Last week, all three major stock market indices climbed higher as corporate earnings season kicked into high gear. On the economic front, we received the September employment report -- originally due for release during the government shutdown -- which reflected only 148,000 jobs created. That's well short of the 183,000 consensus estimate and the 193,000 positions created in August (which was revised up from the prior 169,000). In addition, September's durable orders for core capital goods -- read that as ex-defense and non-aircraft -- fell 1.1%. Particularly large declines registered in orders for machinery, which fell 1.8%; fabricated metals, with a 0.9% decline; and motor vehicles and electrical components, each down 0.3%.
With that in mind, the October interest-rate decision is on tap this week from the Federal Open Market Committee -- but it increasingly looks as if the Fed is likely to delay tapering stimulus for at least a few months. Ahead of that report, we'll get another look at the domestic industrial economy in the form of September industrial production (Monday), October manufacturing data from the Institute for Supply Management (Friday) and Markit's U.S. manufacturing purchasing managers index (also Friday).
Meanwhile, we are still in the heart of earnings season: Nearly half of the companies that comprise the S&P 500 have issued their September-quarter results. More than 1,000 companies reported their quarterly results last week, and this week more than 1,200 are scheduled. Before we dive headlong into that onslaught, what can be said about the numbers we've received thus far?
Well, of the firms that have reported, roughly 75% have surpassed estimates on earnings per share, while 25% have reported actual EPS below the mean target, according to data from FactSet. Only 52%, however, have reported sales above the average Wall Street expectations. In other words, fewer companies are beating on the top line -- it seems more companies have been focused on controlling costs, which helps explain the disparity between revenue and earnings beats. Sifting deeper, however, we find that company earnings have registered 0.8% above expectations in aggregate. That compares with the 3.7% average beat over the last four quarters and 6.5% over the last four years.
Also, of the S&P 500 companies that have issued December-quarter EPS guidance, 49 have offered negative guidance and just eight have issued positive forecasts. As I mentioned, we're just about halfway through in terms of third-quarter results -- so the metrics could get better. That said, as anyone would know if they've attended college or graduate school, it's a lot harder to pull your grades up with only half of the course load remaining.
With that in mind, some of the corporate results that will garner significant attention this week include Apple (AAPL), Facebook (FB), LinkedIn (LNKD), Starbucks (SBUX), Nokia (NOK), and Buffalo Wild Wings (BWLD). Aside from those headline-grabbers, it'll be a big week for rail stocks: American Railcar (ARII), FreightCar America (RAIL) and the industry heavyweight Trinity Industries (TRN) are expected to report their quarterly results. Other transportation and capital-goods companies on the earnings docket include Cummins (CMI) and Paccar (PCAR), as well as General Motors (GM), TRW Automotive (TRW) and Advance Auto Parts (AAP). We'll also hear from the housing and building-product sector via Ryland (RYL), Standard Pacific (SPF), Armstrong World (AWI) and Masco (MAS), among others.
That's just a fraction of the more than 1,200 earnings reports that will hit the tape in the coming five trading days. Here's a more detailed look at what you can expect in the week ahead:
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Economic Data
Monday, Oct. 28
- Industrial Production (September)
- Capacity Utilization (September)
- Pending Home Sales (September)
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Tuesday, Oct. 29
- Retail Sales (September)
- Producer Price Index (September)
- Case-Shiller 20-City Index (August)
- Business Inventories (August)
- Consumer Confidence (October)
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Wednesday, Oct. 30
- Markit Eurozone Retail PMI
- Mortgage Bankers Association (MBA) Mortgage Index (Weekly)
- ADP Employment Change (October)
- Consumer Price Index (CPI)
- Crude Inventories (October 26)
- Federal Open Market Committee (FOMC) Rate Decision (October)
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Thursday, Oct. 31
- Challenger Job Cuts (October)
