Sunday, September 19, 2004

Weekly Outlook

There are several important economic reports and a number of significant corporate earnings reports scheduled for release this week. Economic reports include the Housing Market Index, Housing Starts, Building Permits, Initial Jobless Claims, Leading Indicators, Durable Goods and Existing Home Sales. Housing Starts, Leading Indicators, Durable Goods and Existing Home Sales have market-moving potential.

Adobe Systems(ADBE), Carmax(KMX), Nike(NKE), Autozone(AZO), Red Hat(RHAT), PalmOne(PLMO), Lennar(LEN), General Mills(GIS), Goldman Sachs(GS), Paychex(PAYX), Bed, Bath & Beyond(BBBY), FedEx(FDX), Morgan Stanley(MWD) and Lehman Brothers(LEH) are some of the more important companies that release quarterly earnings this week. There are also a few other events that have market-moving potential. The Fed's interest rate decision/policy statement, Light Reading's Links and Bank of America's Investment Conference could also impact trading this week.

Bottom Line: I expect U.S. stocks to finish the week mixed as earnings worries, profit-taking and violence in Iraq offset diminishing terrorism fears, declining energy prices, falling inflation/interest rate concerns and economic data showing sustainable growth. As well, investor complacency and the market's technically overbought state should lead to further consolidation. The Fed will raise rates 25 basis points on Tues. and likely say that diminishing inflation concerns will continue to allow measured rate increases. My short-term trading indicators are still giving Buy signals and the Portfolio is 100% net long heading into the week.

No comments: