Last week was a nice turnaround for the stock market. The major averages all had their best weeks in quite some time as traders covered short positions and investors bought into stocks they felt were undervalued. What will this week bring?
Economic data becomes of extreme importance now as the FOMC will be watching 
every single number as closely as possible in determining the need for a rate cut. In fact, just last week Ben Bernanke himself said that the major determining factor on the need for rate cuts would be the impending economic data.
On Monday auto sales will be released. This probably won't move the overall market a lot, but it will certainly move the automotive industry stocks. Productivity and costs will be released on Wednesday morning. This number is usually looked at as a gauge of whether inflation is at a danger zone. For the stock market bulls, continued lower inflation numbers are absolutely essential.
Friday will be the day this week that is very important from an economic data standpoint. On Friday morning the employment report will be released. The market is expecting 75,000 jobs created, far less than the 166,000 created last month. The unemployment rate is expected to rise to 4.8%. The market will be wanting a fairly weak number so the FOMC will feel forced to move interest rates lower, but not too weak of a number that would signal recession. A lukewarm report would likely be reacted to quite positively.
Notable earnings reports this week:
Monday December 3rd
- Guess Inc. (NYSE:GES) Guess is expected to bring in 58 cents per share. Guess has proven to be a real standout in the retail space in the past couple of quarters as shoppers have gravitated toward their products.
Tuesday December 4th
- AutoZone Inc. (NYSE:AZO) AutoZone is expected to earn $1.91 per share when it reports Tuesday before the opening bell. AutoZone has actually held up fairly well considering the weak auto sales and the retail slump of late.
- Chico's FAS Inc. (NYSE:CHS) Chico's FAS is the perfect example of how quickly a retailer can fall out of favor with consumers. Chico's was one of the hottest stores around just a couple of years ago, but has now fallen on extremely hard times.
Thursday December 6th
- National Semiconducter (NYSE:NSM) National Semi will report on Thursday, and investors will be watching to see how this semiconducter company does. The semiconducter industry is one where some companies are seemingly on fire right now, while others are having significant trouble.
- Toll Brothers (NYSE:TOL) For Toll Brothers its a question of how bad will these earnings numbers be. Everyone knows they will be bad, but just how bad, and what is the outlook?
Have a good week and stay tuned for more insights on the market and the fundamentals of investing.
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