Last week we closed the books on July, which, after Thursday's pullback in the Dow Jones Industrial Average, left the major market indices mixed with two of three in positive territory.
Friday's dip added to the weakness in the major market indices and left the Dow in the red and S&P 500 and Nasdaq Composite Index well off their highs from just a few weeks ago. In case you missed it, it was a trio of factors that led to the selloff: the talk of an Argentinian default, the sharp rise in the Employment Cost Index, which climbed 0.7% in Q2 2014, up from a 0.3% increase in the first quarter, and the initial 2Q 2014 GDP reading of 4%.
As I noted in The Friday Wrap, looking at the industrial data we received last week -- the July ISM Manufacturing Report and several geographic PMI reports -- I fall into the camp that sees last week as a release from a steam valve. The continued grind higher we've seen over the last several weeks tends to put Wall Street on edge and in some ways it looks for a reason to pullback. Thursday's headlines gave us some reason to be concerned about the timing of interest-rate hikes by the Fed, but diving into the 2Q GDP report showed it was a lower quality beat thanks to inventory builds. The rate-hike edge was further dulled on Friday's July employment report.
More than 1,000 companies reported earnings last week and the scorecard for S&P 500 companies exiting last week showed 74% have reported earnings above the mean estimate and 65% have reported sales above the mean estimate for 2Q 2014. Given the high percentage of companies that issued forward guidance coming out of the March quarter, one could argue that earnings are holding up better than many expected. That's not to say we haven't had any high profile blow ups -- Whole Foods Market (WFM), Kellogg (K), Herbalife (HLF), Amazon (AMZN) and more than a few others -- but again, so far generally better than expected.
After the plethora of economic data last week, we have a dramatic drop in that kind of information flow this week, with only June Factory Orders and the July ISM services report joining the weekly data streams. While it will be relatively quiet on that front, the week ahead will bring us another 1,100 earnings calls this week, but with 346 of the 500 S&P 500 companies having already reported their results we have to watch one Dow component and 74 S&P 500 companies report. Given the market move last week, I'll be looking at reports from Henry Schein (HSIC), Mueller Water (MWA) and Nu Skin (NUS), as well as several Thematic Growth Portfolio positions II-VI (IIVI), Allscripts (MDRX) and American Water Works (AWK).
One housekeeping item. Based on initial box office receipts, Disney (DIS) had a home run with its "Guardians of the Galaxy" and truth be told, not only did I see it Friday (and it was awesome), I would also recommend the soundtrack, which is already the top selling album on iTunes and rocks the house. Toss in continued success with "Frozen" and I suspect at a minimum Disney will have an upbeat tone its earnings call on Tuesday.
Below is more detailed look at what's coming at you in the week ahead. Be sure to check back midweek for The Corner of Wall & Main, in which Lenore Hawkins and I will dish on the first half of the trading week and other key matters and thoughts, as well as how to play it all. Be sure to join us again at the end of the week for The Friday Wrap, in which we'll put the whole week in context for you.
