Sunday, July 24, 2005

Weekly Outlook

There are several important economic reports and a number of significant corporate earnings reports scheduled for release this week.

Economic reports for the week include:

Mon. - Existing Home Sales
Tues. - Consumer Confidence
Wed. - Durable Goods Orders, New Home Sales, Fed's Beige Book
Thur. - Initial Jobless Claims
Fri. - Advance 2Q GDP, Advance 2Q Personal Consumption, Advance 2Q GDP Price Index, 2Q Employment Cost Index, Final Univ. of Mich. Consumer Confidence, Chicago Purchasing Manager

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

Mon. - Altera Corp.(ALTR), American Express(AXP), Cendant Corp.(CD), Lincare Holdings(LNCR), Texas Instruments(TXN)
Tues. - ADP(ADP), Aflac Inc.(AFL),, Biogen Idec(BIIB), BJ Services(BJS), Burlington Northern(BNI), Centex(CTX), Chicago Merc(CME), Corning(GLW), Electronic Arts(ERTS), Imclone(IMCL), Infospace(INSP), Lexmark Intl.(LXK), Lockheed Martin(LMT), Medco Health(MHS), Omnicom Group(OMC), Starwood Hotels(HOT), Valero Energy(VLO), Verizon Communications(VZ)
Wed. - Amerada Hess(AHC), Anheuser-Busch(BUD), Boeing(BA), Chiron(CHIR), Computer Assoc.(CA), ConocoPhillips(COP), Diamond Offshore(DO), HCA Inc.(HCA), Newmont Mining(NEM), Pulte Homes(PHM), Sprint Corp.(FON), Starbucks(SBUX), Zimmer Holdinga(ZMH)
Thur. - Aetna Inc.(AET), Apache Corp.(APA), Beazer Homes(BZH), Dow Chemical(DOW), Exxon Mobil(XOM), McAfee(MFE), Nabors Industries(NBR), Phelps Dodge(PD), Symantec(SYMC), Whole Foods Market(WFMI), XM Satellite Radio(XMSR)
Fri. - Archer-Daniels(ADM), Baker Hughes(BHI), Chevron(CVX), Gillette(G)

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

Mon. - None of note
Tue. - MOT Analyst Meeting, XLNX Analyst Meeting
Wed. - BofA Specialty Pharmaceuticals Conference
Thur. - MSFT Analyst Meeting, BofA Specialty Pharmaceuticals Conference
Fri. - None of note

BOTTOM LINE: I expect US stocks to finish the week modestly higher on good earnings reports, short covering and mostly positive economic data. However, stocks are still extended near-term, thus a healthy consolidation period remains likely. I continue to believe US stocks will mount a significant rally sometime over the next several months and finish the year 10%+ higher from current levels, giving the S&P a 13-15% gain for the year. My trading indicators are still giving bullish signals and the Portfolio is 100% net long heading into the week.

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