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  1. Home
  2. / Investing
  3. / Economic Data

The Week Ahead

Key themes and events to watch for in the coming week.
By CHRIS VERSACE AND LENORE HAWKINS Feb 01, 2015 | 05:00 PM EST
Stocks quotes in this article: AAPL, AMZN, MA, V, XOM, CLF, APC, CMG, DIS, CLX, GM, UA, WHR, BWLD, DNKN, KORS, TWTR, YELP, YUM, ETN, CMI, PCAR, USG, UFS, CHD, XLU, UNG

Friday closed the books on trading for January, and that means we are already through a twelfth of 2015 -- not to mention that in just a couple of weeks we'll be halfway through the 1Q 2015. Thus far, all the major domestic stock market indices are in the red, with the Dow Jones Industrial Average taking the largest drop, down 3.7%. Both the S&P 500 and Nasdaq Composite Index are not far behind, down between 2% and 3.1%. A week ago we said the coming week would be an onslaught composed of an earnings deluge, Fed commentary and the initial read of fourth-quarter 2014 GDP. To say we got all of that in spades would not be an understatement.

On the earnings side, there were big and positive surprises from Apple (AAPL) and Amazon (AMZN), but beneath it all there were several key themes among the plethora of announcements from S&P 500 and Dow companies. In our view, these are the key themes:

  • There is little to no economic growth in the eurozone.
  • Economic growth in China is steadily declining.
  • The U.S. enjoys relatively consistent growth, even though, as we learned on Friday, at 2.6% 4Q 2014, GDP disappointed and marked the lowest level since 2Q 2013.
  • The stronger U.S. dollar is having a material impact -- again, not a surprise given its move in 4Q 2014
  • Lower oil and gas prices are having an effect on oil-sector jobs and spending plans amid newfound frugality as consumers are not spending their gas savings. "We haven't seen the extra savings from lower gas prices translate into additional discretionary consumer spending," said MasterCard (MA) CEO Ajaypal Banga on the company's 4Q 2014 earnings call last week. A survey of 4,500 consumers conducted for Visa (V) in early January found that consumers are hanging onto roughly half of their gasoline savings.

While the Fed upgraded its view that growth in the world's biggest economy is "solid," the backdrop of weak global growth renewed concern over Greece and the disappointing 4Q 2014 GDP print, as well as a relatively tame employment cost index figure for 4Q 2014. That means Fed watchers will be dialed in to Fed Chair Janet Yellen's February testimony before Congress. It also means that Friday's January nonfarm employment report will be scrutinized as much for wage growth as for job creation.

Prospects for the Fed boosting interest rates again seem to be later rather than sooner. That leaves us wondering how much higher stock market indices and multiples can go. Bears are no doubt pointing to the Baltic Dry Index (which measures shipping costs for dry bulk commodities such as minerals and metals, grain and other food) hitting a 28-year low and sounding the "Danger, Will Robinson! Danger!" alarm.

Stepping back, earnings growth expectations are being revised lower, but at Friday's market close the S&P 500 was trading at 16.4x 2015 earnings per share of $122.05. That's more than a tad rich for what is shaping up to be contracting earnings in the first half of the year, which in our view puts even more pressure on earnings expectations for the back half of the 2015 in order to growth expectations of 4.4%, according to FactSet.

Helping further refine those expectations during the week ahead we have another 100 S&P 500 companies (including three Dow 30 components) reporting December quarter results. Yes, that's another 20% of the S&P 500 sharing results and outlooks in the coming days. Following the 8% upward move in oil last week, earnings from Exxon Mobil (XOM), Cliffs Natural Resources (CLF) and Anadarko Petroleum (APC) will be in focus this week. Highfliers for the week include Chipotle Mexican Grill (CMG), Disney (DIS), Clorox (CLX), General Motors (GM), Under Armour (UA), Whirlpool (WHR), Buffalo Wild Wings (BWLD), Dunkin Brands (DNKN), Michael Kors (KORS), NXP Semiconductor (NXPI), Twitter (TWTR), Yelp (YELP) and Yum! Brands (YUM).

Other earnings reports to watch include Eaton (ETN) and engine company Cummins (CMI) following Friday's results from heavy truck company Paccar (PCAR), as well as wallboard companies USG (USG) and Domtar (UFS), to take the pulse of the U.S. housing market. Were things buzzing ahead of the Super Bowl? We'll find out when Church & Dwight (CHD) reports this week.

