There are number of economic reports scheduled for release this week. As well, another heavy week of corporate earnings reports is on tap. Scheduled economic reports include New Home Sales, Consumer Confidence, Existing Home Sales, GDP, Employment Cost Index, Initial Jobless Claims, Help Wanted Index, Personal Income/Spending and Chicago Purchasing Manager. Consumer Confidence and GDP are the most important reports scheduled for release.
Zimmer Holdings(ZMH), BP(BP), Du Pont(DD), Imclone(IMCL), U.S. Steel(X), Verizon(VZ), Flextronics(FLEX), McDonald's(MCD), Monster Worldwide(MNST), Boeing(BA), Bristol-Myers Squibb(BMY), Comcast(CMCSA), Hilton Hotels(HLT), Electronic Arts(ERTS) and Ingram Micro(IM) are some of the more important companies that release quarterly earnings this week. There are also a few other events that have market-moving potential. The Fed's Moskow and ECB's Issing speak at a Fed Conference Monday. Finally, on Tuesday CIBC has its Biotech Conference and Greenspan speaks at the Washington Energy Conference.
BOTTOM LINE: It was good to see investor complacency drop last week with the AAII Bullish % falling 21.57% to 50.0%. The CRB breaking down through its 6-month uptrend line was positive as well. I would like to see the NASDAQ move through 2,060 on good volume to confirm last week's move. This should strengthen the broad market and set the indices up for a test of the recent highs. The stock market will once again key off the bond market. I expect both Consumer Confidence reports to exceed expectations and a blow-out GDP report on Thursday. I expect U.S. GDP growth for the first quarter to come in around 6.0%. This is significantly higher than the recently upwardly revised 5.0% estimate. The bond market's reaction to these very positive data points will likely direct stock prices throughout the week. It is probable the major indices will rise through mid-week, then decline as interest rates rise on the blow-out GDP report.