Week Ahead: Refocus on Reality

Now that the drama of D.C. is behind us, we can refocus our attention on economic realities. Un- fortunately, that could mean an end to the stock market rally we have so enthusiastically enjoyed (judging by the performance of the broader indexes this year). I warn investors this week that the truth might hurt, because the employment data due for release and other news could refocus attention on the Fed and on potential tapering, which would be bad for stocks near-term. Keep a close eye on the data for your guide, and you are welcome to tune in to our stock market blog to set your game plan.

Index ETF	Week Ending Oct. 18	Year-to-Date
SPDR S&P 500 (NYSE: SPY)	+2.4%	+22.5%
SPDR Dow Jones (NYSE: DIA)	+1.1%	+17.6%
PowerShares QQQ (Nasdaq: QQQ)	+3.7%	+26.1%

Week Ahead

Stocks of course rallied last week on the resolution of the government shutdown and debt ceiling issues. You can expect stocks to benefit for a little longer, depending on what the Employment Report shows on Tuesday. A refocusing of investors on a potentially tapering Fed would be quite disruptive, so you are actually rooting for a mild employment report this week.

Economic Events

THIS WEEK’S ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected
MONDAY
Chicago Fed National Activity Index	0.14	NA
Existing Home Sales	5.48 M	5.3 M
Charles Evans Speaks
EIA Petroleum Status (Last Week’s)
-Crude Oil Inventory
-Gasoline Inventory
TUESDAY
Employment Situation Report
-Nonfarm Payrolls	+169K	+185K
-Private Payrolls	+152K	+184K
Unemployment Rate	7.3%	7.3%
ICSC Weekly Store Sales	-0.7%	NA
-Year-to-Year Pace	+1.0%	NA
Redbook Store Sales	+3.2%	NA
Richmond Fed Manufacturing Index	0
EIA Natural Gas Report (Last Week’s)
WEDNESDAY
International Trade Prices
-Imports	0.0%	+0.2%
-Exports	-0.5%	-0.1%
FHFA House Price Index	+1.0%	+0.8%
Mortgage Activity	+0.3%
EIA Petroleum Status	NA
-Crude Oil Inventory
-Gasoline Inventory
THURSDAY
PMI Manufacturing Index	52.8	52.7
New Home Sales	421K	420K
JOLTS Report	3.689 M	3.725 M
Kansas City Manufacturing Index	2
Bloomberg Consumer Comfort	-34.1
Weekly Jobless Claims	358K	335K
EIA Natural Gas Report	NA
FRIDAY
Durable Goods Orders	+0.1%	+2.5%
Consumer Sentiment	-0.1%	+0.5%

The week’s economic slate is chock full of old reports that should have been reported over the last two weeks but were not due to the government shutdown. For this reason, we’ll get two reportings of the natural gas and petroleum inventory data, the first being last week’s on data from two weeks ago. Also, and likely to be highly and hotly followed, the monthly Employment Situation Report finally reaches the wire for September on Tuesday.

The employment data is of utmost importance to the investment community, as it is a great barometer of current economic health and trend. Nonfarm payrolls are expected to show better job creation in September versus August, but not quite enough to really enthuse the investment community. The unemployment rate is expected to hold steady at 7.3%. This report will refocus the market on the Federal Reserve, and depending on what it shows, either fuel the current belief that the Fed will not taper this year or pull the rug away from the market – watch for this, because investor greed is currently causing the community to ignore what the Fed has assured us will come.

Both the pace of Existing Home Sales and New Home Sales are expected to have eased a bit when reported this week. This is another important economic barometer, due to the importance of real estate to the overall economy, but it will swing those stocks in the sector far more wildly than the broader market. Several homebuilders and suppliers are also reporting this week.

Finally, we’ll get another look at manufacturing this week, with PMI data, regional indicators and also the Durable Goods Orders data on the slate. While durables are seen increasing by 2.5%, be aware that when excluding transportation goods, orders are only seen increasing by 0.5%.

Last week, Bloomberg’s consumer comfort measure showed horrible deterioration in the consumer mood, undoubtedly on American concern about their government. Expect to see the same in this week’s reporting of the University of Michigan’s measure. Still, I doubt the mood will affect actual spending.

Corporate Events

This is an important week for corporate earnings reporting season. We will hear from many major American companies. Just to name a few, and the list below is not a complete list, look for news from Amazon.com (AMZN), McDonald’s (MCD), Caterpillar (CAT), Ford (F), Procter & Gamble (PG) and Microsoft (MSFT).

