Wall Street Strategies'  Instablog

Maybe it's a sign of things to come but the action today is very compelling. I sense some panic buying as fence-sitters understand that they'll have to make a stand or probably spend the next leg higher crying in their milk...again. The market is still range-bound but acts like all is forgiven or forgotten. That "sobering" jobs report last Friday, all those economic data releases that missed the mark, all the corporate insider selling, and the fact the market is up 505-points from the low of the year are all forgotten or forgiven. Then, there are signs like those from Gannett (GCI), Hovnanian (HOV), and Blockbuster (BBI) being able to go out and raise money. Forget about more IPOs, (IPO's tripled to 17 during the third quarter) these are companies that have been left for dead like a Clint Eastwood movie; they have the scars to prove they've been to hell and back but are still hanging tough.

Additional signs that the market is ready to move higher is the action in a couple of stocks in the news today.

• Mosaic (MOS) posted an earnings report that could only be described as coyote ugly, but the silver tongue of the company's CEO has the shares higher.
• Emerson (EMR) made a $1.2 billion acquisition today and its shares are noticeably higher.

Of course, there are still things to worry about, including weak volume. Retail stocks are up smartly ahead of the same-store sales data set for release this Thursday, but across the board volumes within the sector are problematic. The same thing with energy stocks, especially coal names.

I'm looking for some anxiety to enter the market, maybe not enough to derail today's momentum but enough to maybe see a lull in the action.

The Dow Jones Industrial Average looks great on the chart, bouncing off the trend line, and is on the cusp of breaking out. However, we aren't adding at the moment.

Brief Notes by the WSS Research Desk

By: Brian Sozzi, Research Analyst
 

• Coach's (COH) patent infringement outcry against certain handbags at Target (TGT) certainly has merit in my opinion. A glance of Target's handbags this fall almost mirrors those offered by Coach in terms of patterns and finishes. The quality isn't the same as a Coach, but when you are up to your eye balls in debt, have no job, but want a fresh fall bag why not opt for the Target rendering.

• There is some weird trading activity unfolding today in Liz Claiborne (LIZ), which I attribute to chatter of possible asset sales. The first brand likely to be shed is Mexx due to its loss overhang and new leadership which must be dying to emerge from the sinking Liz Claiborne ship. However, the most value is in Juicy Couture, which could in fact IPO given the market thaw. I was just going back to look into the Juicy purchase by Liz Claiborne from 2003. Liz Claiborne never broke down the purchase price, but at the time of purchase Juicy was bringing in close to $300.0 million in annual revenue. Since then, annual revenues are approaching $700.0 million, and the store base has been expanded into some high profile locations (think Las Vegas). Looking at a comparable specialty retailer, say Bebe, which has about $650.0 million in annual revenue (market cap $600.0 million or so), and then taking into account Juicy's better long-term outlook among other factors, I fancy the brand would certainly IPO high enough to wipe out Liz Claiborne's burdensome debt load while still leaving Lucky Brand, Mexx, Kate Spade, and the traditional wholesale operations as the future earnings drivers. This is all hypothetical of course.

By: David Urani, Research Analyst

According to Reis Inc., apartment vacancies rose in the third quarter to 7.8% from 7.7% the previous quarter, representing the highest vacancy rate since 1986. It's certainly old news, but it is still alarming to see homes and apartments go vacant nationwide as Americans lose their ability to make payments, usually as a result of unemployment or pay cuts. What we don't hear too often, however, is where these people go.

One particular market that is experiencing a crisis and has gained significant attention from government funding is subsidized senior living. Not only has the senior community become a larger demographic nationwide, but a large proportion of those people are retired or jobless for health reasons. The jobless group speaks for itself, while many retired individuals were living on home equity that has diminished as home values have fallen.

One housing authority in Grand Junction, Colorado that operates affordable housing communities is running a $35,000 deficit per month just trying to keep people in homes. The U.S. Department of Housing and Urban Development has stepped in to help but it's not a fix for everything. Applications are up 25.0% from a year ago, a quarter of which are currently homeless. At present, there is a two-year wait and the housing authority simply has to turn down many applicants. In the end, homelessness rates are simply rising quickly. In 2008, a conference of mayors reported that 12 of 25 surveyed cities reported an increase of homelessness due to foreclosures, while another eight cities did not have enough information to determine.

There is currently $10.5 billion available to the Department of Housing and Urban Development, $1.5 billion of which has been spent so far.

Written by Charles Payne, CEO and Principal Analyst of Wall Street Strategies (wstreet.com) providing independent stock market research to over 30,000 subscribers, in more than 60 countries. Mr. Payne is a regular contributor to the Fox Business and Fox News Networks. For more information about Mr. Payne, please refer to the company’s website www.wstreet.com.