While we entered the past week with a punch list skewed toward corporate earnings and some economic data, what we got during the week serves as a reminder that the stock market can still offer up some unexpected surprises.
While earnings remained choppy in general as a result of the strong dollar and other 1Q 2015 factors we've mentioned previously, the Nasdaq Composite Index finally joined its sister indices in reaching a new level on the back of stronger-than-expected tech earnings from Microsoft (MSFT), Amazon.com (AMZN), Starbucks (SBUX) and others that surprised with earnings on the upside.
Other surprises during the week included Google's (GOOGL) announced new Fi wireless service that brings the search company into a tighter relationship with Sprint (S) and T-Mobile (TMUS) to compete with Verizon Wireless (VZ) and AT&T (T). Comcast (CMCSA) called off its planned deal with Time Warner Cable (TWC). And while not exactly a surprise, Apple's (AAPL) new Apple Watch started shipping and, as we expected, the early read is it's a device you may want to have, but don't need to have. Even though Starwood Hotels (HOT) has announced you can use the Apple Watch to open your hotel room door at over 100 of its hotels, we'll wait for the second or third iteration.
The economic data we did get last week -- the various flash PMI reports from Markit Economics, the March durable-orders report and new-home sales figures for March -- all pointed to a continued slowing in the domestic economy as well as in China and Japan. That sure seems to support Caterpillar's (CAT) updated 2.7% global growth forecast this year, barely unchanged from 2.6% last year. Even CSX's (CSX) outlook for certain commodity volumes, like petroleum, calls for flattish performance in the coming quarters as domestic rig counts continue to fall. To us, it's more confirmation the Fed will be doing nothing with interest rates in the short term.
This week, we'll be getting the first look at 1Q 2015 GDP, and much like last year's first quarter, Wall Street believes the economy took a hit during the first three months of 2015. Current consensus expectations per Bloomberg stand at 1%, but you know that's a tad aggressive when even the Atlanta Federal Reserve cut its 1Q 2015 GDP forecast to 0% in early April from 1.9% in February. Irrespective of the initial GDP reading, the vector is down and that will weigh on the velocity of economic growth, at least in the first half of the year. In other words, that forthcoming data point will only add to the existing runway the Fed has in front of it to hold off moving interest rates higher, and we expect no change at all on Wednesday's FOMC rate announcement.
Looking at the rest of the economic data coming at us in the week ahead, personal income and spending, a favorite of ours, will be reported for March. Over the last few months, the savings rate has ticked up despite the lack of meaningful change in disposable income. Was this related to weather shut-in or growing consumer unease? We'll have a better sense on Thursday and what it may mean for retailers and restaurant stocks.
As we pointed out last Wednesday, the real test of the domestic economy will be the April-May data we get in the coming weeks. Between now and then, we have a helluva lot more earnings reports to digest. The frequency of those reports hits a fever pitch this week with more than 1,050 companies on deck -- a 72% jump over the number last week. Stepping back a bit, this is the third week of March quarter earnings and it's time to start collecting what were individual company results and connecting dots to form clear signals as to what is occurring in different industries.
For example, the CSX comment above combined with a drop in new railcar orders that was mentioned in Trinity Industries' (TRN) quarterly results means we are likely to see more cautious guidance from American Railcar (ARII), FreightCar America (RAIL) and others. Even though Caterpillar beat revenue expectations, top-line sales were down over the trailing 12 months, which doesn't bode well for Deere (DE), which reports in late May. Both Microsoft and Amazon surprised on the upside with their cloud businesses, and this means giving data center companies, like Equinix (EQIX), DuPont Fabros Technology (DFT), Digital Realty Trust (DLR) or Rackspace (RAX), another look.
A word to the wise: Don't be fooled by Monday's lack of headline grabbers during trading hours. The day will be centered on Apple's results after the market close, and given the significant presence Apple shares have in the Nasdaq, as Apple goes, so goes the Nasdaq on Tuesday. Those results will either propel or weigh down key suppliers such as Qualcomm (QCOM), Skyworks Solutions (SWKS), Cirrus Logic (CRUS) and others. While not fun to do, you may want to revisit stop losses on Monday and tighten them up.
As you can see below in the earnings calendar for this week, Tuesday through Thursday will be the most challenging as we drink from not the firehose, but more like the hydrant itself. Our advice is to take the weekend, revisit that shopping list of yours we've been suggesting you build and get ready. Opportunities will present themselves, just like Under Armour (UA) did this week, but unless you're prepared, you're likely to miss them.
