Economic reports for the week include:
Mon. - Wholesale Inventories
Tues. - None of note
Wed. - Trade Balance, Monthly Budget Statement
Thur. - Advance Retail Sales, Initial Jobless Claims
Fri. - Import Price Index, Business Inventories, Univ. of Mich. Consumer Confidence
Some of the more noteworthy companies that release quarterly earnings this week are:
Mon. - Tesoro Corp>(TSO)
Tues. - Cisco Systems(CSCO), El Paso Corp.(EP)
Wed. - Federated Dept. Store(FD), May Dept. Stores(MAY), Walt Disney(DIS)
Thur. - Dell Inc.(DELL), Kohl's Corp.(KSS), Target Corp.(TGT), Wal-Mart Stores(WMT), Analog Devices(ADI), American Eagles Outfitters(AEOS)
Fri. - Liberty Media(LBTYA), Tiffany & Co.(TIF)
Other events that have market-moving potential this week include:
Mon. - UBS Global Financial Services Conference, Prudential Software Summit
Tue. - Prudential Software Summit, Merrill Lynch Global Industries Conference, Bear Stearns Intl. Healthcare Conference, Merrill Lynch Metals and Mining Conference, UBS Global Financial Services Conference, CIBC Communications and Tech Conference, Fed's Fisher speaks, Fed's Hoenig speaks
Wed. - Goldman Consumer Symposium, Lehman Brothers Financial Services Conference, Piper Jaffray Tech Conference, UBS Leveraged Finance Conference, CIBC Communications and Tech Conference, UBS Global Financial Services Conference, Prudential Software Summit, Merrill Lynch Global Industries Conference, TXN Analyst Meeting, Fed's Bies speaks, Fed's Poole speaks
Thur. - Piper Jaffray Tech Conference, UBS Leveraged Finance Conference, Bear Stearns Global Transportation Conference, Lehman Brothers Financial Services Conference
Fri. - American Society of Clinical Oncology Meeting begins, Piper Jaffray Tech Conference
BOTTOM LINE: I expect US stocks to finish the week modestly higher on short-covering, good earnings reports and bargain-hunting. The recent rally will likely continue near-term as a result of the relatively high levels of skepticism regarding its validity. However, a more significant advance will not occur until it is perceived that the Fed will slow the pace of rate hikes and oil falls meaningfully below $50/bbl. I continue to believe US growth is slowing to around 2.5% temporarily, notwithstanding the strong employment report on Friday. However, I am monitoring recent data carefully for signs that growth is stronger than I currently perceive. Slower growth and decelerating measures of inflation should allow the Fed to slow the pace of rate hikes after the June 29-30 meeting. As I stated in the prior post, I continue to believe oil has seen its cycle highs and will begin an accelerated downward move during the second half of the year, thus helping boost GDP growth back to more healthy levels. My trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.
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