Filed under: Indices, Market matters, Money and Finance This day, Technical Analysis, Housing

Many people believe that the bursting of the housing bubble was a prelude to a far-reaching property bust, and that few segments of the market will ultimately be spared.

Indeed, reports indicate that the commercial property market, which held up relatively well amid the early decline in home prices, is now in trouble and seems headed for a potentially nasty spill.

Given that, I thought it might be useful to go back and look at the pattern of the S&P 500 Homebuilder’s Index in the run-up to the July 2005 peak and beyond, and see how that pattern compares to the recent price action in the Dow Jones Equity REIT index, which is made up of publicly-traded real estate investment trusts.

The conclusion? While not a perfect fit, there are some very interesting overlaps. Under the circumstances, that could indicate the REIT market is setting up for a six-month countertrend rally, spurred, perhaps, by recent aggressive Federal Reserve easing.

Still, even if a rebound does occur, that doesn’t necessarily mean it’s time to turn bullish on commercial property-related investments. Following the technical correction that took place in the homebuilders’ index from late-2006 through early-2007, share prices eventually succumbed to an even more dramatic second-stage collapse.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle.

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Filed under: Bad news, Products and services, Motorola (MOT)

It’s really sad that a wireless giant like Motorola, Inc. (NYSE: MOT), who invented the radio technology used heavily in World War II and helped invent the consumer cellular business more than 20 years ago, could have fallen into such disrepair. It’s so bad that it may be a hard search to find a company to buy the handset maker’s faltering handset division. LG Electronics’ spokesperson Joh Joong Kwon even said “We are not interested in buying Motorola’s handset business … we believe it is better for us to focus on our resources to grow on our own.”

Remember, this is the part of Motorola responsible for trend-setting hits like the StarTac and the RAZR. It’s hard to imagine how a seasoned leader like former CEO Ed Zander (mis)managed to absolutely fail in his attempt to keep the cellphone giant at the top of its game. After quarters of massive losses and a product portfolio that spent all of 2007 losing market share, Motorola’s just not near what it used to be. And, buyers are not coming out of the woodwork looking to purchase its cellphone business.

It’s not that Motorola is a has-been: it still commands third place globally in wireless handset market share, which is nothing to sneeze at. But Asian cellphone makers like LG Electronics, Samsung Electronics and even joint partnership Sony Ericsson are not exactly lining up to look, based on what is being reported. All of them remember the disastrous results when, years ago, Taiwanese handset maker BenQ purchased Germany’s ailing Siemens handset division — what a big flop that was. BenQ Siemens eventually filed for bankruptcy due to the decision. Although this deal would be different, the similarities are too hard to ignore — which means Motorola might just have to break up the company and go at it as separate entities without any buyers for those divisions.

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Oil Prices Climb
Newsday - VIENNA, Austria - Oil prices rose Friday, adding to an overnight rebound as a more stable stock market calmed investor fears about the U.S. economy. Light, sweet crude for March delivery rose 61 cents to $88.72 a barrel by afternoon in European

Housing ‘Commitment Contracts’
BBC News - At first, the new social housing attracted a mix of the “haves and have-nots”, but since the early 1980s, housing estates have catered increasingly for the unemployed and neediest in society. This, in some instances, created ghettos of worklessness

Fed official: Economy weak, but no recession
CNN Money - In a speech given late Thursday in Hawaii, Janet Yellen, the regional Fed president, stated an economic downturn - led by a decline in the housing market - will remain with us for at least the remainder of 2008. “I consider it most probable that the U.S

Push for New GI Bill
FOX News - It’s long past time to expand the GI bill to give vets more health, education and housing benefits. That’s the right thing to do and would help recruiting, which the country desperately needs. Again, our military’s fighting terrorism pretty much

Grower wants to build 1,175 homes: A.D. Makepeace plan for South
Patriot Ledger - PLYMOUTH - Life is apt to change for residents of rural South Plymouth, where a gallon of milk is often more than five miles away down a bumpy dirt road or a narrow, winding way. A proposed housing project between the Wareham and Bourne roads and

US: Weyerhaeuser swings to 4Q loss on housing market weakness
MSN UK News - Weyerhaeuser Co. said Friday it swung to a fourth-quarter loss as the deteriorating U.S. housing market cut into demand for lumber _ a downturn the paper and wood products company expects will continue through 2008. Federal Way, Washington-based

UPDATE 2-Weyerhaeuser 4th-qtr hurt by U.S. housing slump
Reuters - NEW YORK, Feb 8 (Reuters) - Weyerhaeuser Co (WY.N: Quote , Profile , Research ) posted a fourth-quarter loss on Friday as its wood products business was hurt by the slump in the U.S. housing market, sending shares falling 4.3 percent in early trading

AP Business NewsBrief at 9:04 a.m. EST
CNBC - Weyerhaeuser Swings to Loss on Housing news://newsclip.ap.org/D8UM4JP00@news.ap.org NEW YORK (AP) _ Weyerhaeuser Co. said Friday it swung to a fourth-quarter loss as the deteriorating U.S. housing market cut into demand for lumber _ a downturn the

