Ahead next week: Wal-Mart, Target, Dell . . . and Italy

The third-quarter earnings season ends this week with results from Wal-Mart, Home Depot and others. But as has happened so often recently, Europe will move markets, too. Can Italy form a new government?

By Charley Blaine Nov 11, 2011 10:52PM

Charley BlaineUpdated: 11:44 p.m. ET Sunday

These are exciting, scary and, admit it, exhausting times to be an investor.

It seems like every week, there's a crisis that generates lots of pronouncements that the world as we know it is a goner.

That's followed by a sense from the market that maybe a lot of people with money in a lot of places were, well, overreacting.

Article continues below.


And lastly, there's a thrilling whiff that the world would really muddle through all its crises.

You saw it this past week when the markets went up Monday and Tuesday and utterly fell apart on Wednesday. And then rebounded solidly on Thursday and nicely on Friday. Futures trading suggests a strong open Monday after Silvio Berlusconi resigned as prime minister of Italy Saturday and economist Mario Monti was asked to form a new government on Sunday.

You may see it again in the week ahead, as Monti moves on with his task in Italy, earnings from Wal-Mart (WMT), Target (TGT), Dell (DELL) and others, and reports on inflation, retail sales and housing starts.

If you haven't gotten used to all this drama by now, you'd best start. But before you throw up your hands and say, "It's insane!" look at the record.  

The market started to put in a bottom in early August. Admittedly it was very choppy, but the Standard & Poor's 500 Index ($INX) wouldn't fall below 1,100 for more than a day. A breakout came in October, and the major averages are now positive for the year.

The Dow Jones industrials ($INDU) and the S&P 500 are higher so far in November. The Nasdaq Composite Index ($COMPX) is flat.

The weekly reports on new jobless claims show weekly claims may drop below 400,000, despite nasty cuts in state and local government jobs. Manufacturing is perking along. Auto sales aren't bad.

So, maybe, for a while, things may not be as bad as everyone thinks. Put it another way: The markets may be crazy -- but crazy like a fox. The trendline is telling the story.

The stock market went up nicely through April. The summer lull hit (OK, it was more like a head slap), and the fall rally began.
If all goes well, maybe it will continue. Here are two things that need to go well.

Italy's new government has to perform strongly. The government that Mario Monti has been asked to form needs to have the strength and imagination to get its debt problems under control without sinking its economy -- continental Europe's third-largest and the eighth-largest in the world.

If the new government fails in this task, things could get tricky. That's  because much of the sovereign debt in Europe is held by banks. If the debt goes bad, credit markets could freeze up.

Congress has to come up with a debt-reduction plan over the next two weeks. It probably will take longer than that. So far, the supercommittee that is supposed to come up with a plan is deadlocked. Taxes, as usual, are the hangup.

On the Italian and U.S. issues, it's fair to be very skeptical. China's bond-rating agency is threatening another downgrade of U.S. debt. It's possible Moody's or Standard & Poor's could downgrade the U.S. as well.

What a downgrade would mean practically is a different question. Since S&P downgraded U.S. debt in August, interest rates have gone down.

Markets for the week



% chg.

YTD chg.
Dow Industrials




S&P 500








Russell 2000




Crude oil 




(per barrel)

U.S. Dollar Index 




10-yr. Treasury








The bond market was closed Friday for Veterans day.

The last big week of earnings season
Every earnings season has a specific pattern. It starts basically with Alcoa (AA) and ends with Wal-Mart. Wal-Mart reports before Tuesday's open. But it's not reporting in a vacuum.

The big question is whether the holiday shopping season will be weak or OK because of a lot of discounting. IHS Global Insight is projecting a 4.2% sales gain, down slightly from a year ago's 5% gain. Discounting has already begun by many retailers. Still, a gain is better than 2008 and 2009 when sales fell.

Many of this week's reports will shed light on what retailers really expect.

Here's the lineup of the important reports.

Monday: JC Penney (JCP), Lowe's (LOW) and Urban Outfitters (URBN). All should give us a sense of consumer confidence. Urban Outfitters has been struggling of late; October same-store sales fell 7%.

