Stock Market: Looking Forward to Next Week !

The stock market fell 2% this past week.

What the past week really demonstrated is how easy it is for a panic in oil markets to spill over into the rest of the financial markets and the economy. Crude oil jumped 13.7% to $97.99 a barrel for the week, the biggest weekly gain since the week ending Feb. 27, 2009. The panic was all about Libya and the Middle East and what might happen if Libyan oil was entirely shut in. 

The Dow  ended the week down  2.1% to  12130.  The S&P 500 dropped 1.7% to 1320, with the Nasdaq off 1.9% to 2781. The losses were the first in three weeks for the indexes and the largest since early November.

Yet, for all that, all three indexes remain up nearly 5% for the year, still a very good start.

Earnings reports: Costco, Joy Global, Heinz, Staples
While all 30 Dow companies and most of the S&P 500 companies have reported earnings, there are still some reports to watch. Here are some of the key reports due:

Monday: EIX, GGP and RST.

Tuesday: BMO, DPZ, and MDR.

Wednesday: Costco Wholesale, BJ and PETM.

Thursday: BUD, KR and WEN.

 Friday: ABR and HESAY.

The jobs report may be the week's big event 

The price of oil may be the most closely watched economic indicator next week. It will also color how jobs and other economic data that come next week is interpreted. 

The big report is obviously the Labor Department's on payroll employment and unemployment, due before financial markets open on Friday. The consensus estimate is for a gain of 179,000 and an unemployment rate of 9.1%.

Personal income, due Monday. 
Pending homes sales, due Monday. . 

Construction spending, due Tuesday. 
Institute for Supply Management Manufacturing Index for February, due Tuesday. 
Motor vehicle sales, due Tuesday. 

Institute for Supply Management's Non-Manufacturing Index, due Thursday. 

 
Bernanke speaks before twice Congress. Federal Reserve Chairman Ben Bernanke will testify Tuesday and Wednesday, a requirement under the 1978 Full Employment Act -- better known as the Humphrey-Hawkins Act, which mandates the twice-yearly reports from the central bank. Bernanke will emphasize the slack in the economy and defend the Fed's  monetary policy against charges that it's stoking inflationary fires.

The Fed's Beige Book report, due Wednesday. 

Jobless claims, due Thursday. 

Stock Market: Looking Forward to Next Week !

The Market will close Monday for Presidents Day.

For the past week, The S&P 500 and Dow hit fresh two years high, while the Nasdaq hit a three-year high and is 30 points away from its 2007 high. Overall it was a slow week , with energy stocks acting as the primary driver of this week’s gain.

Next week, it’s the last big week of earnings season,  here are the earning reports to watch for:

Tuesday’s key reports:  Home Depot, Wal-mart, Macy’s and Hewlett-Packard

Wednesday’s key reports: Chico’s FAS, Dollar Tree, Lowe’s

Thursday’s key reports: General Motors, Target and Salesforce.com

Friday’s key report: JC Penny

Housing dominates the economic reports

The Standard & Poor's/Case-Shiller Housing Index, due Tuesday, is likely to show a third straight month of falling prices in 20 U.S. markets.

Consumer Confidence Index, due Tuesday from The Conference Board. The index reached its highest level since March 2008 and has risen for five months. Nomura Securities sees the optimism to persist in February and beyond.

Existing-home sales, due Wednesday from the National Association of Realtors. The consensus estimate is for a seasonally adjusted rate of about 5.2 million units, down slightly from December. A big question is how much the horrible storms affected business. Gains in the California market, which accounts for 10% of total U.S. home sales, will be offset by declines in other states.

Durable-goods orders, due Thursday from the Commerce Department. December was a crummy month. Many economists see a rebound in January. The key will be aircraft orders.

New-home sales, due Thursday from the Commerce Department. This will probably come in at 320,000 to 330,000 units annualized. If there are gains, don't get too excited. New-home sales are running at a third or less of their levels of 2006.

Gross domestic product for the fourth quarter of 2010, first revision. Due Friday from the Commerce Department. This measures the total of goods and services running through the economy. Its revisions are as important as the initial report because the data about the economy are more complete. The initial estimate was that the economy expanded at a 3.2% rate. IHS Global Insight sees the growth unchanged. Nomura Securities sees it growing to 3.5%.

