Week Ahead - An Apple a Day

Perhaps good news from Apple might turn the tide, because there’s not much on the economic slate that seems capable of it this week. Stocks rallied on Friday on an Employment Situation Report that was just right. It was not poor enough to concern investors about the economy, and it was not good enough to ensure the Fed would be raising rates any time soon. I’ve got a good feeling about Apple this week, mainly because it would just be unfathomable that it had nothing new to offer at its developers’ conference. Come see us at the Wall Street Greek blog for daily data analysis and review.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Week Ahead

Monday

Apple (Nasdaq: AAPL) keys the wire Monday as it could unveil a new product at its annual developers’ conference in California. Apple has been dead money in the water because of the dearth of new product excitement and failing growth expectations about the stock. I have a good feeling about this, so consider placing a bet in a call option, June or January, depending on your risk profile. Also, I think it’s the right time to simply buy the stock back here.

St. Louis Federal Reserve Bank President James Bullard, a noted hawk, is scheduled to speak about the global economy at a Montreal event.

The City of Detroit is in it deep, and its emergency manager will likely ask D-town creditors to accept a 90% haircut this week.

China’s securities markets are closed through Wednesday of this week. However, the nation will see a slew of economic data releases that could move stocks elsewhere.

The corporate wire has more than just Apple on tap. Look for analyst and/or shareholder meetings at Echo Global Logistics (Nasdaq: ECHO) and Calumet Specialty Products (Nasdaq: CLMT). Oil-Dri (NYSE: ODC) has a conference call scheduled. The earnings wire has news from Amira Nature Foods (Nasdaq: ANFI), Annie’s (Nasdaq: BNNY), Camelot Information Systems (NYSE: CIS), Champions Oncology (Nasdaq: CSBR), Diamond Foods (Nasdaq: DMND), Enzo Biochem (NYSE: ENZ), KMG Chemicals (NYSE: KMG), Limoneira (Nasdaq: LMNR), Lululemon Athletica (Nasdaq: LULU), Majesco Entertainment (Nasdaq: COOL), Pep Boys (NYSE: PBY) and Synergetics USA (Nasdaq: SURG).

Barron’s reports that at some time this month, a New York bankruptcy court decision regarding the “Nova Scotia bondholders” could cost General Motors (NYSE: GM) as much as $1.5 billion.

Tuesday

The first news Tuesday emanates from overseas. The Bank of Japan (BOJ) is due to update its monetary policy. Expectations are for no change on interest rates, though it could extend the term of its low-interest fund provision.

International sourced market moving news continues at the European open to the day as well. The German Constitutional Court will examine the German legality of the established euro area crisis management plan. It will take an especially close look at the European Central Bank’s (ECB) bond purchase program.

The National Federation of Small Business (NFIB) will report its Small Business Optimism Index today. Last month’s report for April showed a 2.6 point improvement in confidence to a still deeply inadequate level of 92.1. The economists’ consensus expectation for May’s report is for a slight gain to a mark of 92.3.

At 10:00 AM ET, look for the monthly Wholesale Trade Report. In this report for the month of April, economists are expecting just a 0.2% increase in wholesale inventories, against the 0.4% gain the month before. You’ll want to compare the month’s inventory growth to the change in sales for a more complete perspective.

The regular weekly retail same-store sales report of the International Council of Shopping Centers (ICSC) is on tap for Tuesday. Last week’s report covering the period ending June 1 showed a week-to-week sales increase of 1.9%, following the 0.9% decline the week before. On a year-to-year basis, sales were higher by 4.3%, versus the 2.8% increase in the prior week.

