Economic reports for the week include:
Mon. - None of note
Tues. - Consumer Confidence, Factory Orders and Fed Minutes
Wed. - 2Q GDP, 2Q GDP Price Index, 2Q Personal Consumption and Chicago Purchasing Manager
Thur. - Personal Income, Personal Spending, PCE Deflator, PCE Core, Initial Jobless Claims, Continuing Claims, Construction Spending, ISM Manufacturing, ISM Prices Paid, Pending Home Sales and Total Vehicle Sales
Fri. - Unemployment Rate, Average Hourly Earnings, Change in Non-farm Payrolls
A few of the more noteworthy companies that release quarterly earnings this week are:
Mon. - AES Corp.(AES)
Tues. - Zale Corp.(ZLC)
Wed. - Freddie Mac(FRE), Tiffany & Co.(TIF)
Thur. - H&R Block(HRB), Saks Inc.(SKS)
Fri. - Del Monte Foods(DLM)
Other events that have market-moving potential this week include:
Mon. - None of note
Tue. - GM Analyst Event, NVLS Mid-Quarter Update
Wed. - Fed’s Santomero speaks, Fed’s Yellen speaks
Thur. - None of note
Fri. - None of note
BOTTOM LINE: I expect US stocks to finish the week modestly higher on higher volatility. Equities will likely come under pressure early in the week on fears over a spike in commodity prices related to Hurricane Katrina. According to Stratfor.com, the Port of Southern Louisiana is the fifth-largest port in the world and the biggest port in the United States. It is a key global port for the export and import of commodities. The port could become unusable if levees burst, thus substantially impacting global agricultural prices as peak harvest time is over the next 30 days. Gasoline prices would also rise on any significant and sustained disruption to transportation systems to and from the port. About 2% of global oil production and about 25% of US produced oil comes from the Gulf, according to Stratfor. Later this week, US stocks should rally as the negative economic impact of the hurricane is viewed as mostly temporary and economic data come in better-than-expected. I continue to believe we are in a consolidation phase within a significant intermediate-term move higher in the major averages. My trading indicators are now giving mixed signals and the Portfolio is 75% net long heading into the week.
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