The Greek's Week Ahead has been engineered to prepare you for the events that could impact your portfolio this week.
Just when you thought it could not get any worse, someone goes and finds a way. That's life isn't it? I don't know who said it best, Frank Sinatra or Rocky Balboa, but it can always get worse can't it. Your best friend can let you down and your dog can bite you in the ass when you turn your back.
Last week, not to our surprise but clearly to the market's shock, Caterpillar (NYSE: CAT) offered up that bit of reality nobody wanted to chew on. Caterpillar announced not only that its U.S. business was in distress, but that global impact from U.S. woes and U.S. recession seemed all too possible. Nice timing too, on the anniversary of the infamous crash of 1987.
Traders are a superstitious lot, so it would not have taken much more than that to get the paper walls of the market's recent rise crumbling Friday. Still, the market was also digesting Honeywell's (NYSE: HON) penny earnings miss, September housing starts at levels not seen in 14 years, AND August foreign demand for long-term U.S. securities fleeting at a pace never seen. You could say we had a witches brew to churn.
If the market could not rely on the so called "global economy" or the consumer he had already begun to worry about, then what could he believe in? Well, maybe Ben Bernanke of all people. Treasury securities that had previously forecast just a small chance of a Fed follow up easing in a week, were now pricing in the strong likelihood of one. We are raising the odds here at the Greek as well. There may now be a 50/50 chance of a 25 basis point move on Halloween, but ironically, this decreased certainty could empower Fed inaction in driving the market sharply lower on the 31st. Increased expectation also increases impetus.The Week Ahead...Monday
will most certainly start tentatively, considering Friday's frightening falloff. International market activity, and especially that of Mainland Chinese markets, will be closely monitored for U.S. market inspired decline. The annual meeting of the World Bank and International Monetary Fund could offer some news, as could addresses from Fed Governor Randall Kroszner and Fed President Charles Evans.
Earnings season will get right back into full swing, with notable reports from Apple (Nasdaq: AAPL), Halliburton (NYSE: HAL) and Merck (NYSE: MRK). Also, Kimberly-Clark (NYSE: KMB) will report for the third quarter fresh after announcing broad price increases. A full one-third of the S&P 500 Index is scheduled to report earnings this week. What's disgusting to us is that analysts are still predicting double-digit earnings growth in the fourth quarter, while the third quarter is currently looking like low-single digit growth. Come on guys, get on the ball! In my own experience, I was amazed at the incompetence of many analysts, especially those in supervisory positions. Too many were forecasting numbers without even an earnings model. While it must have been a nice life collecting a paycheck for nothing, I'm not sure how they could sleep at night.
The full schedule includes Albemarle Corporation (NYSE: ALB
), Ambassadors Group, Inc. (Nasdaq: EPAX
), American Express Company (NYSE: AXP
), Apollo Group (Nasdaq: APOL
), ArthroCare (Nasdaq: ARTC
), Astec Industries (Nasdaq: ASTE
), AU Optronics Corporation (NYSE: AUO
), Banco Latinoamericano de Exportaciones (NYSE: BLX
), Bank of Hawaii (NYSE: BOH
), Brown & Brown (NYSE: BRO
), Buckeye Technologies Inc. (NYSE: BKI
), Canadian National Railway (NYSE: CNI
), Ceragon Networks Ltd (Nasdaq: CRNT
), Charles & Colvard (Nasdaq: CTHR
), Check Point Software Technologies (Nasdaq: CHKP
), Community Bancorp Nev (Nasdaq: CBON
