Sunday, August 29, 2004

Weekly Outlook

There are a number of important economic reports and some significant corporate earnings reports scheduled for release this week. Economic reports include Personal Income, Personal Spending, PCE Deflator(YoY), Chicago Purchasing Manager, Consumer Confidence, Construction Spending, ISM Manufacturing/Prices Paid, Total Vehicle Sales, Final 2Q Productivity, Final Unit Labor Costs, Initial Jobless Claims, Factory Orders, Unemployment Rate, Average Hourly Earnings, Change in Non-farm Payrolls, Average Weekly Hours and ISM Non-Manufacturing. Chicago Purchasing Manager, Consumer Confidence, ISM Manufacturing/Prices Paid, Change in Non-farm Payrolls and ISM Non-Manufacturing all have market-moving potential.

Accredo Health(ACDO), Cooper Companies(COO), Engineered Support Systems(EASI), Corinthian Colleges(COCO), Cardinal Health(CAH), Shuffle Master(SHFL), Mandalay Resort Group(MBG) and Albertson's(ABS) are some of the more important companies that release quarterly earnings this week. There are also several other events that have market-moving potential. The Republican National Convention, Boston Scientific's 2004 Update, Altera's Business Update and Intel's Mid-quarter Update could also impact trading this week.

Bottom Line: I expect U.S. stocks to finish the week higher on light volume as terrorism fears subside, optimism increases over the effects of falling energy prices on future economic growth, President Bush rises in the polls with pro-business political rhetoric and economic data show stabilizing growth. Measures of investor anxiety will likely fall again this week and then begin to head higher ahead of the 9/11 anniversary. My short-term trading indicators are still giving Buy signals and the Portfolio is 125% net long heading into the week.

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