There are a few important economic reports and a number of significant corporate earnings reports scheduled for release this week. Economic reports this week include Existing Home Sales, Consumer Confidence, New Home Sales, Durable Goods Orders, Employment Cost Index, Initial Jobless Claims, GDP, Personal Consumption, GDP Price Deflator, Univ. of Mich. Consumer Confidence and Chicago Purchasing Manager report. Home Sales, Consumer Confidence readings, GDP and the Chicago Purchasing Manager report all have market-moving potential.
Andrew Corp.(ANDW), Boston Scientific(BSX), HCA Inc.(HCA), Intl. Paper(IP), American Express(AXP), Automatic Data Processing(ADP), E.I. du Pont(DD), Lockheed Martin(LMT), Nabors Industries(NBR), Phelps Dodge(PD), Verizon Communications(VZ), Veritas Software(VRTS), Boeing(BA), Comcast(CMCSA), Hilton Hotels(HLT), KLA-Tencor Corp.(KLAC), Gillette(G), Time Warner(TWX), BellSouth(BLS), Bristol-Myers Squibb(BMY), Ingram Micro(IM) and Liz Claiborne(LIZ) 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 Hoening's speech on monetary policy, the Government Security Expo and Bank of America's Specialty Pharmaceutical Conference could also impact trading this week.
Bottom Line: I expect U.S. stocks to remain under pressure through mid-week, then to rise through week's end, leaving the major U.S. averages modestly higher for the week. The Morgan Stanley Technology Index is now down 17.8% from its recent high in January. Barring any domestic terror attacks, the end of the Democratic Convention should prompt at least a relief rally in many oversold stocks. My short-term trading indicators are still giving sell signals and the Portfolio is 50% net short heading into the week.
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