), Community Bank System (NYSE: CBU
), Crane (NYSE: CR
), drugstore.com (Nasdaq: DSCM
), DST Systems (NYSE: DST
), Eagle Materials Inc. (NYSE: EXP
), Ecolab Inc. (NYSE: ECL
), Edwards Lifesciences (NYSE: EW
), eOn Communications (Nasdaq: EONC
), Equifax Inc. (NYSE: EFX
), Everest Re Group, Ltd. (NYSE: RE
), EXACT Sciences Corporation (Nasdaq: EXAS
), ExpressJet Holdings, Inc. (NYSE: XJT
), First Citizens BancShares (Nasdaq: FCNCA
), Forward Air (Nasdaq: FWRD
), Frontier Financial (Nasdaq: FTBK
), Gentex (Nasdaq: GNTX
), Green Bankshares (Nasdaq: GRNB
), Hasbro, Inc. (NYSE: HAS
), Hexcel Corporation (NYSE: HXL
), Hub Group (Nasdaq: HUBG
), JAKKS Pacific Inc. (Nasdaq: JAKK
), Kilroy Realty Corp. (NYSE: KRC
), KNBT BANCORP INC (Nasdaq: KNBT
), Liberty Property Trust (NYSE: LRY
), Lincare Holdings (Nasdaq: LNCR
), Netflix (Nasdaq: NFLX
), Ocwen Financial (NYSE: OCN
), Owens & Minor (NYSE: OMI
), Pactiv (NYSE:PTV
), PartnerRe Ltd. (NYSE: PRE
), PetMed Express, Inc. (Nasdaq: PETS
), PFF Bancorp (NYSE: PFB
), Plum Creek Timber (NYSE: PCL
), PLX Technology (Nasdaq: PLXT
), PrePaid Legal (NYSE: PPD
), PrivateBancorp, Inc. (Nasdaq: PVTB
), Regis Corporation (NYSE: RGS
), Reinsurance Group of America, Inc. (NYSE: RGA
), Royal Caribbean Cruises Ltd. (NYSE: RCL
), Schering-Plough (NYSE: SGP
), Sierra Bancorp (Nasdaq: BSRR
), SL Green Realty (NYSE: SLG
), Sterling Financial Corporation (Nasdaq: STSA
), Synplicity (Nasdaq: SYNP
), Taubman Centers (NYSE: TCO
), Telefonos De Mexico (NYSE: TMX
), Texas Instruments (NYSE: TXN
), TGC (NYSE: TGE
), Thomas & Betts (NYSE: TNB
), TSYS (NYSE: TSS
), Ultra Clean Holdings Inc. (Nasdaq: UCTT
), United Fire (Nasdaq: UFCS
), Veeco Instruments Inc. (Nasdaq: VECO
), Vineyard National Bancorp (Nasdaq: VNBC
), Volterra Semiconductor (Nasdaq: VLTR
), W.R. Berkley (NYSE: BER
), Waste Connections (NYSE: WCN
), Weatherford International (NYSE: WFT
), Wintrust Financial (Nasdaq: WTFC
), Zebra Technologies (Nasdaq: ZBRA
) and Zoran Corporation (Nasdaq: ZRAN
The International Council of Shopping Centers - UBS produces its weekly same-store sales report on Tuesday, and we continue to be attentive to changes in consumer spending. Last week's year-over-year growth measure of 2.5% ticked up slightly from the week before it, but the trend was still far below last year's growth rate. With oil prices involved in a mad race to $90, we see no reason to expect increased consumer spending, especially if oil prices hold and allow gasoline prices to catch up.
At 10:00 AM, State Street will report its Investor Confidence Index for October. Considering the market's reaction to the Fed's September rate cut, we expect October's confidence reading to exceed September's result of 92.1. Remember, State Street measures the amount of risk carried in portfolios, and relates it to investor confidence. This month's figure is meaningless to us, as the Fed's Halloween meeting should decide the direction of stocks and capital flow into or out of stocks thereafter.
Wal-Mart (NYSE: WMT) begins a two-day analysts' meeting on Tuesday, where this analyst is sure the key questions will be how international expansion might boost top line growth and how much cost can be squeezed out of the lemon in the meantime.
Tuesday's extensive earnings schedule includes: 1-800-FLOWERS.COM (Nasdaq: FLWS), ACE Limited (NYSE: ACE), Actel (Nasdaq: ACTL), Aflac Inc. (NYSE: AFL), Aftermarket Technology
(Nasdaq: ATAC), AK Steel (NYSE: AKS), Akzo Nobel N.V. (Nasdaq: AKZOY.PK), Aladdin Knowledge Systems (Nasdaq: ALDN), Altera Corp. (Nasdaq: ALTR), Amazon.com, Inc. (Nasdaq: AMZN), American Ecology (Nasdaq: ECOL), Ameritrade Holding Corp. (Nasdaq: AMTD), AmSurg (Nasdaq: AMSG), ANADIGICS, Inc. (Nasdaq: ANAD), Anixter Int'l Inc.