Economic Calendar
Monday, August 4
NM
Tuesday, August 5
Markit US Services PMI
JPMorgan Global Composite PMI
Factory Orders (June)
ISM Services Index (July)
Wednesday, August 6
HSBC Emerging Market Index
MBA Mortgage Index (Weekly)
Crude Inventories (Weekly)
Thursday, August 7
Markit Global Sector PMI
Initial & Continuing Jobless Claims (Weekly)
Natural Gas Inventories (Weekly)
Consumer Credit (June)
Friday, August 8
Productivity (2Q 2014)
Unit Labor Costs (2Q 2014)
Wholesale Inventories (June)
Earnings Calendar
Monday, August 4
Axcelis Tech (ACLS)
Banco Santander-Chile (BSAC)
Cardinal Health (CAH)
Carmike Cinemas (CKEC)
Checkpoint Systems (CKP)
Cubic Corp. (CUB)
Henry Schein (HSIC)
Loews Corp. (L)
Leapfrog Industries (LF)
Limelight Networks (LLNW)
Michael Kors (KORS)
Rudolph Tech (RTEC)
Senior Housing (SNH)
Trex Company (TREX)
Texas Roadhouse (TXRH)
Tuesday, August 5
Archer Daniels Midland (ADM)
American Superconductor (AMSC)
Bloomin Brands (BLMN)
Avis Budget Group (CAR)
Cinemark Holdings (CNK)
Coach Inc. (COH)
Cablevision Systems (CVC)
CVS Caremark (CVS)
Famous Dave's (DAVE)
Walt Disney Co. (DIS)
Dresser Rand Group (DRC)
Emerson Electric (EMR)
FireEye Inc. (FEYE)
First Solar (FSLR)
Cedar Fair (FUN)
Groupon (GRPN)
Icahn Enterprises (IEP)
International Flavors & Fragrances (IFF)
II-VI Inc. (IIVI)
MGM Resorts (MGM)
Marathon Oil (MRO)
Motorola Solutions (MSI)
Mueller Water (MWA)
Monster Worldwide (MWW)
Office Depot (ODP)
Potbelly Corp. (PBPB)
Ritchie Brothers (RBA)
Rosetta Stone (RST)
Comscore (SCOR)
Steris Corp. (STE)
Tecumseh Products (TECU)
Time Inc. (TIME)
Take-Two Interactive (TTWO)
Vitamin Shoppe (VSI)
Zillow Inc. (Z)
Zagg Inc. (ZAGG)
Wednesday, August 6
Apollo Resource Management (AMTG)
AOL Inc. (AOL)
Atmel Corp. (ATML)
American States Water (AWR)
Blount International (BLT)
Cumulus Media (CMLS)
Coupons.com (COUP)
Centurylink Inc. (CTL)
Keurig Green Mountain (GMCR)
Hanger Inc. (HGR)
Kelly Services (KELYA)
Mondelez International (MDLZ)
Nature's Sunshine Products (NATR)
Nu Skin Enterprises (NUS)
Novatel Wireless (NVTL)
Parker Hannifin (PH)
Parker Drilling (PKD)
ePlus Inc. (PLUS)
Ralph Lauren (RL)
Sapient Corp. (SAPE)
Stifel Financial (SF)
Starwood Properties (STWD)
Molson Coors (TAP)
Tim Hortons (THI)
Time Warner Inc. (TWX)
Visteon Corp. (VC)
Viacom (VIA)
Vimpelcom Ltd. (VIP)
Aqua America (WTR)
Thursday, August 7
AES Corp. (AES)
Agrium Inc. (AGU)
Air Methods (AIRM)
AMC Networks (AMCX)
American Water Works (AWK)
Craft Brew Alliance (BREW)
CBS Corp. (CBS)
CF Industries (CF)
Cooper Tire (CTB)
Duke Energy (DUK)
Devry Education (DV)
Brinker International (EAT)
Fairway Group (FWM
Genomic Health (GHDX)
Harman International (HAR)
Harsco Corp. (HSC)
HSN Inc. (HSNI)
InterDigital Inc. (IDCC)
ID Systems (IDSY)
Jack in the Box (JACK)
Key Energy (KEG)
Lee Enterprises (LEE)
Molycorp Inc. (MCP)
Maiden Holdings (MHLD)
Mix Telematics (MIXT)
Monster Beverage (MNST)
Mylan Inc. (MYL)
Nvidia Corp. (NVDA)
News Corp. (NWSA)
Universal Display (OLED)
Omega Protein (OME)
Orbitz Worldwide (OWW)
Pozen Inc. (POZN)
Freightcar America (RAIL)
Bankrate Inc. (RATE)
Resource America (REXI)
Scripps Network (SNI)
Shutterstock (SSTK)
Stratasys Ltd. (SSYS)
Treehouse Foods (THS)
Terra Nitrogen (TNH)
Tumi Holdings (TUMI)
US Concrete (USCR)
Vivus Inc. (VVUS)
Wave Systems (WAVX)
Boingo Wireless (WIFI)
Whitewave Foods (WWAV)
Zynga Inc. (ZNGA)
Friday, August 8
Ashford Hospitality (AHT)
Brookfield Asset (BAM)
Sotheby's (BID)
Choice Hotels (CHH)
Lions Gate Entertainment (LGF)
Main Street Capital (MAIN)
Allscripts (MDRX)
Magna International (MGA)
MTR Gaming (MNTG)
Post Holdings (POST)
EW Scripps Co. (SSP)
