WaveStrength Radar for January 3, 2007

Macro Outlook

The average price of Manhattan apartments is up 5% over the past 12 months, as per Terra Holdings chief economist Greg Heym, with the average price beating the $1.14 million mark. The median price increased 9% hitting a new record at $760,000.

Don’t care because you don’t think anyone real lives there? It’s just brokers from Goldman, right?

Hey, I’ve got a mother, brother, aunt, uncle, and grandmother shelling out stupid bucks to live in teeny, tiny apartments in the Big Apple.

Not me, I got out, and now spend my time in a bunker in rural Maryland. And I just got my new tax assessment from those fine folks at the state capitol, and trust me when I tell you that real estate is not collapsing.

More tonight…

Market Trends

Retail sales numbers for December are starting to trickle in. According to the International Council of Shopping Centers (ICSC), sales at U.S. retailers likely grew by 2.5%. This is a slower growth than a year ago… and is being blamed on “warmer weather.”

Same-store sales open at least a year are expected to increase only 2.5% to 3.5%, which, believe it or not, is at the low end of the scale.

Official December retail sales will be announced by the ICSC tomorrow.

Material Profits

Agricultural commodities will be big in 2007… My two favorite grains are corn and soybeans. In fact, I was due up in New York today to speak live on Bloomberg about these two crops, but was unexpectedly bumped this morning.

I guess a presidential speech is a bit more important than why corn is up 52% compared to this time last year. Understandable…

While agriculture is sure to be a hot topic this year, I’d like to highlight a couple commodities that could struggle a bit. Stay tuned in Market Report.

Trading Tactics

Home Depot (HD:NYSE) is the big news story today, as embattled Chairman and Chief Executive Robert Nardelli has resigned, effective immediately. There’s no denying what Home Depot shareholders think about this idea – as the stock is rallying, up $1.42 on the news.

There has been much said about Home Depot’s underperformance and Nardelli’s excessive pay package, which is valued at about $210 million. Now that he’s gone, let’s see how HD responds to new high-level management and direction.