HIGHLIGHTED EPS REPORTS
Company	Ticker
MONDAY
Sonic Automotive	NYSE: SAH
Petmed Express	Nasdaq: PETS
Halliburton	NYSE: HAL
NVR	NYSE: NVR
Manpower	NYSE: MAN
Lennox Int’l	NYSE: LII
Gannett	NYSE: GCI
McDonald’s	NYSE: MCD
A.O. Smith	NYSE: AOS
Hasbro	NYSE: HAS
VF Corp.	NYSE: VFC
Carolina Trust Bank	Nasdaq: CART
Netflix	Nasdaq: NFLX
BancorpSouth	NYSE: BXS
American Campus Communities	NYSE: ACC
Discover Financial	NYSE: DFS
Cathay General Bancorp	Nasdaq: CATY
Sonic	Nasdaq: SONC
Zions Bancorporation	Nasdaq: ZION
Texas Instruments	NYSE: TXN
Rent-A-Center	Nasdaq: RCII
VMware	NYSE: VMW
TUESDAY
Whirlpool	NYSE: WHR
Illinois Tool Works	NYSE: ITW
Freeport-McMoRan	NYSE: FCX
Delta Air Lines	NYSE: DAL
Forest Laboratories	NYSE: FRX
CIT Group	NYSE: CIT
Carlisle Cos.	NYSE: CSL
Lockheed Martin	NYSE: LMT
United Technologies	NYSE: UTX
EMC Corp.	NYSE: EMC
Potlatch	NYSE: PCH
Capella Education	Nasdaq: CPLA
McGraw Hill Financial	NYSE: MPH
Reynolds American	NYSE: RAI
Gulfmark Offshore	NYSE: GLF
Coach	NYSE: COH
Travelers	NYSE: TRV
State Street	NYSE: STT
Polaris	NYSE: PII
Harley-Davidson	NYSE: HOG
Lexmark Int’l	NYSE: LXK
Waters	NYSE: WAT
AK Steel	NYSE: AKS
RadioShack	NYSE: RSH
Regions Financial	NYSE: RF
Signature Bank	Nasdaq: SBNY
Fulton Financial	Nasdaq: FULT
RF Micro Devices	Nasdaq: RFMD
Broadcom	Nasdaq: BRCM
C.R. Bard	NYSE: BCR
Altera	Nasdaq: ALTR
Amgen	Nasdaq: AMGN
Unisys	NYSE: UIS
USANA Health	Nasdaq: USNA
Calamos Asset Management	Nasdaq: CLMS
Panera Bread	Nasdaq: PNRA
Cree	Nasdaq: CREE
Iberiabank	Nasdaq: IBKC
Xoom	Nasdaq: XOOM
WEDNESDAY
WellPoint	NYSE: WLP
Federal-Mogul	Nasdaq: FDML
Boeing	NYSE: BA
Molex	Nasdaq: MOLX
Caterpillar	NYSE: CAT
Norfolk Southern	NYSE: NSC
Mastech	NYSE: MHH
Dr. Pepper Snapple	NYSE: DPS
Bristol-Myers Squibb	NYSE: BMY
FBR	Nasdaq: FBRC
B/E Aerospace	Nasdaq: BEAV
Six Flags Entertainment	NYSE: SIX
Northrop Grumman	NYSE: NOC
Lumber Liquidators	NYSE: LL
The Medicines Co.	Nasdaq: MDCO
American Electric Power	NYSE: AEP
Lithia Motors	NYSE: LAD
NASDAQ OMX	Nasdaq: NDAQ
Allegheny Technologies	NYSE: ATI
Wyndham Worldwide	NYSE: WYN
US Airways	NYSE: LCC
Lorillard	NYSE: LO
JAKKS Pacific	Nasdaq: JAKK
Commercial Metals	NYSE: CMC
Brinker Int’l	NYSE: EAT
Prologis	NYSE: PLD
TripAdvisor	Nasdaq: TRIP
Forrester Research	Nasdaq: FORR
Tractor Supply	Nasdaq: TSCO
Famous Dave’s	Nasdaq: DAVE
AvalonBay Communities	NYSE: AVB
Lam Research	Nasdaq: LRCX
MKS Instruments	Nasdaq: MKSI
Varian Medical	NYSE: VAR
Corelogic	Nasdaq: CLGX
Skechers USA	NYSE: SKX
E*TRADE	Nasdaq: ETFC
Angie’s List	Nasdaq: ANGI
KKR Financial	NYSE: KKR
Cheesecake Factory	Nasdaq: CAKE
Akamai Technology	Nasdaq: AKAM
AT&T	NYSE: T
Teradyne	NYSE: TER
THURSDAY
Sirius XM Radio	Nasdaq: SIRI
Celgene	Nasdaq: CELG
Chubb	NYSE: CB
Amazon.com	Nasdaq: AMZN
Raytheon	NYSE: RTN
UnderArmour	NYSE: UA
Ford Motor	NYSE: F
AutoNation	NYSE: AN
Ball Corp.	NYSE: BLL
Hershey	NYSE: HSY
3M	NYSE: MMM
Janus Capital Group	NYSE: JNS
Southwest Airlines	NYSE: LUV
World Acceptance	Nasdaq: WRLD
Dunkin’ Brands	Nasdaq: DNKN
Altria Group	NYSE: MO
Safeguard Scientifics	NYSE: SFE
Quality Systems	Nasdaq: QSII
Noble Energy	NYSE: NBL
Hercules Offshore	Nasdaq: HERO
USG	NYSE: USG
Colgate-Palmolive	NYSE: CL
Teledyne	NYSE: TDY
Cabela’s	NYSE: CAB
Kennametal	NYSE: KMT
AllianceBernstein	NYSE: AB
Mead Johnson	NYSE: MJN
SEI Investments	Nasdaq: SEIC
Boston Scientific	NYSE: BSX
Celgene	Nasdaq: CELG
Reliance Steel	NYSE: RS
Builders FirstSource	Nasdaq: BLDR
Microsoft	Nasdaq: MSFT
Cerner	Nasdaq: CERN
Federated Investors	NYSE: FII
Zynga	Nasdaq: ZNGA
Taubman Centers	NYSE: TCO
KLA-Tencor	Nasdaq: KLAC
SVB Financial	Nasdaq: SIVB
MICROS Systems	Nasdaq: MCRS
FRIDAY
Immunogen	Nasdaq: IMGN
Rockwell Collins	NYSE: COL
United Parcel Service	NYSE: UPS
West Bancorporation	Nasdaq: WTBA
LifePoint Hospitals	Nasdaq: LPNT
Procter & Gamble	NYSE: PG
Legg Mason	NYSE: LM
Lear	NYSE: LEA
Weyerhaeuser	NYSE: WY
Sherwin-Williams	NYSE: SHW
Lakeland Financial	Nasdaq: LKFN
National Presto	NYSE: NPK

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.