406 Days Until This Market Crashes…

by Robert Williams, Publisher Friday, November 20, 2009

David Fessler has a sector that warrants your attention. But first, I want to officially raise a red flag in another market.

Something’s amiss in the municipal bond market. Year-to-date, “munies” have behaved more like momentum stocks than their intended purpose of providing a safe yield.

Consider this: A handful of closed-end muni funds have averaged a 46% return so far this year.

The rally, of course, was borne out of the financial crisis, when investors and institutions alike went furiously scrambling to safety.

The novice move was into cash. But the smart money flowed strategically into the bond market. And a lot of the action was in municipal bonds. (The junk bond market is similarly overheated.)

What’s noteworthy, however, is that when the market’s

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This week, initial claims for unemployment insurance (or jobless claims) were 505,000, the same as last week’s revised figure. However, the initial read was 502,000, so it is just as valid to see this as a 3,000 increase. That, however, is not much in the overall scale of things. The four-week average fell by 6,500 to 514,000, and is now almost 145,000 below its mid-April peak. The graph below (from http://www.calculatedriskblog.com/) shows the very significant progress that has been made in brining initial claims down, but also the long way we still have to go. The four-week average is still above the peaks of the two previous recessions. It is also still at a level that would indicate continuing net job losses. We probably have to see initial claims fall below the 400,000 level to indicate that, on balance, the economy is adding jobs. On the positive ...

For Immediate Release

Chicago, IL – November 19, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: D.R. Horton (DHI), Pulte (PHM), Owens Corning (OC), Masco (MAS) and EnCana Corporation (ECA).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday’s Analyst Blog:

Housing Starts, Permits Plunge

Housing prices are still under pressure, despite unprecedented steps by the Federal government and the Federal Reserve to prop up the price of that asset class. Artificial government support is not as durable a way to prop up prices as a better balance between supply and demand

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In October, Housing Starts fell to a seasonally adjusted annual rate of just 529,000, a 10.6% decline from September and down 30.7% from a year ago.  That puts housing starts at their lowest level since April, and takes a lot of steam out of the incipient economic recovery. Most of the damage, however, came in the very volatile apartment and condo area. Starts in buildings with five or more units dropped to their lowest level yet in this cycle at an annualized rate of just 48,000. That is down 33.3% from September and is off 78.1% from an already depressed level of a year ago. When most people think about housing starts, they think about single family starts.  There the news was bad, but not quite as bad as the news from "condo-land." Nationwide, single-family housing starts fell 6.8% from September and are down 10.9% from a year ago, ...

This morning Trans Union, the big credit bureau, released its quarterly report on mortgage delinquencies, and it was not pretty. Nationwide, 6.25% of all residential mortgages were at least 60 days past due in the third quarter, up from 5.81% in the second quarter and 3.96% a year ago. This was the 11th straight quarter that delinquencies increased. Mortgage delinquencies are the first step in a house eventually going into foreclosure, so look for those to start heading up again. Foreclosures have been held down by trial modifications under the HEMP program, but very few of those have gotten to the stage of being final modifications. And even when mortgages are modified, there is a strong tendency for those people to again find themselves in financial trouble. Clearly people not paying on their mortgages is not good news for the big banks like Bank of America (BAC) ...

Baltimore — (TFN): It’s confirmation! On Friday I wrote how I may have a touch of the flu or some other mind-altering ailment because my thoughts were far more liberal than I am comfortable with admitting.

Well, it turns out my ultra-liberal, straight-ticket voting, French-guy marrying sister has a verifiable case of the pig flu. And guess who I had dinner with on Thursday night? You betcha, big sis.

There we have it: cause and effect.

Fortunately, my head case was short-lived. By the time my venison sausage and eggs were off the front burner on Saturday morning, I was back to my old self, almost knocking my O.J. off the table stomping my fist over a local political battle.

In Friday’s edition of notes, I quoted the following paragraph from Callum Robert’s book The Unnatural History of the Sea:

If any trawling ground be over-fished, the trawlers themselves will be the

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For Immediate Release

Chicago, IL – November 13, 2009 – Zacks Equity Research highlights Expedia Inc. (EXPE) as the Bull of the Day and Triumph Group, Inc. (TGI) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Target (TGT), TJ Maxx/Marshall’s (TJX) and Abercrombie & Fitch (ANF).

Full analysis of all these stocks is available at http://at.zacks.com/?id=5506

Here is a synopsis of all five stocks:

Bull of the Day:

Expedia Inc. (EXPE) is one of the leading online travel companies in the world. The company reported strong results in the last quarter, beating the Zacks Consensus Estimate. Promotional activity continues to have a positive impact on the conversion rate, and spending is expected to strengthen in the next few quarters.

We are also positive about international initiatives, which we think will be the key to future growth.

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Dr Stock Pick HOT News & Alerts!

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FREE Daily Stock Alerts From DrStockPick.com

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DrStockPick.com Watch List!

My Picks for Friday November 13, 2009 are:

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EMKR, EMCORE Corporation

EMKR provides compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite, and terrestrial solar power markets. EMKR is the world’s largest manufacturer of highly efficient radiation hard solar cells for space power applications.

** EMKR has been awarded a contract by Dutch Space of Leiden, The Netherlands to manufacture, test, and deliver the solar panels to power the Cygnus’ spacecraft being developed by Orbital Sciences Corporation for NASA’s Commercial Resupply Service project.

The total value of the contract would be in excess of $15 million.

More about EMKR

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Initial claims for unemployment insurance (or jobless claims) fell to 502,000 last week -- a drop of 12,000 from last week's revised level (and 10,000 from last week’s unrevised level). That brought the four-week moving average down to 519,750 -- a decline of 4,500 from last week, and of 139,000 from its mid-April peak. That was the lowest level of initial claims since the first week of January (when the numbers were distorted due to the New Years Holiday). As the chart below (from http://www.calculatedriskblog.com/) shows, that was probably the high point for this cycle. The decline has been quite smooth and steady -- unlike the experience of the last two economic downturns, where after an initial decline, claims leveled off and remained high for an extended period of time. The fact that we are back to around the same levels we were in January points ...

Initial claims for unemployment insurance (or jobless claims) fell to 502,000 last week -- a drop of 12,000 from last week's revised level (and 10,000 from last week’s unrevised level). That brought the four-week moving average down to 519,750 -- a decline of 4,500 from last week, and of 139,000 from its mid-April peak. That was the lowest level of initial claims since the first week of January (when the numbers were distorted due to the New Years Holiday). As the chart below (from http://www.calculatedriskblog.com/) shows, that was probably the high point for this cycle. The decline has been quite smooth and steady -- unlike the experience of the last two economic downturns, where after an initial decline, claims leveled off and remained high for an extended period of time. The fact that we are back to around the same levels we were in January points ...