Economic reports for the week include:
Mon. - Existing Home Sales
Tues. - Consumer Confidence, New Home Sales
Wed. - Durable Goods Orders
Thur. - Advance 1Q GDP, Initial Jobless Claims, Help Wanted Index
Fri. - Personal Income, Personal Spending, 1Q Employment Cost Index, Final Univ. of Mich. Consumer Confidence, Chicago Purchasing Manager
Some of the more noteworthy companies that release quarterly earnings this week are:
Mon. - Altera Corp.(ALTR), Cendant Corp.(CD), Chubb Corp.(CB), Kimberly Clark(KMB), SBC Communications(SBC), Zimmer Holdings(ZMH)
Tues. - Aflac(AFL), Amazon.com(AMZN), American Express(AXP), BJ Services(BJS), Chicago Merc.(CME), Coach Inc.(COA), ENSCO Intl.(ESV), Express Scripts(ESRX), Hilton Hotels(HLT), ImClone Systems(IMCL), Infospace Inc.(INSP), Lockheed Martin(LMT), Medco Health Solutions(MHS), Monster Worldwide(MNST), Schlumberger(SLB)
Wed. - Allergan(AGN), Anheuser-Busch(BUD), Baker Hughes(BHI), Biogen Idec(BIIB), Boeing(BA), Chiron(CHIR), Colgate-Palmolive(CL), ConocoPhillips(COP), Diamond Offshore(DO), JDS Uniphase(JDSU), Newmont Mining(NEM), Phelps Dodge(PD), Pulte Homes(PHM), Starbucks(SBUX), Verizon Communications(VZ), XM Satellite Radio(XMSR)
Thur. - Barrick Gold(ABX), Beazer Homes(BZH), Black & Decker(BDK), Bristol-Myers(BMY), Comcast(CMCSA), Dow Chemical(DOW), Estee Lauder(EL), Exxon Mobil(XOM), Kellogg(K), Kla-Tencor(KLAC), Microsoft(MSFT), Northrup Grumman(NOC), Procter & Gamble(PG), Sirius Satellite(SIRI), Starwood Hotels(HOT)
Fri. - Archer-Daniels(ADM), Cardinal Health(CAH), ChevronTexaco(CVX), Clear Channel(CCU), Electronic Arts(ERTS)
Other events that have market-moving potential this week include:
Mon. - Fed's Pianalto speaks
Tue. - Lehman Brothers Annual Retail Seminar
Wed. - Lehman Brothers Annual Retail Seminer
Thur. - CSFB Power Producers/Utilities Conference, Smith Barney Software Conference, Fed's Hoenig speaks, Fed's Santomero speaks
Fri. - Smith Barney Software Conference
BOTTOM LINE: I expect US stocks to finish the week modestly higher on bargain hunting, short-covering, good earnings reports and low long-term interest rates. While I believe that US growth is slowing, an imminent recession is highly unlikely. As well, inflation measures are in the process of peaking, in my opinion. Thus, the chances of a period of stagflation are even more remote. Sentiment is currently near levels normally associated with meaningful market bottoms. Given the overall positive fundamentals and the p/e on the S&P 500's forward earnings estimates is at 15.63 and falling daily, stocks are becoming too cheap to ignore. I continue to expect the second half to be much better for US equities than the first half as inflation decelerates, commodities prices fall, long-term interest rates remain low, low valuations tempt investors, growth accelerates, the US dollar remains firm, employment continues to improve and merger activity continues. As I have stated previously, it is my belief that longer-term investors should use any further weakness over the coming weeks to begin building positions in favorite longs. Homebuilder, Retail, Biotech, Airline, Financial, Internet and Gaming shares should outperform in the second half of the year, given my outlook. My trading indicators are still bearish and the Portfolio is 25% net long heading into the week.
No comments:
Post a Comment