Hello, and Happy Friday!

This is Mark Vickery, subbing for Sheraz Mian while he is away.
 
Boy, just when you thought it was safe to start ignoring Egypt again…

Egyptian President Hosni Mubarak has refused to step down and has decided to turn over day-to-day operations to his Vice President, Omar Suleiman. This has promoted fresh, active protests in Cairo’s Tahrir Square today outside the country’s state television building. At this hour, the amount of protesters has swelled greatly. It is unsure what will develop next, and as we all know, the market hates uncertainty.

Thus, futures are down this Friday, but only slightly at this point. Yesterday the Dow finally took a breather after 8 straight days of gains, but it fell less than a tenth of a percentage point, meaning bullish sentiment was still present as of Thursday trading. Will the Bulls fight through the renewed Egyptian turmoil with light economic news and fewer earnings reports expected today?

The Obama administration introduced its plan to wind down Fannie Mae and Freddie Mac’s share of the U.S. mortgage industry, which Treasury Secretary Tim Geithner said was “very fragile still” (in an interview on CNBC this morning). It has been proposed over the next 5-7 years that GSEs will make up just 40% of the market, and mortgage costs are expected to rise modestly over the long term.

The Trade Deficit is expected to have risen to $40.7 billion in December from $38.3 billion in November. As Zacks Chief Market Strategist Dirk van Dijk, CFA notes frequently, current trade deficit levels are unsustainable over the long term, so a bit of bad news is expected on this front today.

A handful of earnings reports are expected Friday, but no household names are among them. After the bell Thursday, Kraft Foods met Zacks EPS estimates but issued disappointing guidance, sending KFT shares down in the pre-market.

But it is the fresh wave of Egyptian protests which will command the market’s attention today.

Mark Vickery

P.S. What is Zacks Ahead of Wall Street? To find out more about Zacks Ahead of Wall Street, click here.
 
KRAFT FOODS INC (KFT): Free Stock Analysis Report
 
Zacks Investment Research