We briefly touched on Friday's January jobs report, but that finishes off what will be a week heavy with economic data. Kicking it off is a smorgasbord of global PMI data as well as December personal income and spending data. In between, we'll get January auto and trucks sales and December construction figures. We'll also get productivity and unit labor cost data for the December quarter. Mixed among the data are several speeches from Federal Reserve presidents, and we expect those to only fuel the back and forth that tends to make as much sense as a jar that premixes peanut butter and jelly.

Enjoy the Super Bowl. Versace is "Go Pats!" while Hawkins is still in denial that her Chargers didn't even come close -- maybe some good commercials, pale ale and guacamole dip with soothe her. If you live in the Midwest or Northeast, you are probably keeping one eye on the game and one on winter storm Linus, which is expected to drop a foot of snow on Chicago before reaching the Northeast. Making matters worse, a rash of Artic cold is slated to follow. Stay bundled up and, for Versace, turn up those thermostats to help his Utilities SPDR (XLU) and United States Natural Gas Fund (UNG) positions. More weather-related trading ideas can be found here.

Below is a more detailed look at what's coming in the week ahead. Be sure to check back midweek for our column, in which we will dish on the first half of the trading week and other key matters and thoughts, as well as how to play it all.

Economic Calendar

Date

Release

For

2-Feb

HSBC China Manufacturing PMI

Jan

2-Feb

Markit Eurozone Manufacturing PMI

Jan

2-Feb

Markit US Manufacturing PMI

Jan

2-Feb

JPMorgan Global Manufacturing PMI

Jan

2-Feb

Personal Income

Dec

2-Feb

Personal Spending

Dec

2-Feb

PCE Prices - Core

Dec

2-Feb

ISM Index

Jan

2-Feb

Construction Spending

Dec

3-Feb

Factory Orders

Dec

3-Feb

Auto Sales

Jan

3-Feb

Truck Sales

Jan

4-Feb

MBA Mortgage Index

Weekly

4-Feb

ADP Employment Change

Jan

4-Feb

ISM Services

Jan

4-Feb

Crude Inventories

Weekly

4-Feb

JPMorgan Global Composite PMI

Jan

4-Feb

Cleveland Fed President Loretta Mester speech

5-Feb

Challenger Job Cuts

Jan

5-Feb

Initial Claims

Weekly

5-Feb

Continuing Claims

Weekly

5-Feb

Trade Balance

Dec

5-Feb

Productivity-Prel

Q4

5-Feb

Unit Labor Costs

Q4

5-Feb

Natural Gas Inventories

Weekly

6-Feb

Nonfarm Payrolls

Jan

6-Feb

Nonfarm Private Payrolls

Jan

6-Feb

Unemployment Rate

Jan

6-Feb

Hourly Earnings

Jan

6-Feb

Average Workweek

Jan

6-Feb

Atlanta Fed President Dennis Lockhart speech

6-Feb

Consumer Credit

Dec

Earnings Calendar

Monday, February 2

ADVS

Advent Software

FLWS

1800flowers.com

LLNW

Limelight Netwk

PBI

Pitney Bowes In

RTEC

Rudolph Tech

SYY

Sysco Corp

TEN

Tenneco Inc

TNAV

Telenav Inc

XOM

Exxon Mobil Crp

Tuesday, February 3

ACI

Arch Coal Inc

ADM

Archer Daniels

AET

Aetna Inc-new

AFG

Amer Finl Group

AGCO

Agco Corp

AN

Autonation Inc

APAM

Artisan Ptnr Am

APC

Anadarko Petrol

ARG

Airgas Inc

BHE

Benchmark Eletr

BIP

Brookfield Infr

CARB

Carbonite Inc

CEVA

Ceva Inc

CHD

Church & Dwight

CLF

Cliffs Natural

CMG

Chipotle Mexicn

DIS

Disney Walt

EMR

Emerson Elec Co

ENTR

Entropic Commun

ETN

Eaton Corp Plc

FHCO

Female Health

FISV

Fiserv Inc

GCI

Gannett Inc

GILD

