Week Ahead: Auto Show & EPS Go!

North American Auto Show Pushes Detroit Back Into Spotlight

Visit the front page of Wall Street Greek to see our current coverage of Wall Street, economic reports and global financial markets.

(Relative Tickers: NYSE: AIG, NYSE: F, OTC: SBUOF.PK, NYSE: AA, NYSE: CVX, NYSE: FRX, Nasdaq: PEDH, Toronto: CDV.TO, Nasdaq: BKMU, NYSE: SKY, Nasdaq: VOXX, Nasdaq: WDFC, NYSE: VOL, Nasdaq: HELE, NYSE: TIF, Nasdaq: LLTC, NYSE: SVU, NYSE: DPZ, OTC: OCENY.PK, NYSE: GAP, NYSE: FUL, NYSE: KBH, NYSE: MON, NYSE: CLC, NYSE: GS, NYSE: JPM, NYSE: BAC, NYSE: MS, NYSE: HI, Nasdaq: INTC, NYSE: BGG, Nasdaq: SHFL, NYSE: MDZ, Nasdaq: OZRK, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: NYX)

Week Ahead: Auto Show & EPS Go!

The North American Auto Show kicks off this week in Detroit, push-starting America's rebuilt auto industry back into the spotlight. While last year's show was about limiting excesses, this year's focus is in reassuring the American car buyer that Detroit is geared up to serve the needs of today's drivers and tomorrow's. We have a few important economic reports on the slate, but market focus will be on the start of earnings season, though very few companies actually report this week.

Monday

The North American Auto Show kicks off in Detroit, Michigan. Things might be a little different than last year, when AIG's (NYSE: AIG) wasteful spending of our money led automakers to cut out most of the fancy bells and whistles from their annual escapade. Motor vehicle sales were just reported for December last week, with Ford (NYSE: F) garnering more market share. GM made some positive sounding announcements last week as well. Still, we betcha one of the Asian carmakers will steal the show, like perhaps Subaru (OTC: SBUOF.PK), which has moved up to #11 in global share.

Alcoa (NYSE: AA) informally opens the fourth quarter earnings season with its report after the close. The Street consensus forecasts AA will earn $0.06 in its Q4 report, contrasting against a loss of $0.28 in last year's quarter. Alcoa beat expectations handily at its last reporting in Q3. Though, AA shares are already up markedly from its early March low.

Central bankers are gathering at the Bank for International Settlements meeting Monday. St. Louis Fed President James Bullard will be at a safe, though disclosed location; that being the Global Interdependence Center conference in Shanghai, where he will be delivering a speech. This latter conference runs from January 10 through 12. While we are covering Asia, we should note markets in Japan are closed on Monday.

Cowen & Company will hold its consumer conference in New York, while J.P. Morgan fills New Orleans with its health-care conference. Chevron (NYSE: CVX) is scheduled to give an interim update Monday. The FDA is set to review Forest Labs' (NYSE: FRX) intent to use an existing drug for the treatment of chronic heart failure.

Look for EPS reports from Peoples Educational Holdings (Nasdaq: PEDH), COM DEV International (Toronto: CDV.TO), Bank Mutual (Nasdaq: BKMU), Skyline (NYSE: SKY), Audiovox (Nasdaq: VOXX), WD-40 (Nasdaq: WDFC), Volt Info Sciences (NYSE: VOL) and Helen of Troy (Nasdaq: HELE).

Tuesday

International Trade will be reported for the month of November at 8:30 ET. In October, the trade deficit narrowed to $32.9 billion from $35.7 billion in September. Economists see an expansion of the deficit in November to $-35.0 billion, as export demand on international growth and the weak dollar outweigh rising imports on higher oil prices.

The International Council of Shopping Centers (ICSC) reported year-over-year sales growth of 2.5% for the week ended January 2. That compared against the prior week's 2.3% increase. Week-to-week sales also rose 1.5%, versus the prior week's 0.4% gain. Look for this week's report in the pre-market.

The Department of Agriculture will update crop estimates. This data tends to drive volatility in the prices of various crops, as farmers' data varies from prior information.

Needham & Company kicks off its growth conference in New York City. This was a conference I enjoyed as an analyst. Tiffany (NYSE: TIF) is scheduled to report on its holiday sales a bit later than the rest of retail. I guess it takes more time to add up the bigger numbers. An FDA panel takes a look at Actelion's drug application for Zavesca, a neurological medication. Russian aluminum company, Rusal, gets a listing on the Hong Kong exchange, and the US earnings schedule includes reports from Linear Technology (Nasdaq: LLTC), SuperValue (NYSE: SVU), OCE ADR (OTC: OCENY.PK), Great Atlantic & Pacific (NYSE: GAP), H.B. Fuller (NYSE: FUL) and KB Home (NYSE: KBH).

Secretary of State Clinton is slated to give a policy address on US Asia Pacific engagement. Philly Fed President Charles Plosser will address the Entrepreneurs Forum of Greater Philadelphia at 7:00 p.m.

Wednesday

Wednesday dials 911 for the financial markets police. The Financial Crisis Commission brings in leaders from Goldman Sachs (NYSE: GS), J.P. Morgan Chase (NYSE: JPM), Bank of America (NYSE: BAC) and Morgan Stanley (NYSE: MS) to testify on the financial sector meltdown. The American SEC takes up the subjects of high-frequency trading, "dark pools," and risk management rules. Meanwhile, Lehman Brothers will be in bankruptcy court seeking resolution on $800 billion in claims.

