Although last Tuesday marked the official start of fourth-quarter earnings season, with Alcoa (AA) kicking off the fun as usual, the true focus was on the Consumer Electronics Show. This time around, the highlights included ultra-high-definition television, organic light-emitting diode (OLED) TVs and 3-D printing. Also notable were chip announcements from the likes of Intel (INTC), Qualcomm (QCOM) and ARM Holdings (ARMH), as well as some interesting display technologies.
On the earnings and pre-earnings front, Alcoa met analyst expectations and issued a cautiously optimistic view on the coming year. Management sees aluminum consumption rising 7% in 2013, up slightly from the 6% climb last year. Long-term, the company is still calling for aluminum demand to double between 2010 and 2020. This is the latest data point that supports the idea of an improving industrial landscape, and it also backs my recent call to get behind shares of Freeport-McMoRan (FCX) and laser-optics company II-VI (IIVI).
We were also reminded of disappointing holiday sales when Tiffany (TIF) reported flat comparable-store sales, in all regions save for China, over the two-month holiday selling season. That news hit the shares, which exited last week down 4.7% from Wednesday's high point.
On the other hand, last Friday Best Buy (BBY) reversed course, climbing 12%, thanks to fiscal third-quarter results that were arguably better than expected. Total revenue fell only 0.4%, with U.S. sales down 1.2% and international sales up 2.2%. The real surprise, however, was the 10% jump in online sales to $1.1 billion. Despite that short-term bump in the stock price, I continue to see a challenging competitive environment ahead for Best Buy courtesy of Wal-Mart (WMT), Target (TGT) and, of course, Amazon (AMZN).
That sets the stage for the Census Bureau's December retail-sales data, due for release Tuesday. As we saw in November, the continued slide in gas prices will have a negative impact on the gas-station category, but weak spending overall is also expected to take its toll. All in all, the consensus expectation is for December retail sales to rise 0.2% in aggregate and 0.3% excluding autos.
Hopefully you've rested up over the last few weeks, because the data flow is going to pick up dramatically over the next five days, both on the economic and earnings fronts. While some know this, it bears stating: Earnings reports in January can be the most crucial and insightful of the year, largely because of the attendant business outlooks and competitive guidance for the coming year. We do normally dissect, compare and contrast earnings-season releases from a company's partners, customers, suppliers and competitors -- but it's far more intense this time of year. In other words, buckle up!
Get your protective eyewear in place, as well, as we get ready to hear from a number of financial firms over the next few days. Wells Fargo (WFC) tipped us off, to some degree, but a number of the big banks and financial companies are set to more or less take center stage this week -- among them, the Bank of New York (BK), Goldman Sachs (GS), Bank of America (BAC) and JPMorgan Chase (JPM).
We're also set to hear from a few aerospace firms, such as Rockwell Collins (COL). This should be interesting, given recent developments regarding Boeing's (BA) 787 Dreamliner, and in light of the still-lingering prospect of fiscal-cliff-related sequestration. On the industrial front, a number of economic data points are due this week (see below), capped off by scheduled earnings reports from both General Electric (GE) and Parker Hannifin (PH).
Here's a more granular look at key data hitting the tape this week:
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Economic Agenda
Tuesday, Jan. 15:
- Retail Sales (December)
- Producer Price Index (December)
- Empire Manufacturing Index (January)
- Business Inventories (November)
Wednesday, Jan. 16
- Mortgage Bankers Association (MBA) Mortgage Index (Weekly)
- Consumer Price Index (December)
- Industrial Production & Capacity Utilization (December)
- National Association of Home Builders (NAHB) Housing Market Index (January)
- Federal Reserve Beige Book (January)
Thursday, Jan. 17
- Initial and Continuing Jobless Claims (Weekly)
- Housing Starts and Building Permits (December)
- Philadelphia Fed Index (January)
Friday, Jan. 18
- Michigan Sentiment Index (January)
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Corporate Earnings Agenda
Monday, Jan. 14
Tuesday, Jan. 15
Wednesday, Jan. 16
- Bank of New York
- Comerica (CMA)
- eBay (EBAY)
- Goldman Sachs
- JPMorgan
- Kinder Morgan (KMI)
- U.S. Bancorp (USB)
Thursday, Jan. 17
- ASML Holding (ASML)
- American Express (AXP)
- Bank of America
- BB&T (BBT)
- Citigroup (C)
- Capital One (COF)
- Fastenal (FAST)
- Fifth Third Bancorp (FITB)
- Intel (INTC)
- PNC Financial (PNC)
- Xilinx (XLNX)
Friday, Jan. 18