(NYSE: AXE), Applied Industrial Technologies (NYSE: AIT), Arlington Tankers Ltd (NYSE: ATB), Arrow Electronics, Inc. (NYSE: ARW), Art Technology Group (Nasdaq: ARTG), Arthur J. Gallagher & Co. (NYSE: AJG), AT&T (NYSE: T), Avery Dennison (NYSE: AVY), BancorpSouth, Inc. (NYSE: BXS), BankUnited Financial (Nasdaq: BKUNA), Biogen Idec Inc. (Nasdaq: BIIB), BP plc (NYSE: BP), Brasil Telecom Participacoes (NYSE: BRP), Brinker International (NYSE: EAT), Broadcom (Nasdaq: BRCM), BTU Int'l (Nasdaq: BTUI), Burlington Northern Santa Fe (NYSE: BNI), C.H. Robinson Worldwide Inc (Nasdaq: CHRW), C.R. Bard, Inc. (NYSE: BCR), Calamos Asset Management (Nasdaq: CLMS), Candela Corp. (Nasdaq: CLZR), Capital Southwest (Nasdaq: CSWC), Carter's, Inc. (NYSE: CRI), Cascade Microtech, Inc. (Nasdaq: CSCD), Cavalier Homes (NYSE: CAV), CEC Entertainment (NYSE: CEC), Celanese Corp. (NYSE: CE), Centene Corp. (NYSE: CNC), Centex Corp. (NYSE: CTX), Chubb Corp. (NYSE: CB), CNH Global N.V. (NYSE: CNH), Coach, Inc. (NYSE: COH), Columbus McKinnon (Nasdaq: CMCO), Compugen (Nasdaq: CGEN), Computer Task Group (Nasdaq: CTGX), Con-Way (NYSE: CNW), Cooper Industries (NYSE: CBE), CSG Systems, Inc. (Nasdaq: CSGS)...
CTS Corp. (NYSE: CTS), Cymer, Inc. (Nasdaq: CYMI), Data Domain Inc. (Nasdaq: DDUP), Delphi Financial (NYSE: DFG), DuPont (NYSE: DD), Echelon Corp. (Nasdaq: ELON), Electronics for Imaging (Nasdaq: EFII), Encore Wire (Nasdaq: WIRE), Endwave (Nasdaq: ENWV), Entrust, Inc. (Nasdaq: ENTU), Epicor Software (Nasdaq: EPIC), EPIQ Systems (Nasdaq: EPIQ), First Busey Corp. (Nasdaq: BUSE), First Financial Holdings (Nasdaq: FFCH), FirstMerit (Nasdaq: FMER), Flextronics (Nasdaq: FLEX), GSI Group (Nasdaq: GSIG), Harmonic (Nasdaq: HLIT), HealthStream, Inc. (Nasdaq: HSTM), Heartland Express (Nasdaq: HTLD), Hoku Scientific, Inc. (Nasdaq: HOKU), ICON plc (Nasdaq: ICLR), IHOP (NYSE: IHP), II-VI (Nasdaq: IIVI), Illumina, Inc. (Nasdaq: ILMN), Ifinera (Nasdaq: INFN), IPC Holdings (Nasdaq: IPCR), Iteris, Inc. (NYSE: ITI), JetBlue Airways (Nasdaq: JBLU), Johnson Controls (NYSE: JCI), Journal Communications, Inc. (NYSE: JRN), Juniper Networks (Nasdaq: JNPR), Kelly Services (Nasdaq: KELYA), Kinetic Concepts (NYSE: KCI), LaBranche & Co Inc. (NYSE: LAB), Leadis Tech (Nasdaq: LDIS), Level 3 Communications (Nasdaq: LVLT), Lexmark International, Inc. (NYSE: LXK), Lockheed Martin (NYSE: LMT), LogicVision, Inc. (Nasdaq: LGVN), Manhattan Associates (Nasdaq: MANH), MDU Resources (NYSE: MDU), Meridian Gold Inc. (NYSE: MDG), Metalink (Nasdaq: MTLK), Microchip Tech (Nasdaq: MCHP), Midwest Banc Holdings (Nasdaq: MBHI)...