Tuesday: Dell, Home Depot (HD), Saks (SKS), Staples (SPLS), TJX Companies (TJX) and Wal-Mart. Dell has been looking stronger in recent months. Wal-Mart shares are up 14% this month and 9.8% for the year. Listen to how these companies view the holiday shopping season.

Wednesday: Abercrombie & Fitch (ANF), Applied Materials (AMAT), NetApp (NTAP) and Target. Abercrombie and Target will have a lot to say about the holiday season as well.

Thursday: Dollar Tree (DLTR), Gap (GPS), Salesforce.com (CRM), Marvell Technology (MRVL). Dollar Tree will have a sense of how the bargain-conscious shopper feels. Salesforce.com will be a good indicator of whether business expects to invest in technology.

Friday: Ann (ANN), formerly known as AnnTaylor. Its guidance will tell us a lot about affluent shoppers.

Ahead for the economy
It's a busy week in terms of economic reports. Here's a rundown.

Retail sales for October: due Tuesday from the Commerce Department. Look for a small gain for sales overall and minus auto sales. Lower fuel costs will pull sales gains lower.

Producer Price Index for October
: due Tuesday from the Labor Department. Look for a decline because of falling energy prices. (Look for a gain in November because of higher energy prices.)

Empire Manufacturing Index, due Tuesday from the Federal Reserve Bank of New York and the Philadelphia Manufacturing Index, due Thursday from the Federal Reserve Bank of Philadelphia. Both should show some improvement from lows this summer. But Nomura Securities says both reports will reflect business wariness about the near-term future.

Consumer Price Index: due Wednesday from the Labor Department. Expect little change. Rising food and housing costs (mostly higher rents on apartments) will be offset by lower prices for autos, energy and apparel.

Housing starts: due Thursday from the Commerce Department. Look for a small decline, mostly because starts moved higher as people replaced homes damaged in this year's hurricanes and tornadoes.

Initial jobless claims: due Thursday from the Labor Department. This past week showed claims at a seasonally adjusted 390,000. But revisions after an initial reading tend to boost claims. If the revision this week is under 400,000, that's good news.

Leading economic indicators for October: due Friday from The Conference Board. Look for a gain because of slightly higher interest rates, a longer week and gains in the S&P 500. The index rose 10.8% in October.
Nov 12, 2011 3:22AM
Economics 101-Nerd-If we want to fix our Nation , we should simply use the formula that is proven to work. In 1993 we had a skyrocketing debt and we were in a mediocre recession, Clinton enacted the Omnibus Debt Reconciliation Act, this legislation increased taxes on the 1.2% wealthiest who had prospered disproportionately in the 80's from the reagan tax cuts, it gave tax cuts to 15 million low income families and cut taxes for over 90% of all small businesses, the bill also included a deficit reduction plan that called for mandatory spending reductions and a mandate for a balanced budget. This single bill immediately curbed the skyrocketing debt and stimulated our economy creating 22.7 million jobs in 8 years, the Republican's called this bill a job killer and not one voted for it. The bill balanced our budget in four years and gave us 8 straight years of economic growth. Today the Republican's will say the same thing, but we know from history that their wrong, the fix is simple, it worked before and it will work again.Thumbs up
Nov 12, 2011 7:15AM
Easy to predict what´s ahead: Italy will replace the PM, as Greece did, and we will have a releief rally. Then after a few days we get the same crisis under new management... that´s all
Nov 12, 2011 8:40PM

A very sound indication on how our American economy is doing is to track corporate trends and investments.


The dire economic conditions of the world have undoubtedly hit hard at home and have had a devastating effect on many of our iconic businesses and investors everywhere seem to be stumbling around in the dark not knowing where to invest their money.


It’s been recently alleged that the dire economic conditions have hit one iconic business, Hotel 6, exceptionally hard; in fact, it’s been assumed that this was the reason they will no longer be able to “keep the lights on for you”; and could also be the reason why many investors are stumbling around in the dark.

Nov 12, 2011 1:02AM

I agree with this article that we might just muddle through all this. I am still just looking preserve capital here but their is hope. We need a few things to happen.


