The Week Ahead: Macro Worries Hang in the Air

 | Feb 03, 2013 | 5:00 PM EST  | Comments
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Last week was an extremely busy one, with quarterly results out from a few hundred companies, and the release of an armful of global economic data.

On the economic front, the takeaway from all that data was that the global situation has continued to improve, but that concerns remain regarding the U.S. Those domestic concerns were highlighted in Friday's January employment report, which revealed that 157,000 nonfarm jobs were added and the unemployment rate ticked up to 7.9%. Sifting below the headline number, we learned that prior monthly numbers were revised higher, in part due to the monthly recalculation of seasonal factors as well as annual re-benchmarking of the data. Despite those upward revisions, the trend of declining job creation vs. the prior month remained -- 157,000 jobs in January, down from 196,000 jobs in December, which was down from 247,000 jobs in November. 

On the bright side, it seems the overhang from the "fiscal cliff" has been lifted. While we will eventually trade that for uncertainty regarding the debt ceiling and sequestration-related spending cuts, January manufacturing data painted an improving picture in the U.S. -- but these numbers also showed we're still not out of the woods yet. Yes, durable orders improved in December. Further, the Institute for Supply Management Manufacturing Index rose to 53.1 for January, with its order components climbing to 53.3 from December's 49.7. However, the order-backlog component of the ISM index fell to a 10-month low in January, which means orders will need to further improve in order for production growth to be maintained.

One area of strength continues to be the domestic automotive market -- which, as we learned Friday, continued its shipment growth into 2013, with U.S. auto sales rising 14%. Figures from Autodata put January U.S. auto sales at an annual 15.3 million, marking the third straight month that the number has come in above 15 million. That means good things for Ford (F), General Motors (GM) and Chrysler, as well as their suppliers. 

Digging more deeply into the Bureau of Labor Statistics data, we see January's average hourly earnings rose 2.1% year over year. However, disposable income remains under pressure thanks to the expiration of the payroll tax holiday, as well as due to rising gas and food prices. According to AAA, on Friday the national average price of retail gas posted its biggest one-day increase in 23 months, jumping $0.04 to $3.46 a gallon. Over the last six weeks, we've seen more than an 8% gain in the national average price of gas prices at the pump. 

Underlying this has been a rise in oil prices: Since the close of last week, for instance, West Texas Intermediate crude has climbed to $97.61 to $97.61 per barrel. Helping to fuel that rise has been the continuing economic expansion in China and other emerging markets, as reported by both HSBC and Markit Economics late last week. That also confirms recent commentary from the likes of General Electric (GE), DuPont (DD), Proctor & Gamble (PG) and others that says China and the emerging market are poised for much faster growth in 2013 than the domestic economy. 

Odds are that, as the global economy continues to move forward, we will see oil and gas prices march higher over the coming months. While many investors are anticipating the return of uncertainty as the U.S. nears debt-ceiling and sequestration timelines, we need to keep an eye on rising input prices. These stand to affect only affect the consumer wallet, but also corporate margins and profits. 

Against that backdrop, we're in for another wave of earnings this week, with a few hundred companies scheduled to report. We'll start to get a better view of the retail environment when we hear from Polo Ralph Lauren (RL), True Religion (TRLG), Stanley Furniture (STLY), Panera (PNRA) and others, including Walt Disney (DIS). One of the key barometers of the consumer will be Disney's theme-park metrics. Rising food prices and its impact on margins will be watched at Panera, as well as at Chipotle (CMG) and Flowers Food (FLO). We'll also hear the latest on the industrial economy from Eaton (ETN), Cummins (CMI) and American Axle (AXL).

That's quite a list of companies to listen to this week, but it's only scratching the surface. Here's a look at which names are slated to report their results this trading week, as well as what economic data will be hitting the tape in the coming days:

_____________

Economic Data

Monday, Feb. 4

  • Factory Orders (December)
  • Markit Japan Composite PMI (January)

____

Tuesday, Feb. 5

  • Institute for Supply Management Services Index (January)
  • HSBC China Composite Purchasing Managers Index (January)
  • Markit Eurozone Composite PMI (January)

____

Wednesday, Feb. 6

  • Mortgage Bankers Association (MBA) Mortgage Index (Weekly)
  • HSBC Emerging Markets Index (January)

____

Thursday, Feb. 7

  • Initial & Continuing Jobless Claims (Weekly)
  • Productivity (fourth quarter of 2012)
  • Unit Labor Costs (fourth quarter of 2012)
  • Consumer Credit (December)                                         

____

Friday, Feb. 8

  • Trade Balances (December)
  • Wholesale Inventories

_________________

Corporate Earnings

Monday, Feb. 4

____

Tuesday, Feb. 5

  • Arch Coal (ACI)
  • Archer Daniels Midland (ADM)
  • Automatic Data Processing (ADP)
  • AGCO (AGCO)
  • ARM Holdings (ARMH)
  • Cerne (CERN)
  • Church & Dwight (CHD)
  • Chipotle
  • Walt Disney
  • Delphi Automotive (DLPH)
  • Eaton
  • Hain Celestial (HAIN)
  • Kellogg (K)
  • Regal-Beloit (RBC)
  • Revlon (REV)
  • Shutterfly (SFLY)
  • Sirius (SIRI)
  • Scotts Miracle-Gro (SMG)
  • Trimble Navigation (TRMB)

____

Wednesday, Feb. 6

  • Apollo Investment (AINV)
  • Akamai Technologies (AKAM)
  • Cummins
  • CVS/Caremark (CVS)
  • DuPont Fabros Technology (DFT)
  • DeVry (DV)
  • Green Mountain Coffee Roasters (GMCR)
  • LeapFrog (LF)
  • Measurement Specialties (MEAS)
  • Marathon Oil (MRO)
  • News Corp. (NWS)
  • Penske Auto (PAG)
  • Panera
  • Polo Ralph Lauren
  • Spectrum Brands (SPB)
  • Stericycle (SRCL)
  • Stanley Furniture
  • True Religion
  • Time Warner (TWX)
  • USG (USG)

____

Thursday, Feb .7

  • Advance Auto Parts (AAP)
  • Alcatel-Lucent (ALU)
  • Bunge (BG)
  • Badger Meter (BMI)
  • Cardtronics (CATM)
  • Coca-Cola Enterprises (CCE)
  • Columbia Sportswear (COLM)
  • Coinstar (CSTR)
  • Eagle Materials (EXP)
  • Flowers Food
  • Hasbro (HAS)
  • Starwood Hotels & Resorts (HOT)
  • International Flavors & Fragrances (IFF)
  • Ingredion (INGR)
  • iRobot (IRBT)
  • LinkedIn (LNKD)
  • Monster Worldwide (MWW)
  • Noble Energy (NBL)
  • Nuance (NUAN)
  • New York Times (NYT)
  • OpenTable (OPEN)
  • Philip Morris (PM)
  • Regal Entertainment (RGC)
  • Rofin-Sinar Technologies (RSTI)
  • Sprint-Nextel (S)
  • Snap-On (SNA)
  • Sony (SNE)
  • Vodafone (VOD)
  • Xylem (XYL)

____

Friday, Feb. 8

  • AOL (AOL)
  • American Axle
  • Laboratory Corp. (LH)
  • Moody's (MCO)
  • Sensient Technologies (SXT)

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