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THE NORTHWEST ECONOMIC MAINLINE 04·13·2009
What to Watch This Week
- With first quarter earnings season now fully underway, the coming week is chalked full of important indicators and announcements. Tuesday's announcement on retail sales and Goldman Sach's first quarter earnings will prove important, as will Intel's earnings figures.
- Washington State employment figures are being released on Tuesday and will surely be tracked carefully.
- Wednesday will allow everyone a chance to stop and take a breather; however, plan to keep an eye on Fed. Beige Book details...
- Thursday, JP Morgan Chase and Google will make their earnings announcements. Both will surely impact sentiment on Wall Street and potentially, shape expectation on both upcoming tech. and financial sector earnings in the upcoming weeks.
- To round out the week, Citigroup will be the company to watch on Friday. Citigroup has been relatively unpredictable for two quarters now, so with expectation of earnings set at -0.36 per share, this one has the capability to cause either panic or excitement. We will see!
- Last week, details from the Fed. Minutes indicated that gross domestic product was "expected to flatten out gradually over the second half of this year and then expand slowly next year as the stresses of the financial markets ease, the effects of fiscal stimulus take hold, inventory adjustments are worked through, and the correction in housing activity comes to an end." Given such bold predictions, it will be quite interesting to compare and contrast notes and language from this and the Beige book report being released, as stated above, on Wednesday.
What I Saw Last Week
- Last week kicked off on a positive note with statistics released from the NWMLS resulting in local headlines such as "Spring Hits Seattle-area Housing Market." Although a bit premature for such a conclusion, the positive nature of the report, indicating signs of improvement in both inventory and pending home sales, was welcome indeed!
- THE news of the week came early Wednesday morning with Pulte Homes' ostensibly unforeseen announcement to buy Centex for $1.3 billion in stock. Given Centex's current presence in the Puget Sound region, this will certainly have a significant impact on the competitive environment moving forward. THIS IS BIG...
- The Commerce Department also announced on Wednesday that wholesale inventories in February dropped by the largest amount in 17 years. At a decline of 1.5 percent, the decrease in inventories was more than double analysts' expectation. This is important as it shows that firms are getting their inventory levels under control. Sales at the wholesale level rose 0.6 percent, demonstrating that retailers and other businesses have, at long last, started to replenish their supplies.
- Investors were surprised on two separate occasions Thursday morning when the Labor Department announced that initial unemployment claims fell more than expected to a seasonally adjusted 654,000, while Wells Fargo divulged its expectation of record first quarter earnings of approximately $3 billion. This had a very prominent effect on Wall Street, pushing the equity markets higher by over 3.5%.
- Locally, a few eye catching yet less emphasized reports emerged, stating that Chase has begun to rebrand Washington Mutual Branches locally and the Kirkland city council began the process of annexing Finn Hill, North Juanita, and Kingsgate. It was also announced that Nordstrom is outperforming its competitors on a comparative basis, and while Microsoft global employment fell by a whopping 113 in February, Puget Sound regional employment increased by 54.
- All and all, much of last week's news was positive at a time when most expected a flurry of disappointment. If it weren't for looming GM bankruptcy reports, Amgen laying off 100 employees, and Boeing lowering its expectations, last week would have been almost ideal given the circumstances!
Quote/Link of the Week
While some images may cause an awkward and somewhat nervous chuckle, this slideshow is nonetheless, extremely entertaining... |
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