Monday

Earnings Announcements: Novellus (NVLS)

The furious rally that the markets have staged over the last three months appears to be running out of steam. The consensus that we are heading for a pullback is growing every day.

No real surprise here, Existing Homes Sales are expected to increase. It should be a combination of two factors, too-good-to-pass-up deals on foreclosed homes, and families moving to new school districts over the summer to avoid switching schools mid-year.

In the late 1800’s, a man was looking for a material with the ability to withstand intense heat. He took filaments of bamboo and baked them at a very high temperature in a controlled atmosphere. Through this process, called pyrolysis, the bamboo filaments became fire resistant and able to withstand extreme heat. The man’s name was Thomas Edison, and he was searching for the filament needed to create the incandescent lightbulb.Fast forward 120 years or so, and chances are you own something that utilizes nearly the same technology: a tennis racket, a bicycle, or for the younger crowd, a car hood or spoiler. I am talking about carbon fiber.

While the viability of the electric car is still heavily debated, the other attempt to reduce our dependency on foreign oil is making news again. And the news is not good.

There is quite a bit of discussion right now about if this market rally is real, and if it is how long it can last. The last round of corporate earnings weren’t as bad as many expected, and there seems to be some tempered optimism that this could be a sustained rally.

On Monday it was announced that Homebuilder Sentiment rose again in April, marking the eight-straight month of increases. Yesterday the April Building Permit and Housing Start reports came out, and they both woefully missed estimates.

On the earnings calendar, as you can see from the ones I have listed there is a significant amount of retailers reporting this week. That’s only a partial list, here’s the rest: ANN, BJ, APP, DDS, HOTT, DKS, ARO, GPS, PSUN, NWY, ROST, and TJX.

A little over a week ago the title to one of my articles was “Employment Numbers Are About To Get Historically Bad”. The article was looking ahead to last Friday’s employment report, which had it followed expectations would have shown another 600,000 jobs lost in April.