What's ahead for the stock market
It's a monster week for earnings, with Apple, Intel, Citigroup, Wells Fargo, Chipotle Grill and Goldman Sachs among companies set to report. Data on leading indicators and existing-home sales also are due.
You could see a lot of tension in the markets this past week. They emerged from concerns about the economy, the budget battles in Washington, inflation pressures, conflict in the Middle East, worries about how fast Japan could recover from the March 11 earthquake and tsunami.One day, the market would open with a thrilling flourish and then fade. Or panic would set in, with the averages sinking before slowly working their way back.
You could see the tension in the market's reactions to earnings from the likes of JPMorgan Chase (JPM) and Google (GOOG). Both reported strong profit gains -- but with blemishes. JPMorgan's mortgage business is more of a mess than the banking giant would like. Google is investing heavily in the future even if the payoff isn't clear nor near. JPMorgan was off 4.2% for the week. Google tumbled 8.2%.
These are important tensions that will play a big role in how markets perform in what will be a short week. There are important economic reports due, including housing starts, existing-home sales and leading economic indicators. But they will be drowned out by earnings results from Citigroup (C), Wells Fargo (WFC), Goldman Sachs (GS), Intel (INTC), Apple (AAPL), AT&T (T), General Electric (GE) and Verizon Communications (VZ). Markets will close for Good Friday.
The week past was a struggle. The Dow Jones Industrial Average ($INDU) finished the week off 0.3% with the Standard & Poor's 500 Index ($INX) and the Nasdaq Composite Index ($COMPX) down 0.6%.
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The dollar dropped on Thursday to October 2009 levels as traders bet they could force the Federal Reserve to raise interest rates before the central bank wants to. The U.S. Dollar Index is off 5.4% this year and off 15.2% from its 2010 peak at the worst of the European debt crisis.
There was weakness in energy, gold, steel, semiconductor and financial stocks.
But not every index was lower. The Dow Jones Transportation Average ($DJT), whose components are very vulnerable to energy prices, finished the week with a 1.1% gain. Even if American Airlines parent AMR (AMR) and JetBlue Airways (JBLU) were down 2.1% and 5.5%, respectively.
11 Dow stocks ready to report -- and Apple, too
The coming week -- and the two weeks after that -- will be dominated by earnings first and the economy second. Here's what to look for.
Monday: Key earnings are due from Citigroup, Eli Lilly (LLY), Gannett (GCI), Halliburton (HAL), Steel Dynamics (STLD), TD Ameritrade (AMTD). Citigroup will get the most scrutiny because it is one of the world's largest banks, and it's trying to shed the government's ownership position. But watch Halliburton. The stock fell 2.7% this past week and is off 6.1% this month. Why raise this? Energy shares appear to have topped. When oil prices broke in 2008, energy stocks were already falling.
Tuesday: Three Dow stocks will report: Intel, IBM (IBM) and Johnson & Johnson (JNJ). Plus, railroad giant CSX (CSX), Goldman Sachs, coal producer Peabody Energy (BTU) and Yahoo (YHOO). With Intel and IBM, watch for comments about sales in Japan and their feel for the economy.
Much attention will be paid to Goldman Sachs, especially after reports suggested more evidence the investment house bet against its own clients in the lead-up to the housing collapse. Peabody Energy and CSX should have comments about the health of all-important Asian markets.