1. No more wars   These last two cost us 8-9 trillion dollars and counting (when you add in all the rebuilding and use of subcontractors )    Unless someone attacks Pearl Harbor we have to stay home for a decade   and terrorists are just criminals we track down one at a time


2. The Bush era tax cuts where nice while they lasted but they have to end


3. We need to keep domestic spending at the 2009 levels until 2019


4. We should focus on rebuilding Infrastructure ( especially energy dependancy lowering infrastructure)   at the federal Level and education at the state level as best we can honestly must be an extra 500 billion floating around somewhere


And we should appreciate that austerity for us will be alot nicer than it is in Greece



Nov 14, 2011 7:10AM
This may already have been said but The market is being manipulated in order for a few to make money. The author makes a living by trying to explain the market swings while I'm sure he doesn't really understand the market. If he did understand it he would be making a killing in the market instead of writing about it. He's second goal, in my opinion, is to keep everyone in the market so others can make money off your losses. Just follow the money!
Nov 13, 2011 8:11PM
well-off people already living above the world-wide standard of living due to debt do not need SS payments

Hot Active, there you go again changing the rules to steal from the well prepared to subsidize the ill prepared. Social Insurance is a promise of compensation for specific potential future losses of wage income in exchange for a current periodic payment.  If you retire you have no wage income. Socialism is to each according to his needs from each according to his ability.


Social Security is an insurance system promising to pay a specific potential return for a current contribution. Nowhere in the sales literature were contributors told their future specific returns would be reduce based on their ability to invest and save to accumulate wealth. If that were put into the literature then I and millions of other Boomers would have voted the system out of existence long ago.  How well someone prepares for their retirement should not determine what they get from the system. I know plenty of peers that have wasted their life time earnings on fancy cars, multiple marriages, failed businesses and child support. That is not my problem, it is their problem.  I will get my promised Social Security returns or I will not fund or support local, state and federal governments.

Nov 13, 2011 9:24PM
H.R. 1148: Stop Trading on Congressional Knowledge Act, 112th Congress: 2011-2012, To prohibit commodities and securities trading based on nonpublic information relating to Congress, to require additional reporting by Members and employees of Congress of securities transactions, and for other purposes. Sponsor: Rep. Timothy Walz [D-MN1], Status: This bill is in the first step in the legislative process. Explanation: Introduced bills and resolutions first go to committees that deliberate, investigate, and revise them before they go to general debate. The majority of bills and resolutions never make it out of committee. [Last Updated: Nov 5, 2011 6:13AM]
Sarcastic Wow, a bill to prohibit Congressional members from trading on insider information?
Nov 12, 2011 12:06PM

Max and Jeremy

Super , Super Posts.The possible solutions you suggest are realistic, viable and doable. The opposition to these potential remedies is 100% political. Simply put, we have to get rid of the career politicians in both parties but notably republicans , who from day 1 made it their agenda to oppose everything and anything that might make the democrats look like problem solvers of the mess the repulicans created.

Nov 12, 2011 10:42AM
China’s Dagong Global Credit Rating Co. may cut the U.S.’s sovereign rating for the second time since August if the world’s biggest economy conducts more large- scale asset purchases. Dagong, based in Beijing, lowered the U.S. sovereign rating one level to A on Aug. 3, on par with Russia and South Africa, after saying America’s decision to raise the debt ceiling will precipitate a national crisis. Investors have been speculating the U.S. will conduct a third-round of quantitative easing, or QE3, to boost an economy hurt by job losses
Hot Gee, what would happen if the interest rate on US debt started going up from 2-3% to 5-6%? Existing US Treasuries prices would plummet as the US sovereign debt bubble would burst. The stock market would fall as everyone desiring fixed income would buy CDs and Treasuries at 6% or better and the US would have to spend a large portion of taxes of debt interest.  The US is following the ill conceived ways of the EU.  Which is worse 6-7% interest rates, 4-5% inflation rates or 8-9% unemployment? Greece has all three that are higher!
Nov 12, 2011 4:16AM

Max, you're right on.


The republicans are all for big large corporations.  They think the world revolves around them.  When many businesses were and still somewhat are the majority of business in the US-- I believe small business employ about 1/2 of non-farm workers and represent 99.7% of employer firms from 2007 US department of commerce and 2003 bureau of labor statistics. 


