Over the last few weeks the stock market has been stuck in a rut, with the S&P 500 zigzagging all of 68 points since early March. Along the way it contended with a growing set of missed economic data, tepid-at-best jobs and wage data, the rising dollar and falling oil prices. On the one hand, it would be easy to say the market is shrugging off the bad news or at least looking past it. That was the case until we were reminded on Friday about the potential for Greece's financial situation to give the market a case of heartburn. Despite what seems to be a never-ending situation over there, the safety net for the stock market has been and continues to be the current low-to-no interest-rate environment, which increasingly looks like it will remain in place until perhaps the end of 2015. Last Wednesday's Fed Beige Book report all but confirmed that timing.
Now all we have to do is get through the next iteration of the quarterly gauntlet that is earnings season. That means battening down the hatches and sifting through a growing pile of press releases and financial tables as well as logging a lot of hours on company conference calls. This week alone there have been more than 125 companies issuing quarterly results and by and large it's been a mixed bag, even within a particular industry. Financial companies such as Goldman Sachs (GS) delivered while Bank of America (BAC) and others didn't. Outside of that universe, companies such as Intel (INTC) "beat" already reduced earnings expectations. Stepping back and looking at the continued decline in PC shipments, it's difficult to get excited about a company that primarily serves that market.
The bad-news-good-news is the velocity of these reports is going to jump significantly next week as we have more than 600 companies publishing their March-quarter results. If that sounds like a lot, it is, but it also means a number of confirming data as well a signposts for what we should be avoiding. Case in point, given its results, semiconductor chip company Intel slashed its capital-spending program by $1.3 billion to an expected $8.7 billion -- a 13% cut. On Thursday, chipmaker Taiwan Semiconductor (TSM) offered a weaker-than-expected outlook for the current quarter. Taken together, it means weaker demand for semiconductor capital equipment companies such as Applied Materials (AMAT) and Lam Research (LRCX).
It's connecting dots like those that helps us see where we are going, what waters we should fish in and which ones are to be avoided.
Turning to the week ahead, we have more housing data on tap following last week's disappointing March housing starts figures. If you missed that, you missed the "realization" that the continued misses are due to something more than just the weather. That was proven by the sharp declines month over month in the West and the drop in the South -- areas not encumbered by severe winter weather. In our view, quality jobs, wages, shifting preferences among Millennials regarding home ownership and a looming retirement crisis are larger issues that are likely to hold the housing market in check. At current levels, we are less than enamored with any of the housing stocks like Toll Brothers (TOL), Lennar (LEN), DR Horton (DHI) and others.
We'll also get the March Durable Orders Report, another one that has disappointed in the recent past. In that report, the line item we track most is core capital goods orders and they've been on a contraction streak over the last five months. Granted, the durable orders report is a tad rear view mirror, but that means Thursday's rash of April flash Purchasing Managers' Index (PMI) data from Markit Economics will clue us in to any inflection in the trend.
Markit's indicators will also be reported for a number of geographies outside the U.S. With European Central Bank President Mario Draghi proudly beating his chest about how stimulative policies are starting to work in the eurozone, we hope for his sake the flash data matches his swagger. Of all the flash PMI data, the one we think will get the most attention will be China's. There have been a growing number of comments over the vector and velocity of the Chinese economy, with many expecting China to launch more stimulative efforts to combat a sagging economy. That growing expectation has led to a near 24% rise in the iShares FTSE/Xinhua China 25 Index ETF (FXI) over the last month. This is where we remind you to be prudent rather than a greedy pig as we'd hate to have you to lose those paper profits if China's stimulative efforts fall short of expectations. Some trimming or protective stops may be in order.
As we mentioned above, we'll get more than 600 company earnings reports in the coming days. Viewed differently, that's far more S&P 500 companies and members of the Dow Jones Industrial Average than last week. Key reports to watch include IBM (IBM), Verizon Communications (VZ), AT&T (T) Coca-Cola (KO), the uber-challenged McDonald's (MCD), Qualcomm (QCOM), General Motors (GM), Google (GOOGL), PepsiCo (PEP) and Procter & Gamble (PG).