| Markets for the week | ||||||||||||
| 4/15/2011 | 4/8/2011 | % chg. | YTD chg. | |||||||||
| Dow industrials | 12,341.83 | 12,380.05 | -0.31% | 6.60% | ||||||||
| S&P 500 | 1,319.68 | 1,328.17 | -0.64% | 4.93% | ||||||||
| Nasdaq | 2,764.65 | 2,780.42 | -0.57% | 4.21% | ||||||||
| Russell 2000 | 834.98 | 840.89 | -0.70% | 6.55% | ||||||||
| Crude oil | $109.66 | $112.79 | -2.78% | 20.00% | ||||||||
| (per barrel) | ||||||||||||
| U.S. Dollar Index | 75.03 | 75.27 | -0.33% | -5.37% | ||||||||
| 10-yr. Treasury | 3.41% | 3.57% | -4.48% | 3.18% | ||||||||
| Gold | $1,486.00 | $1,474.10 | 0.81% | 4.54% | ||||||||
| (per troy ounce) | ||||||||||||
Wednesday: Three Dow components report: American Express (AXP), AT&T and United Technologies (UTX). But Apple, which reports after Wednesday's close, will get the attention. The company is expected to earn $5.35 a share, up 61% from a year ago. Revenue may jump as much as 72% to $23.3 billion. But there are questions: How much is the Japanese earthquake affecting its suppliers? How about Cirrus Logic's problem with its audio chip? And what is Steve Jobs' status?
Also reporting: Chipotle Grill (CMG), whose shares are up 34% this year alone, Wells Fargo, Union Pacific (UNP), Qualcomm (QCOM) and Yum Brands (YUM).
Thursday: Five Dow components: DuPont (DD), General Electric, McDonald's (MCD), Travelers Companies (TRV) and Verizon Communications (VZ). With GE, the question is whether new businesses are emerging that will offset the problems in its financial operations. Watch how McDonald's discusses whether gasoline prices are hurting domestic restaurant counts. With Verizon, it's easy: How are its iPhone sales doing?
Also reporting: Diamond Offshore (DO) and Schlumberger (SLB), both energy stalwarts, and Southwest Airlines (LUV). Southwest officials will be asked to discuss the costs of doing inspections on older Boeing 737 planes.
The economic reports: An important week for housing
Only a few weeks ago, there was a great deal of optimism about first-quarter U.S. growth. That is getting scaled back in a hurry because of the impact of higher energy and food costs on consumer spending, bad winter weather and weaker inventories.
There will definitely be more debate over whether the Fed should stop buying in Treasury securities, as well as intensifying debate about the House budget bill and the federal debt ceiling. Friday's Consumer Price Index report suggested that aside from fuel and food prices, inflation is not spreading throughout the consumer economy.
Moreover, to get real inflation, you need a tight job market. That's not the case, not with 8.8% unemployment and a broken housing market. This week's reports will confirm again the weakness of real estate.
National Association of Home Builders Sentiment Index, due Monday. Look for the index to be static at around 17 because of tighter mortgage standards coming and the expectation of lower home prices.
Housing starts and building permits, due Tuesday from the Commerce Department.
Look for a bit of a jump to around 520,000 units on an annualized basis. That will be mostly due to better weather. But don't get too excited. These are still record low numbers.
Existing-home sales, due Wednesday from the National Association of Realtors. These should come in at an annualized 4.9 million units. Watch to see how many homes are short sales or bought by investors.
New and continuing jobless claims, due Thursday from the Labor Department. Watch to see if new jobless claims drop back below 400,000. A jump this past week surprised traders.
Philadelphia Federal Reserve Bank Manufacturing Index, due Tuesday. This should show a gain. But there may be some discussion about supply disruptions from Japan.
Leading Economic Indicators for March, due Thursday from The Conference Board. Nomura Securities sees a 0.5% gain from February, thanks in part to the continuing strength in manufacturing. But depressed consumer confidence levels in March may dampen the results.
How is it that any reform on Medicare and Medicaid has to come at the expense of Senior Citizens.
How about cutting benefits for the "Baby Factories" that have multiple kids by multiple daddies because they know the Goverment will take care of them and the babies regardless of how many they have. This is not too mention the illegals and assistance to them.
Take from people that help build the system to give to those who will never pay a dime into but get all the benefits. No wonder everybody wants to run from where they are to the United States!!