We need to stimulate smaller businesses, more competition provides more jobs (more wages and earnings opportunities for consumers), and more products and services (provides more quantity of goods provided lowering prices and providing more options).  Unfortunately, the many of the republicans are all bought and sold by huge corporations-- instead we get consolidation after consolidation in every industry-- we have banks too big to fail, cell phone companies consolidating charging huge prices reeking in huge profit margins, box stores especially wally world, all getting monopsony powers.


  And to add insult to injury, most of these large corporate monopsonies and oligopolies all engage in "globalization" or what is really exploitation of labors in foreign lands either to manufacture their stuff and/or service their stuff (call centers).  All going to decrease competition which makes prices higher, fewer options, lower wages with fewer jobs, and a spiral that keeps feeding on itself.  Until there is no middle class or consumer spending.  All the wealth consolidates into a few hands, and the rest are stuck at slave wages, making only enough money to get food, but forego living expenses like rent, utilities, and other bills (transportation, recreation, communication, etc). 


Talk about spread the wealth.  All of it has been consolidated into a very few hands.  This is not sustainable.  The result will be stagnation, massive bankruptcies of the "too big to fail" business and banks, potential starvation, and civil war.

Nov 11, 2011 11:42PM
And then the very last word had to be...........Italy.
Nov 13, 2011 8:35PM

Re-TOG Quote:

And the majority of people posting here are Doom and Gloomers mantra....Maybe not some here today....But the BIG majority most days.


My Comment

I would agree Re-TOG. One of the better days where there has been some excellent discussion. We may not agree with each other, but most everyone today has been civil when posting. I for one, really appreciate the civility exhibited today. 

Nov 13, 2011 2:37PM
Look for the Greed in oil speculation to continue with prices being pushed well over $100 a barrel with no basic fundamentals to support them given the current state of our economy. If prices continue to rise, any recovery will be halted as comsumers will once again cut back on spending which drives the economy. There will be many poor people going cold this winter because of these thugs. They should be proud.
Nov 13, 2011 7:01PM

Active Quote:

well-off people already living above the world-wide standard of living due to debt do not need SS payments .. they want them but don't need them. the situation is drastic and, if you are not a "math person" almost beyond comprehension due to the size of the debt, the time value of money (inflation) and the demographics (declining population/workers with increasing retirees all wanting SS).

My Comment:

Can’t agree without a bit of discussion. My Mom Passed in September at the age of 95. My Dad passed away in 2004 at the age of 88. My Father-in-law passed away in 1997 at the age of 92. My Mother-in-law is 98 years of age, and I’m sure in her present condition, she will out live me and my wife. Of the 5 children of these two couples, four are living and all are on SS. For obvious reasons (their life span), my parents used up their savings (in 2007). For two years, I supported by Mom while she was in a Nursing home by paying what her SS income and Teachers pension could not cover. In 2009, concerned about the rate of my savings withdrawal, I made application to Medicaid and moved my Mom to where I live and the Nursing Home had a Medicaid bed. Mom’s pension and Teachers pension paid about 1/3 of her total monthly cost, the rest being paid by Medicaid. As you say, the math is staggering, and as a retired mathematician, know its complicated when human needs are entered into the equations.

What is happening now, is not only what you mentioned, but that we now have, in many cases, two generations drawing SS and one those generations, in many cases, drawing Medicaid & SS. Your proposal on means testing to withdraw SS can be a easy decision (Warren Buffett for example). However, if the decision to cut-off a retired persons SS causes an increase in their withdrawal from savings, they could deplete those accounts sooner and be placed on Medicaid and, and not drawing SS. What I’m saying, any decision today to withdraw SS from individuals must and has to take into account how the Government would take care of persons who deplete their savings quicker than occurs today. For these reasons, I'm against withdrawing SS from anyone who qualifies unless done very, very, carefully.

Nov 13, 2011 4:30PM

Actice..The 'Balance the Budget" part was kind of  Tongue out and Sarcastic


But there is enough PORK in the Military Industrial Complex and the NASA Space program.

To fund a multitude of other programs, much more beneficial to the American Citizens.

AND the rest could be used towards paying down the debt.


I didn't realize there are 10,000 "Boomers" retiring per day and I know damn well they aren't going to be boomers retiring in 15-20 yrs....Different group of people and Generation.

Kind of wonder how many "Boomers" are dying everyday at this time?? I know of a few I hear about or know personally.

