After a super strong January, the essentially sideways move in the Dow Jones Industrial Average has continued, even though both the S&P 500 and the Nasdaq Composite have inched higher for February thus far. The continued climb last week saw the Nasdaq and the S&P 500 put in fresh five-year highs, thus fueling the debate between the market bulls and bears. Bears are looking for a pullback, while the bulls see further upside as the global economy continues to recover.
Furthering the debate over the market direction, and reminding us that the specter of uncertainty is poised to return, last week President Obama urged Congress to pass a new package of spending cuts and tax increases ahead of the looming sequestration date of March 1. This Tuesday is the president's State of the Union address, and the expectation is that he will further detail the types of spending cuts and tax adjustments he is targeting. This, in turn, will likely reignite the political debate over what should or should not be done -- as well as remind investors about the political gridlock and dysfunction in Washington that has held the domestic economy in check over the last few quarters.
From my vantage point, I continue to see bull markets out there, due in part to pain points that have built up over the last few years -- in housing, automotive and other sectors. General Motors (GM) is due to report this week, so we'll see how the company is progressing as it continues to overhaul its product portfolio. We'll also get an update on the benefits accorded to the automotive ecosystem when BorgWarner (BWA) and TRW Automotive (TRW), release their respective earnings reports.
Similarly, regarding the rebounding housing market, we'll see how well the ripple effect is faring for faucet-and-cabinet manufacturer Masco (MAS) and Furniture Brands (FBN), as well as coating-and-paint manufacturer Valspar (VAL). One other set of companies to watch, in terms of paint points, includes Henry Schein (HSIC) and GNC (GNC). These are a part of my "Living Longer Lives" investment theme.
That said, I continue to be concerned about the health of the U.S. consumer. Not only have we seen a recent run-up in food prices, but gas prices have also gapped higher, having climbed more than 8% over the last several weeks. This, coupled with the expiration of the payroll-tax holiday, promises to strain disposable income for the average consumer. In light of those worries, I'll be listening intently this week to Whole Foods (WFM), Pilgrim's Pride (PPC), Dean Foods (DF), Ruth's Chris (RUTH) and PepsiCo (PEP) for commentary not only on food inflation, but also about these companies' efforts to pass those increases to consumers in the form of price hikes.
One other company to watch this week is Apple (AAPL), as CEO Tim Cook will be speaking at Goldman Sachs's technology conference. Another is Angie's List (ANGI), whose numbers are due out Wednesday, as we see whether the strong results from LinkedIn (LNKD) carry over to other Internet-based businesses.
Here's a more comprehensive look at which companies will report their results this trading week, as well as what economic data will be hitting the tape in the coming days.
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Economic Data
Tuesday, Feb. 12
- Treasury Budget (January)
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Wednesday, Feb. 13
- Mortgage Bankers Association (MBA) Mortgage Index (Weekly)
- Retail Sales (January)
- Import/Export Prices
- Business Inventories (December)
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Thursday, Feb. 14
- Initial and Continuing Jobless Claims (Weekly)
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Friday, Feb. 15
- Empire Manufacturing (February)
- Industrial Production (January)
- Capacity Utilization (January)
- Michigan Sentiment Index (February)
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Corporate Earnings
Monday, Feb. 11
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Tuesday, Feb. 12
- Avon Products (AVP)
- Brookdale Senior Living (BKD)
- Buffalo Wild Wings (BWLD)
- Fossil (FOSL)
- Goodyear Tire & Rubber (GT)
- Coca-Cola (KO)
- Michael Kors (KORS)
- Martin Marietta Materials (MLM)
- Blue Nile (NILE)
- Reynolds American (RAI)
- Rackspace Hosting (RAX)
- Valspar
- Zebra Technologies (ZBRA)
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Wednesday, Feb. 13
- Applied Materials (AMAT)
- Angie's List
- Comcast (CMCSA)
- Cisco Systems (CSCO)
- CenturyTel (CTL)
- Deere (DE)
- Dean Foods
- Dr. Pepper Snapple (DPS)
- Equinix (EQIX)
- Furniture Brands
- Hyatt Hotels (H)
- Henry Schein
- Lorillard (LO)
- Mondelez (MDLZ)
- Nvidia (NVDA)
- Rovi (ROVI)
- Skechers (SKX)
- Whole Foods Market
- Weight Watchers (WTW)
- Zillow (Z)
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Thursday, Feb. 14
- Agilent Technologies (A)
- BorgWarner (BWA)
- Cabela's (CAB)
- CBS (CBS)
- General Motors
- GNC
- Harsco (HSC)
- Jarden (JAH)
- PepsiCo
- comScore (SCOR)
- Strayer Education (STRA)
- Molson Coors Brewing (TAP)
- Vulcan Materials (VMC)
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Friday, Feb. 15
