Saturday, April 23, 2011

Itz Week End Review 4-23-11

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Bad economic reports this past week were off set by some outstanding earnings reports from companies like Apple, Shlumberger and Honeywell. The biggest economic surprise came from the Philly Fed Manufacturing report. The headline number dropped from a 27 year high in March at 43.4 to a five month low at 18.5. Jobless Claims came in at 403,000 and the second week over 400K. This Wednesday will be the FOMC Announcement & the Ben Bernanke Press Conference, reporters will likely quiz the chairman on growth, inflation and monetary policy. He will probably talk about the success of QE2 and confirm it will end on schedule. Remark on the spike in oil prices is temporary, deflect questions on the dollar, the timing for the next rate hike and the debate on the debt ceiling. Q1 GDP is Thursday. The earnings calendar for next week is the busiest yet with more than 175 S&P companies (34%) reporting....AMZN, MMM, F, COP, BP, EBAY, MSFT. CAT & MRK.
Apple (AAPL) gained +8 on Thursday to $350 after beating estimates after the close on Wednesday. Apple has sold 19.5 million iPads since the first release through the end of Q1. Net income was $6.40 per share compared to analyst estimates of $5.37 per share. Revenue rose +83% to $24.7 billion for the quarter.
On the commodities sector, ITZ believe that gold & silver maybe putting in a near term top. No doubt that the US Dollars fee fall is to blame for higher commodities. Talk of gold going to $2000 should remind investors of the tech bubble mania, we may see $2000 but  not for a few years. Morningstar released a report this weekend saying gold prices could decline to $1200 within three years. When you begin to get opposing views, that should raise a warning flag and one should protect their gains. With gold so expensive investors are turning to silver, ITZ preferred metal for sometime now. Silver is closing in on $50 and what would be a 30:1 ratio to gold. Precious metals investors continue to repeat the common ratio silver used to have to gold was more in the ratio of 20:1 and that would put silver over $75 an ounce. Again as with gold, I'd be cautious nearterm, we could see a reversal @ $50. That said, any correction should be bought.
Itz is starting to see the lower dollar trade as becoming crowded, I know that sounds contrarian, however...we maybe seeing a reversal coming. Itz maybe be early on the call but it comes down to this country either becoming Greece and letting our trillion in debt take us down along with the dollar. Or take action to save the dollar. Foreign central banks are reducing their dollar holdings for the simple reason the U.S. is monetizing its debt and the U.S. is continuing to go into debt at the rate of $1.6 trillion per year. The choice will have to be made in what direction this country wants to head to remain the global economic leader and keep the dollar as the reserve currency.
Bottom line, there's allot on the plate next week between earnings reports, economic events and geopolitical tensions. Will the old adage hold true this May and investors sell and go away?
Best wishes to those celebrating Easter Holiday.

Itz Charts

ITZ Videos

Questions, Larry Kudlow would like to ask Ben Bernanke at next week's Federal Reserve press conference, with Lee Hoskins, former Cleveland Fed president, and Wayne Angell, Former Federal Reserve governor.

Dennis Gartman, of The Gartman Letter, takes a look at the latest market mystery. What's behind the dollar's decline?

Gold is at new highs, at over $1500 an ounce. A look at the best way to go, if collecting gold with Nick Barisheff, Bullion Management Group president/CEO

A look at the S&P 500, with Carter Worth, Oppenheimer Asset Management.

Joe Petrowski, Gulf Oil LLP CEO, discusses oil demand destruction, as prices rise.

Anthony Neglia of Tower Trading reveals how he's handling silver's volatile trading range.

Don't Like a Weak Dollar? Might as Well Get Used to It

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