Trading And Investing Radar For July 21-25, 2014. BIG Earnings Week!

[ 0 ] July 19, 2014 |

Trading Radar: Potential for Global Crises, Corporate Earnings to Dominate Next Week’s Action

Although US risk assets sustained a strong bounce on Friday, market participants will still be looking towards the Sunday political TV talk shows to see what the US response will be to the plane shootdown in Ukraine and the Israeli invasion of Gaza. Thus far, the US has given its support to Israel as long as it pursues its goals of shutting down the tunnel system underneath Israel’s border from Gaza. Regarding the plane, there seems to be a push within the market that says if the missile originated with Ukrainian rebels, Russian President Vladimir Putin will have ample cover to back away from his support of that movement. A cause for further concern would be if these two regional conflicts evolve into global crises, or if two global powers feel the need to duke it out even more.

The main economic event to be reported next week is June consumer price inflation. Due to recent increases in the annual rate of change for inflation, investors and policymakers have begun to think that the economy is improving faster than expected. If inflation were to rise in July, as expected, it would be the 13th straight month of increases. This author thinks that the inflation cycle is in its late stages and if the temporary factors that have been driving prices recently (utilities/energy, food, distributive services, medical services) continue to wane, inflation will fall back to 1.5% year-on-year. Gas prices rose 3.77% in June according to Bloomberg data, although other retail sources of gas prices did not rise to that extent and have since fallen sharply. A potential headwind is restaurant prices. Total retail sales fell in June on what appears to be large price cuts at restaurants looking to increase sales.

The other notable reports for the week are June new home sales and durable goods orders. New housing starts for June showed a surprisingly large drop in new home construction. Capital goods orders are expected to be very strong.

In the week ahead, the IMF will update is global economic outlook on Thursday. Last week, IMF Managing Director Christine Lagarde indicated that the outlook will be cut “slightly.” Said outlook was cut last month with the main downgrades targeting US growth. Another cut to US growth is expected. The most important global economic data report next week is the preliminary China private manufacturing PMI for July. Last month the index rose above 50 for the first time this year, signaling expansion in activity. Further expansion is expected this month — to 51.0 from 50.7 last month.

There is a bevy of earnings reports scheduled for next week as the reporting season kicks into high gear. The majority of financial companies reported last week, although a few regional banks remain, and tech will dominate the week ahead. Notable reports in tech include: Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Netflix (NASDAQ:NFLX), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Qualcomm (NASDAQ:QCOM). A number of staple companies such as Coca-Cola (NYSE:KO), AT&T (NYSE:T), Caterpillar (NYSE:CAT), General Motors (NYSE:GM), Ford (NYSE:F), and McDonald’s (NYSE:MCD) are also scheduled to report.

Monday, July 21

US Economics (Time Zone: EST)

08:30 Chicago Fed National Activity Index – expected 0.18, prior 0.21
11:00 Fed to purchase $1b-$1.25b bonds in 22-30 year range
11:30 Treasury to sell $26b 3-month bills and $24b 6-month bills

Global Economics (Time Zone: GMT)

04:30 JPY All Industry Activity Index
06:00 CHF Trade Balance
08:30 GBP Public Trade Balance

Earnings

Before:
Halliburton (HAL)
BB&T (BBT)
Suntrust Banks (STI)
Six Flags Entertainment (SIX)

After:
Chipotle Mexican Grill (CMG)
Netflix (NFLX)
Texas Instruments (TXN)
Rent-A-Center (RCII)

Tuesday, July 22

US Economics (Time Zone: EST)

08;30 Consumer Price Index YoY (June) – expected 2.1%, prior 2.1%
08:30 CPI Ex Food & Energy YoY – exp 2.0%, prior 2.0%
09:00 FHFA Home Price Index MoM (May) – exp 0.2%, prior 0.0%
10:00 Richmond Fed – exp 5, prior 3
10:00 Existing Home Sales (June) – exp 4.99M, prior 4.98M
11:30 Treasury to sell $25b 52-week bills, 4-week bills

Global Economics (Time Zone: GMT)

01:30 AUD CPI
08:30 GBP Boe Minutes
12:30 CAD Retail Sales

Earnings

Before:
Coca-Cola (KO)
duPont (DD)
Harley-Davidson (HOG)
McDonald’s (MCD)
Comcast (CMCSA)
State Street (STT)
Lockheed Martin (LMT)
Verizon (VZ)

