Global economic data out today is akin to Goldilocks and the Three Bears except that there is no sweet little girl in this story, rather two bowls of economic growth one that is too little and one bowl that's too hot. The U.S. and Germany are a little disappointed with their January trade results; even though the trade gap narrowed in America, exports came down along with imports. Less demand for crude oil is more often than not a negative reflection on the American economy, but at some point over the next decade or two that will change. Germany's trade surplus slipped to $8.7 billion from $16.6 billion in December. Exports of autos were off $544.0 million and commercial aircraft $474.0 million. So while the trade gap decreased 6.6% the overall story is slowing global trade with the exception of that big bowl of porridge being in China.

Tidbits
By: Brian Sozzi, Research Analyst

* I have the great fun of attending the Ugg analyst event in NYC today. The weird looking boot, designed by Decker's Outdoor (DECK), has been a cultural icon for some time already. In doing some digging through the 10-k release, it was interesting that there is much more to the company than selling well insulated, sheepskin boots. The company is taking a disciplined approach to global store openings; these stores are very in line with the brand's heritage. Moreover, the company has other brands including Teva, and Simple, the latter being a brand that is made from sustainable products (organic cotton, recycled rubber, etc.). There were things we were not thrilled with in the 10-k, so we are eager to be proven wrong at this evening's analyst event.

* Net worth increased in the fourth quarter by $700 billion, slowing from the $2.78 trillion increase posted in 3Q09. 4Q09 represented the third consecutive quarterly increase, though the pace slowed as a result of the hiccup in home prices. 2011 may be an interesting one for makers of high-end luxury goods (higher manufacturing costs, higher costs to open stores, tougher margin comparisons, potentially softening demand).

* Starting to see retailers assume the following approach to operations: close four wall negative profit stores in the U.S., mostly rooted in California and Florida, and go after growth opportunities in China. Retail sales trends (reflecting volume and price) support the direction retail management teams are engineering. However, keep in mind these stores are being opened, potentially, near the top of the real estate market and will need a certain level of sales to bring in profits. Sort of sounds like the case currently in the U.S., where retailers opened up stores in California and are now left sitting on unproductive stores given a new normal sales volume.

General Motors Burning Oil
By: David Silver, Research Analyst

So in an interesting turn of events, General Motor's CEO Ed Whitacre said that the U.S. taxpayer is going to make money off its General Motors investment. Oh yeah, but a Congressional Oversight Panel said that U.S. taxpayer could lose $6.3 billion from its investment in GMAC (and that is assuming we don't dump anymore money into GMAC which is far from on solid footing).

Let's discuss GM first. Mr. Whitacre indicated that GM will repay the direct loans given to it (which totaled more than $9 billion) by the U.S. and Canadian governments by June. He also said that in the subsequent IPO, taxpayers would be paid back in full (and even make money) on selling its 60% stake in Government Motors. The company got rid of half its brands and closed more than a handful of plants, and the market value of the company is going to be larger than it has ever been? I find that hard to believe.

There are rumors about an IPO as early as July of 2010. I had expected an IPO to happen in the second quarter of 2011, however, I am moving up my expectations to the end of 2010. Auto sales have been progressing better than expected for General Motors. Now back to GMAC. The auto and home loan company has received more than $17.2 billion from the government but the conditions (after becoming a bank holding company) were far less stringent than it was for just about every company that took TARP money. The government is saying that the bailout of GMAC was necessary to save GM and Chrysler, but didn't GM and Chrysler go bankrupt? How did this investment save these two companies? The government held GM's hand through the process and now Chrysler is owned by an Italian automaker. Interesting how things work out...

Final Note

I like seeing the market climb off the canvass today but it might have made its move too early. There aren't any catalysts in sight although we could see buying ahead of tomorrow's retail sales data.