Weekly Outlook

There are a few important economic reports and some significant corporate earnings reports scheduled for release this week. Economic reports for the week include:

Mon. - None of note
Tues. - Producer Price Index, FOMC Rate Decision
Wed. - Consumer Price Index, Existing Home Sales
Thur. - Durable Goods Orders, Initial Jobless Claims, New Home Sales
Fri. - Good Friday: All US markets closed

Some of the more noteworthy companies that release quarterly earnings this week are:

Mon. - Carnival Corp.(CCL), KB Home(KBH), Paychex(PAYX)
Tues. - Biomet Inc.(BMET), Family Dollar Stores(FDO), General Mills(GIS), Lennar Corp.(LEN), Oracle Corp.(ORCL), Williams-Sonoma(WSM)
Wed. - Darden Restaurants(DRI)
Thur. - ConAgra Foods(CAG), Solectron Corp.(SLR)

Other events that have market-moving potential this week include:

Mon. - Morgan Stanley Global Automotive Conference
Tue. - Merrill Lynch Retailing and Household Products/Cosmetics Conference, Goldman Sachs Transportation Conference, Morgan Stanley Global Automotive Conference, Prudential Best Ideas Conference
Wed. - AMAT Analyst Meeting, Goldman Sachs Transportation Conference, Prudential Best Ideas Conference, Merrill Lynch Retailing and Household Products/Cosmetics Conference, Morgan Stanley Global Automotive Conference
Thur. - Merrill Lynch Retailing and Household Products/Cosmetics Conference

BOTTOM LINE: I expect US stocks to finish the holiday-shortened week modestly higher on an oversold bounce and relief rally after the Fed rate hike. Once again, the policy comments from the Fed are more important than the widely anticipated increase. The PPI will likely exceed estimates, however this should already be discounted by investors. The CPI will garner more attention and will likely meet estimates. Home sales could miss expectations, but should begin strengthening again this month. I expect the most oversold sectors such as Biotech, Internet and Networking to outperform this week. While an oversold rally is likely, weakness may resurface soon thereafter on slowing global growth and rising energy prices. I continue to expect the second half of the year to be much better for US stocks than the first half. My trading indicators are bearish and the Portfolio is 25% net long heading into the week.