I'm aware of illegals paying into the system, but believe there is a "good chance" they are taking it out "somewhere else."  


I agree we have to change entitlements and how they are disbursed, BUT THERE IS A HUGE AMOUNT OF FRAUD IN THE SYSTEM, it might be as high as 25-35%, they really don't even have a clue.........THAT HAS TO BE ADDRESSED "FIRST"


As far as the "means testing" you might be or sounded like you might be proposing?

What would be the reason to work,save or invest? Only to use it all up and go to the "poorhouse" anyway....That part of what you wrote really didn't make any sense at all.

It is nice to be positive, but better to tell the truth. The market is in a downtrend. Check out the difference in up and down volumn. When you say words like choppy and gradually stable that is misleading. In addition, oil is up from the low $80s per barrel in early Oct. to almost $100 now. That my friend is STRONG INFLATION. I thought you were better than the government. Now, you have raised doubts. JFL
Nov 12, 2011 12:46AM
Let´s all pretend that changing governments will fix all the problems of the world...as if rising financial costs and credit risk deterioration could be contained with political renewal... 
Nov 13, 2011 8:16PM

Consider this. I do pay back a portion of my SS to the trust, as do many others drawing SS. Today it contributes about 3% of the total SS revenue collected each year. Have no problem with this, although in my circumstances, I count on SS to reduce my withdrawal from my savings and investment accounts (I do my own retirement planning, don’t trust other peoples math!!:<). The taxes I pay on my investments and income goes to the Treasury. Suppose all of my taxes, unchanged as they apply today, went to the SS trust instead of the Treasury. Suppose this was true for all persons drawing social security. If this came to a total of X amount taxes collected, all of it would be revenue used by the trust to assist in paying benefits each year . Knowing the amount the treasury would not receive provides an amount to be cut from government spending. I like this, because all of the taxes collected from those drawing SS contributes to debt reduction, or at least, not increasing the debt. Just a suggestion.

Nov 11, 2011 11:26PM

Have all the incompetent and thieving banks and any and all other businesses go bankrupt. New competent and trustworthy ones will emerge and replace them. THEY ALWAYS DO! Simple business and economics 101! For every failure, there's a success to take it's place.


Throw all rich criminals in jail or out of the country and shut down and ban Fraud Street forever. WE WILL BE MUCH BETTER OFF AND MORE SUCCESSFUL AS A COUNTRY IN THE LONG RUN!


Money is no object when it comes to creating a rich and successful country! READ MY LIPS..... There is no such thing as INFLATION or DEFLATION when speaking of monetary policy. You can keep printing all the money to your heart's content and always keep it at the SAME value. INFLATION AND DEFLATION ARE CREATED AND CAUSED BY HUMAN MANIPULATION!  You can even print a NEW currency to replace the old currency, rendering that old currency worthless. Again, INFLATION or DEFLATION don't matter!  DEFICITS AND BORROWING FROM OTHER COUNTRIES DOES MATTER! Simple economics 101!


This country is doomed unless I or someone like me becomes President to save this backward and upside down society of ignorant fools.

Nov 12, 2011 2:26PM

Pretty hard not to agree with the majority of your spending cuts Havasu...


But with the amount that many Corporations pay now......How can you give a tax cut to a company that is paying zero as it is....Would that not be a subsidy at that point.??


Yeah the Space program is giving us some pretty pictures...For millions of dollars per.

Multi Million dollar Farm Corporations, brag how they keep our food cost down,while shipping tons overseas. 

And how many "Children have been left behind" by the Fed. Dept of Education??

And the the Dept. of "Defense."...The Military Industrial Complex; We have enough weapons to destroy the Earth 3-times over, and we need more?


We occupy and secretly control countries in the name of "Defense." My azz, a few CIA operatives and a few million dollars could have accomplished what two Major wars in the Middle East have accomplished...And we wouldn't be funneling Billions of dollars to Foreign Govts. that will probably be considered "Our Enemies" within 20 years? 

The worst being that we are paying for it in the blood of our young men and women also.


Sorry, I cannot"relate objectively"to Soc.Sec and Medicare, because I'm retired and a recipient...

But if we only took the "fraud" out of those programs; There would be huge savings.

And with the rest...Taking the "pork" out of all programs, would probably balance the budgets.???

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