The Week Ahead: Bracing for the Storm

 | Oct 28, 2012 | 9:00 PM EDT  | Comments
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Earnings season is normally a busy period, but the current one is likely filling at least some investors with stress, as a greater percentage of companies have missed expectations and revised outlooks downward. Of the more than 1,200 companies that shared quarterly results last week, the market was weighed by noteworthy announcements from Caterpillar (CAT), 3M (MMM), Netflix (NFLX), Deckers (DECK), VeriSign (VRSN)  and Apple (AAPL). A number of positive announcements were seen from Facebook (FB), which appears to be getting its mobile house in order; Broadcom (BRCM), which is benefitting from the increasing shift toward mobility; and Coach (COH), among others.

Although last week's economic data came in relatively light, we did receive the latest durable-orders report, as well as the initial gross domestic product reading for the third quarter. The headline numbers on both were favorable, though sifting through the data reveals that both reports benefited from stronger-than-expected government/defense and lumpy transportation spending. Adjusted for those factors, the data continue to point to a modest recovery. That has prompted the return of job cuts from the likes of DuPont (DD), Newell Rubbermaid (NWL), Colgate-Palmolive (CL) and Advanced Micro Devices (AMD), to name a few. 

The net effect of earnings and economic results led to a 1.5% drop for the S&P 500 and more modest fall of 0.6% for the Nasdaq Composite Index last week. 

S&P 500 -- Daily

Based on the preponderance of headlines, an investor may conclude there are few to no areas in which they should be involved. But, as we know, there is always a bull market out there somewhere; we just have to find it and understand how to trade or invest in it. One set of investments that fared well last week were the market inverse ETFs, such as ProShares Short Dow 30 (DOG) and ProShares Short S&P 500 (SH). These respectively rose 1.6% and 1.4% last week as the S&P 500 and Dow Jones Industrial Average saw declines.

While inverse ETFs are not everyone's cup of tea, more aggressive investors would have made out even better by trading leveraged, inverse ETFs such as ProShares UltraShort Dow 30 (DXD) and ProShares UltraShort S&P 500 (SDS). These correspond to twice the inverse performance of their respective market indices. 

DXD -- Daily

With more than 900 companies scheduled to report their quarterly results this week, the earnings fun stands to continue. Adding to "fun" will be Hurricane Sandy, which the East Coast is bracing for, and which is expected to cause severe damage.

Book-ending that will be the October employment report at the end of the week. This will be the last major economic report before Election Day, so it stands to be scrutinized even more closely than usual. Despite slower nonfarm job creation compared with that in July and August, the September jobs number showed a dip in the unemployment rate, which served to highlight issues surrounding the housing survey's methodology. Current consensus expectations call for 125,000 nonfarm payrolls to be added in October, with the unemployment rate expected to tick up to 7.9% from September's 7.8%.

Here's a more granular look at what investors should be watching and listening to over the next five trading days.

Economic Events This Week

  • Personal Income & Spending (September) -- Monday, Oct. 29
  • Dallas Fed Manufacturing Survey (September) -- Monday, Oct. 29
  • S&P/Case-Shiller 20-City Index (August) -- Tuesday, Oct. 30
  • Consumer Confidence (October) -- Tuesday, Oct. 30
  • Mortgage Bankers Association (MBA) Mortgage Index (Weekly) -- Wednesday, Oct. 31
  • ADP Employment Change Report (October) -- Wednesday, Oct. 31
  • Employment Cost Index (Third Quarter) -- Wednesday, Oct. 31
  • Chicago Purchasing Managers Index (October) -- Wednesday, Oct. 31
  • Challenger Job Cuts (October) -- Thursday, Nov. 1
  • Initial & Continuing Jobless Claims (Weekly) -- Thursday, Nov. 1
  • Unit Labor Costs (3Q 2012) -- Thursday, Nov. 1
  • Institute for Supply Management Index (October) -- Thursday, Nov. 1
  • Construction Spending (September) -- Thursday, Nov. 1
  • Nonfarm Payrolls & Unemployment Rate (October) -- Friday, Nov. 2
  • Factory Orders (September) -- Friday, Nov. 2

