Day and many traders/investors were gone for the extended holiday.

The consumer confidence (actually called the Michigan Consumer Sentiment Index) number came in well below expectations. According to CNBC, the reading of 69.6 (market was looking for 76.5) was the lowest in has been since Feb. 1992!

Also, Best Buy (the retailer who has been kicking Circuit City’s butt) came out with some bad news. They lowered their full-year guidance and hinted at a decline in consumer spending. The CEO said that “soft domestic customer traffic in January, coupled with our near-term outlook, now indicate that our fourth-quarter revenue will fall short of our planned targets.” Best Buy stock declined 2.5% and most “chip” stocks were also down (Intel, ADM, and NVIDIA). (Source: Bloomberg.com)

We got some inflation data (regarding import and export prices) and it was stronger than expected. Food prices were up 3.1% and gas prices were up 5.5%. (Source: CNBC TV)

The only major earnings report came from Abercrombie & Fitch and they gave mixed numbers. For their fourth quarter, they achieved record revenues, but it fell short of analysts’ expectations. Also, their guidance for ’08 was below what The Street was looking for. The stock was down only 0.87%. (Source: TheStreet.com)

There was news that FGIC (the bond insurer that was just downgraded by Moody’s) might consider splitting up its business to save its ratings on its only profitable part – municipal bonds. According to Bloomberg.com, the major bond “insurers use their AAA ratings to back about $2.4 trillion of debt.” If a downgrade occurs, that debt is not worth $2.4 trillion anymore. It just disappears! Two very important names to pay attention to are Eliot Spitzer (NY governor) and Eric Dinallo (Superintendent of the New York State Insurance Dept.). These two individuals have been in the news a lot recently and they have lots of control/regulatory power over the bond insurers.

Microcrazy

Everyone's favorite journal has more to say about Microsoft's history. Apparently, Microsoft has always paid a pretty hefty premium for their acquisitions. As the article noted, "The average one-day premium for tech deals since 2000 is 25%, according to Dealogic. The average premium for Microsoft’s deals since during the same time is 43%."

What is their motivation? I'm sure Microsoft may suggest that they simply aren't bothered, and don't want to waste time competing, like Murdoch did with Dow Jones (the publishing firm which owned the Wall Street Journal) offering a 65% premium.

Normally, prices shoot up when an aquisition is announced (look at around May 1, 2007 on this chart showing Dow Jones and other papers), hacking away at any hope for a profitable deal. Or a bid war may ensue (as Bellz noted with News Corp. jumping into the deal).

Clearly, from this perspective, one might assume that Microsoft simply doesn't want to bother with this kind of fight. But, oftentimes, very human mistakes are made, and pay too much because other buyers jump in and a nervous, frenzied, suspicious fight ensues. Jack Welch, the greatest leader since the Pharaohs, calls it "deal heat," (Winning by Jack Welch page 237) and admits that it has affected him in the past as well. This was very common practice in the .com bubble, when companies were being bought left and right, and such buyout practices continue to today in the tech industry. It's an easy assumption to make that Microsoft's corporate culture is just to jaded to bother getting a better, more Buffetlike, price.

Market Summary: Thurs. Feb. 14, 2008 (Updated 02.18.08)

Today Ben Bernanke stole the show and what he said caused the markets to sell off. If you remember his last "interim" statement, he used the word "substantive." There was a sense of urgency then to lower rates because things looked like they were spiraling out of control. In today's message there was no sense of urgency to lower rates. Once again he said inflation concerns could prevent them from aggressively lowering rates, and this caused investors to sell, sell, sell.

He did hint that the Fed is ready to lower rates at their next meeting given the slowing economy. He said the Fed "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks." This is pretty much standard language for "we'll cut rates if the economy is still slow/slowing." He also noted that the Fed lowered their projections for economic growth in 2008 -- the first two quarters will be slow (not contracting) and things are expected to pick up the second half of the year.

He stated that "more-expensive and less-available credit seems likely to continue to be a source of restraint on economic growth" and that the "outlook for the economy has worsened in recent months, and the downside risks to growth have increased." Here's the Bloomberg.com article summarizing Bernanke's comments.

Moody's (the rating agency) downgraded FGIC to AA (from AAA). MBIA and Ambac both rallied because Moody's said that they are better positioned in terms of capital and no government bail out will be necessary. Here is an article describing the situation. CNBC discussed the idea of more write-downs if the bond/mortgage insurers continue to get downgraded. This new dragged on all the financial stocks.

Intel was down big today, as was tech, because Goldman Sachs removed Intel from its "conviction buy" list. The stock was down 3% on the day. Comcast beat analysts' estimates, announced a $6.9B buyback plan and a quarterly dividend - this caused the stock be be up big on the day.

UBS (a Swiss bank) was down big after they reported a quarterly loss of $13.7B because of huge write-downs. The stock was also downgraded to "hold." Here's an article describing UBS's financial situation and the causes of all their problems.

Liz Claiborne (higher-end women's retailer) gave a sub-par outlook for their 4th quarter and most retailers were down on this news.