The corporate wire has analyst and shareholder meetings at Altria Group (NYSE: MO), V.F. Corp. (NYSE: VFC), Regency Energy Partners (NYSE: RGP) and CF Industries (NYSE: CF). Look for the IPO of Gigamon at $18 to $20. The Goldman Sachs Healthcare Conference highlights the presentations of Amgen (Nasdaq: AMGN), Bristol-Myers Squibb (NYSE: BMY), Abbott Laboratories (NYSE: ABT) and Baxter International (NYSE: BAX). The William Blair Growth Stock Conference offers the presentation of Abbott Laboratories (NYSE: ABT) as well. The Morgan Stanley Financials Conference highlights the presentation of Bank of America (NYSE: BAC). The earnings schedule has LDK Solar (NYSE: LDK), Medical Action Industries (Nasdaq: MDCI), National Technical Systems (Nasdaq: NTSC), Piedmont Natural Gas (NYSE: PNY), Syncora Holdings (OTC: SYCRF), AEP Industries (Nasdaq: AEPI), ARI Network (Nasdaq: ARIS), Oxford Industries (NYSE: OXM) and Ulta Salon (Nasdaq: ULTA).

Wednesday

After several weeks of high profile mortgage rate rise and a coinciding drop-off in mortgage application activity, the latest mortgage activity data arrives from the Mortgage Bankers Association. Last week’s report covering the period ending May 31 showed mortgage applications decreased by 11.5%. Applications tied to the purchases of homes decreased by 2.0% on a seasonally adjusted basis. The Refinance Index decreased by 15%. In a rising rate environment, though, I favor residential real estate over stocks.

The Monthly Treasury Budget will be reported for the month of May at 2:00 PM ET. Economists expect the month to offer a budget deficit of $110 billion, versus the $112.9 billion surplus reported in April. Over the past 10 years, the average deficit for May has been $97.3 billion.

Look for the EIA’s regular Petroleum Status Report at 10:30 AM ET. Last week’s report covering the week ending May 31 showed crude oil inventory decreased by 6.3 million barrels, and remained above the upper limit of the average range for this time of year. Total motor gasoline inventory decreased by 0.4 million barrels but remained near the upper limit of the average range for this time of year.

In D.C., the Senate Appropriations Committee will hold a hearing on cyber-security. Meanwhile a House Education & Workforce subcommittee studies pension reform.

Securities markets are closed today in China, Hong Kong, Taiwan and Russia.

The corporate wire has analyst and shareholder meetings at Target (NYSE: TGT), SanDisk (Nasdaq: SNDK), Electronic Arts (NYSE: EA), Molson Coors Brewing (NYSE: TAP) and Novo Nordisk (NYSE: NVO). The Deutsche Bank dbAccess Global Consumer Conference offers presentations by Procter & Gamble (NYSE: PG) and The Coca-Cola Co. (NYSE: KO). The Piper Jaffray Consumer Conference brings news from The Gap (NYSE: GPS) and Urban Outfitters (Nasdaq: URBN). The EPS schedule highlights reports by H&R Block (NYSE: HRB), PVH Corp. (NYSE: PVH), Agilysis (Nasdaq: AGYS), Luby’s (NYSE: LUB), Men’s Wearhouse (NYSE: MW), Rand Logistics (Nasdaq: RLOG) and Sigma Designs (Nasdaq: SIGM).

Thursday

The monthly Retail Sales Report for May is due at 8:30 AM ET. Economists expect retail sales to increase 0.5%, versus the 0.1% increase in April. Excluding autos and gasoline, sales are expected to have increased by 0.3%, versus the 0.6% increase in April.

The Bloomberg Consumer Comfort Index, a weekly measure of the consumer mood, was unchanged last week, and remained at a mark of -29.7. Consumers are not generally in a good mood today in my opinion, though the latest data from the University of Michigan, due Friday, may offer a different message. A large portion of the consumer confidence reflected in the University of Michigan data is based on future hope, versus the less positive consumer view of things today. Such flighty faith is easily lost.

Investors will be tuned into the Weekly Initial Jobless Claims report Thursday, due at 8:30 AM ET. Last week’s report covering the period ending June 1 showed weekly claims fell by 11K, to 346K. Economists see claims rising to 350K this week. The 4-week moving average increased by 4,500 last week, to 352,500.

