Linkfest: Week in Preview

Sunday, July 15, 2007 | 06:30 PM

Yesterday, we looked at the week that was. Today, we preview the upcoming market events that may be stock and market movers.

We have a few economic releases -- notably, inflation -- coming out this week. On Tuesday, we'll get producer-price index (PPI) and on Wednesday, consumer-price index (CPI).  Also on Wednesday are Housing Starts, and on Thursday, we hear from the Conference Board's index of leading indicators -- its expected to be flat to slightly negative.

On Wednesday, we get Federal Reserve Chairman Ben Bernanke making his semi-annual monetary policy testimony to House Financial Services Committee; He repeats the same show on Thursday for the Senate Banking Committee. The Q&A portion is unscripted, and that's where we may learn something new.

Cheat_sheet But all that's secondary. This week is all about earnings season really kicking into high gear:  On Tuesday, we hear from Merrill Lynch (MER), Wells Fargo (WFC) Coca Cola (KO) and Intel (INTC). Also on the docket: Johnson & Johnson (JNJ) and Yahoo (YHOO).

eBay reports Wednesday, along with IBM, JP Morgan Chase (JPM), Pfizer (PFE), United Technologies  (UTX), Allstate (ALL) Abbott Laboratories (ABT) and Altria Group (MO).

Google (GOOG) reports on Thursday, as does Microsoft (MSFT), Honeywell (HON), Bank of America (BAC), Motorola (MOT), TD Ameritrade (AMTD) and Nasdaq Stock Market (NDAQ)

Citigroup (C) reports Friday, along with Wachovia (WB), Caterpillar (CAT), Schlumberger (SLB) and Boston Scientific (BSX).

Here's our preview of the stories that will matter in the coming days and weeks for investors. Pour a cup of joe, strap on your carpal tunnel wrist guard, and get clickin':

INVESTING & TRADING

No irrational exuberance in sight None of stubborn optimism typically seen at market tops    Does the stock market have what it takes to mount an impressive encore?  The surprising conclusion of contrarian analysis is, "Yes." Investment newsletter editors on balance remain quite cautious about the stock market. Not only are they not overly bullish right now, they in fact are markedly more cautious than they were earlier this year when the Dow was a thousand points lower. (Marketwatch)

•  Most lucrative college degrees Nearly nine out of 10 employers reported that they're seeing more competition for new college graduates than in past years, according to a study by the National Association of Colleges and Employers (NACE). The students who made out the best were chemical engineering majors. They earned an average 5.4 percent more than last year, bringing their average to $59,361, according to the survey. (CNNMoney) 

•  How Low Can the Greenback Go? The U.S. Dollar Index was crushed this week, breaking a key technical support. The question now is how bad is it going to get for the greenback? Still, long-term charts show a good reason why the worst may be over. (Barron's)

•  The KKR Way: The deals are just the start. The original "barbarians at the gate" now command a $107 billion global empire. Here's how the buyout giant fires up its companies with a profit-or-perish creed. (Bloomberg magazine)

The Top Unsung Tech-Stock Leaders: For the first time in years, the world's largest computer companies are strutting across Wall Street with an undeniable swagger, as second-quarter earnings are likely to come in above expectations and shares are sweeping to multiyear highs. (TheStreet.com)

Loan Slump May Crimp Buyout Wave: It isn't clear if the loan market will be able to absorb more than $200 billion in new issuance that is planned for the coming months. Over half of that will go toward funding buyouts, such as Cerberus Capital Management's purchase of a majority stake in DaimlerChrysler's Chrysler Group and Kohlberg Kravis Roberts & Co.'s plan to buy First Data Corp. Last month, several debt sales were postponed or banks were forced to finance deals from their own pockets because of turbulence in the market. Still, many bankers say they expect to sell the large deals that are coming up. (free Wall Street Journal)

•  How Hot Commodity Investments Burn the Little Guy: More individual investors are rushing these days into the rough-and-tumble commodities pits, long considered a backwater of the investment world, as the prices of hard assets have boomed in recent years. But some are learning a hard lesson in the risks of these sometimes-volatile investments. One reason commodities can be rocky is the amount of borrowing used to fund trades. Investors can put down less than 10% of the value of a commodities contract, compared with a minimum of 50% of a stock's purchase price. (free Wall Street Journal)

•  Moody's Blues: Have Days of LBOs' Future Passed? Moody's Investors Service Monday issued a remarkable report in which the ratings agency highlighted its concerns about private equity's headlong rush into LBOs. Remarkable, in that Moody's looked ahead at the clear and present danger posed by these risky practices, in contrast to the rating agencies' traditional after-the-fact assessment of the damage done by feckless financings. (Barron's)

Talk about late to the party!  Moody's slams private equity: Moody's, the credit rating agency, will on Monday launch an attack on the booming private equity industry, criticising its increasing use of debt to buy companies and questioning its claims that listed companies are better off in private hands. Moody's voice adds to the growing chorus of US critics, which includes trade unions, politicians of both parties and some company executives. The critical position of Moody's comes at a sensitive time for both the private equity industry and credit rating agencies. The former is facing a deterioration in debt markets just as a number of buy-out firms, including Blackstone and Kohlberg Kravis Roberts, have listed or are seeking to do so. Rating agencies have been criticised by investors for being slow in spotting credit markets problems such as the crisis in the subprime sector. (FT)

•  Why I Read Business Blogs   


ECONOMY

The Wall of worry continues to build:

Bernanke on Inflation:  Forget volatility, the focus on the Core is about lowering inflation expectations.   

