Week Ahead: It’s Earnings Prime Time Baby

The week ahead is “prime time” for earnings season, with major American companies and sensational stocks due to put up or shut up. As these companies report their results for the latest quarter, they will either offer their shareholders vindication for hanging in there or a feeling of betrayal. Among the most notable reporters on the week with something to prove, Apple (Nasdaq: AAPL), Facebook (NYSE: FB), Caterpillar (NYSE: CAT), Boeing (NYSE: BA), Zynga (Nasdaq: ZNGA) and Amazon.com (Nasdaq: AMZN) among others. Earnings season has allowed stocks to break away from macro-drivers and show off alpha if they got it. This week will certainly continue that trend, with the economic data that is due on the soft side. Catch our daily thoughts at the blog.

Index ETF	Week Ending July 19	Year-to-Date
SPDR S&P 500 (NYSE: SPY)	+1.0%	+18.8%
SPDR Dow Jones (NYSE: DIA)	+0.7%	+18.8%
PowerShares QQQ (Nasdaq: QQQ)	-0.9%	+14.7%

A disappointing week for the NASDAQ was highlighted by disappointments at Google (Nasdaq: GOOG), Intuitive Surgical (Nasdaq: ISRG) and Microsoft (Nasdaq: MSFT). It caused the PowerShares QQQ (Nasdaq: QQQ) to diverge from the modest increases posted by the SPDR S&P 500 (NYSE: SPY) and the SPDR Dow Jones Industrial Average (NYSE: DIA). Bad news was not limited to the NASDAQ though, with a notable disappointment at Coca-Cola (NYSE: KO) causing some concern about this week’s report by PepsiCo (NYSE: PEP). The greatly anticipated report from Apple will likewise dominate and drive the NASDAQ this week; though the direction remains unknown today, it seems the company’s EPS result could be soft but there remains the possibility of a new product announcement like for instance a watch of some sort.

Economic Events

THIS WEEK’S ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected
MONDAY
Chicago Fed National Activity Index	-0.3	+0.03
Existing Home Sales	5.18 M	5.27 M
TUESDAY
FHFA House Price Index	+0.7%	+0.8%
Richmond Fed Manufacturing Index	8	8
ICSC Store Sales	-1.1%	NA
Senate Examines Sequestration
WEDNESDAY
PMI Manufacturing Index (Flash)	52.2	52.8
New Home Sales	476K	481K
Mortgage Activity	-2.6%	NA
EIA Petroleum Status – Crude Oil Inv.	-6.9 M	NA
THURSDAY
Durable Goods Orders	+3.6%	+1.5%
-Orders Ex-Transportation	+0.7%	+0.6%
Kansas City Fed Manufacturing Index	-5	0
Bloomberg Consumer Comfort	-28.4	NA
Weekly Jobless Claims	334K	341K
EIA Natural Gas Report	+58 Bcf	NA
SEC Examines Dodd-Frank
FRIDAY
Reuters/Michigan Consumer Sentiment	83.9	84.0

It was amazing that the individual stock news outweighed the very high profile testimony of Federal Reserve Chairman Bernanke last week. This week’s economic schedule will be much more subdued, giving the floor to the corporates even more.

Still, the week offers several key housing data points that could confirm the bad news reported last week in Housing Starts. The Existing Home Sales Report especially carries weight this week, though not much change is expected by economists. Still, the existing home market is much more important than the new home market, which often gets more attention. New Home Sales are seen increasing modestly, but the economic data point will be overshadowed by the individual reports of the homebuilders this week, with major names including industry leader PulteGroup (NYSE: PHM) due to report. Speaking of putting up or shutting up, the valuations in this group have received their first true test of the recovery lately, due to concern about the impact of rising mortgage rates on activity.

Several key manufacturing measures are set for release as well this week, including the PMI Manufacturing measure and Durable Goods Orders. We will also hear from major reporting regions, with data due from Federal Reserve Banks of Richmond and Kansas City. So the market will have plenty of significant data from important sectors of the economy to weight.

The Chicago National Activity Index for June could confirm the bad news received last week from the Leading Economic Indicators Index, which was unchanged in the last month of the second quarter. With economists across Wall Street lately cutting their GDP forecasts for the quarter, every June measure will either confirm that caution or rebuke it, and the investment community will be paying attention.

Corporate Events

HIGHLIGHTED EPS REPORTS
Company	Ticker
MONDAY
McDonald’s	NYSE: MCD
Halliburton	NYSE: HAL
Federal-Mogul	Nasdaq: FDML
Gannett	NYSE: GCI
Texas Instruments	NYSE: TXN
PetMed Express	Nasdaq: PETS
Hasbro	NYSE: HAS
Volterra Semiconductor	Nasdaq: VLTR
Carmike Cinemas	Nasdaq: CKEC
Six Flags Entertainment	NYSE: SIX
TUESDAY
Apple	Nasdaq: AAPL
AT&T	NYSE: T
UPS	NYSE: UPS
United Technologies	NYSE: UTX
Travelers	NYSE: TRV
Valero Energy	NYSE: VLO
Electronic Arts	NYSE: EA
Norfolk Southern	NYSE: NSC
VMWare	NYSE: VMW
Broadcom	Nasdaq: BRCM
WEDNESDAY
WellPoint	NYSE: WLP
PepsiCo	NYSE: PEP
Ford Motor	NYSE: F
Boeing	NYSE: BA
Caterpillar	NYSE: CAT
Radian Group	NYSE: RDN
EMC	NYSE: EMC
Northrop Grumman	NYSE: NOC
Realogy	Nasdaq: RLGY
Facebook	NYSE: FB
THURSDAY
Under Armour	NYSE: UA
Sirius XM Radio	Nasdaq: SIRI
Biogen Idec	Nasdaq: BIIB
Harley-Davidson	NYSE: HOG
General Motors	NYSE: GM
Zynga	Nasdaq: ZNGA
Starbucks	Nasdaq: SBUX
Amazon.com	Nasdaq: AMZN
Cliff’s Natural Resources	NYSE: CLF
Gilead Sciences	Nasdaq: GILD
FRIDAY
Choice Hotels	NYSE: CHH
Weyerhaeuser	NYSE: WY
KKR	NYSE: KKR
Newell Rubbermaid	NYSE: NWL
Helmerich & Payne	NYSE: HP
Dresser-Rand	NYSE: DRC
DTE Energy	NYSE: DTE
Donegal Group	Nasdaq: DGICA
Provident Financial	NYSE: PFS
Ventas	NYSE: VTR

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