The Kirk Report

Big Week For Earnings

Good morning. Premarket futures are pointing slightly higher in a relatively volatile premarket session. Overall news flow remains on the slow side as we head into a big week for earnings.

Top headlines in focus include a comment by Geithner regarding more stimulus, a better than expected earnings report from Philips Electronics, CIT scrambles to survive suggesting that its failure will precipitate a crisis for as many as 300,000 retailers, the battle between Microsoft and Google is heating up, more tough times for major American magazines, and a dim outlook for U.S. airlines.

Premarket gainers: RINO, OSIP, CPHD, ARST, FEED, SJT, CROX, AIG, FITB, SNDK, HBAN, GS, DAN, BAC, STP, HUN, CTIC, DFS, & VMC.

Premarket losers: BEAT, FAST, CIT, LPX, EXPD, ABG, PKI, AXL, DEL, EBS, CEDC, CYOU, IPI, SPPI, CELL, STEC, HOKU, TSM, BCS, GOLD, & ICO.

While there are no market-moving earnings or economic releases in store for this morning, we have the 2PM Treasury Budget and earnings from Csx (CSX) & Novellus Systems (NVLS) after the closing bell.

The next big catalyst on the calendar is tomorrow morning's retail sales report and earnings from Goldman Sachs which is rumored to report at least $2 billion in profits. Ahead of Goldman's report, Meredith Whitney is out recommending its shares this morning.

Again, there are big hopes that we'll see a positive reactions to this week's earnings reports. No doubt, a fair amount of disappointment will follow if that doesn't pan out.

Let's make it a great week!

Madoff & M&A Monday

Good morning. We're set for a higher open at the start of this four-day trading week. News and data flow are on the slow side again, but there are a few noteworthy items to review including a plethora of merger & acquisition announcements.

First off, we have M&A activity between consulting firms Towers Perrin Forster & Crosby and Watson Wyatt Worldwide, Enterprise and Teppco have announced a merger, Novartis is reportedly in talks to buy parts of Elan, Anglo American is in talks to sell a major investment stake to Aluminum Corp. of China, and Vodafone is considering a bid to buy T-Mobile UK.

In other news, five more banks were seized by regulators, General Electric's CEO Immelt says cyclical downturn is now behind us, Obama's aid Romer is upbeat on US economy, late Friday the House passed the Climate & Energy bill, and the Honduran President is ousted in coup.

Premarket gainers: DCGN, CYTR, EVTC, FTWR, EXP, SIRI, CFW, MNI, LEE, FULT, BPHX, MDRX, CAEI, TRW, FEED, KIRK, CSIQ, SPPI, SLM, FRE, FNSR, PCAR, DFS, JASO, CLR, SNY, ELN, & SNP.

Premarket losers: RAE, HTM, HMPR, BIIB, DPTR, UEC, LEA, FCH, ARL, TLM, CTIC, SIMG, OPEN, SYUT, ALY, CRME, KOL, CHBT, SYMX, FNLC, & ZEP.

While there will be plenty of economic data to consider later this week, for today there's nothing on the calendar. Instead, expect the focus of the day to be on this morning's M&A activity, Madoff's sentencing and preparing for Thursday's jobs report.

Let's make it a great week!

Fearful Of The Fed

Good morning. Premarket futures are showing a positive bias following strength in overseas markets and a better than expected durable goods report.

Other headlines in focus include earnings from Oracle, rising mortgage applications, the OECD raises its outlook for the first time in two years, a government watchdog wants a new government agency to protect consumers from banks, and Citigroup plans to raise base salaries as much as 50% to compensate for reduced bonuses.

Premarket gainers: MGM, STX, OCLS, NCS, AIB, NM, FRZ, HST, EDC, AM, CTIC, CLNE, STSI, USU, AGEN, PETM, CYBX, SOL, AAUK, ORCL, PALM, APWR, DRYS, RIMM, OREX, AVAV, BCS, TS, C, MT, NOK, SONC, & ESLR.

Premarket losers: ZRAN, LYG, PQ, AGP, SVU, EDZ, RT, FXP, OI, EEV, SRS, SMN, TPX, TZA, FAZ, STI, OSIR, ROY, WFR, JBL, DRI, HLIT, AGP, SNY, & BGZ.

At 10:AM we have the New Home Sales report, at 10:30 the weekly oil inventories, and at 2:15 the FOMC announcement.

There's a belief that if we're going to get a reversal, the Fed will be the catalyst as they try to reassure the market that the punchbowl of easy money will not be taken away anytime soon, that the economy is recovering, and that inflation is of little concern. In other words, the Fed is expected to tell the market exactly what it so much wants to hear.

Keep in mind that when the S&P gaps up greater than +0.5% on a Fed day, it has closed greater than the open 10 out of 11 times for an average of +1.2% according to Jason Goepfert. Unfortunately, the gains produced on Fed days often are reversed the following day. For what it is worth, I am seeing some selling within the leveraged bearish ETFs in premarket trading, so it appears that at least some bears are fearful of the Fed as oversold conditions remain in place.