Reuters/University of Michigan Consumer Sentiment Index. Final estimate for February, due Friday.

Stock Market: Looking Forward to Next Week !

If Egypt's peaceful government change continues, stocks have a good chance to move higher. Earnings are due from Dell, Comcast, Deere and Nordstrom. But a big jump in the consumer price index could cause jitters.

In the meantime, here’s how things stand: The Dow ended the week with a 1.5% gain. The S&P 500 index added 1.4%, and the Nasdaq rose 1.45%. It was the 10^th weekly gain for the Dow in last weeks the ninth in the last 11 for the s&p 500 and the eighth in the last 11 for the Nasdaq.

A week of good earning ahead:

Monday: Masco (MAS), Walter Energy (WLT)

Tuesday: BHP Billiton,  DELL, FRT and CTL.

Wednesday: Comcast, Dean Foods, Deere, natural-gas producer DVN, data-storage manufacturer NTAP and graphics-chip maker NVDA.

Thursday: Oil-and-gas producer APA, Barrick Gold (ABX)and Nordstrom. 

Friday: Tire maker Bridgestone (BRDCF)and Campbell Soup (CPB).

The economy: Manufacturing, inflation and housing

The economic reports due next week include two important manufacturing indexes from the Federal Reserve banks of New York on Tuesday and Philadelphia and Thursday. Both indexes have been rising decently in the last year. The question is if the trend will continue. 

The inflation results will inflame the debate over the subject. The Labor Department issues its producer price index report on Wednesday and its consumer price index report on Thursday. The headline numbers for both should show jumps in food and energy costs. Some will blame the Fed's monetary policy. 

Housing starts and building permits for January will come out Wednesday. Expect both to show seasonally adjusted annual rates of 500,000 to 550,000. You should hope for lower starts so the excess supply of homes can get sopped up. Weather may depress starts. 

Building permits may drop. December permits were up 15% as builders in New York, New Jersey and Pennsylvania wanted to get permits before stricter building codes took effect. IHS Global Insight sees permits dropping 17% as a payback for December.

Stock Market: Looking Forward to Next Week !

The Dow finished higher every day this past week, ending the week at 12092, up 2.3% and at their higher level since June 2008. The S&P 500 , up 4 days out of 5, added 2.7% for the week to 1311, and the Nasdaq  ended the week up 3.1% to 2769.

In a word, amazing , given how many people believe the market is about to stage a major pullback.

Earning will drive the market

Next week is fat on earnings,  and that’s what the market will trade on, assuming Egype doesn’t spiral out of control. It’s fairly light on important economic reports. Here’s how the week shapes.

Monday: Humana(HUM), Imperal Sugar, HAS, SYY.

Tuesday: Toyota(TM), Belo(BLO) and Disney.

Wednesday: Coca-Cola, Allstate(ALL), and Cisco Systems(CSCO).

Thursday: Kraft Foods(KFT) and Cheesecake Factory(CAKE). 

Friday: Discovery Holdings (DISCA) and Pilgrim’s Pride(PPC).

There are some factors that are giving stocks a reason to move higher and should be on display next week. One is that consumers are gaining confidence in the economy and are increasingly willing to spend – to the benefit of  Walt Disney (DIS) and Polo Ralph Lauren(RL).

Another is that Industrial America is alive and Investing.

A third is that global growth means rising prices for commodities, to the benefit of such companies as Imperial Sugar (IPSU).

The down side of rising commodity prices is that others will face challenges. We’re talking Coca-Cola(KO), Molson Coors(TAP) and Penera Bread (PNRA).

 A Quick Week For the Economic Reports

The week following the report on payroll employment and unemployment is always light on market-moving events. 

The Federal Reserve's Consumer Credit report on Monday will measure whether consumers are willing to take on much debt. That will dovetail with the University of Michigan's first cut of consumer confidence in February.  That report comes out Friday. 

Fed Chairman Ben Bernanke will testify before the new House Budget Committee on Thursday. The Fed is not expected to change its tune on its policy orientation, as Bernanke indicated in his recent news conference. Indeed, the recent readings on the employment market have been somewhat ambiguous.