Week Ahead: Contemplating Substantive Action
The Greek's Week Ahead has been engineered to prepare you for the events that could impact your portfolio this week.
After last week’s unsettling trading that led the Dow Jones Industrials down 1.5%, the Nasdaq off 2.6% and S&P 500 Index 0.75% lower, investors are left trying to gauge what exactly Fed Chief Ben Bernanke meant by “substantive action” during a market-moving speech last week. Quoting the Chairman word for word, he said “We stand ready to take substantive additional action as needed to support growth.”
Bernanke’s Fed has come under scrutiny, and been criticized as being behind the curve regarding its comprehension of the severity of economic conditions. Through most of last year, the group emphasized its predominant concern for inflation over economic growth. The group shifted back and forth from August through December, leading the stock market on a roller coaster ride as it contemplated economic turmoil without a sure-footed Fed. Mixed messages from Fed representatives didn’t help matters much, as regional Fed presidents appeared before public audience conveying very different messages, especially in December.
Ben finally appears to be properly captaining his ship though, and the message last week from Fed representatives Plosser, Rosengren, Mishkin and Bernanke was one in the same. Economic growth is the focus of attention based on concern about wavering consumer sentiment and spending. Wall Street Greek had argued that Bernanke’s leadership was lacking because of the mixed messages that he allowed to pervade the marketplace, and also because of his leadership by consensus that seemed to leave the Fed without leadership at all.
Mr. Bernanke, a student of the Great Depression, is well-known for his own work and a white paper produced with fellow Fed-head Frederic Mishkin. Within this important paper, Bernanke and Mishkin discuss inflation targeting as a framework for central bank governance, not a rule. We understand the importance of transparency and inflation targeting after thoroughly reading through this early work. After going over the piece, it seems clear to us that this targeting theory will not preclude Bernanke’s Fed from decisive and strong action to head off recession.
Mishkin, a stable rock Bernanke relies on, is also well-known for his work including the theoretical usage of sharp, temporary rate cuts in limiting economic deterioration, and in limiting the amount of total rate reduction necessary to stave off recession or limit its tenure. The Greek suspects this dynamic duo would gain special satisfaction from seeing their theories put into practical use, especially if the result is as amicable as they expect. If things did play out well, there’s no doubt that this highly criticized Fed Chief would be raised from goat to hero, and he is well-aware of this.
Another reason Ben could act in unprecedented manner (read cutting rates 100 points or more in short time) is the fact that he’s proven malleable, in our view. In August of 2007, while under intense pressure from the administration, Congress and market participants, he changed his tune in their favor. Then, just weeks after telling the market he was shifting to a neutral rate bias, Bernanke cut interest rates another quarter point in December on market pressure. Well, the pressure has never been as high as it is currently for significant Fed action, so that’s what should ensue. At the same, we agree that significant Fed action is exactly what is needed now.
Bernanke and Mishkin’s white paper on inflation targeting, and other works that also cover the topic of political pressure and conflicts of interest seem to point the Fed in a direction of independence. However, when the pressure is as intense as it is now from market pundits and high ranking political officials, it could prove awfully difficult for any man to not succumb to. Real life offers incalculable intangibles that often lead men in different directions than they expected they would move in theory.
What’s he waiting for then… The Federal Open Market Committee is not scheduled to next meet until January 29-30, which coincidentally falls a day after President Bush’s last State of the Union Address. The president is expected to offer Congress his own stimulus plan that night in very public fashion before the nation. Political ramifications in doing so should benefit the next Republican nominee.
Ben would also have a nice opportunity before or on Thursday of this week, when he’s scheduled to speak before the House Budget Committee on nothing other than the near-term economic outlook. In this very political year, we suspect President Bush has asked Bernanke to hold off until he returns from the Middle East, so he can enjoy a photo opp for the sake of the party, not to mention his own legacy. Luck has it that the president will be concluding his Mid-East trip on the 16th of the month, according to the public schedule, which does not include a likely stopover in Iraq for obvious reasons.
