July 23, 2007 at 21:01 PM EDT
The Greek's Week Ahead - A Different Tone to Trading
The Greek's Week Ahead has been engineered to prepare you for events that could impact your portfolio this week. After last week's unexpectedly disappointing earnings reports from the likes of Google ( Nasdaq: GOOG ), Caterpillar ( NYSE: CAT ) and Yahoo! (YHOO), the tone of this season's reporting calendar has shifted quite a bit. The first quarter's strong reports from the large multinationals in the Dow Jones Index spurred quite a run. The memory of those results took the Dow up over 14,000 last week, but the tone has since changed. In recent issues of "The Greek's Week Ahead" we have looked forward to a short earnings run higher that we anticipated would last a couple weeks or so. Shares could still gain some enthusiasm from the plethora of reports due this week. They could also benefit from decreasing energy prices, which we view as a strong possibility. Oil and natural gas have already started weakening from recent highs. This week's inventory data on Wednesday and Thursday should prove important to the degree of decrease, though we think the power behind a declining price trend will be overwhelming in the short term. We have quite a busy earnings week in store, and a good deal of market-moving news will be generated by companies, until Friday's key GDP and consumer sentiment reports. Now let's take a look at the week ahead... Monday's focus will be on corporate earnings and the beginning of two important meetings for the publishing and auto industries. The soap opera continues within publishing firm, Dow Jones ( NYSE: DJ ), as the Bancroft family, who own a controlling interest, meets to discuss whether to follow the advice of Dow Jones' board of directors and accept Rupert Murdoch's $60 bid. Of course, the family could also side with the view of newly departed Director, Dieter von Holtzbrinck, who found the decision so disheartening that he withdrew his membership in the group. We found a couple things about the meeting very interesting. Christopher Bancroft reportedly left early, while Leslie Hill, a family member, abstained from the vote. We wrote an article weeks ago that illustrates our belief that the family has strung Murdoch along in order to keep his bid in play as it attempts to lure another buyer it might better digest (see " Dow Jones Will Sell, but Not to Potter! "). If the Bancrofts let Murdoch's offer slip away, the next best proposal known to the public is the Greenspan offer for a 25% interest in DJ. The price is the same, but the family would still be involved, while allowing the Internet entrepreneur two board seats and an opportunity to implement his digital strategy. Greenspan has since returned to the table with a revised plan, a more detailed version of how he plans to create value for shareholders. We expected Ron Burkle to show up with an offer, but he has yet to do so, despite rumors that he might partner with Greenspan to raise the offer or acquire the entire company. In effect, what the board has done here is serve its employer well, the shareholders of Dow Jones. Now, the controlling party can influence whether a sale occurs or not, while the Board remains neutral and avoids liability. Also on Monday, the United Auto Workers Union begins formal discussions with Ford and General Motors, after having begun discussions with Chrysler on Friday. With national contracts set to expire on September 14, and taking the recent downswing in the business cycle into account, these meetings are critical to both parties. The big three need to bring their costs into parity with Japanese manufacturers, and if the UAW doesn't agree, that can happen via Mexican production for North America. Earnings season has its second busy week ahead of it, and Monday starts the schedule with reports from Altera Corp. ( Nasdaq: ALTR ), American Express ( NYSE: AXP ), Arch Coal ( NYSE: ACI ), Chemical Financial ( Nasdaq: CHFC ), Crane ( NYSE: CR ), Dr. Reddy's Laboratories ( NYSE: RDY ), DSP Group ( Nasdaq: DSPG ), Equifax ( NYSE: EFX ), Everest Re ( NYSE: RE ), Halliburton ( NYSE: HAL ), Hasbro ( NYSE: HAS ), Hercules ( NYSE: HPC ), Merck ( NYSE: MRK ), Netflix ( Nasdaq: NFLX ), PetMed Express ( Nasdaq: PETS ), PrePaid Legal ( NYSE: PPD ), Schering-Plough ( NYSE: SGP ), Taser International ( Nasdaq: TASR ), Texas Instruments ( NYSE: TXN ), Weatherford International ( NYSE: WFT ) and others. On Tuesday , we will be anxiously awaiting the usual ICSC-UBS Weekly Same-Store Sales Report. Recent weeks' trends have shown sales at a level well below prior year growth rates. For your information, we are going to begin tracking this report within our sidebar soon. Also on Tuesday, State Street reports its Investor Confidence Index. Recall, the report studies levels of risk held within portfolios. Considering June's report reflected an increase from May, to 97.2, we expect investor excitement heading into earnings season could drive a positive result for July. St. Louis Fed President William Poole is scheduled to address a group in Delaware on the topic of energy and the U.S. macroeconomy. Internationally, North and South Korea are scheduled to hold high level military meetings. Perhaps the tension along the million man border could be reduced as a result. We can hope and dream... With everything becoming state controlled, it may not matter anymore that markets in Venezuela will be closed on Tuesday. Tuesday is perhaps the busiest day of earnings season, with a slew of companies set to report. The day's schedule includes Aaron Rents ( NYSE: RNT ), AFLAC Inc. ( NYSE: AFL ), Akzo Nobel NV ( Nasdaq: AKZOY ), Alliance Financial ( Nasdaq: ALNC ), Amazon.com ( Nasdaq: AMZN ), AT&T ( NYSE: T ), Biogen Idec ( Nasdaq: BIIB ), BJ Services ( NYSE: BJS ), Calamos Asset Management ( Nasdaq: CLMS ), Cavalier Homes ( AMEX: CAV ), CDW Corp. ( Nasdaq: CDWC ), Centex Corp. ( NYSE: CTX ), Countrywide Financial ( NYSE: CFC ), DuPont ( NYSE: DD ), Eli Lilly ( NYSE: LLY ), Energizer ( NYSE: ENR ), Jacobs Engineering ( NYSE: JEC ), JetBlue Airways ( Nasdaq: JBLU ), Kimberly Clark ( NYSE: KMB ), Lab Corp. of America ( NYSE: LH ), Lockheed Martin ( NYSE: LMT ), McDonald's Corp. ( NYSE: MCD ), Nabors Industries ( NYSE: NBR ), Occidental Petroleum ( NYSE: OXY ), Panera Bread ( Nasdaq: PNRA ), PepsiCo ( NYSE: PEP ), Plantronics ( NYSE: PLT ), Robert Half International ( NYSE: RHI ), Sony Corp. ( NYSE: SNE ), The Cheesecake Factory ( Nasdaq: CAKE ), UAL Corp. ( Nasdaq: UAUA ), USG ( NYSE: USG ), Websense ( Nasdaq: WBSN ), XTO Energy ( NYSE: XTO ) and quite a few more. When reported Wednesday , Existing Home Sales are expected to show an annual pace of 5.87 million homes sold in June. In May, the same report showed a sales pace of 5.99 million. It's our view that home builders are finally facing reality, and making serious cutbacks to production, while likely consolidating operations and laying off employees. This builder capitulation should better allow inventory to sell off, and eventually lead to stabilization and growth again. See, Wall Street Greek is not a permabear afterall; we just call it like it is. Earlier the same morning, the Mortgage Banker's Association will report on new applications. The Fed is scheduled to release its Beige Book of regional economic conditions on Wednesday afternoon. Most of the regional data has been strong, so we do not expect a negative impact here. Also, New York Fed President Timothy Geithner will speak about economics and global integration. Of course, the regular Petroleum Status report at 10:30 a.m. EDT will be closely watched with oil prices showing signs of having reached a near-term top last week. The earnings report schedule includes Alcon ( NYSE: ACL ), Allegheny Technologies ( NYSE: ATI ), Ameriprise Financial ( NYSE: AMP ), Anheuser-Busch ( NYSE: BUD ), Apple Inc. ( Nasdaq: AAPL ), Baidu ( Nasdaq: BIDU ), Cabot Oil & Gas ( NYSE: COG ), Colgate-Palmolive ( NYSE: CL ), Conoco Phillips ( NYSE: COP ), Covance ( NYSE: CVD ), DaimlerChrysler ( NYSE: DCX ), Drugstore.com ( Nasdaq: DSCM ), EnCana Corp. ( NYSE: ECA ), Fair Isaac ( NYSE: FIC ), Fiserv ( Nasdaq: FISV ), General Dynamics ( NYSE: GD ), GlaxoSmithKline ( NYSE: GSK ), Honda Motor ( NYSE: HMC ), IHOP ( NYSE: IHP ), MEMC Electronic Materials ( NYSE: WFR ), National Oilwell Varco ( NYSE: NOV ), Nomura Holdings ( NYSE: NMR ), Norfolk Southern ( NYSE: NSC ), P.F. Chang's China Bistro ( Nasdaq: PFCB ), Plug Power ( Nasdaq: PLUG ), Psychiatric Solutions ( Nasdaq: PSYS ), Pulte Homes ( NYSE: PHM ), Qualcomm ( Nasdaq: QCOM ), Rockwell Automation ( NYSE: ROK ), Sealed