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 27 - Friday, May 1 | |
| 28-Apr | Case-Shiller 20-city Index |
| 28-Apr | Consumer Confidence |
| 29-Apr | MBA Mortgage Index |
| 29-Apr | GDP-Adv. |
| 29-Apr | Chain Deflator-Adv. |
| 29-Apr | Pending Home Sales |
| 29-Apr | Crude Inventories |
| 29-Apr | FOMC Rate Decision |
| 30-Apr | Initial Claims |
| 30-Apr | Continuing Claims |
| 30-Apr | Personal Income |
| 30-Apr | Personal Spending |
| 30-Apr | PCE Prices - Core |
| 30-Apr | Employment Cost Index |
| 30-Apr | Chicago PMI |
| 30-Apr | Natural Gas Inventories |
| 1-May | ISM Index |
| 1-May | Construction Spending |
| 1-May | Michigan Sentiment - Final |
| 1-May | Auto Sales |
| 1-May | Truck Sales |
| 1-May | Markit Japan Manufacturing Index |
| 1-May | Markit US Manufacturing PMI |
| Earnings Calendar: Monday, April 27 - Friday, May 1 | |
| Monday, April 27 | |
| AAPL | Apple Inc |
| ACW | Accuride Corp |
| AMKR | Amkor Tech Inc |
| CUDA | Barracuda Ntwrk |
| HTLF | Heartland Fincl |
| MCY | Mercury Genl Cp |
| OSTK | Overstock.com |
| PCL | Plum Creek Tmbr |
| PDS | Precision Drill |
| PLT | Plantronics Inc |
| QSR | Restaurant Bran.. |
| ROP | Roper Inds Inc |
| RTEC | Rudolph Tech |
| SOHU | Sohu.com Inc |
| TCS | Container Store |
| TEN | Tenneco Inc |
| Tuesday, April 28 | |
| ABX | Barrick Gold Cp |
| AET | Aetna Inc-new |
| AFG | Amer Finl Group |
| AGCO | Agco Corp |
| AKAM | Akamai Tech |
| BGFV | Big 5 Sporting |
| BMY | Bristol-myers |
| BP | Bp Plc |
| BWLD | Buffalo Wld Wng |
| CMI | Cummins Inc |
| CNX | Consol Energy |
| COH | Coach Inc |
| CPLA | Capella Educatn |
| CR | Crane Co |
| CRUS | Cirrus Logic |
| CTS | Cts Corp |
| DFRG | Del Friscos Rst |
| F | Ford Motor Co |
| FDP | Fresh Del Monte |
| FLWS | 1800flowers.com |
| GLW | Corning Inc |
| GPRO | Gopro Inc-a |
| HELE | Helen Of Troy |
| IIVI | Ii-vi Incorp |
| INAP | Internap Netwrk |
| IPI | Intrepid Potash |
| JBLU | Jetblue Airways |
| JEC | Jacobs Engin Gr |
| JJSF | J&j Snack Foods |
| LRN | K12 Inc |
| MAS | Masco |
| MHFI | Mcgraw Hill Fin |
| MRK | Merck & Co Inc |
| MSTR | Microstrategy |
| MTSI | Ma-com Tech Sol |
| OMI | Owens & Minor |
| OSK | Oshkosh Corp |
| PAG | Penske Auto Grp |
| PFE | Pfizer Inc |
| PH | Parker Hannifin |
| SERV | Servicemastr Gh |
| SIRI | Sirius Xm Hldgs |
| ST | Sensata Technol |
| SVU | Supervalu Inc |
| SWFT | Swift Transport |
| SWI | Solarwinds Inc |
| TWTR | Twitter Inc |
| TXT | Textron Inc |
| UPS | Utd Parcel Srvc |
| VDSI | Vasco Data Sec |
| WAT | Waters Corp |
| WDC | Western Digital |
| WDR | Waddell&reed -a |
| WHR | Whirlpool Corp |
| WNC | Wabash National |
| WWW | Wolverine World |
| YNDX | Yandex Nv-a |
| Wednesday, April 29 | |
| ACCO | Acco Brands Cp |
| ADT | Adt Corp |
| AFL | Aflac Inc |
| ANTM | Anthem Inc. |
| AUY | Yamana Gold Inc |
| AVY | Avery Dennison |
| BIDU | Baidu Inc |
| CAVM | Cavium Inc |
| CEB | Corp Exec Brd |
| CG | Carlyle Group |
| DHX | Dice Holdings |
| EDR | Education Rlty |
| EQIX | Equinix Inc |
| ESRX | Express Scripts |
| ETN | Eaton Corp Plc |
| FCAU | Fiat Chrysler A.. |
| FDML | Federal Mogul-a |
| FLEX | Flextronic Intl |
| FUN | Cedar Fair |
| GD | Genl Dynamics |
| GEL | Genesis Energy |
| GNW | Genworth Finl |
| GRMN | Garmin Ltd |
| GT | Goodyear Tire |
| HAWK | Blackhawk Netwk |
| HLT | Hilton Ww Hldg |
| HOLX | Hologic Inc |
| HOT | Starwood Hotels |
| IACI | Iac/interactive.. |
| IDCC | Interdigitl Inc |
| IP | Intl Paper |