It seems the conservative gentlemen of the Fed are likely to at least cut rates 50 basis points in the near future. They have signaled at least that, so they had better. They could follow up this action with a near-term similar cut before the March meeting. We believe a sharp cut is the exact medicine the economy and stock market need now. A sharp reduction could be seen by some as an inflation threat that could drive long-term rates higher. However, we expect the shock of the action would raise concern in the market that things could be worse than thought. If this happens, while the spread between the 2-year and 10-year treasury yields could widen, we expect long-term rates would still fall. This could be perfect medicine for the mortgage market by allowing burdened borrowers more opportunity to renegotiate into more amicable loans. We believe this would directly treat the illness, not the symptoms, and thus better solve the problem within credit markets.
Market-Moving Event Schedule:
Monday
The North American International Auto Show kicks off on Monday, and we suspect fuel efficient and alternative fuel vehicle designs will be in focus considering gasoline prices near $3. Otherwise, the week starts out quiet on the economic front, with no data releases scheduled.
Despite last week’s symbolic start to earnings season with the report from Alcoa (NYSE: AA), the corporate reporting period kicks off in earnest this week. Even so, the fourth quarter is typically an elongated reporting period due to the end of year aspect for most companies.
The day’s most notable earnings releases include reports from Genentech (NYSE: DNA) and M&T Bank (NYSE: MTB). The analysts’ consensus EPS estimate for DNA’s Q4 is $0.67, down from $0.72 forecasted just 90 days prior. DNA has exceeded estimates over the past four quarters, but only beat its number by a penny last time around. This and the fact that the quarterly number has been trending lower through the period would seem to imply DNA has lapped the factor behind its positive earnings surprises of the past.
Tuesday
Apple’s Macworld Conference & Expo kicks off with CEO Steve Jobs’ keynote address. Past conferences have introduced some of Apple’s (Nasdaq: AAPL) hottest products, and shareholders will be revved up or let down as a result of this week’s announcements. Barron’s reports Apple may introduce a new line of ultra-slim laptops and an online movie rental business.
Mitt Romney hopes to launch a comeback in the Michigan Republican primary election. Michigan is his birthplace and the state his father ran as a multiple-term governor. Michigan and Saturday’s primary in South Carolina should shed further light on who might take the lead in these very tight primary races for both parties.
Bright and early on Tuesday morning, the International Council of Shopping Centers - UBS will issue its weekly retail same-store sales report. Last week’s data showed sales growth dipped to just 1.9%, continuing a trend that has illustrated intensifying consumer softness throughout the past 12 months. At 8:30 on Tuesday, the Census Bureau is scheduled to release the December retail sales figure. Reuters reports economist expectations for a slight 0.1% rise month-to-month, versus November’s 1.2% increase. Bloomberg indicates no expected change, with a 0.1% expected decline if auto sales are excluded. Wall Street Greek expects a soft sales rate as well, as December was a relatively poor sales month outside of the period just before and after Christmas.
According to Reuters, the scheduled Producer Price Index (PPI) report for the month of December is expected to show an increase of 0.2% month-to-month. Core PPI, which excludes fluctuations of volatile food and energy prices, is seen rising 0.1%. In November, the core figure increased 0.4%, raising inflation concerns. This report and the Consumer Price Index slated for later in the week are very important to the Federal Reserve. The Fed has two key government mandates, maintaining full employment and price stability. So, if the PPI and especially the CPI show inflation running high, the stock market will grow concerned that it might stop the Fed from taking expansionary economic measures (read cutting interest rates).
At 10:00 a.m. Tuesday, the Census Bureau releases business inventories data for November. According to Reuters, economists are looking for an increase of 0.4% in inventories. This figure becomes most important when compared to sales. If inventories have risen because of sales decline, it reflects poorly on the health of the economy. This looks to be the reason behind the increase this time around, in our view.
January’s Empire State Manufacturing Index is due for release Tuesday morning at 8:30. Last month offered disappointing measures from both the New York and Philadelphia area markets, while the Chicago Fed reported a still healthy manufacturing environment. Bloomberg notes a consensus view for a soft reading of 9.75 on this metric.