There are also quite a number of what we'd call "out-of-the-limelight" companies that bear watching given industry-specific tailwinds, such as falling commodity and other input costs. Examples include Hanesbrands (HBI), a stock that's dropped meaningfully over the last few weeks. Another is a Hawkins favorite for alter-ego Batman tanks, Under Armour (UA), which continues to target the female demographic and expand internationally. Given the strength of the dollar, the speed of that expansion will be something to watch in 2015. Two others that will have Wall Street chins wagging this week will be Starbucks (SBUX) and Yahoo! (YHOO).
Our advice heading into the belly of the earnings beast remains the same: Have your shopping lists ready, and collect your data points so you can stitch together a clearer picture of what is happening with the companies you own and the ones you are considering.
Below is a more detailed look at what's coming in the week ahead. Be sure to check back for our midweek 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: Monday, April 20 - 24 | ||
| Date | Release | For |
| 20-Apr | Chicago Fed National Activity Index | Mar |
| 22-Apr | MBA Mortgage Index | 18-Apr |
| 22-Apr | FHFA Housing Price Index | Feb |
| 22-Apr | Existing Home Sales | Mar |
| 22-Apr | Crude Inventories | 18-Apr |
| 23-Apr | Markit Flash Japan Manufacturing PMI | April |
| 23-Apr | HSBC Flash China Manufacturing PMI | April |
| 23-Apr | Markit Flash France Composite PMI | April |
| 23-Apr | Markit Flash Germany Composite PMI | April |
| 23-Apr | Markit Flash Eurozone Composite PMI | April |
| 23-Apr | Markit Flash US Manufacturing PMI | April |
| 23-Apr | Initial Claims | 18-Apr |
| 23-Apr | Continuing Claims | 11-Apr |
| 23-Apr | New Home Sales | Mar |
| 23-Apr | Natural Gas Inventories | 18-Apr |
| 24-Apr | Durable Orders | Mar |
| 24-Apr | Durable Goods ¿ex transportation | Mar |
| Earnings Calendar: Monday, April 20 - 24 | ||
| Monday, April 20 | ||
| BBNK | Bridge Cap Hldg | |
| CHKP | Check Pt Softw | |
| FTNT | Fortinet Inc | |
| HAL | Halliburton Co | |
| HAS | Hasbro Inc | |
| IBM | Intl Bus Mach | |
| KNL | Knoll Inc | |
| LII | Lennox Intl Inc | |
| LRCX | Lam Research | |
| MS | Morgan Stanley | |
| RCL | Royal Caribbean | |
| RMBS | Rambus Inc | |
| SANM | Sanmina Corp | |
| STI | Suntrust Bks | |
| UBSH | Union Bankshars | |
| ZION | Zions Bancorp | |
| Tuesday, April 21 | ||
| ABG | Asbury Auto Grp | |
| ACI | Arch Coal Inc | |
| AMGN | Amgen Inc | |
| AMTD | Td Ameritrade | |
| BMI | Badger Meter | |
| BRCM | Broadcom Corp-a | |
| CLS | Celestica Inc | |
| CMG | Chipotle Mexicn | |
| CREE | Cree Inc | |
| CS | Credit Suisse | |
| DD | Du Pont (ei) De | |