After the bell, Chipotle reported somewhat disappointing earnings (only 25% growth) and the stock was getting crushed. CMG is a high-growth, high-multiple stock so when they disappoint investors, the stock gets crushed.

Market Summary: Wed. Feb. 13, 2008

What am I currently seeing in the markets (or more importantly, what should you be seeing in the markets)? Tech has sold off very hard the last two months - almost too much. There were very high expectations for tech in Q4 '07 because these companies were supposedly immune to this credit crunch/slowing economy that has become the talk of the elections. Expectations were too high and at the slightest miss of earnings, sales, margins, etc., tech sold off hard and fast. Now we are at the point (or at least we were three days ago) where expectations are too low for tech. Estimates have come down a great deal and the "big money" has pulled out billions of dollars and moved into different sectors - retailers, financials, homebuilders. We've set a bottom for a lot of the big names (Apple and Google) and soon enough the "big money" will make its way back in. For investopedia, I got into tech last week and I'm sticking with it until the earnings estimates start to get bumped up. When the estimates go up, the "big money" will follow and that's when you'll catch the biggest gains. Tech will not get back to the same level it was three months ago, but it will certainly be higher than where it is now.

I think the market is in good shape (until the next Fed meeting) and the only thing holding us back is the mortgage/bond insurers. There is so much uncertainty with them regarding whether or not they have enough capital. Now the financials (Citi, Merrill, JPMorgan, etc.): the major write-downs are behind us, although I do not expect them to go away. The Fed is helping out with the lowered rates so they can actually make a profit when they lend. Currently, the bond market has stabilized (2-year treasuries at 1.9-2.0% and the 10-year at 3.6-3.7%) and it signaling the Fed will have to cut again in March. I believe the Fed will cut again, it's just a matter of 25 or 50 bp. The only real negative thing I have heard is in regard to jumbo mortgage rates -- according to CNBC, rates have actually gone up after the Fed cut 125 bp. It will take some time to actually see the results of the Fed rate cuts. Also, the dollar has stabilized against most major currencies, well off its lowest levels. Oil has also been trading in a range ($85-95) for some time now, mostly because of recession fears and that oil demand will be lower when the economy slows.

On the consumer side, retail stocks have spiked because of the Fed cuts and the stimulus package (just got signed by President Bush today - here's the Bloomberg.com article). You've missed the big move, but long term they still are a good play because they were beaten down so bad the second half of '07. In news today, January retail sales rose 0.3% when analysts were expecting a decline. Here’s an article describing what caused this report to be better than expected. Some people on CNBC said today this report might allow the Fed to keep rates at 3%, but that is mostly likely not the case. The Fed is cutting aggressively to keep the global financial system afloat, not to keep America out of a recession. The Fed just can't look at one backward-looking piece of data - they have to take on a much broader view of the economy's health.

What moved the markets today? Lots of good earnings reports. Coca-Cola's earnings increased 79% year-over-year and revenues increased 24%. Applied Materials (semiconductor) beat estimates and was up 10%. This was the main reason tech was stronger than the rest of the market today and because tech was the laggard yesterday. Deere's profit was up 54%, but their guidance was only "okay" and shares were down about 1%. Venezuela announced they would stop selling oil to Exxon Mobil after Exxon's seizure of Venezuelan assets.

Back to Yahoo! and Microsoft once again. There was news that News Corp. (Rubert Murdoch) might be interested in taking a stake in Yahoo!. Here's the Bloomberg.com article. This move was most likely done to prevent Microsoft from acquiring Yahoo!. I don't know if Yahoo! will take the deal (although nothing has been formally offered) but I can foresee some sort of bidding war between Microsoft and Yahoo!'s shareholders.

Tomorrow, pay attention to Ben Bernanke's testimony to Congress regarding the economy and financial system. He probably won't say anything we already don't know, however, it will be the focus of the day.

Bull Stocks - Vice

Recession or not, there's one stock on the market right now that is a disgustingly good play. Altria (MO), aka Phillip Morris. Altria sells cigarettes under several brands, the most notable being Marlboro. Obviously this is a recession proof market, if anything people smoke more when they're stressed, this makes it a very safe play even if things with the economy get worse. Altria currently trades at 16x trailing twelve months earnings but we have a major catalyst here. Altria is splitting into 2 companies: one with US exposure and Phillip Morris International (PMI). PMI will be exposed to the hot growing places like China, apparently people in China love to smoke if they can afford it, and many of them are just getting enough money to afford it. Each shareholder will receive one share of each company when the split is consummated in March. The PMI shares will earn a higher multiple given their faster growth. On top of that PMI will begin with a 13BN share repurchase plan in place and a 65% dividend payout ratio in place. In english, PMI will have authorization to repurchase well over 10% of its shares outstanding. Share repurchase means there are fewer shares which boosts earnings per share and thus stock price. The 65% payout ratio means that 65% of earnings will be paid out in dividends. This ratio is only slightly less than Altria's current payout ratio, which gives the company a 4% yield right now, well above treasuries.

