The Week Ahead: All Eyes on Washington

 | Oct 13, 2013 | 8:00 PM EDT  | Comments
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Another trading week has come and gone. We're heading into the storm that is corporate earnings season and, as I write this, the government shutdown is still in place. While some furloughs have been lifted and it's looking as if some national parks could reopen, we're hearing other stories of the shutdown's impact. For instance, orders have ground to a halt because the shuttered U.S. Export-Import Bank isn't providing financing; there's a lack of Federal Aviation Administration (FAA) inspectors; and of course we're seeing a drop in reported economic data. That's not to mention the havoc the shutdown has wreaked on weddings, vacations and the like.

Late last week, the stock market soared on hopes that a deal would soon materialize to end the shutdown and at least temporarily address the country's debt ceiling. Over the weekend, however, the House and White House reached an impasse, and that resulted in new discussions in the Senate. Following a meeting with Senator Mitch McConnell (R-Ky.) on the 12th day of the shutdown, Senator Harry Reid (D-Nev.) remarked the talks "should be seen a very positive," but that the two sides still have a long way to go. That suggests the shutdown would span at least two weeks, if not more.

Although Monday is the Columbus Day holiday, the stock market will be open. If we head into the trading week without a deal or signs that tension is running high in Washington, odds are that the indices will give back the gains recorded Thursday and Friday.

In an environment characterized by uncertainty, I would expect companies reporting results this week will offer a tad wider guidance range than the otherwise would and/or address the potential impact on their business for the current quarter. To the degree that this happens, it could drive earnings revisions for S&P 500 companies. Keep in mind that 91 firms issued negative earnings-per-share guidance vs. only 19 offering positive EPS guidance, according to FactSet.

Following Friday's results from JPMorgan Chase (JPM) and Wells Fargo (WFC), the financial sector will forcefully take center stage this week. Over the coming five days, earnings results from Citigroup (C), American Express (AXP), Bank of America (BAC), Bank of New York Mellon (BK), Comerica (CMA), U.S. Bancorp (USB), Goldman Sachs (GS) and others will be on hand.

We're also set to hear from the industrial side of the economy via General Electric (GE), Honeywell (HON), Stanley Works (SWK), Snap-On (SNA), PPG Industries (PPG), Ingersoll-Rand (IR), Danaher (DHR), Parker Hannifin (PH) and Briggs & Stratton (BGG). The rails will also be on track (no pun intended) this week as CSX (CSX) and Kansas City Southern (KSU) report their September quarter results. Rounding out those categories, we'll get earnings from a number of highfliers, including Google (GOOG) and Yahoo! (YHOO) as well as Chipotle (CMG) and Intel (INTC).

Those are just some of the highlights. In short, the pace will pick up big time -- and we've got more than a handful of economic releases on the calendar as well. Among the reports on deck are the Empire Manufacturing Index, the Philadelphia Federal Reserve Survey, the National Association of Home Builders (NAHB) Housing Market Index and the Fed's October Beige Book. We'll see if we'll get the September consumer price index and housing figures as well.

Even if we do, it's bound to be a bumpy ride if Washington continues along the path that -- according to a Gallup poll from this past week -- has resulted in Americans considering "dysfunctional government" the No. 1 issue facing the U.S.

 

_________________

Economic Calendar

Monday, Oct. 14

  • Columbus Day
  • Stock market open; banks closed

____

Tuesday, Oct. 15

  • Empire Manufacturing Index (October)

____

Wednesday, Oct. 16

  • Mortgage Bankers Association (MBA) Mortgage Index (Weekly)
  • Consumer Price Index (September)
  • National Association of Home Builders (NAHB) Housing Market Index (October)
  • Federal Reserve Beige Book (October)

____

Thursday, Oct. 17

  • Initial and Continuing Jobless Claims (Weekly)
  • Housing Starts and Building Permits (September)
  • Industrial Production and Capacity Utilization (September)
  • Bloomberg Consumer Comfort Index (Weekly)
  • Philadelphia Fed Survey (October)

____

Friday, Oct. 18

  • Leading Indicators (September)

_________________

Earnings Calendar

Monday, Oct. 14

  • Brown & Brown (BRO)
  • J.B. Hunt Transport (JBHT)

____

Tuesday, Oct. 15

  • Citigroup (C)
  • Domino's Pizza (DPZ)
  • Intel Corp. (INTC)
  • Johnson & Johnson (JNJ)
  • Joe's Jeans (JOEZ)
  • The Coca-Cola Company (KO)
  • Rocky Mountain Chocolate (RMCF)
  • Stanley Furniture (STLY)
  • Yahoo! Inc. (YHOO)

____

Wednesday, Oct. 16

  • Abbot Labs (ABT)
  • ASML Holding NV (ASML)
  • American Express (AXP)
  • Bank of America (BAC)
  • The Bank of New York Co. (BK)
  • BlackRock, Inc. (BLK)
  • Comerica (CMA)
  • CSX Corp. (CSX)
  • eBay Inc. (EBAY)
  • W.W. Grainger (GWW)
  • IBM (IBM)
  • Kinder Morgan, Inc. (KMI)
  • Mattel Inc. (MAT)
  • PepsiCo, Inc. (PEP)
  • Piper Jaffray Comp. (PJC)
  • PNC Financial Services (PNC)
  • Select Comfort (SCSS)
  • SanDisk Corp. (SNDK)
  • Stanley Works (SWK)
  • U.S. Bancorp. (USB)
  • Xilinx Inc. (XLNX)

____

Thursday, Oct. 17

  • Acacia Research Group (ACTG)
  • Advanced Micro Devices (AMD)
  • BB&T Corp. (BBT)
  • Briggs & Stratton Corp. (BGG)
  • Badger Meter (BMI)
  • Peabody Energy (BTU)
  • Chipotle Mexican Grill (CMG)
  • Cypress Semiconductor (CY)
  • Danaher Corp. (DHR)
  • Dover Corp. (DOV)
  • Google Inc. (GOOG)
  • Goldman Sachs Group (GS)
  • Intuitive Surgical (ISRG)
  • Las Vegas Sands (LVS)
  • Philip Morris International (PM)
  • PPG Industries (PPG)
  • Rambus Inc. (RMBS)
  • Snap-On Inc. (SNA)
  • Supervalu (SVU)
  • Taiwan Semiconductor (TSM)
  • UnitedHealth Group (UNH)
  • Union Pacific (UNP)
  • United Rentals (URI)
  • Verizon Communications (VZ)
  • WD-40 Company (WDFC)
  • Winnebago Industries (WGO)

____

Friday, Oct. 18

  • Baker Hughes (BHI)
  • General Electric (GE)
  • Genuine Parts Co. (GPC)
  • Honeywell International (HON)
  • Ingersoll-Rand (IR)
  • Kansas City Southern (KSU)
  • Morgan Stanley (MS)
  • Parker Hannifin (PH)
  • Schlumberger Ltd. (SLB)
  • Textron Inc. (TXT)
  • Valmont Industries (VMI)

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