Millicom International Cellular S.A. (Nasdaq: MICC), Monro Muffler Brake (Nasdaq: MNRO), Nabors Industries (NYSE: NBR), Nara Bancorp (Nasdaq: NARA), Novellus Systems, Inc. (Nasdaq: NVLS), O'Reilly Automotive (Nasdaq: ORLY), Omnicom Group (NYSE: OMC), OptionsXpress (Nasdaq: OXPS), Panera Bread (Nasdaq: PNRA), Par Technology (NYSE: PTC), Pentair, Inc. (NYSE: PNR), Pervasive Software Inc. (Nasdaq: PVSW), Pharmaceutical Product Development (Nasdaq: PPDI), Phase Forward (Nasdaq: PFWD), Phoenix Tech (Nasdaq: PTEC), Plantronics, Inc. (NYSE: PLT), Platinum Underwriters (NYSE: PTP), Pogo Producing (NYSE: PPP), Pool Corporation (Nasdaq: POOL), Precision Castparts (NYSE: PCP), Prosperity Bancshares (Nasdaq: PRSP), Provident Financial (Nasdaq: PROV), Prudential PLC (NYSE: PUK), QLogic (Nasdaq: QLGC), Radware (Nasdaq: RDWR), Ramco-Gershenson Properties Trust (NYSE: RPT), Raymond James (NYSE: RJF), Rayonier Inc. (NYSE: RYN), RF Micro Devices, Inc. (Nasdaq: RFMD), Riverbed Tech (Nasdaq: RVBD), Rohm and Haas (NYSE: ROH), Sandy Spring Bancorp (Nasdaq: SASR), Satyam Computer Services (NYSE: SAY), SAVVIS, Inc. (Nasdaq: SVVS), Scientific Learning (Nasdaq: SCIL), SeaBright Insurance Holdings, Inc. (Nasdaq: SEAB), Seacoast Banking FL (Nasdaq: SBCF), Seattle Genetics (Nasdaq: SGEN), Sherwin-Williams (NYSE: SHW), Sigma-Aldrich Corporation (Nasdaq: SIAL), Silicon Storage Technology, Inc. (Nasdaq: SSTI), Smith International, Inc. (NYSE: SII), Sterling Bancshares (Nasdaq: SBIB), STMicroelectronics (NYSE: STM)...
StockerYale (Nasdaq: STKR), Sunoco Logistics Partners L.P. (NYSE: SXL), Supertex (Nasdaq: SUPX), Susquehanna Bancshares, Inc. (Nasdaq: SUSQ), T. Rowe Price (Nasdaq: TROW), TCF Financial Corp. (NYSE: TCB), Tellabs (Nasdaq: TLAB), Tennant Co. (NYSE: TNC), The Cheesecake Factory (Nasdaq: CAKE), The New York Times Co (NYSE: NYT), TradeStation Group, Inc. (Nasdaq: TRAD), Transalta Corp. (NYSE: TAC), Trimble Navigation (Nasdaq: TRMB), Trustmark Corp. (Nasdaq: TRMK), Tupperware Brands (NYSE: TUP), Twin Disc (Nasdaq: TWIN), UAL Corp. (Nasdaq: UAUA), UMB Financial (Nasdaq: UMBF), Unisys (NYSE: UIS), United Community Banks (Nasdaq: UCBI), UNITED PARCEL SERVICE INC (NYSE: UPS), Universal Stainless & Alloy Products (Nasdaq: USAP), USG (NYSE: USG), Utah Medical (Nasdaq: UTMD), Virginia Financial Corp. (Nasdaq: VFGI), Vitran Corp. (Nasdaq: VTNC), Vocus, Inc. (Nasdaq: VOCS), Waddell & Reed Financial, Inc. (NYSE: WDR), Waters Corp. (NYSE: WAT), Wausau Paper Corp. (NYSE: WPP), Webster Financial Corp. (NYSE: WBS), Western Union Co. (NYSE: WU), Whirlpool Corp. (NYSE: WHR), Whitney Holding Corporation (Nasdaq: WTNY), World Acceptance Corp. (Nasdaq: WRLD), XL Capital Ltd (NYSE: XL) and XTO Energy Inc. (NYSE: XTO).
