Sunday, March 22, 2009

Psychology of the Upcoming Week's Earnings & Economic Data

The entire Psychology of the Call (POTC) team is excited and happy to bring back the weekend piece we call Psychology of the Upcoming Week's Earnings & Economic Data. We thank the loyal readers who found it useful enough to request that we bring it back to life. Here we go...
Monday, March 23rd at 10ET brings Existing Home Sales for February:
Prior amount sold was 4.49M units and now the consensus forecast is 4.45M. Home sales continue to plague the capital markets. No other bubble has ever had such devastating effects as this ongoing U.S. housing asset and credit crisis. Falling long-term interest rates as the Treasury buys bonds should help sales, yet we do not believe this positive fundamental change of cheaper money (lower interest rates) will impact behavior this year. The pendulum of psychology will not swing quickly. Even as more favorable raw data starts coming in, be alert to the smoothing effects caused by foreclosures, otherwise known as distressed sales. POTC does not see a meaningful turn in existing home sales until the employment numbers recover, and that may not happen until mid 2011 by our guesstimates. Before market earnings from Tiffany & Co. (TIF), Q4 '09, revenue and earnings per share (eps) estimates are $838M and $.80. Walgreen Company (WAG), Q2 '09, revenue and earnings per share estimates are $16.42B and $.66.
After market earnings from Focus Media Ltd. (FMCN), Q4 '08, $193M in revenues and $.38 in eps (bottom line). Sonic Corp. (SONC), Q2 '09, $170.2M in revenues and $.09 eps expected.
For several reasons, POTC believes shares of SONC should be... ---------------------------
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1 comment:

Anonymous said...

Sales were helped as predicted, still think mkt will test old lows as well. Great work, appreciate you!