Earnings season picks up steam on Tuesday with headline reports from Citigroup (NYSE: C), Intel (Nasdaq: INTC), State Street Corp. (NYSE: STT) and U.S. Bancorp. (NYSE: USB). Of all the day’s reports, the one that should grab the most market attention is Citigroup’s. Vikram Pandit’s first report and conference call as CEO should include news of major workforce reduction, new foreign investment and possibly a significant dividend cut. Last week, Wall Street Greek recommended investors consider investment banks, including Citigroup (NYSE: C), though we warned C might hold extra risk in its earnings report.
The rest of the earnings schedule includes AEP Industries (Nasdaq: AEPI), California Pizza Kitchen (Nasdaq: CPKI), Century Bancorp (Nasdaq: CNBKA), Forest Laboratories (NYSE: FRX), H.B. Fuller (NYSE: FUL), Linear Technology (Nasdaq: LLTC), Marshall & Ilsley (NYSE: MI), New Oriental Education & Technology (NYSE: EDU), Renasant Corp. (Nasdaq: RNST), Student Loan Corp. (NYSE: STU), Suffolk Bancorp (Nasdaq: SUBK) and a few others.
Wednesday
On Wednesday, possibly the entire free world will be anticipating the release of the Consumer Price Index for December. Reuters consensus expects a 0.2% month-to-month increase in both the headline and core growth. Remember, The Greek says both figures are important. We cannot discount increases in food and energy prices any longer as they are no longer seasonal issues, but secular in nature, and will impact pricing across much of the broader product spectrum as a result. Any number hotter than the forecast figure here will light a sell-signal-fire for the market.
The Mortgage Bankers Association will release its weekly Purchase Applications mortgage report on Wednesday as usual. Last week, applications soared on lower mortgage rates that allowed a good deal of borrowers an opportunity to refinance out of troublesome loans. At 9:15 AM, the Federal Reserve is scheduled to report December Industrial Production, and Bloomberg’s consensus is looking for a 0.2% decrease month-to-month. Capacity utilization is seen at 81.2%, down from 81.5% in November, a trend consistent with a deteriorating economy.
After last week’s unsettling trading that led the Dow Jones Industrials down 1.5%, the Nasdaq off 2.6% and S&P 500 Index 0.75% lower, investors are left trying to gauge what exactly Fed Chief Ben Bernanke meant by “substantive action” during a market-moving speech last week. Quoting the Chairman word for word, he said “We stand ready to take substantive additional action as needed to support growth.”
Bernanke’s Fed has come under scrutiny, and been criticized as being behind the curve regarding its comprehension of the severity of economic conditions. Through most of last year, the group emphasized its predominant concern for inflation over economic growth. The group shifted back and forth from August through December, leading the stock market on a roller coaster ride as it contemplated economic turmoil without a sure-footed Fed. Mixed messages from Fed representatives didn’t help matters much, as regional Fed presidents appeared before public audience conveying very different messages, especially in December.
Ben finally appears to be properly captaining his ship though, and the message last week from Fed representatives Plosser, Rosengren, Mishkin and Bernanke was one in the same. Economic growth is the focus of attention based on concern about wavering consumer sentiment and spending. Wall Street Greek had argued that Bernanke’s leadership was lacking because of the mixed messages that he allowed to pervade the marketplace, and also because of his leadership by consensus that seemed to leave the Fed without leadership at all.
Mr. Bernanke, a student of the Great Depression, is well-known for his own work and a white paper produced with fellow Fed-head Frederic Mishkin. Within this important paper, Bernanke and Mishkin discuss inflation targeting as a framework for central bank governance, not a rule. We understand the importance of transparency and inflation targeting after thoroughly reading through this early work. After going over the piece, it seems clear to us that this targeting theory will not preclude Bernanke’s Fed from decisive and strong action to head off recession.
Mishkin, a stable rock Bernanke relies on, is also well-known for his work including the theoretical usage of sharp, temporary rate cuts in limiting economic deterioration, and in limiting the amount of total rate reduction necessary to stave off recession or limit its tenure. The Greek suspects this dynamic duo would gain special satisfaction from seeing their theories put into practical use, especially if the result is as amicable as they expect. If things did play out well, there’s no doubt that this highly criticized Fed Chief would be raised from goat to hero, and he is well-aware of this.