| LINE | Linn Energy Llc |
| LL | Lumber Liquidat |
| LOCK | Lifelock Inc |
| LVLT | Level 3 Comm |
| MA | Mastercard Inc |
| MDLZ | Mondelez Intl |
| NOC | Northrop Grummn |
| NSC | Norfolk Southrn |
| NSR | Neustar Inc -a |
| OI | Owens-illinois |
| PNRA | Panera Bread Co |
| PX | Praxair Inc |
| SAM | Boston Beer Inc |
| SAVE | Spirit Airlines |
| SFLY | Shutterfly Inc |
| SKT | Tanger Fact Out |
| SLAB | Silicon Lab Inc |
| SNCR | Synchronoss Tec |
| TPX | Tempur Sealy |
| TRI | Thomson Reuters |
| TWX | Time Warner Inc |
| WM | Waste Mgmt-new |
| YELP | Yelp Inc |
| Thursday, April 30 | |
| ADP | Automatic Data .. |
| AKR | Acadia Rlty Tr |
| ALLE | Allegion Plc |
| APD | Air Prods & Che |
| ARG | Airgas Inc |
| ARII | Amer Railcar |
| ARW | Arrow Electroni |
| AVP | Avon Prods Inc |
| AWI | Armstrong World |
| BG | Bunge Ltd |
| BRKS | Brooks Automatn |
| BWA | Borg Warner Inc |
| BYD | Boyd Gaming Cp |
| BZH | Beazer Homes |
| CACI | Caci Intl A |
| CAH | Cardinal Health |
| CCE | Coca-cola Entrp |
| CCMP | Cabot Microelec |
| CELG | Celgene Corp |
| CL | Colgate Palmoli |
| COLM | Columbia Sports |
| COP | Conocophillips |
| CWT | Calif Water Svc |
| CY | Cypress Semicon |
| DBD | Diebold Inc |
| DIN | Dineequity Inc |
| DLPH | Delphi Auto Plc |
| DWA | Dreamworks Anim |
| EBIO | Eleven Biotherp |
| EPD | Enterprise Prod |
| EXPE | Expedia Inc |
| FBHS | Fortune Brd H&s |
| FEYE | Fireeye Inc |
| FHCO | Female Health |
| GILD | Gilead Sciences |
| GTI | Graftech Intl |
| HAR | Harman Intl Ind |
| IMAX | Imax Corp |
| IMMR | Immersion Corp |
| INGR | Ingredion Inc |
| IVZ | Invesco Ltd |
| JDSU | Jds Uniphase Cp |
| LBY | Libbey Inc |
| LKQ | Lkq Corp |
| LLL | L-3 Comm Hldgs |
| LLNW | Limelight Netwk |
| LNC | Lincoln Natl-in |
| LNKD | Linkedin Corp-a |
| LONG | Elong Inc-adr |
| LPLA | Lpl Finl Hldgs |
| LUNMF.PK | Lundin Mining C.. |
| LYV | Live Nation Ent |
| MAR | Marriott Intl-a |
| MOBL | Mobile Iron Inc |
| MOS | Mosaic Co/the |
| MPC | Marathon Petrol |
| MPLX | Mplx Lp |
| MTW | Manitowoc Inc |
| MUR | Murphy Oil |
| NTRI | Nutri/system |
| NXPI | Nxp Semiconduct |
| NYT | Ny Times A |
| O | Realty Income |
| PF | Pinnacle Foods |
| PKI | Perkinelmer Inc |
| POT | Potash Sask |
| PPC | Pilgrims Pride |
| RDWR | Radware Ltd |
| RGC | Regal Entmnt Gp |
| RGS | Regis Corp/mn |
| ROK | Rockwell Automt |
| ROVI | Rovi Corp |
| RYL | Ryland Grp Inc |
| SEE | Sealed Air Corp |
| SNE | Sony Corp Adr |
| SNMX | Senomyx Inc |
| SPB | Spectrum Brands |
| SPWR | Sunpower Corp-a |
| STM | Stmicroelectron |
| SWKS | Skyworks Solutn |
| SYNC | Synacor Inc |
| TASR | Taser Intl Inc |
| TEVA | Teva Pharm Adr |
| TEX | Terex Corp |
| TKR | Timken Co |
| TNAV | Telenav Inc |
| TRMB | Trimble Navigat |
| TWC | Time Warner Cab |
| UFS | Domtar Corp |
| V | Visa Inc-a |
| VA | Virgin America .. |
| VALE | Vale Sa |
| VIA | Viacom Inc-a |
| WTS | Watts Water Tec |
| WWE | World Wrestling |
| XOM | Exxon Mobil Crp |
| XYL | Xylem Inc |
| Friday, May 1 | |
| AIMC | Altra Holdings |
| ATHN | Athenahealth In |
| BCO | Brinks Co The |
| BERY | Berry Plastics |
| CBOE | Cboe Holdings |
| CLX | Clorox Co |
| CVS | Cvs Caremark Cp |
| CVX | Chevron Corp |
| FLS | Flowserve Corp |
| GWR | Genesee & Wyo |
| HPY | Heartland Paymt |
| ISBC | Investors Bancp |
| ITT | Itt Corp |
| LM | Legg Mason Inc |
| MCO | Moodys Corp |
| MSG | Madison Square |
| NWL | Newell Rubbermd |
| RUTH | Ruths Hospitlty |
| VFC | V F Corp |
| WY | Weyerhaeuser Co |