 

Corporate Earnings This Week

  • Anadigics (ANAD) -- Monday, Oct. 29
  • Armstrong World Industries (AWI) -- Monday, Oct. 29
  • Baidu.com (BIDU) -- Monday, Oct. 29
  • Burger King (BKW) -- Monday, Oct. 29
  • Cavium Networks (CABM) -- Monday, Oct. 29
  • Cirrus Logic (CRUS) -- Monday, Oct. 29
  • Gardner Denver (GDI) -- Monday, Oct. 29
  • Loews (L) -- Monday, Oct. 29
  • Luminex (LMNX) -- Monday, Oct. 29
  • Overstock (OSTK) -- Monday, Oct. 29
  • Tumi (TUMI) -- Monday, Oct. 29
  • Texas Roadhouse (TXRH) -- Monday, Oct. 29

 


 

  • Archer Daniels Midland (ADM) -- Tuesday, Oct. 30
  • AGCO (AGCO) -- Tuesday, Oct. 30
  • TD Ameritrade (AMTD) -- Tuesday, Oct. 30
  • Anadarko Petroleum (APC) -- Tuesday, Oct. 30
  • Ashland (ASH) -- Tuesday, Oct. 30
  • Avon (AVP) -- Tuesday, Oct. 30
  • Big 5 Sporting (BGFV) -- Tuesday, Oct. 30
  • Annie's (BNNY) -- Tuesday, Oct. 30
  • BTU (BTUI) -- Tuesday, Oct. 30
  • Cummins (CMI) -- Tuesday, Oct. 30
  • Deutsche Bank (DB) -- Tuesday, Oct. 30
  • DineEquity (DIN) -- Tuesday, Oct. 30
  • Delphi Automotive (DLPH) -- Tuesday, Oct. 30
  • Equinix (EQIX) -- Tuesday, Oct. 30
  • Ford (F) -- Tuesday, Oct. 30
  • SourceFire (FIRE) -- Tuesday, Oct. 30
  • Flowserve (FLS) -- Tuesday, Oct. 30
  • GNC (GNC) -- Tuesday, Oct. 30
  • hhgregg (HGG) -- Tuesday, Oct. 30
  • Herbalife (HLF) -- Tuesday, Oct. 30
  • Johnson Controls (JCI) -- Tuesday, Oct. 30
  • Masco (MAS) -- Tuesday, Oct. 30
  • Nu Skin (NUS) -- Tuesday, Oct. 30
  • Office Depot (ODP) -- Tuesday, Oct. 30
  • MetroPCS (PCS) -- Tuesday, Oct. 30
  • Pfizer (PFE) -- Tuesday, Oct. 30

  • American Tower (AMT) -- Wednesday, Oct. 31
  • BorgWarner (BWA) -- Wednesday, Oct. 31
  • Clorox (CLX) -- Wednesday, Oct. 31
  • CNH (CNH) -- Wednesday, Oct. 31
  • Eaton (ETN) -- Wednesday, Oct. 31
  • General Motors (GM) -- Wednesday, Oct. 31
  • Garmin (GRMN) -- Wednesday, Oct. 31
  • Heartland Payment Systems (HPY) -- Wednesday, Oct. 31
  • ITT (ITT) -- Wednesday, Oct. 31
  • MasterCard (MA) -- Wednesday, Oct. 31
  • Mueller (MWA) -- Wednesday, Oct. 31
  • Papa John's (PZZA) -- Wednesday, Oct. 31
  • Elizabeth Arden (RDEN) -- Wednesday, Oct. 31
  • Polo Ralph Lauren (RL) -- Wednesday, Oct. 31
  • Sealed Air (SEE) -- Wednesday, Oct. 31
  • Time Warner Cable (TWC) -- Wednesday, Oct. 31
  • Visa (V) -- Wednesday, Oct. 31
  • Watts Water Technologies (WTS) -- Wednesday, Oct. 31

  • Atmel (ATML) -- Thursday, Nov. 1
  • Bebe (BEBE) -- Thursday, Nov. 1
  • Blount (BLT) -- Thursday, Nov. 1
  • CACI (CACI) -- Thursday, Nov. 1
  • Cardtronics (CATM) -- Thursday, Nov. 1
  • CEVA (CEVA) -- Thursday, Nov. 1
  • Cott (COT) -- Thursday, Nov. 1
  • Estee Lauder (EL) -- Thursday, Nov. 1
  • Furniture Brands (FBN) -- Thursday, Nov. 1
  • Greenbrier (GBX) -- Thursday, Nov. 1
  • Hain Celestial (HAIN) -- Thursday, Nov. 1
  • Harmin (HAR) -- Thursday, Nov. 1
  • Hillshire Brands (HSH) -- Thursday, Nov. 1
  • Kellogg (K) -- Thursday, Nov. 1
  • LinkedIn (LNKD) -- Thursday, Nov. 1
  • NII (NIHD) -- Thursday, Nov. 1
  • Blue Nile (NILE) -- Thursday, Nov. 1
  • OpenTable (OPEN) -- Thursday, Nov. 1
  • Priceline.com (PCLN) -- Thursday, Nov. 1
  • Sturm, Ruger & Co (RGR) -- Thursday, Nov. 1
  • Rovi (ROVI) -- Thursday, Nov. 1
  • RR Donnelley & Sons (RRD) -- Thursday, Nov. 1
  • Red Robin (RRGB) -- Thursday, Nov. 1
  • Boston Beer (SAM) -- Thursday, Nov. 1
  • Starbucks (SBUX) -- Thursday, Nov. 1
  • Steve Madden (SHOO) -- Thursday, Nov. 1
  • Sony (SNE) -- Thursday, Nov. 1
  • Scripps Network Interactive (SNI) -- Thursday, Nov. 1
  • Skyworks Solutions (SWKS) -- Thursday, Nov. 1
  • Teva Pharmaceutical (TEVA) -- Thursday, Nov. 1
  • Trimble Navigation (TRMB) -- Thursday, Nov. 1
  • Exxon Mobile (XOM) -- Thursday, Nov. 1
  • Xylem (XYL) -- Thursday, Nov. 1
  • Yelp (YELP) -- Thursday, Nov. 1
  • Zagg (ZAGG) -- Thursday, Nov. 1

  • Accuride (ACW) -- Friday, Nov. 2
  • Alcatel-Lucent (ALU) -- Friday, Nov. 2
  • Cooper Tire & Rubber (CTB) -- Friday, Nov. 2
  • Chevron (CVX) -- Friday, Nov. 2
  • Comfort Systems (FIX) -- Friday, Nov. 2
  • Gartner  (IT) -- Friday, Nov. 2
  • Orient-Express Hotels (OEH) -- Friday, Nov. 2
  • Progressive (PGR) -- Friday, Nov. 2
  • WABCO (WBC) -- Friday, Nov. 2
  • Aqua America (WTR) -- Friday, Nov. 2

 

Upcoming Company and Investor Conferences

  • Brean Murray, Carret & Co. 2012 Life Sciences Summit, Nov. 7
  • J. P. Morgan Asia Pacific TMT Conference, Nov. 12-13
  • Credit Suisse 2012 Healthcare Conference, Nov. 14
  • Roth Capital Partners Enterprise Software Corporate Access Day, Nov. 14
  • Jefferies 2012 Global Healthcare Conference, Nov. 14-15
  • UBS Global Technology Conference, Nov. 14-15
  • William Blair Second Annual Financial Services & Technology Summit, Nov. 15
  • William Blair Real Estate Services and Technology Summit, Nov. 16
  • UBS Global Real Estate Conference, Nov. 27-28
  • Credit Suisse 2012 Aerospace & Defense Conference, Nov. 28-29
  • Jefferies 2012 Global Energy Conference, Nov. 28-29
  • J.P. Morgan SMid Cap Conference, Nov. 28-29
  • UBS 40th Annual Global Media and Communications Conference, Dec. 3-5

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