Earnings Season Starts Tonight

January 9, 2012

Markets are opening with a small bid this morning on continued sluggish volume. The news flow is quiet as earnings and conference season both kick off this week. The JP Morgan Healthcare conference is in San Francisco and the Consumer Electronics Show in Las Vegas while earnings kick off tonight with Alcoa (AA) reporting after the close.

The Fed and Administration are reportedly looking at a program that would clear the foreclosure backlog at FRE and FNM. The plan would bundle up to 250K foreclosures and sell them to institutional investors as rentals. This REO to rental program could help clear some of the housing backlog, although the logistics of a massive residential rental program are significant and would require the development of massive property management companies.

The BLS is reporting that of the 200K new jobs in December, 44% were in messenger, courier, restaurant and retail.

Regarding Alcoa, the company has already guided down for the quarter, partially due to a ramp up in Chinese production that has led to a glut of aluminum and significant pricing pressure.

Ford (F) has been getting a lot of buzz at the Detroit auto show. The company is getting ready to launch their new Lincoln line later this week

The CFTC reporting that investors increased their net long positions in futures and options by 25% in the past week.

APAC markets closed mixed last night, with the Shanghai rising 2.9% and Hang Seng 1.5%. On the downside the Taiex lost 0.4%, Sensex 0.3%, Kospi 0.9%, and ASX 0.1%.

Tim Tebow kept his magic going as the Broncos beat the Steelers in overtime yesterday, 29-23. After running for an 8 yard TD earlier in the game, he hit Demaryius Thomas over the middle for an 80 yard touchdown. Tonight LSU and Alabama battle it out for the fake college football championship. Hopefully it will be more interesting than the last snooze fest between the two teams.

I will be at CES this week and don't expect to be publishing on Wednesday.

Have a great day

Ned