The Week Ahead: Sitting on Pins and Needles

 | Sep 29, 2013 | 8:30 PM EDT  | Comments
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It's been quite a week: Stocks snapped a three-week winning streak as the market was weighed under concerns over a potential U.S. government shutdown. In full, stocks as measured by the S&P 500 fell just over 1% for the week. With that, September and the third quarter are tracking to achieve gains of 3.6% and 5.3%, respectively.

While the potential government showdown led conversation in the back half of the week, there were ample amounts of other news. For instance, Fairfax Financial has agreed to take BlackBerry (BBRY) private, and Amazon (AMZN) is launching new tablets and e-readers. In addition, Applied Materials (AMAT) announced an acquisition-merger with Tokyo Electron, J.C. Penney (JCP) issued shares as a potential lifeline and Nike (NKE) blasted past earnings expectations.

Simply put, there was no shortage of news -- but what capped the week were the DC-led headlines and the battle over the debt ceiling and government shutdown. Investors and traders have been busy over the weekend trying to assess if a deal -- whether temporary or more permanent -- will be hammered out in time to avoid a government closure. If the feeling is "no," they will look to position themselves accordingly Monday. That could take yet more wind out of the stock market's sails.

For many, this will be a sitting-on-pins-and-needles moment, but let's not forget that the coming week is set to see a pick-up in both earnings announcements and economic data. Leading the economic figures will be several readings on the industrial economies, as well as September sales for autos and trucks.

At the end of the week, the September employment report is scheduled to be reported -- however, its publication could be delayed if the federal government does indeed shut down. If that's the case, more weight will be put on September employment figures from Gallup, ADP and others near-term. Remember, the August report not only missed expectations, but saw major revisions to job creation in prior months. If we see a repeat in that, as well as in trends for hours worked and wages paid, that will be key to the housing market and the consumer.

What won't slow down will be the scheduled corporate earnings reports that are on tap for the coming five trading days: We're set to see a handful more than the average amount over the past few weeks. Still, I view this week's earnings reports as the calm before the storm. Some of the reports that I'll be zeroing in on this week include Global Payments (GPN), Acuity Brands (AYI), Monsanto (MON) and Constellation Brands (STZ).

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Economic Calendar

Monday, Sept. 30

  • Chicago Purchasing Managers Index (PMI) (September)
  • HSBC China Manufacturing PMI

Tuesday, Oct. 1

  • Institute for Supply Management (ISM) Index (September)
  • Construction Spending (August)
  • Auto and Truck Sales (September)
  • Markit U.S. Manufacturing PMI
  • J.P. Morgan Global Manufacturing PMI
  • Markit Eurozone Manufacturing PMI

Wednesday, Oct. 2

  • Mortgage Bankers Association (MBA) Mortgage Index (Weekly)
  • ADP Employment Report (September)

Thursday, Oct. 3

  • Challenger Job Cuts (September)
  • Initial and Continuing Jobless Claims (Weekly)
  • Factory Orders (August)
  • ISM Services Index (September)

Friday, Oct. 4

  • Employment Report (September)

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Earnings Calendar

Monday, Sept. 30

  • Diamond Foods (DMND)
  • Park Electrochemical (PKE)
  • SED International Holdings (SED)

Tuesday, Oct. 1

  • Actuant Corp. (ATU)
  • Acuity Brands (AYI)
  • Global Payments (GPN)
  • Paychex, Inc. (PAYX)
  • Walgreen Co. (WAG)

Wednesday, Oct. 2

  • CalAmp Corp. (CAMP)
  • Monsanto (MON)
  • Radiant Logistics (RLGT)

Thursday, Oct. 3

  • IDT Corp. (IDT)
  • International Speedway (ISCA)
  • National American University Holdings (HAUH)
  • Constellation Brands (STZ)
  • Texas Industries (TXI)

Friday, Oct. 4

  • No significant reports scheduled

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