Another reason Ben could act in unprecedented manner (read cutting rates 100 points or more in short time) is the fact that he’s proven malleable, in our view. In August of 2007, while under intense pressure from the administration, Congress and market participants, he changed his tune in their favor. Then, just weeks after telling the market he was shifting to a neutral rate bias, Bernanke cut interest rates another quarter point in December on market pressure. Well, the pressure has never been as high as it is currently for significant Fed action, so that’s what should ensue. At the same, we agree that significant Fed action is exactly what is needed now.
Bernanke and Mishkin’s white paper on inflation targeting, and other works that also cover the topic of political pressure and conflicts of interest seem to point the Fed in a direction of independence. However, when the pressure is as intense as it is now from market pundits and high ranking political officials, it could prove awfully difficult for any man to not succumb to. Real life offers incalculable intangibles that often lead men in different directions than they expected they would move in theory.
What’s he waiting for then… The Federal Open Market Committee is not scheduled to next meet until January 29-30, which coincidentally falls a day after President Bush’s last State of the Union Address. The president is expected to offer Congress his own stimulus plan that night in very public fashion before the nation. Political ramifications in doing so should benefit the next Republican nominee.
Ben would also have a nice opportunity before or on Thursday of this week, when he’s scheduled to speak before the House Budget Committee on nothing other than the near-term economic outlook. In this very political year, we suspect President Bush has asked Bernanke to hold off until he returns from the Middle East, so he can enjoy a photo opp for the sake of the party, not to mention his own legacy. Luck has it that the president will be concluding his Mid-East trip on the 16th of the month, according to the public schedule, which does not include a likely stopover in Iraq for obvious reasons.
It seems the conservative gentlemen of the Fed are likely to at least cut rates 50 basis points in the near future. They have signaled at least that, so they had better. They could follow up this action with a near-term similar cut before the March meeting. We believe a sharp cut is the exact medicine the economy and stock market need now. A sharp reduction could be seen by some as an inflation threat that could drive long-term rates higher. However, we expect the shock of the action would raise concern in the market that things could be worse than thought. If this happens, while the spread between the 2-year and 10-year treasury yields could widen, we expect long-term rates would still fall. This could be perfect medicine for the mortgage market by allowing burdened borrowers more opportunity to renegotiate into more amicable loans. We believe this would directly treat the illness, not the symptoms, and thus better solve the problem within credit markets.
Market-Moving Event Schedule:
Monday
The North American International Auto Show kicks off on Monday, and we suspect fuel efficient and alternative fuel vehicle designs will be in focus considering gasoline prices near $3. Otherwise, the week starts out quiet on the economic front, with no data releases scheduled.
Despite last week’s symbolic start to earnings season with the report from Alcoa (NYSE: AA), the corporate reporting period kicks off in earnest this week. Even so, the fourth quarter is typically an elongated reporting period due to the end of year aspect for most companies.
The day’s most notable earnings releases include reports from Genentech (NYSE: DNA) and M&T Bank (NYSE: MTB). The analysts’ consensus EPS estimate for DNA’s Q4 is $0.67, down from $0.72 forecasted just 90 days prior. DNA has exceeded estimates over the past four quarters, but only beat its number by a penny last time around. This and the fact that the quarterly number has been trending lower through the period would seem to imply DNA has lapped the factor behind its positive earnings surprises of the past.
Tuesday
Apple’s Macworld Conference & Expo kicks off with CEO Steve Jobs’ keynote address. Past conferences have introduced some of Apple’s (Nasdaq: AAPL) hottest products, and shareholders will be revved up or let down as a result of this week’s announcements. Barron’s reports Apple may introduce a new line of ultra-slim laptops and an online movie rental business.
Mitt Romney hopes to launch a comeback in the Michigan Republican primary election. Michigan is his birthplace and the state his father ran as a multiple-term governor. Michigan and Saturday’s primary in South Carolina should shed further light on who might take the lead in these very tight primary races for both parties.
Bright and early on Tuesday morning, the International Council of Shopping Centers - UBS will issue its weekly retail same-store sales report. Last week’s data showed sales growth dipped to just 1.9%, continuing a trend that has illustrated intensifying consumer softness throughout the past 12 months. At 8:30 on Tuesday, the Census Bureau is scheduled to release the December retail sales figure. Reuters reports economist expectations for a slight 0.1% rise month-to-month, versus November’s 1.2% increase. Bloomberg indicates no expected change, with a 0.1% expected decline if auto sales are excluded. Wall Street Greek expects a soft sales rate as well, as December was a relatively poor sales month outside of the period just before and after Christmas.