- Initial and Continuing Jobless Claims (Weekly)
- Chicago Purchasing Managers Index (PMI) (October)
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Friday, Nov. 1
- HSBC China Manufacturing PMI
- Markit US Manufacturing PMI
- HSBC Mexico Manufacturing PMI
- Institute for Supply Management (ISM) Index (October)
- Auto & Truck Sales (October)
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Earnings Ahead
Monday, Oct. 28
- Apple (AAPL)
- Advent Software (ADVS)
- Armstrong World Industries (AWI)
- Burger King Worldwide (BKW)
- Denny's Corp. (DENN)
- Heartland Financial (HTLF)
- Loews Corp. (L)
- Merck & Co. (MRK)
- NutriSystem (NTRI)
- PMC-Sierra (PMCS)
- Peregrine Semiconductor (PSMI)
- Roper Industries (ROP)
- Sanmina-SCI Corp. (SANM)
- Tenneco Inc. (TEN)
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Tuesday, Oct. 29
- Arch Coal (ACI)
- Archer Daniels Midland (ADM)
- Aetna (AET)
- AGCO Corp. (AGCO)
- TD Ameritrade (AMTD)
- Air Products & Chemicals (APD)
- Big 5 Sporting (BGFV)
- Baidu.com (BIDU)
- Buffalo Wild Winds (BWLD)
- Chicago Bridge & Iron (CBG)
- Cummins Inc. (CMI)
- Cumulus Media (CMLS)
- Crane Co. (CR)
- Cirrus Logic (CRUS)
- CTS Corp. (CTS)
- Caesars Entertainment (CZR)
- DineEquity (DIN)
- Dolby Labs (DLB)
- Entropic Communications (ENTR)
- Flextronics (FLEX)
- 1-800-Flowers (FLWS)
- Goodyear Tire & Rubber (GT)
- Herbalife (HLF)
- II-VI Inc. (IIVI)
- Ikanos Communications (IKAN)
- JetBlue Airways (JBLU)
- Johnson Controls (JCI)
- Libbey Inc. (LBY)
- LinkedIn Corp. (LNKD)
- Masco Corp. (MAS)
- MDC Holdings (MDC)
- Nokia Corp. (NOK)
- Paccar Inc. (PCAR)
- Shutterfly (SFLY)
- TRW Automotive (TRW)
- Titan International (TWI)
- Valero Energy (VLO)
- VistaPrint Ltd. (VPRT)
- WebMD Health (WBMD)
- Waddell & Reed (WDR)
- Xylem Inc. (XYL)
- Yelp (YELP)
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Wednesday, Oct. 30
- Automatic Data Processing (ADP)
- Aflac, Inc. (AFL)
- Ameriprise Financial (AMP)
- Yamana Gold (AUY)
- BorgWarner (BWA)
- Cavium Networks (CAVM)
- CEVA Inc. (CEVA)
- Comcast Corp. (CMCSA)
- Crocs, Inc. (CROX)
- Diebold (DBD)
- Dollar Financial (DLLR)
- Digital Realty Trust (DLR)
- Facebook (FB)
- Glu Mobile (GLUU)
- Corning Inc. (GLW)
- General Motors (GM)
- Garmin Ltd. (GRMN)
- Hyatt Hotels (H)
- Hanesbrands (HBI)
- Hess Corp. (HES)
- Heartland Payment Systems (HPY)
- Jarden Corp. (JAH)
- JDS Uniphase (JDSU)
- Jones Apparel (JNY)
- Kraft Foods (KRFT)
- Mueller Water Products (MWA)
- NeuStar, Inc. (NSR)
- PG&E Corp. (PCG)
- Pioneer Energy Services (PES)
- PerkinElmer (PKI)
- Praxair Inc. (PX)
- Bankrate Inc. (RATE)
- Elizabeth Arden (RDEN)
- RealNetworks (RNWK)
- Rovi Corp. (ROVI)
- Ryland Group (RYL)
- Sprint-Nextel (S)
- Boston Beer (SAM)
- SodaStream International (SODA)
- Skyworks Solutions (SWKS)
- Taser International (TASR)
- Tyco Electronics (TEL)
- Speedway Motorsports (TRK)
- Visa (V)
- Weight Watchers (WTW)
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Thursday, Oct. 31
- Advance Auto Parts (AAP)
- Barrick Gold Corp. (ABX)
- Alcatel-Lucent (ALU)
- Alpha Natural Resources (ANR)
- American Railcar Industries (ARII)
- Avon Products (AVP)
- Anheuser Busch Co. (BUD)
- Boyd Gaming (BYD)
- CACI International (CACI)
- CIGNA Corp. (CI)
- The Clorox Company (CLX)
- ConocoPhillips (COP)
- CoreSite Realty (COR)
- Discover Holding (DISCA)
- Estee Lauder (EL)
- Eagle Materials (EXP)
- Fluor Corp. (FLR)
- First Solar (FSLR)
- Greenbrier Companies (GBX)
- GrafTech International (GTI)
- hhgregg, Inc. (HGG)
- Hillshire Brands (HSH)
- InterDigital Communications (IDCC)
- Immersion (IMMR)
- ITT Corp. (ITT)
- Kellogg (K)
- MasterCard (MA)
- Marriott International (MAR)
- MGM Mirage (MGM)
- Marathon Petroleum (MPC)
- Mylan Labs (MYL)
- NII Holdings (NIHD)
- Blue Nile (NILE)
- The New York Times (NYT)
- Ocwen Financial (OCN)
- Oshkosh Truck (OSK)
- Pilgrim's Pride (PPC)
- Perrigo Co. (PRGO)
- PriceSmart (PSMT)
- FreightCar America (RAIL)
- Starbucks Corp. (SBUX)
- Steve Madden (SHOO)
- Sony Corp. (SNE)
- Strayer Education (STRA)
- Trimble Navigation (TRMB)
- Trinity Industries (TRN)
- Time Warner Cable (TWC)
- Exxon Mobile Corp. (XOM)
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Friday, Nov. 1
- Accuride (ACW)
- ALLETE (ALE)
- ASM International (ASMI)
- American Axle & Manufacturing (AXL)
- Blount International (BLT)
- CBOE Holdings (CBOE)
- Church & Dwight (CHD)
- Chevron Corp. (CVX)
- Genesee & Wyoming (GWR)
- Mohawk Industries (MHK)
- Madison Square Garden (MSG)
- MasTec Inc. (MTZ)
- Ruth's Chris Steak House (RUTH)
- Standard Pacific (SPF)
- Tellabs Inc. (TLAB)