Whats "ahead" is more criminal behavior that is rewarded instead of punished by the head of the Crime Syndicate, the U.S. Government and their crime boss big ben bernake. This is the same routine day and week in and out.
Pretty convenient to be able to make laws to protect yourself from whatever you want to do or just exempt yourself from what you don't want to pertain to you but impose it on everyone else. Life of the DOUBLE STANDARD GOVERMENT!!Weda Sheeple....
A house is a home. Do not consider a house an investment. It depreciates, ages, requires high repair, has high real etstate taxes, etc,.. It should be considered like a car... In short it wear out...
Besides, in the market there is an old saying.... "Do not try to catch a falling dagger"... This applies to housing as well. Demographics are working against housing. About the only area, I would consider in RENTAL property of 8 units or more... Or a REIT of that kind.
If your buying a home, that great, but skip the investment part...
Active....
I have no problem with 'Planned Parenthood"...as long as government is not paying for it. I dont' think government should pay for NPR either... Or the endowment for the arts or any causes left or right that really are not a funtion of government.
Glad your common sense took over from your extreme far left views... Personal responsiblity, LIBERTY, the right to fail, and FISCAL responsibility...
I don't know if we are paying too much or too little in taxes, but the federal government is spending 22% of GDP while revenues are 15% of GDP. Something's gotta give.
Republicans think they can solve our deficit problem by cutting social programs, but they refuse to increase revenues. Democrats think they can solve our deficit problem through smaller spending cuts and tax increases. They are both half right.
If we expect to maintain our lifestyle ten years from now, we will need to get spending back down to the Clinton era level of 18% of GDP and also increase revenues to slightly more than 18% of GDP. You don't have to be a finance major to understand how compound interest works, and that if we don't do something very soon, the interest payments on our national debt will have the same effect on the economy that a tsunami has on a coastal city.
the system is broken.
I guess Active this is the only thing we can agree on.
I guess the Baby Factories and Illegal's are safe, I understand now why you keep avoiding that part of this discussion. The Goverment you are so fond of does the same. And in what way does Medicaid go about recouping any money from them? I am sure Medicaid pays out a lot more for a single mother with multiple children than one SENIOR CITIZEN in a nursing home.
Pay into the Goverment {SYSTEM} and get NOTHING or pay nothing and get EVERTHING.
But you have an insurance for those who get NOTHING while our tax dollars pay for those who PAY NOTHING and get EVERYTHING!
Does that pretty much sum it up? Don't worry about being gentle, I can handle it!!
the conservatives will keep pushing until there is no longer any planned parenthood counseling or medicaid abortion assistance even in cases of rape, incest or the mother's life is in danger. they will get their manic right to life agenda passed and then continue to wonder why there are so many welfare babies.
the key is additional early-childhood education and the ready availability of birth-control assistance as opposed to your strategy of starving them to death by taking away assistance.
as PP&M sang, a whole lot of nothing makes a man nothing but mean.
Headline at Daily Finance - Super Rich See Federal Taxes Drop
"Super Rich See Federal Taxes Drop Dramatically
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992."
Hmmm... So I guess to the uber-rich, that 17% average tax rate' is their "fair share" of taxes?
Yes, keep feeding the uber-rich with tax breaks, perks, loopholes, deeply-discounted dividend tax rates and other gimmies. Because they've done / are doing / will do so much more for Joe Schmo in the future. And their interests are altruistic, not totally hedonistic. We've virtually nothing in common with the uber-rich and they're not concerned / interested in our well-being.
As long as we continue to feed them to excess, they'll take it, paying less than most of us who work hard for a living. And they'll feed like-minded candidates. I'm a huge fan of capitalism, but no fan of our current system that coddles American uber-rich royalty. It's a very exclusive club and you'll not make the cut. For us who insist on being their toadies, good luck on that.