Have a great Fed day!

Monday Headlines

Good morning. Premarket futures are pointing lower. Overall, news flow remains on the slow side as we start out the new trading week.

Top headlines include a lowered outlook for global growth by The World Bank, insiders exit U.S. stocks at fastest pace in two years, drug makers trim prices for health overhaul, unemployment in California jumped to 11.5% in May, and U.S. regulators closed three more banks.

In other headlines we have continued health concerns for Steve Jobs, US lodges China censorship complaint, the Fed weighs major changes to the repo markets, a couple of lawmakers want Fannie Mae and Freddie Mac to relax recently tightened standards for new condo mortgages, Congress will take a second shot at the derivatives industry, and George Soros says worst of global crisis is behind us.

Premarket gainers: SUAI, MEDX, AAUK, BCON, EMKR, MRVL, AVII, NSU, LSI, MVIS, SIRI, TRA, & TNK.

Premarket losers: SWHC, JAZZ, ALVR, ESLR, CENX, SSRI, AHT, ATPG, ONNN, ACGY, ALU, DB, RTP, HMY, TLB, BJS, ZZ, STSI, MT, AXA, FRPT, KIRK, PAAS, SOLF, & RIMM.

Other the post options expiration activity, there are no economic reports scheduled for today and nothing of significance on today's calendar. Data will pick up tomorrow ahead of this week's Fed meeting. Much like last week, all eyes will be set again on Bethpage and the U.S. Open as they finish up the golf championship today.

Go make it a great Monday!

Obama, Krugman, & More

Good morning. Premarket futures are slightly positive as the market contemplates a number of headlines revolving around Obama and a bullish prediction by Paul Krugman.

According to the latest reports, the White House plans to pare back its finance reforms, the TARP oversight panel says bank stress tests should be repeated, the Treasury has ten banks on its list of those approved to repay TARP, and the Obama administration wants Europe to put its banks through more rigorous stress tests.

In other news, Texas Instruments raised its second quarter outlook, Chrysler creditors win a Supreme Court stay, auto-parts suppliers plan to request new federal aid, and just in case you were in a coma yesterday, Apple has unveiled a cheaper iPhone.

Premarket gainers: ADCT, MW, GFG, GNBT, SAY, FCEL, MRNA, TLB, PBY, PSUN, FRO, VVUS, CSUN, TC, TXN, ONNN, ATRC, MRVL, SNDK, NUAN, ARNA, OVTI, STEC, ISIS, BDSI, CSIQ, SOLF, PMTI, CIEN, SNDK, & SPWRA.

Premarket losers: ZQK, CRDN, MDTL, ELY, HNBC, NAV, CBL, MAS, CMS, EPB, KNDL, ZLC, OFG, SHS, ARUN, CKSI, BTH, BDC, ANPI, GIGM, EPB, MT, & BBL.

At 10:00AM the market will review the latest read in wholesale inventories and there's hope for easing inventory draws that would indicate an improving economy. A half-hour later Geithner will testify before a Senate subcommittee.

Yesterday's final hour rip helped the market and overall it appears that we are slowly, but surely working off the overbought condition generated by that impressive June 1st breakout without doing much technical damage so far. For today, I'd keep those 10/20 simple moving averages in focus within the major indexes:

Go make it a great day!

Off Till Tuesday

I'll be away from the trading desk today. My wife and I are exploring Bryce Canyon:

See you on Tuesday!

Lackluster Headlines

Good morning. Premarket futures are pointing lower following some lackluster headlines.

Top stories in focus include the fact that banks are selling more stock to raise capital to repay back TARP, a drop in chain store sales last week, confident comments from Geithner in China, and news that Eurozone unemployment reached the highest level in nearly a decade.

Premarket gainers: HLND, CYTK, DDUP, NAVR, ONAV, APAC, NTG, EMKR, EPEX, ROS, SAY, UNFI, RMBS, CDNS, GA, OREX, DV, PARD, ALVR, FEED, CATY, SEED, UNTD, DOV, FREE, OI, ELN, GOLD, & UFS.

Premarket losers: DCT, BCS, GM, DCT, LAYN, MTZ, ITW, LRCX, CEO, PTR, CMP, HGG, AAUK, C, ICON, DAKT, AVAV, JNPR, BLUD, ALTR, ERIC, CTIC, STI, DTV, & FITB.

At 10:AM we have the pending home sales report and throughout the day motor vehicle sales reports from May will be released. The pending home sales report will be a market mover as the market continues to hope to see steady improvement.

We're a tad bit overbought following yesterday's breakout so some sideways consolidation is ok as long as we don't see a complete reversal of fortune from yesterday. S&P 926 is the simple 200 day moving average so holding above that on a pullback this week will be key.

Go make it a great day!