| DFS | Discover Fin Sv | |
| DLB | Dolby Lab Inc-a | |
| DOV | Dover Corp | |
| EAT | Brinker Intl | |
| GCI | Gannett Inc | |
| GPC | Genuine Parts | |
| HOG | Harley-davidson | |
| HSTM | Healthstream | |
| HXL | Hexcel Corp | |
| IBKR | Interactive Brk | |
| IEX | Idex Corp | |
| ILMN | Illumina Inc | |
| INFN | Infinera Corp | |
| ISRG | Intuitive Surg | |
| ITW | Ill Tool Works | |
| KMB | Kimberly Clark | |
| KSU | Kansas City Sou | |
| LMT | Lockheed Martin | |
| MANH | Manhattan Asoc | |
| MBFI | Mb Financl Inc | |
| NTRS | Northern Trust | |
| OMC | Omnicom Grp | |
| PKG | Packaging Corp | |
| PLD | Prologis Inc | |
| PNFP | Pinnacle Fin Pt | |
| PNR | Pentair Plc | |
| SAH | Sonic Automotve | |
| SAP | Sap Ag Adr | |
| STLD | Steel Dynamics | |
| SXT | Sensient Tech | |
| TCB | Tcf Finl Corp | |
| TRV | Travelers Cos | |
| UA | Under Armour-a | |
| VASC | Vascular Solutn | |
| VMW | Vmware Inc-a | |
| VZ | Verizon Comm | |
| YHOO | Yahoo! Inc | |
| Wednesday, April 22 | ||
| ABT | Abbott Labs | |
| ADTN | Adtran Inc | |
| AN | Autonation Inc | |
| ANGI | Angies List Inc | |
| BA | Boeing Co | |
| BK | Bank Of Ny Mell | |
| CAKE | Cheesecake Fact | |
| CLW | Clearwater Papr | |
| CTXS | Citrix Sys Inc | |
| DHI | D R Horton Inc | |
| EBAY | Ebay Inc | |
| EMC | Emc Corp -mass | |
| EVR | Evercore Partnr | |
| FB | Facebook Inc-a | |
| FFIV | F5 Networks Inc | |
| FULT | Fulton Finl | |
| GNTX | Gentex Corp | |
| IRBT | Irobot Corp | |
| KO | Coca Cola Co | |
| MCD | Mcdonalds Corp | |
| MPWR | Monolithic Pwr | |
| MYE | Myers Inds | |
| NBR | Nabors Ind | |
| NLSN | Nielsen Nv | |
| NS | Nustar Energy | |
| OC | Owens Corning | |
| OKSB | Southwest Bc-ok | |
| PCH | Potlatch Corp | |
| PLCM | Polycom Inc | |
| QCOM | Qualcomm Inc | |
| R | Ryder Sys | |
| RUSHA | Rush Entrprs-a | |
| SCSS | Select Comfort | |
| SIX | Six Flags Entmt | |
| SKX | Skechers Usa-a | |
| SONS | Sonus Networks | |
| STJ | St Jude Medical | |
| T | At&t Inc | |
| TMO | Thermo Fisher | |
| TSCO | Tractor Supply | |
| TUP | Tupperware Bran.. | |
| TXN | Texas Instrs | |
| URI | Utd Rentals Inc | |
| WAB | Wabtech | |
| XLNX | Xilinx Inc | |
| YUM | Yum! Brands Inc | |
| Thursday, April 23 | ||
| ABBV | Abbvie Inc | |
| ACTG | Acacia Research | |
| ALK | Alaska Air Grp | |
| AMP | Ameriprise Finl | |
| AMZN | Amazon.com Inc | |
| BAX | Baxter Intl | |
| BBT | Bb&t Corp | |
| BEAV | B/e Aerospace | |
| BGS | B&g Foods Cl-a | |
| BJRI | Bj's Restaurant | |
| BTU | Peabody Energy | |
| CAT | Caterpillar Inc | |
| CBI | Chicago Bridge | |
| CCI | Crown Castle | |
| CFX | Colfax Corp | |
| CLB | Core Labs Nv | |
| CLGX | Corelogic Inc | |
| COL | Rockwell Collin | |
| COLB | Columbia Bk Sys | |
