Week Ahead – Alcoa Reports & Fed Minutes Purport

The week ahead offers a very light start to the corporate earnings reporting season, with Alcoa (NYSE: AA) set to start that process off informally on Tuesday. Meanwhile, the most important domestic economic event of the week could be the Federal Reserve’s release of its meeting minutes for June. The Fed has purported to have no plans to raise interest rates in 2015, despite its own forecast for the Fed Funds Rate and its regional presidents’ public discussions of those expectations. The Fed minutes should offer more evidence of just that likelihood, which could shock stocks back into place. For more of this sort of Greek wisdom, please do visit our blog, and find us on Facebook and Twitter as well.

5-Day Chart at Yahoo Finance

Stocks had a nice week in the holiday shortened last period, and the Dow made big news. It was so big in fact that my peculiar neighbor who works as a school maintenance man spoke opened eyed to me about it. Now, if that’s not a sell signal, I don’t know what is. I’ll tell you what I told him before his eyes glazed over. We have two factors now pitted against one another with regard to forcing market direction. Expectations are for strong economic growth, especially for Q2 (at least in the market). This is the positive factor supporting stocks’ run higher. Opposing that driver, we have the plainly obvious fact that the Fed is likely to begin raising rates in early 2015. Given that the market usually falls when rates rise, especially at the start of that function; and given the fact that the market leads the economy by 6 months, we should expect stocks to stall here. Now, in my Summer Forecast I said stocks had cleared obstacles to move higher, but my focus in the first part of the two part series really was just for June (read it again). I think the momentum will peter out as we move forward and Fed bank presidents keep busting the bubble with their public discussion of rate rise.

Security	YTD	TTM
SPDR S&P 500 (NYSE: SPY)	+7.3%	+21.6%
SPDR Dow Jones (NYSE: DIA)	+3.0%	+12.9%
PowerShares QQQ (Nasdaq: QQQ)	+8.8%	+31.9%
SPDR Gold Shares (NYSE: GLD)	+9.5%	+7.7%
iPath S&P Crude Oil (NYSE: OIL)	+8.7%	+4.5%

The Week Ahead

Reporters of economic data seem to be doing vacationers a favor this week, with some expected reports missing from the schedule. Still, we will get a look at the Fed minutes, which is the one factor I see weighing most importantly this week on a macro scale. Beyond that, look to China inflation data and the speech by ECB President Draghi to move markets from overseas. Several American Fed Bank representatives are slated to speak as well, and they could compound the message I expect from the Fed minutes, so buyer beware this week.

THIS WEEK’S ECONOMIC EVENTS SCHEDULE
Economic Data Point	Prior	Expected
MONDAY
Gallup US Consumer Spending	$91
Investor Movement Index	5.69
Bank of Japan Economic Report
Iran Nuke Talks
TUESDAY
ICSC Weekly Store Sales	+1.0%
-Year-to-Year Pace	+4.6%
Redbook Store Sales	+3.1%
NFIB Small Biz Index	96.6	97.0
Job Openings (JOLTS)	4.455 M	4.40 M
Consumer Credit	$26.8 B	$17.5 B
Lacker Speaks
Kocherlakota Speaks
Senate Committee on Iraq
WEDNESDAY
Mortgage Activity	-0.2%
EIA Petroleum Status
-Crude Oil Inventory	-3.2 MB
-Gasoline Inventory	-1.2 MB
FOMC Minutes
ADP June Regional Employment
China Reports on Inflation
US-China Strategic Economic Meeting
ECB Draghi Lecture
Economists’ Roundtable w/Greece
THURSDAY
Weekly Jobless Claims	315K	315K
Bloomberg Consumer Comfort
EIA Natural Gas Report	+100 bcf
Chain Store Sales
Wholesale Trade Inventories	+1.1%	+0.6%
-Sales
Fischer Speaks
George Speaks
SEC Open Meeting on Market
House Committee on VA
FRIDAY
Treasury Budget	-$130 B	+$86.5 B
Rocky Mountain Economic Summit
Plosser Speaks
Evans Speaks

It’s the informal start of the corporate earnings season, marked by Alcoa’s report this Tuesday. Beyond that, there are very few reports of importance scheduled. Look to Wells Fargo’s (NYSE: WFC) report at the close of the week, which brings in the big bank reports thereafter. Not to demean Wells; it’s obviously included amongst the biggest bankers.

HIGHLIGHTED EPS REPORTS
Company	Ticker
MONDAY
Accretive Health	Nasdaq: ACHI
Adtran	Nasdaq: ADTN
AngioDynamics	Nasdaq: ANGO
Bank of the Ozarks	Nasdaq: OZRK
Doral Financial	NYSE: DRL
GenCorp	NYSE: GY
Global Geophysical Services	Nasdaq: GEGSQ
Griffin Land & Nurseries	Nasdaq: GRIF
Helen of Troy	Nasdaq: HELE
MagnaChip Semiconductor	NYSE: MX
Ocean Power Technologies	Nasdaq: OPTT
Penford	Nasdaq: PENX
Peregrine Pharmaceuticals	Nasdaq: PPHM
Prospect Global Resources	Nasdaq: PGRX
Pure Cycle	Nasdaq: PCYO
SemiLEDs	Nasdaq: LEDS
Tower Group Int’l	Nasdaq: TWGP
TUESDAY
AeroVironment	Nasdaq: AVAV
Alcoa	NYSE: AA
Bob Evans Farms	Nasdaq: BOBE
Container Store	NYSE: TCS
WEDNESDAY
API Technologies	Nasdaq: ATNY
CHC Group	Nasdaq: HELI
Emmis Communications	Nasdaq: EMMS
MSC Industrial Direct	NYSE: MSM
Synergy Resources	Nasdaq: SYRG
WD-40	Nasdaq: WDFC
THURSDAY
Barracuda Networks	Nasdaq: CUDA
Ceres	Nasdaq: CERE
E2open	Nasdaq: EOPN
Family Dollar	NYSE: FDO
Joe’s Jeans	Nasdaq: JOEZ
PriceSmart	Nasdaq: PSMT
VOXX Int’l	Nasdaq: VOXX
Zep	NYSE: ZEP
FRIDAY
Fastenal	Nasdaq: FAST
Wells Fargo	NYSE: WFC

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