Air ( NYSE: SEE ), Seattle Genetics ( Nasdaq: SGEN ), SEI Investments ( NYSE: SEIC ), Symantec ( Nasdaq: SYMC ), Boeing ( NYSE: BA ), Tractor Supply ( Nasdaq: TSCO ), Travelzoo ( Nasdaq: TZOO ), WellPoint Inc. ( NYSE: WLP ), Zebra Technologies ( Nasdaq: ZBRA ) and many more. Over the last two days of the week, the heavy earnings report schedule will be complemented by a handful of important economic data, so trading could get really hot and heavy. The Durable Goods Orders Report is due bright and early on Thursday morning. Bloomberg's consensus expects orders to show a 2.0% June rise, compared to a 2.8% decrease in May. Weekly initial jobless claims will be reported as usual, with expectations for 312,000 new collectors of unemployment benefits. This is about in line with recent results, and not a market moving forecast. The Help-Wanted Index is reported Thursday, but since published ads are now overshadowed by online advertising, this data is somewhat insignificant. Following the existing home sales report of a couple of days prior, new home sales for June are expected to have run at an annual pace of 890,000, according to Bloomberg. That's down from 915,000 reported in May. Earnings season continues with reports from 3M Company ( NYSE: MMM ), Aetna ( NYSE: AET ), Airtran ( NYSE: AAI ), AmeriSourceBergen ( NYSE: ABC ), Amgen ( Nasdaq: AMGN ), Apache ( NYSE: APA ), AutoNation ( NYSE: AN ), Ballard Power Systems ( Nasdaq: BLDP ), Beazer Homes ( NYSE: BZH ), Blockbuster ( NYSE: BBI ), Bristol-Myers Squibb ( NYSE: BMY ), Bright Horizons ( Nasdaq: BFAM ), Cash America ( NYSE: CSH ), Celgene ( Nasdaq: CELG ), Coherent ( Nasdaq: COHR ), Comcast ( Nasdaq: CMCSA ), D.R. Horton ( NYSE: DHI ), EarthLink ( Nasdaq: ELNK ), Echelon Corp. ( Nasdaq: ELON ), Evergreen Solar ( Nasdaq: ESLR ), ExxonMobil ( NYSE: XOM ), Ford Motor ( NYSE: F ), Global Payments ( NYSE: GPN ), Goodrich ( NYSE: GR ), Janus Capital ( NYSE: JNS ), Kellogg ( NYSE: K ), KLA-Tencor ( Nasdaq: KLAC ), Kulicke & Soffa ( Nasdaq: KLIC ), L-3 Communications ( NYSE: LLL ), MBIA ( NYSE: MBI ), McAfee ( NYSE: MFE ), Millennium Pharmaceuticals ( Nasdaq: MLNM ), Newell Rubbermaid ( NYSE: NWL ), Office Depot ( NYSE: ODP ), Penn National Gaming ( Nasdaq: PENN ), Potlatch ( NYSE: PCH ), Raytheon ( NYSE: RTN ), Royal Carribean ( NYSE: RCL ), Southern Company ( NYSE: SO ), The Dow Chemical Company ( NYSE: DOW ), Travelers ( NYSE: TRV ), TheStreet.com ( Nasdaq: TSCM ), US Airways ( NYSE: LCC ), VeriSign ( Nasdaq: VRSN ), Wendy's ( NYSE: WEN ), XM Satellite ( Nasdaq: XMSR ), and so many more. On Friday , two very important bits of data will be reported to help us analyze both the past and the future. At 8:30 a.m. EDT, second quarter GDP is expected to have grown at a 3.2% growth rate, compared to 0.7% growth in Q1. The price index is seen measuring up 3.4%. Wall Street Greek is on the record anticipating Q2 growth before later softness. We view housing critical to the economic wellfare of Americans. Despite the relatively lower level of interest rates, strong unemployment and international demand, which no doubt are very supportive, there are significant price pressures on a good deal of Americans. The expenses of gasoline and food are two of the most important and common expenses seen across this country. There's no escaping it. Consumer spending growth has weakened this year. We'll get a look see into how consumers are feeling when the Michigan Consumer Sentiment metric is provided at 10:00 a.m. Sentiment in July is seen at 91. In June, sentiment measured 85.3, but renewed stock market gains have helped boost the figure more recently. Even so, things are changing in the market. Reporting earnings on Friday, look for news from Active Power ( Nasdaq: ACPW ), Baker Hughes ( NYSE: BHI ), Celanese ( NYSE: CE ), Chevron ( NYSE: CVX ), Fortune Brands ( NYSE: FO ), Gene Logic ( Nasdaq: GLGC ), Idexx Laboratories ( Nasdaq: IDXX ), Ingersoll-Rand ( NYSE: IR ), Medco Health Solutions ( NYSE: MHS ), Sepracor ( Nasdaq: SEPR ), Veeco Instruments ( Nasdaq: VECO ) and more. We hope you have found value in this week's report. Thank you again for your interest. We hope you will continue to support our advertisers and tell your friends about the Wall Street Greek. ( disclosure )
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