After a disappointing end to last week and a terrible start to the new year, stocks will look to regain footing in a week that is full of economic data and earnings reports. Bulls are saying that the market is looking very inexpensive, but bears are saying that the economic crisis is just in the first inning. The data and earnings reports continue to become more important by the week.
Economic Data
January 15th
- Retail Sales- As the economic worries grow around the street, consumer spending patterns become all that more important. The retail sales data is the most timely indicator we have of broad consumer spending patterns, so this report takes on a great deal of significance.
- PPI- The Producer's Price Index measures the prices of goods at the wholesale level and should be watched due to inflation risks.
January 16th
- CPI- The Consumer Price Index is the most widely used gauge of inflation. The Fed will certainly have a close eye on this because if the Fed is to be cutting rates, it won't want to see high inflation numbers. Bulls are hoping for a tame inflation number here.
January 17th
- Housing Starts- This report will be watched to see if the small steady decline continues, or even if there is an acceleration to the downside.
- Initial Jobless Claims- As I have said before, I believe the job market holds the real key to the future of our economy. A job market that slows considerably will be almost impossible to overcome. Watch this number closely.
January 18th
- Preliminary Consumer Sentiment- The Michigan preliminary consumer sentiment numbers will be important as sentiment generally previews consumer spending trends, which are crucial to the welfare of the economy.
Earnings Reports this week
January 15th
- State Street Corporation (NYSE:STT) STT has been one of the very best performers in the financial industry in the last year. The company has beaten earnings estimates quite handily the last couple of times, so expectations are likely high here.
- US Bancorp (NYSE:USB) This regional favorite of Warren Buffett has actually held up better than most in this terrible stretch for the banking sector. The huge dividend of 5.7% likely helps keep the stock afloat in these times.
January 16th
- JP Morgan Chase (NYSE:JPM)- Analysts are expecting JPM's earnings to rise 3% from last year. JPM has up to this point at least, contained its subprime mortgage losses very well compared to the overall industry.
- Wells Fargo and Company (NYSE:WFC) WFC has has less exposure than some to the mortgage problems because its mortgage portfolio is pretty sound, but it has still been hit pretty hard. The company is expected to lose 19 cents a share for the quarter.
January 17th
- TD Ameritrade (Nasdaq:AMTD) This online brokerage is expected to earn 39 cents per share in the quarter. AMTD has been able to stay away from the horrible hardships of the mortgage sector because it never ventured into the area, unlike its competitor E*Trade Financial (Nasdaq:ETFC).
- Huntington Bancshares (Nasdaq:HBAN) Just last week Huntington issued a profit warning, saying it expected to lose 65 cents per share for the quarter because of its connection to subprime lending. The stock has been hit very hard of late.
- International Business Machines (NYSE:IBM) One of the earliest tech companies we will hear from, IBM will look to continue its solid growth of late. The stock has been hit hard in the last three months just like the rest of the tech sector.
- International Game Technology (NYSE:IGT) This gaming equipment maker has been growing quite well of late because of a strong overall gaming market. Expectations are for IGT to earn 36 cents per share.
- Parker Hannifin (NYSE:PH) This fabricated parts maker has fallen about 30% in the past two months as investors have soured on the company's prospects due to the economic worries. The market is expecting $1.19 a share on Thursday morning.
- Merrill Lynch (NYSE:MER) The real question here is just how bad will it be? The market is expecting an additional writedown, but of just how much is the question. This report could certainly move the markets.
- Seagate Technology (NYSE:STX) Thursday afternoon Seagate is expected to bring in 75 cents per share. The disc drive business has been surprisingly strong in the last couple of years and STX has benefited nicely from that.
- Washington Mutual (NYSE:WM) WM is expected to lose $1.20 a share on Thursday after the close. This company has been one of the major faces of the mortgage crisis and is now even being rumored in possible buyouts.
January 18th
- General Electric (NYSE:GE) This massive conglomerate is expected to earn 68 cents per share for the quarter. Because it has a such a broad range of products in different sectors, GE's earnings report is always very informative about the overall economic picture.
- Johnson Controls (NYSE:JCI) JCI has done very well compared to the overall automotive sector which has been under significant pressure in the past couple of years. The company has been growing at about 15% a year in the last few years.
- Schlumberger (NYSE:SLB) This oilfield service company has an impressive record of growth and is expected to earn $1.13 per share for the quarter.
This is certainly a full week of earnings and economic data that will no doubt move the markets in a significant way this week. GrowYourFunds will continue to keep close tabs on these numbers and what they mean for the market going forward.
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