The Week Ahead: A Close Eye on Wages

 | Apr 27, 2014 | 8:00 PM EDT  | Comments
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For the past week, the S&P 500 sank less than 0.1% -- so, if we merely look at the overall move, we might not think the index underwent a weak few sessions. Even looking at the Nasdaq Composite Index, which fell 0.5% last week, one would not perceive some of the big drops seen in Amazon (AMZN), Facebook (FB), Cree (CREE); in e-health companies such as Cerner (CERN) and Allscripts (MDRX); or in such cyber-security companies as Imperva (IMPV).

In other words, while the averages are supposed to be representative of overall market, their recent moves do not reflect some of the pain felt in a number of industries, nor in shares of the companies they encompass.

Thus far this earnings season, roughly 240 companies in the S&P 500 have reported their results -- and, while the metrics for the March quarter have not been alarming, the ratio of negative to positive guidance is once again in focus. Of the 51 S&P 500 companies that have offered estimates for the current quarter, 36 have given "negative" guidance, meaning they expect their numbers to be weaker than what Wall Street is targeting.

So far, this set of guidance is better than what we saw in the December quarter. Still, a few hundred more companies are expected to report this week, including 136 listed on the S&P 500 and three on the Dow Jones Industrial Average -- so let's keep a close eye on this metric.

With more than 1,000 corporate conference calls in the coming trading week, earnings will be in focus, but so will several key pieces of economic data. May begins in the middle of the week, so we'll be getting the April Employment Report and auto-and-truck sales for the month.

Given recent results from Ford (F), as well as market-share questions over General Motors (GM), the auto-and-truck data will be closely watched this week. As for the employment report, odds are that more jobs were created in April as winter weather abated. But the line item to watch here will be wages, given the price climbs in many inputs: coffee, cocoa, beef, pork and gas at the pump, among others. This also means we'll need to tune into this week's personal-income-and-spending data, which will give us a look at disposable income. As usual, a more detailed list of upcoming economic data is found below.

But let's get back to earnings. It will be another busy week, and here are some of the reports that I'll be keeping my eyes and ears on.

Railcar demand will be in the spotlight, particularly as it regards tanker cars, when both Trinity Industries (TRN) and American Railcar (ARII) report their March-quarter results. Trucks will be in focus, as well: Several key suppliers are expected to report -- among them Meritor (MTOR), Eaton (ETN) and Cummins (CMI) -- as are truck manufacturers Paccar (PCAR) and Oshkosh Truck (OSK). With the industrial and manufacturing economy continuing to move along, demand drivers for these two groups should remain positive. Confirming signs for the overall economy will also come from Parker-Hannifin (PH) this week.

The aforementioned impact of rising food inputs will again be in focus this week as Denny's (DENN), Buffalo Wild Wings (BWLD), DineEquity (DIN), Ruth's Chris (RUTH), Noodles (NDLS) and Del Frisco's (DFRG) report earnings and comment on potential price increases. Given the move in beef and pork prices, we could see many of these companies shift their menus toward chicken and poultry. That will make comments from Pilgrim's Pride (PPC) all the more interesting later this week. On top of this, we should get a view-askew take on the restaurant industry's outlook from Yelp (YELP) and OpenTable (OPEN).

With wages and disposable income on our minds this week, pay attention to such names as Hyatt Hotels (H), Marriott (MAR), Revlon (REV), Panera Bread (PNRA), Steven Madden (SHOO), Estee Lauder (EL). These companies are apt to fill in our picture of the U.S. consumer and their willingness to spend.

Finally, given the hit to many social-media stocks over the last few weeks, results from Twitter (TWTR) and LinkedIn (LNKD) will be under the microscope. Are these companies delivering to the bottom line? Are their growth metrics likely to continue and justify respective valuations? Stay tuned and we'll find out.

Yep, it'll be a pretty busy week, and here's a more detailed list of what you can expect.

_________________

Economic Calendar

Monday, April 28

  • Pending-Home Sales (March)

____

Tuesday, April 29

  • S&P/Case-Shiller 20-City Index
  • Consumer Confidence

____

Wednesday, April 30

  • Mortgage Bankers Association (MBA) Mortgage Index (Weekly)
  • ADP Employment Change (April)
  • Gross Domestic Product (First Quarter)
  • Employment Cost Index (First Quarter)
  • Chicago Purchasing Managers Index (PMI) (April)
  • Crude Inventories (Weekly)
  • Federal Open Market Committee (FOMC) Interest Rate Decision (April)

____

Thursday, May 1

  • Challenger Job Cuts (April)
  • Initial and Continuing Jobless Claims (Weekly)
  • Personal Income & Spending (March)
  • Personal Consumption Expenditures (PCE) Prices (March)
  • Institute for Supply Management (ISM) Index (April)
  • Construction Spending (March)
  • Natural Gas Inventories (Weekly)
  • Auto and Truck Sales (April)

____

Friday, May 2

  • Markit Eurozone Manufacturing PMI
  • Employment Report (April)
  • Factory Orders (March)

________________

Earnings Calendar

Monday, April 28

  • Accuride Corp. (ACW)
  • Armstrong World Industries (AWI)
  • Buffalo Wild Wings (BWLD)
  • Charter Communications (CHTR)
  • Carters (CRI)
  • Denny's Corp. (DENN)
  • Corning, Inc. (GLW)
  • Helen of Troy (HELE)
  • Heartland Financial (HTLF)
  • Loews Corp. (L)
  • NetSuite (N)
  • Roper Industries (ROP)
  • Ruth's Chris Steak House (RUTH)