Last Trading Day Of May

Good morning. On this last trading day of May, premarket futures are in positive territory.

Top stories this morning include the latest GDP, General Motors will file bankruptcy on Monday and the restructuring will cost taxpayers much more than expected, earnings from Dell and cautious comments from its CFO, rising mortgage rates, and continued worldwide strength in commodities.

Premarket gainers: STSI, OVTI, JCG, ODP, DPTR, BEXP, AAUK, HALO, RYAAY, CTIC, FCS, IOC, BZH, PMI, BEAT, ELNK, GOLD, ATPG, NOVL, LINE, RCL, HBC, GOLD, TOT, GFI, EXEL, SOL, CIEN, VNDA, ERIC, SLW, AUY, HMY, & GG.

Premarket losers: QSII, CPD, OCLS, MRVL, JMBA, ESL, MENT, RE, CTAS, AXYS, EDZ, WBS, GNBT, KRC, SMN, SEE, VISN, LVLT, & EEV.

At 9:45 we have the Chicago PMI and 10 minutes later the release of the University of Michigan Consumer Sentiment survey.

I suppose we'll all see soon enough if we get the "buy the bankruptcy news" trade finally in General Motors. Go make it a great day!

The Last Week Of May

Good morning. Premarket futures have been volatile ahead of the open and are pointing slightly lower as there are very few market-moving headlines this morning. What negative bias we have is being blamed on North Korea's nuclear testing.

In other headlines, the market continues to prepare for a bankruptcy at GM, the Justice Department cracks down on corporate bribes, reports that mortgage modification programs are having trouble reaching their goals, and Goldman Sachs is apparently pounding the table on commodities and basic materials.

Premarket gainers: CYTK, ARUN, COIN, EMIS, OXGN, BBOX, UTHR, HEB, CTV, EMKR, MDVN, STSI, SHLD, FSYS, MBT, ANDE, GSOL, FEED, QGEN, BCRX, ATVI, ONNN, PALM, Q, VICL, ALTH, AAPL, CKR, CUBA, SEED, CEL, & NVAX.

Premarket losers: GM, ATAC, RRGB, LDK, ZUMZ, CIM, SLM, PSYS, IVN, CSIQ, OGXI, FSLR, AIG, OPEN, KKD, AAI, PSUN, ZZ, AUY, ARMH, PUK, DROOY, DB, STX, & CRM.

Along with the 9:AM S&P/Case-Shiller Home Price Index, at 10:AM we have reports on Consumer Confidence, the State Street Investor Confidence Index, and the Richmond Fed's Manufacturing Index. A half-hour later the Texas Manufacturing Outlook Survey is due. Obama will also report Supreme Court Justice Nominee (Sonia Sotomayor) at 10:15.

Technically, the market needs to show some strength this week or risk much lower prices in the short-term. Simply holding the 20 day moving average line will be key as the market awaits comments from Einhorn and other hedge-fund titans this week and we see the return of end-of-the-month window dressing.

I hope your holiday was a good one. As with all four-day work weeks, this should prove to be a challenging one especially as we close out the month of May. Let's make it a great week!

Retail Sales Fail To Inspire

Good morning. Premarket futures are under sell pressure as the market digests a number of headlines including disappointment over the latest data on retail sales, rising import prices, a drop in mortgage applications, and a rise in home foreclosures.

In other headlines, Obama begins serious discussions on how to revamp compensation practices on Wall Street, Chrysler's bankruptcy might take as long as two years instead of two months, earnings from both Applied Materials and Intel (including its antitrust fine), and the former comptroller general of the U.S. David Walker says America's triple A rating is at risk. As we've seen lately, many companies are rushing to raise money at the most frenzied pace in years.

Premarket gainers: ULTR, SHPGY, GKK, REV, VVUS, ANN, VNDA, DPS, SNY, LULU, ROCK, DSTI, HELE, KNXA, DAR, AMD, HELE, FUJI, ATPG, AUTH, ZGEN, & FTR.

Premarket losers: MDCO, SOLR, AAWW, EE, STV, KRG, ACGY, CTIC, PL, LIZ, MGM, ODP, COIN,, HTE, HBAN, FLEX, NAT, ING, BBT, HBC, BCS, LYG, FITB, NCMI, RTP, WFC, AMAT, UBS, GOLD, & BMC.

At 10:AM we have a report on Business Inventories and 30 minutes later the weekly EIA Petroleum Status report.

Again, what's missing from this pullback is some technical deterioration in the major market indexes that brings back some healthy skepticism and fear. As a first step, we need to see final hour strength turn into final hour weakness and an inability for the market to rally intraday at least for a few days in a row. While I've seen this level of weakness within my screens (and some current holdings), the selling hasn't shown up where it counts most - in the major market averages. Meanwhile, May expiration day tends to be a positive one (the Dow has been up 5 of the last 7 May expiration days) and a lot traders are aware of this bias heading into the second half of the week so keep it in mind.

Go make it a great hump day.