Import and Export Price data will be released Thursday for the month of May. Economists expect export prices slipped by 0.1%, after falling by 0.7% in April. Import prices are seen unchanged this month, versus the 0.5% decrease seen the month before. Large changes in export prices are usually due to agricultural exports while changes in import pricing are typically petroleum related. Deflation, which is readily apparent today, is a symptom of economic illness.

Business Inventories will be reported for April at 10:00 AM ET. Economists see inventories rising 0.3%, following their stagnant state in March. Investors will need to take a closer look at the report for insight into sales activity as well.

The EIA’s Natural Gas Report is due Thursday at 10:30 AM. Last week’s report covering the period ending May 31 showed working gas in storage increased by 111 Bcf. Stocks were 616 Bcf less than last year at this time and 69 Bcf below the five-year average for this time of year.

The National Governors Association publishes its Fiscal Survey of States.

German Chancellor Angela Merkel addresses business leaders in Berlin just a couple days after the German Constitutional Court decision about ECB bond purchases.

The corporate wire has a Clearwire (Nasdaq: CLWR) shareholders meeting to consider competing takeover offers from Dish Network (Nasdaq: DISH) and Sprint Nextel (NYSE: S). Eastman Kodak seeks bankruptcy court approval to allow its creditors to vote on a restructuring plan. Autodesk (Nasdaq: ADSK) holds its annual shareholder meeting. The Piper Jaffray Consumer Conference brings presentations by Nordstrom (NYSE: JWN) and PVH (NYSE: PVH). The William Blair Growth Conference offers the presentation of C.H. Robinson Worldwide (Nasdaq: CHRW). The Deutsche Bank Global Industrials and Basic Materials Conference highlights the presentation of Northrop Grumman (NYSE: NOC). Look for earnings from ALCO Stores (Nasdaq: ALCS), Capstone Turbine (Nasdaq: CPST), Cherokee (Nasdaq: CHKE), Oculus Innovative Sciences (Nasdaq: OCLS), Rentrak (Nasdaq: RENT), Restoration Hardware (NYSE: RH), Synutra International (Nasdaq: SYUT) and VisionChina Media (Nasdaq: VISN).

Friday

Just a day after the import and export price release, we’ll receive insight into producer level pricing. The Producer Price Index (PPI), due at 8:30 AM, is expected to show a May increase of 0.2%, after April’s 0.7% decline. The Core PPI, less food and energy influence, is expected to show a 0.1% increase, matching the prior month increase.

Industrial Production will be reported at 9:15 AM ET. The economists’ consensus sees industrial production higher by 0.2% in May, versus the 0.5% contraction in April. Capacity Utilization is seen expanding to 77.9% in May, versus the 77.8% usage rate in April. Data has been softening in manufacturing, but this report might offer different news this month. Manufacturing production is seen increasing by 0.3%, versus the 0.4% decrease the month before.

The Thomson Reuters/ University of Michigan Consumer Sentiment Index is expected to hold steady in this mid-June reporting, matching the 84.5 mark reached at the close of May. The index climbed 8.1 points in May, but I think the gain was superficial.

The Current Account will be reported for the first quarter at 8:30 AM ET. Economists expect the current account deficit widened to $111.2 billion in Q1, from $110.4 billion in Q4.

European ministers will be talking about measures to curb youth unemployment. Iran is holding presidential elections.

The Deutsche Bank Global Industrials and Basic Materials Conference offers presentations by Tyco International (NYSE: TYC) and Air Products & Chemicals (NYSE: APD). Salesforce.com (NYSE: CRM) has its customer company tour in New York City. Chesapeake Energy (NYSE: CHK) has its annual shareholder meeting. Ford Motor (NYSE: F) will be discussing its Sustainability Report. Corporate Executive Board (NYSE: CEB) has its investor day. The earnings schedule has NGL Energy Partners (NYSE: NGL) and Smithfield Foods (NYSE: SFD).

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