The weather this quarter is taking a toll with floods and blizzards everywhere.

The weather this quarter is taking a great toll with floods and blizzards everywhere.

A rush of fourth-quarter earnings reports from Dow components and data showing declining home prices (down 30% nationwide) weighed on the market. The underlying theme is that there are problems bubbling below the surface from an economic standpoint and those problems simply can't be ignored. As the market has climbed, companies have faced mounting pressure to cook the books in order to impress hedge funds who almost entirely have moved from the short side to the long side.

 United and Continental merged on Oct. 1, 2010 and the company suffered $325 million net loss during the fourth quarter, their first quarter of merger from writing down good will and worthless assets.
 Abbott Laboratories' (ABT) said it would lay off 1,900 of its work force in response to U.S. policies, and the health-products maker reported a 6.4% drop in fourth-quarter earnings. The elimination of about 1,900 jobs will be primarily in Abbott's U.S. operations. Abbott attributed the cuts to a need to cut costs in the face of changes in U.S. health care and the regulatory environment.
 Boeing Co. gave a 2011 income outlook 15% below analyst estimates on Wednesday, reflecting an unprecedented seven delays in its 787 program and new delays in its 747-8 program and less revenue from the U.S. military.
 3M's fourth-quarter profit fell 0.7% as margins declined.
 Bank of America was also weak after CNBC reported the bank has stopped issuing initial foreclosure notices to homeowners in states that don't require a judge to sign off on foreclosures. The U.S. SEC Commission also charged Merrill Lynch, now owned by Bank of America, with securities fraud for misusing customer order information. Merrill agreed to pay a $10 million penalty.
 Health-care giant Johnson & Johnson reported a 12% decline in fourth-quarter earnings and fell short of Wall Street expectations as the company grapples with product recalls and a slowdown in health-care markets.
 Travelers' fourth-quarter profit fell 30%.
 Verizon Communications added fewer smartphone customers in the fourth quarter and missed analysts' expectations.

The dollar strengthens and gold falls in price as the world discovers the best inflation adjusted returns are found in the USA. The Net long-term TIC Flows for November show a sharp trend reversal as the world buys US dollars and treasuries for a safe higher rate of return like the USA banks have enjoyed at 0.25% cost for the last two years.
With a 0.25% cost and a guaranteed 1.88% return banks make money. While investors are forcing European governments from Greece to Ireland to cut spending as governments prepare to sell $1.1 trillion of bonds this year, demand at Treasury auctions has been the highest on record. The precious metals trend line is now down steeply


World Markets:
The Islamic terrorist group Hezbollah is likely to become the next Lebanese government and exterminate Christians and Jews.

Islamists kill again at Moscow's busiest airport.

Chancellor Angela Merkel’s coalition rejected an appeal by the European Union’s top economic official, Rehn, to back more crisis-fighting measures, underlining the risks to EU efforts to calm the euro-area debt turmoil. The precious metals trend line is now down steeply

Britain’s economy unexpectedly shrank the most in more than a year in the fourth quarter as gross domestic product fell 0.5 percent after increasing 0.7 percent in the previous quarter, the Office for National Statistics said in London today.

The USA lost over $300 Billion in trade with China and that is not counting the theft of our technology. Even Apple Corp profits all go to Chinese workers and hurt America's balance of payments.

Chinese have massive illegalities and sucker sales like Hutchison Whampoa Ltd.’s sale. The Asian criminals are essentially selling their Brooklyn Bridge. Red China engages in practices that are illegal in the Free World. China is creating monopolies and cornering the market in Rare Earth's the way criminal organizations did a century ago. China thus is causing shortages and driving up prices all around the world and they are causing unemployment in manufacturing nations in the Asian ring. Remember they illegally imprisoned two Americans for doing diligent economic research for fear the Americans would expose Red China's economic corruption. Their Nobel Peace Prizewinner was thrown in jail because he accepted the peace prize. China should free the two Americans and let their Nobel Prize winner leave China.

Business trends

Friday
Crude Inventories 01/15 Jumped over 2M after declining by similar amounts in past weeks. Red China is behind the higher commodity prices around the world, not because they are doing well but because they bought up much of the world's natural resources in every continent and are raising prices to squeeze the free world.

This week:
 Case-Shiller 20-city Index Nov The Standard & Poor's/Case-Shiller composite index of 20 metropolitan areas declined 0.5 percent in November from October on a seasonally adjusted basis. The closely watched survey showed Single-family home prices fell for a fifth straight month in November and could plumb new lows soon. "A double-dip could be confirmed before Spring," said David Blitzer, chairman of the index committee at S&P. Blitzer defined a double-dip as both the 10 and 20-city composite indices setting new post-peak lows.
 Consumer Confidence Jan rose to 60.6 from 53.3 in December
 FHFA Housing Price Index Nov showed no improvement after improving 0.7% last month
 MBA Mortgage Purchase Index 01/21 fell -12.9% after rising +5% last Month
 New Home Sales Dec was manipulated to 329K by dropping the sales number from last month of 290K
 Crude Inventories 01/22 rose to 4.84M from 2.62M last week
FOMC Rate Decision Jan TBD

Today
Jan 27 8:30 AM Initial Claims 01/22
Jan 27 8:30 AM Continuing Claims 01/22
Jan 27 8:30 AM Durable Orders Dec
Jan 27 8:30 AM Durable Orders ex Transportation Dec
Jan 27 10:00 AM Pending Home Sales Nov
Jan 28 8:30 AM GDP-Adv. Q4
Jan 28 8:30 AM Chain Deflator-Adv. Q4
Jan 28 8:30 AM Employment Cost Index Q4
Jan 28 9:55 AM Michigan Sentiment - Final Jan


Market Outlook Jan 27, 2011

Hedge fund manipulators still control the American stock market. This is not an environment for individual investors. The next drop will not be pretty. Economies around the world face a slowdown as government pretends to create useful jobs as good people in private industry are let go because private businesses cannot produce clear profits.
The socialists have turned the American safety net into a hammock. The billions that went into banks and business must be paid back but the billion Obama spent on APORN and other activist projects went into hammocks for idled.

World Markets
Asian markets were mixed last night. China's market was up 1.4%, Hong Kong down -0.3%, India closed, and Japan up 0.7%,

European markets are up this morning in a range of about 0.1% to 0.4% half way through their day.

US pre-market futures are flat about 0.1 % at 9:00 AM EST.