•  What It Takes to Get the Fed to Move: With Fed policy on hiatus, markets will inevitably obsess over anything that might indicate the pause could be coming to an end. What would it take to get the Fed to move rates again? A fascinating new Fed study provides intriguing clues. The study, which was written by Fed economist Meredith Beechey and Par Osterholm, an economist at Sweden's Uppsala University, has a dull academic title, The Rise and Fall of U.S. Inflation Persistence, but the contents are anything but boring. The results might provide the best insight into the history of Fed thinking of any paper published by the central bank. (Bloomberg)

Economic Research and Retail Shopping The Missus is smart enough to know that when she wants me to go shopping with her, she best not call it that. So the clever lass has taken to calling sport shopping "Economic Research."  Here is what we have found . . .   

U.S. Rebound May Be Bumpier Than Fed Expects as Credit Tightens: The U.S. economy's take-off from a near standstill in the first quarter may prove bumpier than the Federal Reserve and many on Wall Street expect as tighter credit acts as a headwind to growth. What started as a financing squeeze in the subprime- mortgage market now threatens other parts of the economy. Borrowing costs for companies are climbing as banks and investors demand more for their money. Consumers feel the pinch from rising interest rates and sagging house prices. (Bloomberg)



HOUSING

• In light of the rumors about Buffett taking a stake in a homebuilder, this is timely: Can You Judge a Homebuilder By Its Book Value?   

•  Yield spread premiums can bite you: The yield spread premium (YSP) is a mystery to most home buyers, but it would pay them to get more familiar with this little understood feature of the mortgage business. It's the basis for the fee a broker gets for selling a loan above the par rate, or the lowest interest rate a borrower qualifies for. It's a standard industry practice, but it can also be an incentive for abuse. (CNNMoney.com)   

•  Alt-A: The New Home of Subprime?    

Why Haven't Home Construction Jobs Disappeared? The number of housing starts and units under construction have both plunged over the past year, while residential construction employment fell a scant 3.5 percent. Last month the number of people at work on homes was unchanged from May at a little more than 3.3 million, the department said. Federal Reserve officials have been waiting for months for construction employment to fall, but it hasn't. Of course, the decline in housing construction has been a major drag on gross domestic product growth. (Bloomberg)


TECHNOLOGY & SCIENCE

Data, data, data, and more data

Coming Soon: the Touchscreen iPod: I noted Back in January that I did not think the iPhone would cannibalize the iPod because Apple would migrate the touchscreen downstream to the smaller and non iPhone "pods." It was only a matter of time before Apple would bring out a touchscreen (non-phone) iPod. Well,rumors are already starting to pop up that one is coming, and I expect we will see something perhaps in time for this year's Christmas season.

This is what the web looked like in 1994  (Video)

A Hollywood inventor protests the patent bill: In 45 years, George Margolin has patented 26 inventions, including a front-screen projection system (1964) that Hollywood used for special effects in 2001:A Space Odyssey, the James Bond films and Superman. He patented the folding computer keyboard in 1973, and a new type of anti-stick medical syringe in 1993. Find out why he so strongly opposes the proposed patent-reform bill, which includes a change that would favor inventors who were the "first to file" for patent protection above those who came up with ideas first. (FORTUNE Small Business)

•  Cool tool!  The TouchGraph Google Browser reveals the network of connectivity between websites, as reported by Google's database of related sites. Here's what my site looks like with this.



MUSIC BOOKS MOVIES TV FUN!

Blade Runner: The Final Cut -- in Theaters Fall 2007

• Online Music: 90+ Essential Music and Audio Websites

How to get an AT&T subsidy on an iPhone: Buy a heavily subsidized phone from AT&T (i.e., a Treo 750). Unlock it, then go back to AT&T, tell them you want to switch to the iPhone. Your contract switches. Sell the Treo phone on eBay as no-contract for full price.  iPhone for $400 net!

No, really, a hammock would be lovely. Just relax in the shade, read Barron's, smoke a Padron. Now THATS a weekend . . .

~~~

Got a comment, suggestion, link idea? Or do you just have something on your mind? The linkfest loves to get email!  If you've got something to say, then by all means please do.

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