The Week Ahead: Risk Ratchets Higher

 | Aug 18, 2013 | 8:00 PM EDT  | Comments
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Stock quotes in this article:

bby

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aeo

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tgt

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tjx

Last week saw the U.S. stock market take another dive lower -- the S&P 500 closed the past five trading days down 2.1% after a 1% dip in the prior week. Since the Aug. 2 peak, the index has fallen just over 3%.

A number of factors are weighing on the market, and they include corporate guidance that calls for slower earnings growth ahead. We've also witnessed a return in layoffs from the likes of Cisco (CSCO) and AOL (AOL), and consumer concerns have been renewed amid tepid back-to-school spending and weak results from Wal-Mart (WMT), Macy's (M) and others. We're also starting to feel the impact of sequestration-related furloughs.

In addition to all of that, the debate is back on when it comes to the question of whether the Federal Reserve will taper its stimulative efforts in September. We will soon face more conversation over the country's debt limit, as well, and about a potential government shut-down.

It seems that, once again, levels of risk and near-term uncertainty have risen. Couple that with the seasonal dip in trading volume over the coming two weeks, and it should make for a pick-up in volatility.

The first few days of this week will be rather quiet on the economic front -- we aren't due to receive any data until Wednesday. But, at that point, it will come full force as we get the latest purchasing managers index readings around the glove from Markit Economics and HSBC. That data for China will be dissected in order to see if an economic rebound is indeed in the offing. Similarly, investors will pore over the data for confirming signs that the eurozone is (finally) returning economic expansion.

On the earnings front, we're set to be hip-deep in reports from retail companies -- Best Buy (BBY), American Eagle (AEO), Target (TGT), TJX (TJX) and number of others. We are now firmly entering the back-to-school spending season, so outlooks from these names and others will be key.

Current expectations from the National Retail Federation (NRF) call for a year-over-year drop in back-to-school spending per family. According to an NRF survey conducted by Prosper Insights & Analytics, families with school-age children will spend an average $634.78 on apparel, shoes, supplies and electronics this time around, down from $688.62 last year. Total back-to-school spending is expected to reach $26.7 billion. Factor in back-to-college spending, and that figure balloons to $72.5 billion, according to the NRF. 

Here's a more detailed view on the economic data and which companies are reporting their quarterly results in the week ahead.

_______________

Economic Events

Monday, Aug. 19

  • [No major economic reports]

____

Tuesday, Aug. 20

  • [No major economic reports]

____

Wednesday, Aug. 21

  • Mortgage Banking Association (MBA) Mortgage Index (Weekly)
  • Existing-Home Sales (July)
  • Federal Open Market Committee Minutes (July 31)

____

Thursday, Aug. 22

  • HSBC China Flash Manufacturing Purchasing Managers Index
  • Markit Eurozone Flash Composite PMI
  • Markit U.S. Flash Manufacturing PMI
  • Initial & Continuing Jobless Claims (Weekly)
  • Federal Housing Finance Agency (FHFA) Housing Price Index (June)
  • Leading Indicators (Jul)

____

Friday, Aug. 23

  • New-Home Sales (July)

 

______________

Earnings Events

Monday, Aug. 19

  • International Rectifier (IRF)
  • Tower Group (TWGP)

____

Tuesday, Aug. 20

  • Analog Devices (ADI)
  • Barnes & Noble (BKS)
  • Best Buy (BBY)
  • Dick's Sporting Goods (DKS)
  • Home Depot (HD)
  • Intuit (INTU)
  • J.C. Penney (JCP)
  • Medtronic (MDT)
  • Saks (SKS)
  • TJX Companies (TJX)

____

Wednesday, Aug. 21

  • American Eagle (AEO)
  • Eaton Vance (EV)
  • Hain Celestial (HAIN)
  • Hewlett-Packard (HPQ)
  • J.M. Smucker (SJM)
  • Lowe's (LOW)
  • Madison Square Garden (MSG)
  • PetSmart (PETM)
  • Staples (SPLS)
  • Target (TGT)
  • Toll Brothers (TOL)

____

Thursday, Aug. 22

  • Abercrombie & Fitch (ANF)
  • Aeropostale (ARO)
  • Aruba Networks (ARUN)
  • Big Lots (BIG)
  • Bon-Ton Stores (BONT)
  • Buckle (BKE)
  • Cato (CATO)
  • Children's Place (PLCE)
  • Dollar Tree (DLTR)
  • GameStop (GME)
  • Gap (GPS)
  • Hormel Foods (HRL)
  • Marvell (MRVL)
  • Micros Systems (MCRS)
  • Pandora Media (P)
  • Patterson Companies (PDCO)
  • Perry Ellis (PERY)
  • Rue 21 (RUE)
  • Sears (SHLD)
  • Stein Mart (SMRT)

____

Friday, Aug. 23

  • Ann (ANN)
  • Food Locker (FL)
  • Hibbett Sporting (HIBB)

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