____

Tuesday, April 29

  • Archer Daniels Midland (ADM)
  • AGCO Corp. (AGCO)
  • Ameriprise Financial (AMP)
  • Big 5 Sporting (BGFV)
  • Bristol-Myers Squibb (BMY)
  • BTU International (BTUI)
  • CoreLogic (CLGX)
  • Cummins, Inc. (CMI)
  • Coach, Inc. (COH)
  • Crane Co. (CR)
  • Del Frisco's Restaurant Group (DFRG)
  • Dolby Labs (DLB)
  • DreamWorks Animation (DWA)
  • eBay (EBAY)
  • Eaton Corp. (ETN)
  • Fresh Del Monte Produce (FDP)
  • Herbalife (HLF)
  • Jacobs Engineering (JEC)
  • MGM Mirage (MFM)
  • Merck & Co. (MRK)
  • Noodles & Co. (NDLS)
  • Nokia Corp. (NOK)
  • Oshkosh Truck (OSK)
  • Paccar Inc. (PCAR)
  • Parker-Hannifin (PH)
  • RF Micro Devices (RFMD)
  • Sprint-Nextel (S)
  • Spirit Airlines (SAVE)
  • Sensata Technologies (ST)
  • Trulia (TRLA)
  • TRW Automotive (TRW)
  • Twitter (TWTR)
  • VistaPrint Ltd. (VPRT)

____

Wednesday, April 30

  • ADT Corp. (ADT)
  • Yamana Gold (AUY)
  • Banco Bilbao Vizcaya Argentaria (BBVA)
  • Boyd Gaming (BYD)
  • Cavium Networks (CAVM)
  • CEVA Inc. (CEVA)
  • Equinix, Inc. (EQIX)
  • Express Scripts (ESRX)
  • Fortune Brands Home & Security (FBHS)
  • Flextronics (FLEX)
  • Genworth Financial (GNW)
  • Garmin Ltd. (GRMN)
  • Hyatt Hotels (H)
  • Hess Corp. (HES)
  • Hologic Inc. (HOLX)
  • Heartland Payment Systems (HPY)
  • Ingredion Corp. (INGR)
  • Ignite Restaurant Group (IRG)
  • JDS Uniphase (JDSU)
  • Marriott International (MAR)
  • Mueller Water Products (MWA)
  • Panera Bread Company (PNRA)
  • Revlon, Inc. (REV)
  • Regis Corp. (RGS)
  • Rovi Corp. (ROVI)
  • Boston Beer Co. (SAM)
  • Sealed Air Corp. (SEE)
  • Shutterfly, Inc. (SFLY)
  • Stamps.com (STMP)
  • Taser International (TASR)
  • Trinity Industries (TRN)
  • Time Warner (TWX)
  • Western Digital (WDC)
  • Watts Water Technologies (WTS)
  • Weight Watchers (WTW)
  • Yelp Inc. (YELP)

____

Thursday, May 1

  • Akami Technologies (AKAM)
  • American Railcar Industries (ARII)
  • Avon Products (AVP)
  • Bunge Limited (BG)
  • General Cable (BGC)
  • Ball Corp. (BLL)
  • Cardinal Health (CAH)
  • Church & Dwight (CHD)
  • The Clorox Company (CLX)
  • Curtiss-Wright (CW)
  • Constant Contact (CTCT)
  • DineEquity, Inc. (DIN)
  • Domino's Pizza (DPZ)
  • eHealth (EHTH)
  • Expedia (EXPE)
  • Fluor Corp. (FLR)
  • Genesee & Wyoming (GWR)
  • Host Hotels & Resorts (HST)
  • II-VI Inc. (IIVI)
  • Imperva Inc. (IMPV)
  • ITT Corp. (ITT)
  • Kellogg (K)
  • KEYW Holding Corp. (KEYW)
  • Kennametal Inc. (KMT)
  • Kraft Foods Group (KRFT)
  • Libbey Inc. (LBY)
  • LinkedIn Corp. (LNKD)
  • MasterCard (MA)
  • MICROS Systems (MCRS)
  • Motorola Solutions (MSI)
  • Meritor Inc. (MTOR)
  • Monster Worldwide (MWW)
  • Natural Grocers (NGVC)
  • Blue Nile (NILE)
  • NutriSystem (NTRI)
  • Realty Income (O)
  • OpenTable (OPEN)
  • Pilgrim's Pride Corp. (PPC)
  • Rubicon Technology (RGCN)
  • Sally Beauty Holdings (SBH)
  • Steven Madden (SHOO)
  • Skullcandy (SKUL)
  • Sierra Wireless (SWIR)
  • Teva Pharmaceutical (TEVA)
  • T-Mobile US (TMUS)
  • Textron Inc. (TXT)
  • World Wrestling Federation (WWE)
  • Exxon Mobil (XOM)

____

Friday, May 2

  • American Axle & Manufacturing (AXL)
  • Cooper Tire & Rubber (CTB)
  • CVS/Caremark (CVS)
  • Chevron Corp. (CVX)
  • Estee Lauder Co. (EL)
  • Madison Square Garden (MSG)
  • Newell Rubbermaid (NWL)
  • Standard Pacific Corp. (SPF)

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