On Wednesday morning, the regular Purchase Applications Report from the Mortgage Bankers Association will be followed up by September Existing Home Sales. Recall, the existing homes market dwarfs new homes and is all the more important a barometer to measure the degree of illness in housing. Bloomberg's consensus of economists is looking for sales running at an annual pace of 5.3 million. That's down from August's pace of 5.5 million. Remember earlier this year when economists were worried about the six month supply of homes? Well it's now up to 10 months, so prices are very likely to continue lower, which means a good degree of home equity is still to be lost.
At 10:30, the Energy Information Administration will report on oil inventories, but as long as 60,000 Turkish troops continue to trade fire with Kurdish rebels on the border and President Bush continues to speak of World War III, nothing else matters. However, the longer oil prices hold high, the more likelihood gasoline prices will rise, adding more pressure to the global consumer, and that includes you.
Wednesday's earnings schedule is not any lighter than Tuesday's. Some of the day's more popular reports are likely to emanate from Merrill Lynch (NYSE: MER), the Chicago Mercantile Exchange (NYSE: CME), Amgen (Nasdaq: AMGN), ConocoPhillips (NYSE: COP), Covance (NYSE: CVD), Genzyme (Nasdaq: GENZ), Legg Mason (NYSE: LM), Monster (Nasdaq: MNST), Moody's (NYSE: MCO), Occidental Petroleum (NYSE: OXY), Symantec (Nasdaq: SYMC), Boeing (NYSE: BA), Tractor Supply (Nasdaq: TSCO) and VCA Antech (Nasdaq: WOOF).
After posting a surprise uptick last week, investor concern will be keenly focused on the Weekly Initial Jobless Claims Report. Bloomberg's consensus of economists forecasts new benefits filers will amount to 320,000, versus 337,000 last week. Another data point expected to improve on Thursday is the Durable Goods Orders Report. Economists polled by Bloomberg see durable goods order growth of 1.8% in September, after a 4.9% decline in August.
New Home Sales are set for reporting at 10:00 AM, and the consensus sees the annual pace at 770,000 in September, compared to 795,000 in August and 937,000 in January. The EIA will report natural gas inventories as the fall heating season proceeds at a slow pace in the Northeast and through much of the country. Still, prices remain pressured by geopolitcal events and natural gas' increasing substitution, and potential for substitution should oil supplies become restricted in any way.
In the heart of earnings season, Thursday's schedule includes Baidu (Nasdaq: BIDU), CARBO Ceramics (NYSE: CRR), Celgene (Nasdaq: CELG), EMC Corp. (NYSE: EMC), Evergreen Solar (Nasdaq: ESLR), KLA-Tencor (Nasdaq: KLAC), Lithia Motors (NYSE: LAD), Microsoft (Nasdaq: MSFT), MICROS System (Nasdaq: MCRS), Motorola (NYSE: MOT), Penn National Gaming (Nasdaq: PENN), Raytheon (NYSE: RTN), SEI Investments (Nasdaq: SEIC) and others.
On Friday, the final Michigan Sentiment reading is expected unchanged, at 82, the lowest point of the year. Also, Apple (Nasdaq: AAPL) begins shipping its Mac OSX Leopard software. Friday's earnings schedule includes the likes of Baker Hughes (NYSE: BHI), Countrywide Financial (NYSE: CFC), Fortune Brands (NYSE: FO), Waste Management (NYSE: WMI) and others. We hope you found value in this week's copy and look forward to providing value-added information to your day all week.
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