According to Reuters, the scheduled Producer Price Index (PPI) report for the month of December is expected to show an increase of 0.2% month-to-month. Core PPI, which excludes fluctuations of volatile food and energy prices, is seen rising 0.1%. In November, the core figure increased 0.4%, raising inflation concerns. This report and the Consumer Price Index slated for later in the week are very important to the Federal Reserve. The Fed has two key government mandates, maintaining full employment and price stability. So, if the PPI and especially the CPI show inflation running high, the stock market will grow concerned that it might stop the Fed from taking expansionary economic measures (read cutting interest rates).
At 10:00 a.m. Tuesday, the Census Bureau releases business inventories data for November. According to Reuters, economists are looking for an increase of 0.4% in inventories. This figure becomes most important when compared to sales. If inventories have risen because of sales decline, it reflects poorly on the health of the economy. This looks to be the reason behind the increase this time around, in our view.
January’s Empire State Manufacturing Index is due for release Tuesday morning at 8:30. Last month offered disappointing measures from both the New York and Philadelphia area markets, while the Chicago Fed reported a still healthy manufacturing environment. Bloomberg notes a consensus view for a soft reading of 9.75 on this metric.
Earnings season picks up steam on Tuesday with headline reports from Citigroup (NYSE: C), Intel (Nasdaq: INTC), State Street Corp. (NYSE: STT) and U.S. Bancorp. (NYSE: USB). Of all the day’s reports, the one that should grab the most market attention is Citigroup’s. Vikram Pandit’s first report and conference call as CEO should include news of major workforce reduction, new foreign investment and possibly a significant dividend cut. Last week, Wall Street Greek recommended investors consider investment banks, including Citigroup (NYSE: C), though we warned C might hold extra risk in its earnings report.
The rest of the earnings schedule includes AEP Industries (Nasdaq: AEPI), California Pizza Kitchen (Nasdaq: CPKI), Century Bancorp (Nasdaq: CNBKA), Forest Laboratories (NYSE: FRX), H.B. Fuller (NYSE: FUL), Linear Technology (Nasdaq: LLTC), Marshall & Ilsley (NYSE: MI), New Oriental Education & Technology (NYSE: EDU), Renasant Corp. (Nasdaq: RNST), Student Loan Corp. (NYSE: STU), Suffolk Bancorp (Nasdaq: SUBK) and a few others.
Wednesday
On Wednesday, possibly the entire free world will be anticipating the release of the Consumer Price Index for December. Reuters consensus expects a 0.2% month-to-month increase in both the headline and core growth. Remember, The Greek says both figures are important. We cannot discount increases in food and energy prices any longer as they are no longer seasonal issues, but secular in nature, and will impact pricing across much of the broader product spectrum as a result. Any number hotter than the forecast figure here will light a sell-signal-fire for the market.
The Mortgage Bankers Association will release its weekly Purchase Applications mortgage report on Wednesday as usual. Last week, applications soared on lower mortgage rates that allowed a good deal of borrowers an opportunity to refinance out of troublesome loans. At 9:15 AM, the Federal Reserve is scheduled to report December Industrial Production, and Bloomberg’s consensus is looking for a 0.2% decrease month-to-month. Capacity utilization is seen at 81.2%, down from 81.5% in November, a trend consistent with a deteriorating economy.
The Treasury is scheduled to report net foreign purchases of U.S. securities in the month of November. Declining U.S. interest rates are a turn-off for sovereign funds that have other options to choose from besides those in the U.S. China has already threatened to diversify away from U.S. treasuries due to the falling dollar and treasury yields. At 2:00 PM, the Fed releases the Beige Book, its anecdotal report on economic conditions around the country. Also, the National Association of Home Builders releases its Housing Market Index Wednesday. Ara Hovnanian, CEO of Hovnanian Enterprises (NYSE: HOV) indicated in a CNBC interview on Friday that his business surprisingly picked up in December, so upcoming housing news could prove interesting.
