Last Week:

What a difference a week makes. Markets have a big week, rebounding off of two terrible weeks.

So what happened? Last week I wrote that after listening to a substantial amount of financial television over the last two weeks (now three) that I concluded no one really knows what triggered this correction. And they didn’t know what would stop it.

The key was what happened last Friday afternoon. Markets bounced off of their 200-day moving average. I heard one analyst say that if the 200-day didn’t hold on the S&P, the next level of “support” was back to 2010 levels. Yikes. But it did hold. Actually, last Friday we finished comfortably above the 200-day.

A week later, we may not be fully away from this correction, but it feels a whole lot better.

What’s a Gold Medal worth? Many of us have been watching the Winter Olympics this past week, and seen some cherished moments. But what is a medal really worth?

In my reading this week, it’s been reported that if you melted down one of the gold medals, the value would be about $600.

The USOC, through private donors, awards a cash prize of $37,500 for a gold medal ($22,500 for silver, and $15,000 for bronze). If the athlete makes less than $1 million/year, that prize is tax free.

But we all know the real bonanza can be through endorsements. Not all gold medal winners cash in. But occasionally the right athlete, with the right charisma, comes along. Snowboarder Shaun White is a great example. Shaun didn’t come from a wealthy family. His mom was a waitress, and his dad worked for a utility company. So, when the Flying Tomato won gold in 2006 at the tender age of 19, that medal turned into millions almost overnight. Now 31 White, after capturing his third gold in the last four Winter Games, is sure to cash in even more (currently worth up to $40 million). Snowboarding and America… have been very, very, very good to Mr. White.

Retail sales for January missed. Expectations were for an increase of +0.3%, but came in -0.3%.

Inflation rose more than expected. Month-over-month expectations were for an increase of +0.3%, but came in +0.5%. Year-over-year inflation is up +2.1%. If you take out food and energy (the number the Fed goes by), inflation is up y-o-y +1.8%.


This Week:

The economic focus of the week: Once again, how will markets respond this week? Over the last three weeks, we’ve had two bad weeks and one good week. Will we retest the lows, or have we established a bottom? We’ll know more this week.

It’s a short week. Due to President’s Day, markets will be closed on Monday.

Companies reporting this week: Avid Budget, Boston Beer, Cheesecake Factory, Cinemark, Cooper Tire, Cracker Barrel, Dominos, Duke Energy, Garmin, Go Daddy, Herbalife, Hewlett Packard, Home Depot, La-Z-Boy, Mosaic, Owens Corning, Pandora, Southern Co, Toro, Wal-Mart, and Wendy’s.

Indicator focus: Minutes from the Fed’s FOMC meeting the end of January, and January’s existing home sales (Wed.


Have a great week,

Chris

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