We have moved another five trading days toward the end of 2012, and have only 10 left until we ring in 2013 -- yet all of the major stock market indices were essentially unchanged for the past week, and were fractionally in the red. Among the three, the worst offender was the Nasdaq Composite, which dipped a modest 0.3%. As had been expected, the "fiscal cliff" -- that slow boiling pot I discussed last week -- has indeed started to roll as we've neared the end of December. Despite rounds of talks, thus far there has been little movement in striking a deal. With few economic releases or earnings announcements schedule for the first half of the coming week, fiscal-cliff conversations -- or lack thereof -- will once again take center stage and make for a bumpy few days.
Quickly recapping the past week, the flow of economic data was light, but some items did raise eyebrows. First, while auto production rose in November, we saw retail sales for that month, excluding autos. That reads as a negative, but we have to remember that gasoline prices at the pump have been falling over the last 12 weeks, and stood at $3.35 per gallon on average last week, according to the Energy Information Administration. The drop accounts for more favorable underlying retail sales data. Sifting through these same numbers also confirms data from Comscore and Nielsen that says online shopping grew significantly in late November vs. the prior year.
The falling gas prices likely mean good things for United Parcel Service (UPS) and FedEx (FDX), the latter of which is set to report its quarterly results Wednesday. Still, food prices crept up both in the producer- and consumer-price indices for November. Odds are we'll continue to feel the effects of the summer's drought until the next harvest. This will bear watching when Darden Restaurants (DRI), General Mills (GIS) and ConAgra (CAG) report their results this coming Wednesday and Thursday, respectively.
Domestic manufacturing rebounded in November following Hurricane Sandy, as evidenced by the 1.1% rise in industrial production. We saw month-over-month climbs in both manufacturing and total-industry capacity utilization figures from the Federal Reserve, and these numbers are now back in line with August and September figures. While that's a good sign, we have to remember that those utilization readings remain well below levels that suggest employment levels are tight. In the coming week, we're due to get three takes on the domestic manufacturing economy: the Empire Manufacturing Index, the Philadelphia Fed Index and November Durable Orders, respectively due Monday, Thursday and Friday.
As for companies due to release earnings in the next week, aside from the companies I mentioned above, many will be watching two others in particular. The first is Research In Motion (RIMM), which has been struggling to turn around its Blackberry business. While there are a number of headwinds here, more than a few investors have been looking toward the company's next operating system as a potential savior. Discussion of that OS -- the Blackberry 10, or BB10 -- will likely take center stage Thursday night. Any slips or delays will be a setback not only for the company, but for those investors who have been long RIMM shares over the last three to four months.
The other heavily watched company will be Nike (NKE), which missed its May 2012 quarter results, but came back to exceed August-quarter expectations. With Nike shares well off their 52-week high, investors will be listening in to see if demand prospects are solidifying enough to warrant going long the stock from here.
Here's a more granular look at what investors should be watching and listening to over the next five trading days.
Economic Events This Week
- Empire State Manufacturing Index (December) -- Monday, Dec. 17
- National Association of Home Builders (NAHB) Housing Market Index (December) -- Tuesday, Dec. 18
- Mortgage Bankers Association (MBA) Mortgage Index (Weekly) -- Wednesday, Dec. 19
- Housing Starts and Building Permits (November) -- Wednesday, Dec. 19
- Weekly Initial and Continuing Jobless Claims (Weekly) -- Thursday, Dec. 20
- Gross Domestic Product -- Third Estimate (Third Quarter of 2012) -- Thursday, Dec. 20
- Existing-Home Sales (November) -- Thursday, Dec. 20
- Philadelphia Fed Index (December) -- Thursday, Dec. 20
- Leading Indicators (November) -- Thursday, Dec. 20
- Federal Housing Finance Agency (FHFA) Housing Price Index (October) -- Thursday, Dec. 20
- Personal Income and Spending (November) -- Friday, Dec. 21
- Durable Orders (November) -- Friday, Dec. 21
- Michigan Sentiment Index -- Final (December) -- Friday, Dec. 21
Corporate Earnings This Week
- FactSet Research Systems (FDS) -- Tuesday, Dec. 18
- Jefferies (JEF) -- Tuesday, Dec. 18
- Learning Tree (LTRE) -- Tuesday, Dec. 18
- Oracle (ORCL) -- Tuesday, Dec. 18
- Steward Enterprises (STEI) -- Tuesday, Dec. 18
- Accenture (ACN) -- Wednesday, Dec. 19
- Bed Bath & Beyond (BBBY) -- Wednesday, Dec. 19
- FedEx (FDX) -- Wednesday, Dec. 19
- General Mills -- Wednesday, Dec. 19
- Heico (HEI) -- Wednesday, Dec. 19
- Navistar (NAV) -- Wednesday, Dec. 19
- ConAgra -- Thursday, Dec. 20
- Carnival (CCL) -- Thursday, Dec. 20
- Discover (DFS) -- Thursday, Dec. 20
- Darden -- Thursday, Dec. 20
- KB Home (KBH) -- Thursday, Dec. 20
- CarMax (KMX) -- Thursday, Dec. 20
- Nike -- Thursday, Dec. 20
- Paychex (PAYX) -- Thursday, Dec. 20
- Rite Aid (RAD) -- Thursday, Dec. 20
- Research In Motion -- Thursday, Dec. 20
- Scholastic (SCHL) -- Thursday, Dec. 20
- Tibco Software (TIBX) -- Thursday, Dec. 20
- Walgreen (WAG) -- Friday, Dec. 21