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Jul. 22, 2013 2:00 PM ET
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Long/Short Equity, Portfolio Strategy

Seeking Alpha Analyst Since 2008

Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political, and general opinions by several prestigious news organizations. Currently, Mr. Payne is a contributor to the Fox News Network and Fox Business Network. He also hosts his own radio show on KFIAM 640 every Saturday from 2-4pm PST. Mr. Payne recently released his first book entitled Be Smart Act Fast Get Rich. Our all-star analytical team is called first when the media needs to know. We are regularly featured on several well respected finance-oriented radio and television programs such as Fox, CNBC, BNN, WSJ to name a few and widely recognized in the media as a leaders in the analyst community. In addition, Wall Street Strategies is part of Factset, Jaywalk, and Thomson-Reuters Consensus Estimates. Meet our analysts: Brian Sozzi is an equity research analyst specializing in the softline/hardline goods sectors of the retail industry for Wall Street Strategies Inc. Mr. Sozzi graduated Summa Cum Laude from Dowling College, receiving his Bachelors of Business Administration with a concentration in Finance and Accounting. Routinely sought after as a trusted point of reference for opinions and insight on the global economy and retail sector stock evaluation, Mr. Sozzi is a frequent on air contributor to CNBC, Fox Business Network, and Bloomberg, and is cited regularly by online/print publications that include Forbes, Bloomberg, The Wall Street Journal, Thestreet.com, CBS Marketwatch, Reuters, Seekingalpha, Associated Press, Crain’s NY Business, Fortune, Barron’s, AOL Finance, and the Financial Times. In 2009, Mr. Sozzi became recognized by Starmine as a top-ranked equity research analyst for stocks under coverage in such categories as EPS Estimate Accuracy and Industry Excess Return. David Silver is a Research Analyst for Wall Street Strategies. He is a graduate of Tulane University’s A.B. Freeman School of Business where he received his Bachelor of Science in Management with a dual degree in Finance and Accounting. David actively covers companies in the Transports, Autos, and Beverage sectors. He is routinely invited to appear on business oriented television and radio shows including CNBC, Fox News, Fox Business News, the Business News Network of Canada, WCBS Radio, and the Wall Street Journal Radio. In addition, David has been quoted in major business publications such as the Wall Street Journal, Forbes, Marketwatch, CNN Money, and Autoweek. David Urani is a research analyst with concentrations on the homebuilding, staffing, medical devices, and logistical services industries. Along with providing institutional clients with up-to-date reports of individual stocks within his industry coverage, David assists the rest of the Wall Street Strategies research desk with timely analysis of vital economic data. A graduate of the A.B. Freeman School of Business at Tulane University, David earned a Bachelor of Science in Management while majoring in finance. With prior training experience running small businesses, he has an eye for key fundamentals that keep Companies running efficiently. David’s insight has been featured in several outside sources, including the Fox Business Network, MarketWatch, and SeekingAlpha. Carlos Guillen is an Equity Research Analyst providing coverage of the technology sector for Wall Street Strategies, Inc. Mr. Guillen has had experience working in both the sell side and the buy side. Prior to working as an analyst, he was a Design Engineer for Lambda Electronics. Mr. Guillen holds an M.B.A. from NYU’s Stern School of Business, and he has a B.S. in Electrical Engineering from Manhattan College. Conley Tuner is a Research Analyst with Wall Street Strategies Inc. He is a frequent contributor to a number of media outlets including MarketWatch, Bloomberg, BBC news and Xinhua news. Conley holds a Masters in Business Administration and a Masters in International Affairs from the George Washington University. Jennifer N. Coombs is an Equity Research Analyst at Wall Street Strategies. She previously worked on the buy side as an Associate Equity Research Analyst covering the transportation subsector of the industrials sector at AIG SunAmerica Asset Management Corporation. Jennifer also covered Real Estate Investment Trusts (REITs) and has done broader research for the industrials, financials and consumer sectors. Prior to joining their research department, Jennifer worked as a Trading Assistant for SunAmerica’s index funds. She also worked briefly in the client portfolio management department at Dwight Asset Management Company – a fixed income subsidiary of Goldman Sachs. Jennifer graduated with distinction from Clarkson University where she earned a B.S. in Financial Information Analysis and Political Science, with minors in Economics and Law. Jennifer specialized in international markets, and briefly studied East Asian Economics at Sungkyunkwan University in Seoul, South Korea. Jennifer is currently a member of the New York Society of Security Analysts (NYSSA).

By Carlos Guillen

After a very encouraging week of trading last week, which was driven mostly by positive Fed comments, equity markets are off to a fairly decent start this week, with the Dow Jones Industrial Average slowly moving into winning territory; however, existing home sales data and earnings results from McDonald's (MCD) have served to attenuate further upside as they both came in below the Street's expectations.

Clearly having the most significant negative effect on the Dow today is McDonald's after the world's largest fast-food chain reported second-quarter earnings that fell shy of expectations. The company reported earnings per share of $1.38, two cents below the Street's consensus estimate. Revenues during the quarter did grow from the year-ago level to $7.08 billion, but were also a bit short of meeting the Street's estimate of $7.09 billion; global comparable sales increased 1%, but global comparable sales for July are expected to be relatively flat. Perhaps more concerning was that management said that business during the remainder of the year was expected to remain challenging.

Also somewhat of a disappointment today was that existing-home sales data for June declined 1.2 percent while the Street was expecting a rise of 1.9 percent. Despite its decline, existing-home sales landed at the second-highest level of sales since November 2009, still indicating that the housing sector remains strong (more on this below).

While the rest of this week will not have lots of economic data points to move markets, there will be many companies reporting earnings, and this can certainly shake equity markets. In fact, according to Reuters, 157 companies from the S&P 500 will be delivering financial releases this week. And according to FactSet, 71 percent of companies that have reported earnings so far have beaten the Street's earnings consensus, but just 49% have beaten forecasts for sales. In sum, it is going to be a week full of suspense.

Existing Home Sales
By David Urani

Existing home sales for June came in at a 5.08 million annual rate, down 1.2% from the 5.14 million reported in May; this was also below the 5.27 million consensus estimate. In general, when I see a piece of broad economic data, particularly one that's both seasonally and annually adjusted like existing home sales, then I try not to over-analyze a move of just 1.2%. Nevertheless, the Street is a bit disappointed with the results, as investors apparently wanted to see more growth. Still, one positive way to see it is that in May sales touched above 5 million for the first time since the Federal tax credits in 2009, and in June they stayed above 5 million.

Regionally, the Midwest was flat while the Northeast, South and West were down slightly. Over on the supply side, inventory was up 1.9%, leading to months' supply rising to 5.2 from 5.0, bringing it back to the April level. The average price was up to $261k from $251k.

So far the economics have remained favorable. Of course, it's clear the Street is already skittish about mortgage rates and likes to sell on any whiff of weakness and I think we're seeing a bit of that today. Nevertheless, home demand still is not showing any signs of being hit materially.


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