Thread: This Week in Stocks: 6/23 - 6/29/07

Sunday, June 24, 2007

Frank Russell Slams the Market to the Mat
The stock market got a double-whammy this week. First, it was put buyers slamming the market earlier in the week. Then, Frank Russell & Co. did the same on Friday by radically reconstituting stocks in their widely-held Russell 1000 and 2000 indices, forcing huge index fund selling of major stock holdings. By the end of the week, the market was severely bruised and broken by this "mechanical" churning:

In past years, Russell had waited until the end of June to do this massive restructuring of their indices, but for some ill-conceived reason, they decided to move this event to the week immediately following Quad Witching options and futures expiration -- the most vulnerable time of the year for the stock market as the "big money" tends to go on vacation after May. If you lost money last week, blame Frank Russell and the put buyers for slamming it to the mat, not any kind of either technical or fundamental change.

Of course, if you were trading the market, as you should have been in this trendless environment, you made a lot of money both buying and selling, so perhaps you should thank Frank for his valuable services!

Due to this mechanical selling, creating almost a "mini-crash" in stocks, next week could very well see most of last week's losses reversed and the market soar higher. In fact, crashes always create buying opportunities, so traders are going to have a golden opportunity to buy for the rebound off the mat.

http://marketclues.blogspot.com/

I did not provide a link. Sorry. It is at http://www.briefing.com/Investor/Index.htm and I will try.

did anyone hear the entire interview w/ Abby Joseph Cohen on CNBC just at around noon EST? I only caught the first minute. Please give a recap if you did. The part I caught, she said she thought the Fed didn't need to act to any data yet. Then I went underground into a parking lot and the reception got cut off -- not sure if she qualified that with a statement on them changing the wording for the chance of a rate cut going up? Was she bullish or bearish?

Originally Posted by fedgolfer

did anyone hear the entire interview w/ Abby Joseph Cohen on CNBC just at around noon EST?

http://www.cnbc.com/id/15840232?video=395823311

Originally Posted by tsptalk

http://www.cnbc.com/id/15840232?video=395823311

Thanks, Tom. Helpful as always. Can you dig up an interview with Thunder5's thoughts on the markets? His latest IFT may have said it all.

LOL, where is thunder5? He doesn't spend much time with us common folk.

What a day! Where she stops, nobody knows.

We're stuck in a trading range!....>>>>DOW 150 points in 1 Day<<<<....

Originally Posted by fedgolfer

Thanks, Tom. Helpful as always. Can you dig up an interview with Thunder5's thoughts on the markets? His latest IFT may have said it all.

Looks like he's jumped in the boat with a lot of us...a day late and a dollar short...

Originally Posted by budnipper1

Looks like he's jumped in the boat with a lot of us...a day late and a dollar short...

Hopefully, it's a day early.

AP
Lennar Falls to 2nd-Quarter Loss
Tuesday June 26, 8:04 am ET Lennar Drops to 2nd-Quarter Loss As Housing Downturn Continues; Forecasts 3Q Loss

MIAMI (AP) -- Homebuilder Lennar Corp. said Tuesday it swung to a second-quarter loss as the housing downturn continues, and warned it would likely post a loss in the third quarter as well.
Losses totaled $244.2 million, or $1.55 per share, versus profit of $324.7 million, or $2 per share, in the previous year.
The company said results were hurt by a charge of $1.33 per share related to valuation adjustments and write-offs of option deposits and pre-acquisition costs.
Analysts surveyed by Thomson Financial forecast a profit of 5 cents per share. The estimates typically exclude one-time charges.
Quarterly revenue slid 37 percent to $2.88 billion from $4.58 billion in the prior-year period, which beat the analysts' consensus of $2.58 billion.
"The housing market has continued to deteriorate throughout the second quarter. The supply of new and existing homes has continued to increase resulting in declining home prices across our markets," President and Chief Executive Stuart Miller said in a statement.
Lennar said new home deliveries, excluding unconsolidated entities, fell to 8,940 homes from 12,506 homes in the year-ago period. The average sales price of homes delivered slipped to $298,000 from $322,000 due to higher sales incentives offered to buyers.
Gross margins, including $171.6 million in valuation adjustments, were $193.2 million, or 7.2 percent, versus $946.5 million, or 23.5 percent. The prior-year period included $8.7 million in valuation adjustments.
Gross margins excluding valuation adjustments were $364.8 million, or 13.6 percent, compared with $955.2 million, or 23.7 percent, in the previous year. Lennar attributed the decline to more sales incentives.
Loss on land sales totaled $108.8 million, including $69.4 million of valuation adjustments and $48.9 million of write-offs of deposits and pre-acquisition costs related to approximately 5,400 homesites under option that the company does not intend to buy. Miller said the company anticipates a third-quarter loss due to uncertain market conditions.