The European Central Bank (ECB) is scheduled to make its latest policy decision on Wednesday. Economists widely see the ECB keeping rates steady. Later in the afternoon, the Fed will release its latest Beige Book regional economic survey. Chicago Fed President Charles Evans is scheduled to speak on the economy and monetary policy at a luncheon gathering.

The Mortgage Bankers Association took the week off two weeks ago, and so reported two weeks worth of data last week. In the week ended December 25, the Market Composite Index decreased 22.8% and rose 0.5% in the week ended January 1, after seasonal adjustment for the holidays. We have to question the MBA's seasonal adjustment skill though, as we have noticed big swings when seasonality might come to play.

However, the big swing factor this time seems to be non-seasonal. As rates increased in the week ended December 25, the Refinance Index fell 30.5%. The average contract interest rate for 30-year fixed rate mortgages measured 5.18% in the week of January 1. Look for the latest data in the pre-market on Wednesday.

The EIA will make its regular report on oil inventory at 10:30 AM. In the week ended January 1, crude oil inventory grew by 1.3 million barrels and remained above the upper limit of the average range for this time of year. Gasoline stocks rose by 3.7 million barrels, as the end of holiday shopping eased demand. Distillate Fuel inventories still fell by 0.3 million barrels, driven by weather and heating demands for heating oil, diesel and other distillates.

The US Treasury Budget will be reported for December at 2:00 PM ET. November showed a treasury deficit of $120.3 billion, marking the 14th straight monthly deficit. In recent years, December has offered a monthly surplus, but in fiscal '09, it produced a deficit. Economists are looking for a deficit of $92.0 billion this year, as stimulus efforts continue to outweigh slim receipts.

Monsanto (NYSE: MON) is slated to go over its R&D pipeline with investors and analysts in Boston Wednesday. Domino's Pizza (NYSE: DPZ) has its investor's day scheduled, after just having launched a revitalization of product and image marketing campaign. The day's earnings schedule includes only a report from CLARCOR (NYSE: CLC).

Thursday

Retail Sales will be reported for the month of December this morning. This comes after Chain Store Sales showed individual retailers mostly bettered performance through the holiday season of 2009. Economists surveyed by Bloomberg foresee a sales increase of 0.4%, versus a strong 1.3% spike in November. Ex-autos, November sales still rose 1.2% (this forecast is for 0.2% in December).

This week's Initial Jobless Claims data will measure the week ended January 9, so it will provide the first post holiday reading. We have been pointing toward January after receiving two weeks of significantly lower new claims filings, but this one might be a little too soon anyway. Still, we need confirmation of labor market stabilization this month or next for the stock market to consider another leg up. Most economists are looking for it. The consensus forecast for this week's data sees 437K new claims filers, versus the 434K recorded last week.

Import and Export Price data is due for report at 8:30 AM. Last month's report showed November's import prices advanced 1.7% on a 7.3% fuel price increase, while export prices rose 0.8%.

At 9:00 AM, look for RBC's Cash Index. The RBC Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments. Last month's reading improved about 8 points over November, to 39.0. In December 2008, the RBC Cash Index stood at just 15.3. There is no economists' consensus forecast for this measure.

Business Inventories will be reported for November at 10:00 AM ET. Business inventories grew for the first time since August 2008 in October, rising 0.2%. We reported that inventory stabilization is a good sign and that restocking would prove a significant driver of economic growth in Q4, and likely Q1 2010 as well. Economists are looking for another 0.2% increase in November's reading.

The EIA reported that Natural Gas in storage decreased again in the week ended January 1, falling by 153 Bcf this time around. We reported last week that while inventory still stood well ahead of the average for this time of year, it was seeing draw at a significant pace due to the cold winter. We presciently advised natural gas and related investment consideration on this view. Look for the EIA's latest report at 10:30.

Perhaps the morbid among you will look forward to Hillenbrand's (NYSE: HI) investor meeting on Thursday. The rest will be focused on Intel's (Nasdaq: INTC) EPS results. The rest of the earnings schedule includes Briggs & Stratton (NYSE: BGG), Shuffle Master (Nasdaq: SHFL), MDZ, Inc. (NYSE: MDZ) and Bank of the Ozarks (Nasdaq: OZRK).

Friday

Friday offers a slew of economic reports, including the monthly Consumer Price Index. In November, the CPI increased by a hefty 0.4%, driven by energy price increase. Core CPI stuck at October's mark though. For December, economists see 0.1% increases for both Headline and Core CPI, however, chatter is calling for a higher Headline rise.

The Empire State Manufacturing Index, measuring New York area business conditions, dropped precipitously last month to 2.55. However, the reading was inconsistent with data out of Philadelphia and Chicago, so we may find out if the NY area is leading or following trend with this report. Economists see improvement to a modest mark of 13.0 for January.

Industrial Production is up for report at 9:15 AM. Production improved by 0.8% in November, taking Capacity Utilization up 0.7 of a percentage point to 71.3%. Capacity is still grossly underutilized of course, with the average rate measured at 80.9% from 1972 through 2008. Capacity utilization has increased significantly through that span though, due to advances in technology and process. Economists expect production to improve another 0.6% in December, taking capacity utilization up to 71.9%.

Economists also expect gains in Consumer Sentiment this month, with the consensus forecast marking 74.0, versus the 72.5 last reading. Overseas, Mexico is expected to keep rates steady. Richmond Fed President Jeffrey Lacker is set to address a group Friday.

The earnings slate highlights the report of J.P. Morgan Chase (NYSE: JPM). Get revved up for the weekend, as the North American Auto Show Opens to the general public on Saturday.


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.