After:
Apple (AAPL)
Microsoft (MSFT)
Electronic Arts (EA)
Broadcom (BRCM)
Juniper (JNPR)
VMWare (VMW)
Discover Financial Services (DFS)

Xilinx (XLNX)
TDAmeritrade (AMTD)
Regions Financial (RF)

Wednesday, July 23

US Economics (Time Zone: EST)

07:00 MBA Mortgage Apps
11:00 Fed purchasing $2.5b-$3.25b notes in 7 to 10-year range

Fedspeak:

10:00am Yellen (dove, chair) to give semi-annual testimony to House Committee
12:00pm Fisher (hawk, voter) speaks in Los Angeles

Global Economics (Time Zone: GMT)

NZD RBNZ Rate Decision
JPY Trade Balance
01:45 CNY HSBC Manufacturing PMI (July prelim)
08:00 EUR Eurozone Manufacturing & Services PMI
08:30 GBP Retail Sales

Earnings

Before:
Boeing (BA)
Dow Chemical (DOW)
Freeport-McMoran (FCX)
General Dynamics (GD)
Biogen (BIIB)
Delta Airlines (DAL)
Whirlpool (WHR)
Pepsi (PEP)
EMC Corp (EMC)
Norfolk Southern (NSC)

After:
Qualcomm (QCOM)
Citrix (CTXS)
Gilead Sciences (GILD)
F5 Networks (FFIV)
AT&T (T)
CA (CA)
Tractor Supply Co (TSCO)
Etrade Financial (ETFC)
Illumina (ILMN)
Sallie Mae (SLM)
Facebook (FB)
TripAdvisor (TRIP)

Thursday, July 24

US Economics (Time Zone: EST)

08:30 Initial Jobless Claims, June 28, exp. 309k, prior 302k
08:30 Continuing Claims – exp 2513K, prior 2507k
09:45 Markit US Manufacturing PMI (July prelim) – exp 57.5, prior 57.3
10;00 New Home Sales (June) – exp 480K, prior 504K
11:00 Kansas City Fed – exp 6, prior 6
11:00 Fed to purchase $2b-$2.5b notes in 5 to 6-year range
1:00 Treasury selling $15b 10-year TIPS

Fedspeak

1:35pm Bullard (hawk, nonvoter) speaks in Kentucky

Global Economics (Time Zone: GMT)

Japan Investors Purchases of Foreign Stocks/Bonds
JPY CPI
06:00 EUR German GfK Consumer Confidence
08:00 EUR German IFO Current Assessment, Expectations
08:30 GBP GDP (2Q advance)
14:15 BoJ’s Kuroda to speak in Thailand

Earnings

Before:
Cabot Oil & Gas (COG)
Cliffs Natural Resources (CLF)
Starwood Hotels & Resorts (HOT)
Noble Energy (NBL)
Union Pacific (UNP)
DR Horton (DHI)
General Motors (GM)
Ford (F)
Southwest Airlines (LUV)
NASDAQ (NDAQ)
Raytheon (RTN)
UnderArmour (UA)
Caterpillar (CAT)

After:
Starbucks (SBUX)
Deckers (DECK)
Amazon.com (AMZN)
Riverbed (RVBD)
Netsuite (N)
Homeaway (AWAY)
Visa (V)
Pandora (P)
American Airlines (AAL)

Bristol-Myers (BMY)
3M (MMM)
Jetblue Airlines (JBLU)
Dunkin Brands (DNKN)
GrubHub (GRUB)
Celgene (CELG)

Friday, July 25

US Economics (Time Zone: EST)

08:30 Durable Goods Orders (June) – expected 0.5%, prior -1.0%
08:30 Durable Goods ex Transports – exp 0.5%, prior -0.1%
08:30 Cap Goods Shipments Nondef Ex Air – exp 1.5%, prior 0.4%
08:30 Cap Goods Orders Nondef Ex Air – exp 0.4%, prior 0.7%

Global Economics (Time Zone: GMT)

01:30 CNY June Property Prices
12:30 CAD CPI

Earnings

Moody’s (MCO)
Xerox (XRX)

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