There are a number of important economic reports and some significant corporate earnings reports scheduled for release this week. Economic reports this week include Construction Spending, ISM Manufacturing/Prices Paid, Personal Income, Personal Spending, PCE Deflator, Vehicle Sales, ISM Non-manufacturing, Factory Orders, Initial Jobless Claims, Unemployment Rate, Average Hourly Earnings, Change in Non-farm Payrolls, Average Weekly Hours and Consumer Credit. ISM Manufacturing/Non-manufacturing, ISM Prices Paid and Change in Non-farm Payrolls all have market-moving potential.
Proctor & Gamble(PG), Priceline.com(PCLN), Emerson Electric(EMR), Quest Communications(Q), Tyco(TYC), IAC/InterActiveCorp.(IACI), Clorox Co.(CLX), CVS Corp.(CVS), Abercrombie and Fitch(ANF), CIGNA Corp.(CI), Goodyear Tire(GT), XM Satellite Radio(XMSR) are some of the more important companies that release quarterly earnings this week. There is also another event that has market-moving potential. The RBC Technology Conference could also impact trading this week.
Bottom Line: I expect U.S. stocks to finish the week mixed as positive news on the economic front is offset by terrorism fears. It is likely that the major U.S. indices will put in a short-term top this week as worries over terrorism come to the fore once again ahead of the Olympics. It is my contention that levels of investor anxiety will spike up within the next 2 months as most stocks weaken, setting the stage for a very good fourth quarter for U.S. equities. I continue to believe that the selling in much the technology sector is overdone and these stocks will lead the vigorous rally I envision for the year's final quarter.
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