All that said, the Domestic Phillip Morris isn't exactly a bad thing to own right now either. You have the recession resistant product mix, and a shift to smokeless tobacco. The new domestic company will start with a 7.5BN repurchase program and a 75% dividend payout ratio. Meaning at current prices, the company would probably yield closer to 4.5%. The secret play in here that some people don't factor in is that Altria owns over a quarter of SAB Miller, yes the beer brewer. If you are inspired by Coors' numbers, Altria is a way to sneak in the back door on the beer play while getting the catalyst that the split should provide.

Market Summary: Tues. Feb. 12, 2008

Stocks were up big in early trading today, but gradually sold off as the day progressed; the Dow finished up 1% while the Nasdaq was flat. Apple and Research in Motion (RIMM) – maker of the BlackBerry – were the main laggards in technology. People were mostly likely taking profits in Apple (normal trading volume and no news) because it had run up 10% off its recent lows and 8 million BlackBerry users were out of service yesterday due to a nationwide outage.

We opened higher this morning thanks to a variety of positive reports. Monsanto raised its profit forecast $0.20 for 2008. Schering-Plough (drug company) was up 6% because they reported earnings of $0.27/share when analysts were expecting only $0.24/share (excluding one time items). Schlumberger (oil and gas company) was up after an upgrade from Bear Sterns. Not really a market-move, but intriguing to some (DLight), Molson Coors reported better than expected sales and earnings and the stock was up big. Here’s the link to the Bloomberg.com article if you’d like to read more.

General Motors reported mixed results. They reported a net loss of $722M, but excluding one-time items they made $0.08/share. Analysts were looking for a loss of $0.64/share. This profit was because of a $1.6B, or $2.82/share, tax credit. Here’s the article that discusses GM’s domestic and international sales as well as the new CEO’s objectives.

Yesterday, the Fed auctioned $30B in their Term Auction Facility (28-day loans) and results came out today. $30B was auctioned off at 3.01%. This was the first time the interest rate was above the Fed funds target rate, a signal that demand is not as great as it was in the previous three auctions were the interest rates were all below the Fed funds target rate. The total bids received were $58.4B. Here’s a finance.yahoo.com article describing the auction.

Probably the most important news on the day came from Warren Buffet. He announced that he would like to take on $800B in municipal bond liabilities from the troubled insurers, specifically MBIA, Ambac, and FGIC. Because of this news, the financial stocks were rallying; however Ambac and MBIA were down 15% each. According to Bloomberg.com, “MBIA and Ambac dropped on concern Buffett's proposal would leave them with mortgage securities that caused more than $5 billion of losses last quarter.”

Also, the 6 largest American banks decided to put a 30-day freeze on foreclosure proceedings in an attempt to give lenders ample time to work out delinquencies. This cnnmoney.com article describes the current housing slump and how this freeze might help homeowners that are struggling to make their payments.

Market Summary: Mon. Feb. 11, 2008

Today was a very good day for the markets considering the bad news from AIG. We opened this morning lower thanks to weakness in the European and Asian markets and news that AIG’s auditor found accounting errors that may have underestimated losses. Here is the Bloomberg.com link describing the situation. There was also news that Fitch Ratings (one of those rating agencies) might lower AIG’s AA credit rating. Because of all this news AIG’s stock was down 12% and all other financials were also down.

On average, the major indexes finished the day up about 0.5%, and if it wasn’t for the bad news from AIG, we would have seen at least a 2% rally.

Dow Jones announced they will be removing Altria and Honeywell from the Dow Jones Industrial Average, and Bank of America and Chevron will replace them. Here’s the link to the article. Dow Jones explained that Altria is now too small and too focused of a company after their recent split and Honeywell is too levered to the industrial sector which is less important in today’s economy. Because of the rising important of the financial and energy sectors in today’s economy, Bank of America was added because it is the country’s biggest bank by deposits and Chevron is a major integrated company.

Energy stocks were up big again today (thanks to another rally in crude oil – up to $93.67) due to extreme cold weather in many parts of the country.

Back to the Yahoo! – Microsoft battle. There were rumors that Microsoft might up its bid for Yahoo! and this prompted RBC Capital Markets to downgrade Microsoft’s stock. MSFT traded below $28 today. Yahoo! released a statement today saying that the bid “is not in the best interests of Yahoo! and their stockholders and that it substantially undervalues Yahoo!.”

Just recently, Microsoft announced they will take their bid directly to the Yahoo! shareholders instead of letting the Yahoo! board of directors decide. Here is the Bloomberg.com article describing the situation.

In earnings new, Darden Restaurants (Red Lobster, Olive Garden, and LongHorn Steakhouse) offered guidance that surpassed analysts’ estimates. Hasbro, the toymaker, also posted results that beat estimates. This was great news for many restaurants and retailers and it gives us insight as to how the consumer might be spending its money in these uncertain times.

Also, struggling Motorola was in talks with Nortel Networks regarding a possible joint venture in order to combine their wireless departments. Motorola has been struggling recently as Nokia has stolen market share. This joint venture could also result in the expansion of WiMax, which is a large-scale wireless network that has proven itself yet.

Upcoming economic reports to watch:

1) Results from today’s Term Auction Facility by the Fed

2) Tues - February National Association of Home Builders housing index

3) Wed - January CPI and January housing starts

4) Thurs - January leading indicators, February Phily Fed survey