Wednesday also brings the regular EIA Petroleum Status Report, which over the past two weeks has shown price supporting draws from inventory. Despite these flows, we continue to see economic deterioration as the main driver of oil price weakness in the near-term. Besides this, warmer weather in the Northeast offers near-term supply relief for oil and heating oil inventory.
At Detroit’s Auto Analysts of New York Conference, major automakers including GM (NYSE: GM), Ford (NYSE: F) and Toyota (NYSE: TM) could provide important insight into their outlooks. The day’s earnings reporting schedule is highlighted by the report of JP Morgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC) and AMR Corp. (NYSE: AMR). JP Morgan was recently rumored interested in putting its hefty capital to use to acquire a distressed bank like Washington Mutual (NYSE: WM).
The remainder of the earnings schedule includes ASML Holdings NV (Nasdaq: ASML), Gramercy Capital (NYSE: GKK), Knight Capital (Nasdaq: NITE), LeCroy Corp. (Nasdaq: LCRY), Logitech International (Nasdaq: LOGI), Northern Trust (Nasdaq: NTRS), Vasogen (Nasdaq: VSGN), West Coast Bancorp (Nasdaq: WCBO) and a few more.
Thursday
As discussed in our prelude, Fed Chairman Bernanke makes his way to Capitol Hill to discuss the economic outlook before the House Budget Committee on this day. Thursday also brings the regular Weekly Initial Jobless Claims data, with Bloomberg’s consensus looking for 335K new claim benefits filers for the week ended January 12. Unemployment jumped up to 5.0% at last check, and we expect retail and other consumer related softness to continue to drive a rising trend.
At 8:30, December Housing Starts are seen measuring 1.14 million, down from 1.19 million in November. It’ll be interesting to see how accurate Hovnanian’s account for the month proves to be. At 10:00, the Philadelphia Fed Index is expected to post a sour regional business conditions reading of negative 1.3. Finally, the EIA Natural Gas Report is due at 10:30.
A handful of key earnings reports should grab the market’s attention on Thursday, including news from Merrill Lynch (NYSE: MER), IBM (NYSE: IBM) and Washington Mutual (NYSE: WM). Others reporting include Ameritrade (Nasdaq: AMTD), Bank of New York Mellon (NYSE: BK), BB&T Corp. (NYSE: BBT), BlackRock (NYSE: BLK), Briggs & Stratton (NYSE: BGG), Comerica (NYSE: CMA), Continental Airlines (NYSE: CAL), Huntington Bancshares (Nasdaq: HBAN), Insteel Industries (Nasdaq: IIIN), Int’l Game Technology (NYSE: IGT), Novartis (NYSE: NVS), Parker Hannifin (NYSE: PH), PNC Financial (NYSE: PNC), PPG Industries (NYSE: PPG), Provident Bankshares (Nasdaq: PBKS), Seagate Technology (NYSE: STX), Xilinx (Nasdaq: XLNX) and a few more.
Friday
The bond market closes at 2 p.m. on Friday, ahead of Martin Luther King Day. The stock market is open all day, and two important economic reports are set for release. At 10:00 a.m., the Conference Board reports Leading Indicators for December, with Bloomberg’s surveyed economists seeing a 0.1% month-to-month deterioration. This compares to a 0.4% decline in November, again consistent with economic softening. Also at 10:00, the University of Michigan’s Consumer Sentiment figure for the month of January is seen at 74.7, compared to 75.5 in December.
Earnings reports to close out the week include General Electric (NYSE: GE), Johnson Controls (NYSE: JCI), Schlumberger (NYSE: SLB), LaBranche & Co. (NYSE: LAB), Wilmington Trust (NYSE: WL), Amcol International (NYSE: ACO), Community Bank System (NYSE: CBU), Community Bank (NYSE: CBU) and Wipro Limited (NYSE: WIT).
We hope you found value in this week’s copy of “The Greek’s Week Ahead” and look forward to providing your daily insight at Wall Street Greek throughout the week.