Gilead Sciences

LSCC

Lattice Semicon

MHO

M/i Homes Inc

MYGN

Myriad Genetics

NSR

Neustar Inc -a

NYT

Ny Times A

OI

Owens-illinois

PNR

Pentair Plc

R

Ryder Sys

RCII

Rent-a-center

ST

Sensata Technol

TTWO

Take-two Inter

TWIN

Twin Disc

UPS

Utd Parcel Srvc

VASC

Vascular Solutn

VTSS

Vitesse Semicon

WYNN

Wynn Resrts Ltd

Wednesday, February 4

ACXM

Acxiom Corp

ADP

Automatic Data

AFL

Aflac Inc

ATML

Atmel Corp

BPY

Brookfield Ppty

BSX

Boston Scientif

CATM

Cardtronics Inc

CBG

Cbre Group Inc

CKSW

Clicksoftware

CLX

Clorox Co

CTSH

Cognizant Tech

EVR

Evercore Partnr

EXP

Eagle Materials

FBHS

Fortune Brd H&s

FORM

Formfactor Inc

FOXA

Twenty-fst Cf-a

GIL

Gildan Actvwear

GLUU

Glu Mobile Inc

GM

General Motors

GMCR

Keurig Green Mt

HAIN

Hain Celestial

HCSG

Healthcare Serv

KNL

Knoll Inc

MPC

Marathon Petrol

MSI

Motorola Solutn

SMG

Scotts Mircl-gr

SNE

Sony Corp Adr

SO

Southern Co

SPB

Spectrum Brands

STE

Steris Corp

STLY

Stanley Furnitu..

UA

Under Armour-a

VRTU

Virtusa Corp

WHR

Whirlpool Corp

WNC

Wabash National

Thursday, February 5

ACLS

Axcelis Tech

AINV

Apollo Inv Cp

ALL

Allstate Corp

APO

Apollo Global-a

ARW

Arrow Electroni

ATVI

Activision Blzd

BCO

Brinks Co The

BEBE

Bebe Stores Inc

BGC

Genl Cable Corp

BKD

Brookdale Senr

BLL

Ball Corp

BMR

Biomed Rlty Trust

BRKS

Brooks Automatn

BWLD

Buffalo Wld Wng

CEB

Corp Exec Brd

CHTR

Charter Comm-a

CME

Cme Group Inc

CMI

Cummins Inc

COTY

Coty Inc-a

CSL

Carlisle Cos In

CX

Cemex Sa Adr

DFT

Dupont Fabros

DLPH

Delphi Auto Plc

DNKN

Dunkin Brands

DV

Devry Education

EL

Estee Lauder

EXPE

Expedia Inc

FLT

Fleetcor Tech

FWM

Fairway Group

GPRO

Gopro Inc-a

GRUB

Grubhub Inc

IMPV

Imperva Inc

IRBT

Irobot Corp

IT

Gartner Inc -a

KORS

Michael Kors

LAZ

Lazard Ltd

LF

Leapfrog Entrps

LNKD

Linkedin Corp-a

MCK

Mckesson Corp

MDSO

Medidata Solutn

MMS

Maximus Inc

MTD

Mettler-toledo

NTGR

Netgear Inc

NUAN

Nuance Comm Inc

NUS

Nu Skin Enterp

NWS

News Corp-b

NXPI

Nxp Semiconduct

ORLY

O Reilly Auto

OUTR

Outerwall Inc

P

Pandora Media

PBH

Prestige Brands

PJC

Piper Jaffray

PLUS

Eplus Inc

PM

Philip Morris

PRGO

Perrigo Co Plc

PRU

Prudential Finl

RSTI

Rofin-sinar

S

Sprint Corp

SBH

Sally Beauty Co

SIMG

Silicon Image

SIRI

Sirius Xm Hldgs

SNA

Snap-on Inc

SNCR

Synchronoss Tec

SRCL

Stericycle Inc

SWIR

Sierra Wireless

SYMC

Symantec Corp

TWTR

Twitter Inc

USG

Usg Corp

VLP

Valero Egy Ptnr

VMC

Vulcan Matls Co

VOLVY.PK

Volvo Ab

VRSN

Verisign Inc

XYL

Xylem Inc

YELP

Yelp Inc

YUM

Yum! Brands Inc

Friday, February 6

AON

Aon Plc

ASX

Adv Semicon Adr

ATHN

Athenahealth In

AXL

Amer Axle & Mfg

BECN

Beacon Roofing

BMI

Badger Meter

CBOE

Cboe Holdings

CTS

Cts Corp

FLIR

Flir Systems

HRS

Harris Corp

JOUT

Johnson Outdoor

KIM

Kimco Realty Co

LGF

Lions Gate Etmt

MCO

Moodys Corp

MSG

Madison Square

POST

Post Holdings

SPF

Standard Pac

SSD

Simpson Mfg Inc

STRA

Strayer Educ

SXT

Sensient Tech

UFS

Domtar Corp

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At the time of publication, Versace was long XLU and UNG; Hawkins had no positions in the securities mentioned.

TAGS: Investing | U.S. Equity | Economic Data

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