Seeking Alpha

Alex Cook's  Instablog

Alex Cook
Send Message
Alex Cook is a graduate of the University of North Carolina, where he studied economics. In college he founded Tar Heel Business, a print and internet publication focused on business and economics. Alex now writes for frontieroutlook.com, where you can read about macroeconomic trends and... More
My blog:
Frontier Outlook
View Alex Cook's Instablogs on:
  • The best news from last week: Positive CPI
    The big concern last week after the FOMC meeting was that the economy was in a liquidity trap and that deflation was a possibility. Fortunately, CPI was positive. This isn’t necessarily good news, but if the CPI numbers came out negative—things would have gotten ugly.

     

    Deflation can turn a bad situation into a full-scale crisis. Deflation means companies are earning less income—but outstanding debt is still the same, and consumer spending decreases. Deflation helped turned a recession in the early 1930s into the Great Depression.

    Why have we avoided it? GDP reports have been positive, and by the technical definition of a recession as two quarters of negative GDP growth, the recession is over. While unemployment is still uncomfortably high, it could be that consumer spending has increased and industrial demand has ramped up.

    The data

    The Dow dropped from resistance levels around 10,700 to support around 10,300 through this week. The energy component of CPI rose by 2.6 percent, which could be a sign of increased industrial demand. The retail sales report was slightly below consensus, but still within the consensus range.

    What this means going forward

    To reiterate: the positive CPI numbers are not a sign that the worst is over, but it is one less red flag that could have been severe. Things to monitor in the near term:

    • Retail sales data when more back-to-school shopping data is available. On Tuesday, Abercrombie & Fitch releases earnings—and on Thursday, Aeropostale, Gap, The Buckle, and Zumiez release earnings.
    • Data from Western Europe. Right now, the biggest deflationary pressure is contraction in the Eurozone from austerity and stagnation.
    • Chinese statistics. Call it a hunch, but I’m starting to feel a possible credit bubble in China. Financial blogger Robert Eberenz at Diamond Slice has more details here, and they’re not pretty.

    If back-to-school data turns out to be more robust than expected, things may be shaping up. If China ends up contracting, look out below.

    -Alex Cook



    Disclosure: None
    Aug 15 8:38 PM | Link | Comment!
  • Thoughts on CFA Program: 41 days remaining

    It’s 41 days until the Level I Exam of the Chartered Financial Analyst Program. For a while, I felt like I was coasting along, as much of the material was similar to what we did in undergrad. Now though, it’s gotten a lot harder. My advice to people thinking about the program is to start early–very early.

    I’m now on Reading 65, which is in the Fixed Income unit. This section uses terms that I have literally never heard of before. In a way, that’s what I wanted from this program, since I wanted to learn and grow, and not just get an extra credential. That said, it’s become a grind now.

    I’m taking a mock exam on May 8 at nearby Portland State University, and I’m trying to finish up the last of the readings by that time.

    Now that the day is getting closer, it’s starting to feel a bit more daunting. I feel up for the challenge, but I know that I have to bring my A-game. It’s starting to feel like pledging in Alpha Kappa Psi all over again. This means bringing back my time management strategy from those days:

    • Check email, news, Facebook, and things like that no more than twice daily–once in the morning and once in the afternoon. If you don’t see many posts on this site from now until the test date, you’ll know why.
    • Fun takes a back seat until June 5. Apparently the Blazers won last night. I wouldn’t know.
    • Sleep is overrated.

    My suggestion for those thinking about the program is to make a schedule where they plan to complete certain amounts of readings on a time frame. The hard part will be sticking to that schedule, since work obligations and social activities will get in your way. I’m trying to deal with that myself now.

    Good luck to everyone taking the Level I Exam in June.

    -Alex Cook



    Disclosure: Not applicable
    Apr 25 10:02 PM | Link | Comment!
  • Sunday Briefing on April 18

    A massive volcano affects Europe, and Goldman Sachs gets charged with fraud. Next week will be a major week for earnings. Here is a recap of last week, and a preview of the market moving events for next week.

    Market moving events next week:

    Monday April 19: Arch Coal, Citigroup, Eli Lily, Halliburton, IBM, and Zions Bancorp release earnings.
    Tuesday April 20: Apple, BNY Mellon, Delta Air Lines, Goldman Sachs, Harley-Davidson, Jefferies, Johnson & Johnson, Juniper Networks, Novartis, PACCAR, Seagate Technology, State Street Corporation, TD Ameritrade, US Bancorp, UnitedHealth Group, VMWare, and Yahoo release earnings.
    Wednesday April 21: AMR Corporation, AT&T, Boeing, Chipotle Mexican Grill, Citrix Systems, E*Trade Corporation, Fiat, Freeport-McMoRan, KeyCorp, Lockheed Martin, Manpower, McDonalds, Netgear, Piper Jaffray, Qualcomm, SanDisk, Starbucks, and Wells Fargo release earnings.
    Thursday April 22: Producer Price Index report released. Existing Home Sales report released. Amazon.com, BB&T, Continental Airlines, Credit Suisse, Janus Capital Group, Lattice Semiconductor, Microsoft, Nokia, Nucor, PepsiCo, Pixelworks, and Union Pacific release earnings.
    Friday April 23: Durable Goods Orders report released. New Home Sales report released. FLIR Systems, GlaxoSmithKline, Honeywell, Ingersoll-Rand, Rockwell Collins, Schulmberger, Volvo, and Xerox release earnings.

    Analysis

    This coming week is a major week for earnings from companies and sectors across the whole economy. Also be sure to watch the fallout from the Goldman Sachs case, which will likely still be resonating. This case could have implications in the negotiations over a financial reform bill in the US.

    Recapping last week

    World events

    Tremors shake Iceland as volcano spews more ash into sky

    India seeks to open consulate in Karbala, Iraq

    Clegg Surges in U.K. Polls, Giving Labour Most Seats

    Macro events

    Goldman Sachs Clients-First Pledge Undercut by SEC

    Putting the Goldman Sachs charges in perspective: My commentary on the fiasco

    Micro events

    Smartphone maker Palm seeking a buyer

    Just for fun

    KFC Double Down sandwich released, NPR gives it a review

    -Alex Cook



    Disclosure: None
    Apr 18 7:07 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

  • New blog post. The best news from last week: Positive CPI. http://bit.ly/9ybhlm
    Aug 15, 2010
  • just found out he passed the Level I CFA Exam!
    Jul 26, 2010
  • New blog post: A crisis wasted - Why the financial reform bill doesn't get the job done. http://bit.ly/cACvUd
    Jul 19, 2010
More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.