The insanity of about 200 of the S&P's 500 stocks reporting this week just can't be explained. The irrationality of the onslaught of numbers -- and what it means in trying to figure out who is doing well and who is doing badly -- makes no sense whatsoever.
The distortions will impact every day -- including today -- so, companies, listen to me, you need to rethink when you report: later, earlier, anything but this week.
With that said, let's get right to the game plan. If there is a theme of weakness in 2017, it's the autos. The consensus is that the slowdown in car sales has meant a belief that the U.S. industrial output might have peaked. Why don't we hear from General Motors (GM) , which will certainly have better visibility than we do? GM plus Ford (F) on Wednesday will tell the tale.
Three gigantic industrials report in the morning -- Caterpillar (CAT) , 3M (MMM) and United Technologies (UTX) -- and the chatter is that all three will report better-than-expected numbers. That's caused these stocks to ramp ahead of the numbers, and that means if you want to buy them, and I totally get that, wait until the end of the conference calls to make a move, given that these are companies that cannot be traded on the headlines. Of these three, I have the most faith in 3M and the work that Inge Thulin has done as CEO to innovate and drive revenue with new products.
One of the hottest companies in the Dow Jones Average, McDonald's (MCD) , gives us its numbers Tuesday morning -- and people keep thinking that Steve Easterbrook's reign can't keep driving this stock up. A gain of about 60 points is truly a wonder. I think the wonder continues, with better-than-expected numbers, a weaker dollar and some customer relations improvement and technology continuing to propel this stock.
Keeping the restaurant theme going, we have the best of times and the worst of times: Domino's Pizza (DPZ) and Chipotle (CMG) before and after the bell. Remember, Domino's has consistently beaten numbers and Chipotle's failed to beat, and I don't think it will be any different this time. You know that I had a rule that 18 months after a food incident, customers will forget why they stopped going or they will be forgiving. But we had a bunch of new incidents in the last week, and that starts the tolling all over again.
Few companies have generated the excitement of Advanced Micro Devices (AMD) here, whether it be because of the company's gaming chips, or chips that compete with Intel (INTC) or the chips that help mine cryptocurrencies, a small part of AMD's business that continues to generate excitement because of the Bitcoin/Ethereum surges. The company does not seem to be able to tell a great story -- and we get selloffs after the quarter. Wait until then if you want to buy.
Wednesday's the day when most mistakes are made in analysis, because of the overload. It starts with Boeing (BA) , where only fools trade this darned thing before we hear the conference call, especially after this amazing run. Some company's earnings are very hard to understand; I think Boeing's are about as hard as they get.
Will Coca-Cola (KO) under the new CEO be able to deliver some sort of upside surprise? Pepsico (PEP) sure had a terrific quarter. Can Coca-Cola, which has a more-expensive stock, give us a reason to buy? I think it's possible. Low risk, low reward, though.
After the close, the big story is Facebook (FB) . We've done a deep dive on how Facebook's stock trades after the quarter, and the crucial component is whether they say that there are issues with ad load and not hurting the user experience. When they don't exhibit concern, the stock rallies, when they do, it goes down. The benefit here is that this might be the breakout quarter for video, giving the company a very good platform to accept non-intrusive ads. I like the story, but this stock has run to the point that it could get hammered if they fret about ads and experiences. They do run a clinic of a call, if you want to hear how it's done.
I expect one of the strongest quarters this reporting period should come from Lam Research (LRCX) , which makes the equipment for semiconductors that are in short supply, which is basically every kind. Lam's been delivering surprises ever since it made the Novellus acquisition -- and I don't think this time will be any different. Paypal, (PYPL) , which we have featured endlessly, reports after the close, too, and I think that because the stock has run so much, I would wait to see if the bears try to knock it down to buy.
I know we're focused on earnings this week, but do not overlook the Federal Open Market Committee meeting, because I bet we hear about the schedule of how the Fed is going to sell its incredibly large multi-trillion-dollar bond holdings. I think it is vital that they sell them before they raise rates more. They need to get the best deal for the taxpayer and they could drive the longer-term rates up, which would be good for the banks. And boy, do they need it, because their stocks continue to be drubbed even as their quarters weren't that weak. So hold on to your bank stocks and look for this day to be a good one for the financials.
Thursday begins the parade of oil companies' earnings, and I wonder if they will tell a story where they can make good money with the new normal.
The airlines have been terrible, and I wonder if the spell can be broken by Southwest Airlines (LUV) , which has traditionally been the best of the best. My charitable trust owns this and Dow Chemical (DOW) , which also reports Thursday -- and I think both could be excellent buys both before and after their numbers. Remember, we are running out of Dow quarters when the company will be independent. I think this might end up being the last public quarter, and I think it will be a very good one.
After the close, there's a company that has become so controversial that used to be the opposite: Starbucks (SBUX) . Ever since the company introduced mobile pay here, there's been issues involving U.S same store sales. The hope here is simple: that the company has solved throughput and got same-store sales back to a palatable range of 4%-5%, instead of something lower that will cause the stock to get hammered to the mid-$50s.
As if that isn't enough, Thursday night, Amazon (AMZN) reports -- and the company's stock has been extraordinary since the last quarter, with the after burners in full sway since Amazon Prime Day. People want to see Amazon Web Services shine, and they want to know how retail's doing. Amazon's always Spartan with info, so don't expect a compendium about how Amazon's doing.
Then there's Intel (INTC) . Can this company regain its lead in semiconductors? You know that the world is abuzz with Nvidia's (NVDA) numbers. Intel is buying Mobileye to get big in autonomous driving. Let's see what they say about the total addressable market that Mobileye can give them.
Finally, there's Friday, where Exxon Mobil (XOM) and Chevron (CVX) report, and these two will tell the final tale of this beleaguered group. Chevron usually gives you a really good forecast -- and I don't expect it to be a great one.
Will the market go higher through this thicket? I think each day will be a trend unto itself, and some days will cancel out other days. But overall, I suspect that the ton of the internationally oriented companies, which benefit from stronger markets, and a weak dollar could carry the day for the bulls.