Stimulus plan helps some homeowners
MSNBC - It makes a similar change for loans backed by the Federal Housing Administration, a government bureau that insures loans to borrowers with poor credit. As defaults have surged, investors have been extremely skittish about the U.S. mortgage market

U.S. Recession Is Now an Even Bet as Spending Slows (Update3)
Bloomberg - Feb. 8 (Bloomberg) — A U.S. recession is now an even bet as job losses and the housing contraction jeopardize the longest- ever expansion in consumer spending, according to a Bloomberg News survey. The world’s largest economy will grow at a 0.5

Canadian dollar soars 1.2 percent on jobs report
Reuters - Domestic bond prices were mostly lower on the jobs report, as well as on housing starts data that also beat market expectations. At 9:28 a.m. (1428 GMT), that Canadian dollar was at US$1.0016, valuing a U.S. dollar at 99.84 Canadian cents, up from 98

Weyerhaeuser Swings to Loss on Housing
Newsday - NEW YORK - Weyerhaeuser Co. stated Friday it swung to a fourth-quarter loss as the deteriorating U.S. housing market cut into demand for lumber — a downturn the paper and wood products company expects will continue through 2008. Federal Way, Wash

UPDATE 3-Canadian Jan employment defies expectations, soars
Forbes - Adds market reaction, housing starts) By Randall Palmer OTTAWA (Reuters) - The Canadian job market dispelled any idea of a slowdown in January, adding a stunning 46,400 jobs and pushing the unemployment rate back to October’s 33-year low of 5.8

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Filed under: Products and services, Consumer experience, Microsoft (MSFT), Apple Inc (AAPL), Motorola (MOT), Nokia Corp. (NOK), Research in Motion (RIMM), Palm Inc (PALM), iPhone, Technology

Research firm Canalys released its fourth quarter shipment data on the smartphone industry. The bottom line? Apple Inc. (NASDAQ: AAPL)’s iPhone is now in second place in the U.S.’s smartphone market. Globally, it’s in third place.

Nokia Corp. (NYSE: NOK) remained the global market leader, shipping 60.5 million smartphones last year. While its shipments grew 69% in the fourth quarter, its smartphone market share declined year-over-year from to 53% from 54%.

Research in Motion Ltd. (NASDAQ: RIMM) shipments grew 121% globally compared with a year before, as did its share of the market, growing from a 9% to over 11%.

Then Apple swooped into the third place, pushing Motorola Inc. (NYSE: MOT) to fourth place, and capturing 6.5% of the global market, despite starting to sell iPhones (very) late in the second quarter.

Canalys also estimated “that Apple took 28% share of the fast growing US converged device market in Q4 2007, behind RIM’s 41%, but a long way ahead of third put Palm on 9%.” [converged devices==wireless handsets and smartphones]

That was hardware.In software, Apple also made strides. While Canalys estimates, “Symbian had a 65% share of worldwide converged device shipments, ahead of Microsoft on 12% and RIM on 11%,” in North America, Apple pushed Microsoft (NASDAQ: MSFT) to third place with a 21% share and took second place with 27%. RIM was the clear leader with 42%.

Pete Cunningham, Canalys senior analyst, stated that “Apple has shown very clearly that it can make a difference and has sent a wakeup call to the market leaders.” At the same time he warned that “a broad, continually refreshed portfolio is needed to retain and grow share in this dynamic market.”

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Filed under: Earnings reports, Products and services, Consumer experience, Coca-Cola (KO), PepsiCo (PEP)

PepsiCo (NYSE: PEP) reported Q4 and full-year earnings this day, and the Street liked what it saw. Personally, I’m a fan of Coca-Cola (NYSE: KO), mainly because I own the stock — well, that’s pretty much the only reason, since I actually like Pepsi’s soda over Coke’s (although I do like Diet Coke best of all). As of this writing, it’s up about 5%.

Net revenue grew 17% for the fourth quarter and 12% for all of 2007. That’s great double-digit growth, but the bottom line actually declined 29% in the fourth quarter and rose a flat 2% for the full year. That was on a GAAP basis. Excluding various items, net income actually grew 8% in Q4 and 13% in 2007. Full-year operating cash flow jumped 14%, and it was more than enough to cover capital spending and the blue-chip dividend (the latter of which is a key reason why investors put this stock on buy, hold, reinvest, and forget!).

Snack volume — remember, Pepsi owns the tasty Frito-Lay portfolio and the Quaker brand — grew 6%, while beverage volume expanded by 4%. Pepsi anticipates higher operating cash flow for fiscal 2008 — $7.6 billion versus the $6.9 billion generated in 2007 — and it is planning to continue share repurchases. Yes, I suppose I’d rather you purchase shares in Coke since I own them, but truth be told, investors will probably do well owning either beverage company (I do concede that I envy the Frito-Lay asset).

Disclosure: Steven Mallas owns shares in Coke, and might purchase more at any time.

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