Earning Season Starts with AA, BBBY, and CVX

Time flies. Seems like earnings season just ended and yet here we are again. But first-quarter earnings kick off tomorrow with Alcoa (NYSE:AA). 
Given how far the stock market has come over the last three weeks, you might think stock prices are set up for a fall as the reality of earnings dashes the enthusiasm that economic recovery is at hand.

HOV and GHM still in the green

Unemployment numbers continue to rise, but investors are more focused on the hope that the economy has bottomed and may be positioning for recovery. At least for now. 
Please note that I said "positioning for recovery." Mortgage rates are down and that seems to be helping the housing market a little. Credit afforded by the Treasury aimed at removing toxic assets from banks is resulting in higher valuations for those banks. 

GM’s Wagoner Gone and Oil Below $50: Time to Buy?

I didn’t know former General Motors CEO Rick Wagoner was so popular. The morning headlines in the financial press make it sound as though stocks are selling off because Wagoner and other auto industry executives failed to put forth strong enough turnaround plans to guarantee more government loans.  
Never mind that the S&P 500 rallied 167 points, or 25%, over the last two weeks. Ignore the possibility that one of the sharpest rallies in stock market history might have some investors taking profits. 

Retail Sales Up, Income Down: buy KB and HOV?

I’m fond of saying "never underestimate the American consumer." Retail sales for February came in with a 0.2% rise, even though income fell 0.2%. Stocks look ready to sell off, but it’s not a response to retail sales. The indices have come a long way over the past two weeks, and it’s time for a little profit-taking.  
I still believe that "buy the dips" is the appropriate strategy for the current rally. Of course, I’m talking about taking short- to medium-term positions. For the long-term investor, I suspect that you will get better entry points in the future.

U.S. Great Depression & Profits from HOV and GHM

Former Czech Prime Minister and European Union President Topolanek called the U.S. economic stimulus plan "a road to Hell." He claims the Fed, Treasury and Administration of repeating the mistakes of the 1930s that sent the United States into the Great Depression.  
Also attacked were the stimulus bill’s supposedly "protectionist" policies. 

Hovnanian and Graham

Yesterday, I suggested that this rally was unlikely to retrace much ground and give buyers an attractive entry point. I went on to recommend a position in homebuilder Hovnanian Enterprises (NYSE:HOV). 
Well, today stocks are pushing higher and Hovnanian is up 20% from yesterday’s closing price of $1.52.

A Trillion Here, A Trillion There

A trillion here, a trillion there. Pretty soon, we’re talking about real money. Treasury Secretary Geithner will unveil his plan to rid banks of their toxic assets today. And it’s expected to cost another $1 trillion dollars.  
I’m sure we’re all thrilled to learn that we’ll get yet another new government agency. It’s called the Public-Private Investment Program. It’s charged with removing up to $1 trillion in toxic assets from banks’ balance sheets. 

Oil and Recovery

Oil prices have moved over $50 a barrel. There are a few factors at work here. OPEC’s cut production. Of course, that’s been ongoing, and OPEC’s moves have done little to prop up prices as demand around the globe falls.
 

Inflation Coming?

Yesterday, the FOMC voted unanimously to buy over $1 trillion dollars in U.S. Treasury bills, corporate bonds, mortgages and consumer debt.  
Chief economist at Bank of New York Mellon Corp. called it a "Rambo Fed" move in a Bloomberg interview. He said "This is a very powerful and aggressive move…"

Bernanke Beats the Drum

Fed Chief Ben Bernanke keeps beating the "Recovery in 2009" drum. It seems he’s confident that the measures taken by the Fed, Treasury and Administration will free up the banking sector and get money moving again.