Our political system is gamed by the uber-rich to keep the working masses bickering over basically BS issues. All the while, they sit on their bums / continue to amass more wealth to buy more pols. And some here believe wealth distribution is just a rightie / leftie thing? Last 10 years has just fed them more / made them fatter, while we've bickered among ourselves.
We need to revamp the Tax Code now, not next year, not the next Administration. Talk to your pols / make your will known, or prepare to continue with more of the same. Who'd want a flat / "fair" / VAT / non-progressive tax more than Steve Forbes? Feed your local Billionaire? Just keep scape-goating the working poor, not the ubers. That'll help make it all better / they like that.
39.6%? Please! That's for us little people. Job creators, my azz! Let the down thumbs begin.
Have a good weekend.
Our 'leaders' learned nothing two years ago. We're headed down again thanks to oil commodities.
Democrats think they can solve our deficit problem through smaller spending cuts and tax increases.
wow indy, you been living in a cave or a cabin in remote montana? maybe in a coma? obama just outlined his (and his party's) support for the bi-partisan debt commission recommendations for MASSIVE entitlement cuts, MASSIVE military cuts and REASONABLE tax rates with a simplified system.
your perceptions are quite passe.
sorry to hear of your family medical problems taz. let me get this right though, you expect the rest of us taxpayers to pay for your fathers medical care when he has the assets and resources to pay for that care himself? wouldn't that be a de facto socialist system?
also, i mean this in a gentle fashion, but how do feel about healthcare penalties against those who smoke, eat fast food or do not exercise regularly? as you answer, keep in mind that we are in debt about $70 trillion now as a country.
i guess i am saying i see complaining, but no viable alternative solution proposed.
dun- "the tea party and gop should go after the leftwing democratic socialist and ask them this............if you wish to have free or subsidized healthcare or social benefit's then you must do one thing and that is to give up 'ILLEGAL AMNESTY', SANCTUARY CITIES; BIRTH RIGHT'S TO ILLEGAL ANCHORS; threaten these liberal's with sever penalties even doing away with transfer of federal funds to states/ cities! billion's upon billion's saved/ legal citizens then can get the medical help they require as beds are opened for intensive care and surgery........STOP THE STUPIDITY!"
Leftwing? Uh, no. Might want to drop that rock and walk away from your glass house, bud. All pols in control, lefties / indies / righties over the last 30+ years (Reagan granted "amnesty" to these folks in the 80s) have ignored our porous borders. The righties did so because they wanted the cheap labor and the lefties did so for the potential voter block. How convenient!
Thanks Muzik, Feelings not hurt, you took a jab and I jabbed back. I should not have went there. That's how things get out of hand.
You are right, You don't know me and like wise I don't know you. If you did you may understand my point of view or maybe not. Like wise on my end.
Your opinion of me as I told Active is what it is and I am not asking you to change it. If you have never sat in a Medicaid office you won't understand. I hope I never have to again.
Have a good day or at least the best you can!!
in my new libertarian mind-set i don't feel the need to argue for keeping charitable deductions (just don't give then) or for a flat tax (just don't earn the income then) or about charities moaning about their paperwork requirements when a gift is sold for less than FMV (just don't accept the gift).
so, as far as help from others, i don't need it as any mental crackup i am experiencing from tax season and the infernal revenue service is something i chose to bring upon myself.
ahhhh, personal responsibility, i like it! breathe deeply now ....................... 
mirage i guess you haven't heard but i have gone independent-moderate-libertarian now. the libertarians tell me that the solution to solve your aversion to paying taxes as set by the government is to simply re-structure your financial life so that you pay no taxes.
so, sell your business, make no income, employee no-one, make your own soap and beer, learn to sew and ride a bike, and you will not have to pay any taxes whatsoever!
i am so glad to help you out of that tax conundrum! now we can much more meaningful financial discussions in the future!
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The S&P entered today's session with a week-to-date gain of 1.5% as investors expected reassuring words from today's Federal Open Market Committee Statement.
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