Help us grow our grass roots effort by clicking the small envelope at the bottom of this article and sending notice to your friends about the Wall Street Greek value add. Receive Wall Street Greek FREE via email by subscribing here. (disclosure)
Wednesday also brings the regular EIA Petroleum Status Report, which over the past two weeks has shown price supporting draws from inventory. Despite these flows, we continue to see economic deterioration as the main driver of oil price weakness in the near-term. Besides this, warmer weather in the Northeast offers near-term supply relief for oil and heating oil inventory.
At Detroit’s Auto Analysts of New York Conference, major automakers including GM (NYSE: GM), Ford (NYSE: F) and Toyota (NYSE: TM) could provide important insight into their outlooks. The day’s earnings reporting schedule is highlighted by the report of JP Morgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC) and AMR Corp. (NYSE: AMR). JP Morgan was recently rumored interested in putting its hefty capital to use to acquire a distressed bank like Washington Mutual (NYSE: WM).
The remainder of the earnings schedule includes ASML Holdings NV (Nasdaq: ASML), Gramercy Capital (NYSE: GKK), Knight Capital (Nasdaq: NITE), LeCroy Corp. (Nasdaq: LCRY), Logitech International (Nasdaq: LOGI), Northern Trust (Nasdaq: NTRS), Vasogen (Nasdaq: VSGN), West Coast Bancorp (Nasdaq: WCBO) and a few more.
Thursday
As discussed in our prelude, Fed Chairman Bernanke makes his way to Capitol Hill to discuss the economic outlook before the House Budget Committee on this day. Thursday also brings the regular Weekly Initial Jobless Claims data, with Bloomberg’s consensus looking for 335K new claim benefits filers for the week ended January 12. Unemployment jumped up to 5.0% at last check, and we expect retail and other consumer related softness to continue to drive a rising trend.
At 8:30, December Housing Starts are seen measuring 1.14 million, down from 1.19 million in November. It’ll be interesting to see how accurate Hovnanian’s account for the month proves to be. At 10:00, the Philadelphia Fed Index is expected to post a sour regional business conditions reading of negative 1.3. Finally, the EIA Natural Gas Report is due at 10:30.
A handful of key earnings reports should grab the market’s attention on Thursday, including news from Merrill Lynch (NYSE: MER), IBM (NYSE: IBM) and Washington Mutual (NYSE: WM). Others reporting include Ameritrade (Nasdaq: AMTD), Bank of New York Mellon (NYSE: BK), BB&T Corp. (NYSE: BBT), BlackRock (NYSE: BLK), Briggs & Stratton (NYSE: BGG), Comerica (NYSE: CMA), Continental Airlines (NYSE: CAL), Huntington Bancshares (Nasdaq: HBAN), Insteel Industries (Nasdaq: IIIN), Int’l Game Technology (NYSE: IGT), Novartis (NYSE: NVS), Parker Hannifin (NYSE: PH), PNC Financial (NYSE: PNC), PPG Industries (NYSE: PPG), Provident Bankshares (Nasdaq: PBKS), Seagate Technology (NYSE: STX), Xilinx (Nasdaq: XLNX) and a few more.
Friday
The bond market closes at 2 p.m. on Friday, ahead of Martin Luther King Day. The stock market is open all day, and two important economic reports are set for release. At 10:00 a.m., the Conference Board reports Leading Indicators for December, with Bloomberg’s surveyed economists seeing a 0.1% month-to-month deterioration. This compares to a 0.4% decline in November, again consistent with economic softening. Also at 10:00, the University of Michigan’s Consumer Sentiment figure for the month of January is seen at 74.7, compared to 75.5 in December.
Earnings reports to close out the week include General Electric (NYSE: GE), Johnson Controls (NYSE: JCI), Schlumberger (NYSE: SLB), LaBranche & Co. (NYSE: LAB), Wilmington Trust (NYSE: WL), Amcol International (NYSE: ACO), Community Bank System (NYSE: CBU), Community Bank (NYSE: CBU) and Wipro Limited (NYSE: WIT).
We hope you found value in this week’s copy of “The Greek’s Week Ahead” and look forward to providing your daily insight at Wall Street Greek throughout the week.
Help us grow our grass roots effort by clicking the small envelope at the bottom of this article and sending notice to your friends about the Wall Street Greek value add. Receive Wall Street Greek FREE via email by subscribing here. (disclosure)
Labels: Week Ahead
posted by The Greek | 10:44 PM
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