| COR | Coresite Realty | |
| CSL | Carlisle Cos In | |
| DAN | Dana Holding Cp | |
| DHR | Danaher Corp | |
| DNKN | Dunkin Brands | |
| DOW | Dow Chemical | |
| DPS | Dr Pepper Snapl | |
| DPZ | Dominos Pizza | |
| DV | Devry Education | |
| EFSC | Enterprise Finl | |
| EFX | Equifax Inc | |
| ETFC | E Trade Finl Cp | |
| EW | Edwards Lifesci | |
| FCX | Freeport-mcmora.. | |
| FSL | Freescale Semi | |
| GGG | Graco Inc | |
| GHL | Greenhill & Co | |
| GIMO | Gigamon Inc | |
| GM | General Motors | |
| GMT | Gatx Corp | |
| GOOG | Google Inc-cl C | |
| GOOGL | Google Inc-cl A | |
| GRA | Grace (wr) New | |
| HBI | Hanesbrands Inc | |
| HSY | Hershey Co/the | |
| IBKC | Iberiabank Corp | |
| IR | Ingersoll Rand | |
| JAH | Jarden Corp | |
| JCI | Johnson Control | |
| JNPR | Juniper Netwrks | |
| JNS | Janus Cap Grp | |
| KLAC | Kla-tencor Corp | |
| LAZ | Lazard Ltd | |
| LLY | Lilly Eli & Co | |
| LOGI | Logitech Intl | |
| LSTR | Landstar System | |
| LUV | Southwest Air | |
| MDSO | Medidata Solutn | |
| MHO | M/i Homes Inc | |
| MJN | Mead Johnson Nu | |
| MMM | 3m Co | |
| MO | Altria Group | |
| MSCC | Microsemi Corp | |
| MSFT | Microsoft Corp | |
| MTH | Meritage Homes | |
| N | Netsuite Inc | |
| NDAQ | Nasdaq Omx Grp | |
| NTGR | Netgear Inc | |
| NUE | Nucor Corp | |
| NWE | Northwestern Cp | |
| ORLY | O Reilly Auto | |
| P | Pandora Media | |
| PEP | Pepsico Inc | |
| PG | Procter & Gambl | |
| PHM | Pulte Group Onc | |
| PII | Polaris Industr.. | |
| PLXS | Plexus Corp | |
| PNK | Pinnacle Entrtn | |
| PTEN | Patterson-uti | |
| QDEL | Quidel Corp | |
| QLIK | Qlik Technologs | |
| RJF | Raymond Jas Fin | |
| RSG | Republic Svcs | |
| RTN | Raytheon Co | |
| SBUX | Starbucks Corp | |
| SIVB | Svb Finl Gp | |
| SNA | Snap-on Inc | |
| SRCL | Stericycle Inc | |
| SWK | Stanley B&d Inc | |
| SYNA | Synaptics Inc | |
| UNP | Union Pac Corp | |
| USG | Usg Corp | |
| VMI | Valmont Inds | |
| VRSN | Verisign Inc | |
| WBC | Wabco Holdings | |
| WCC | Wesco Intl Inc | |
| Friday, April 24 | ||
| AAL | Amer Airlines | |
| AMX | Amer Movil-adr | |
| AOS | Smith (ao) Corp | |
| ASMI | Asm Intl Nv | |
| BGG | Briggs & Stratt | |
| BIIB | Biogen Idec Inc | |
| COG | Cabot Oil & Gas | |
| FII | Federated Invst | |
| FLIR | Flir Systems | |
| GBCI | Glacier Bancorp | |
| GIFI | Gulf Island Fab | |
| HBHC | Hancock Hldg Co | |
| IPG | Interpublic Grp | |
| LEA | Lear Corporatn | |
| MNI | Mcclatchy Co-a | |
| NEM | Newmont Mining | |
| PFG | Principal Finl | |
| SHOO | Steven Madden | |
| SSD | Simpson Mfg Inc | |
| STT | State St Corp | |
| TRN | Trinity Inds In | |
| TYC | Tyco Intl Ltd | |
| VTR | Ventas Inc | |
| WLB | Westmoreland Co | |
| XRX | Xerox Corp | |
