The January 18 - 22 business week will begin one day late, due to Martin Luther King Jr holiday, leaving only Tuesday to Friday for market action to be staged. The most notable economic data releases will be the Housing Market Index (HMI) and Housing Starts numbers; while Treasury International Capitaldata, the Producer's Price Index (PPI), a Philadelphia Fed report, Leading Indicators and Jobless Claims will fill the docket.
Combine the absence of economic indicating data on Friday and a hand full of releases spanning Tuesday to Thursday, and the spotlight turns squarely on the weeks earnings reports listed by day below...
- Tuesday: Citigroup (C), CSX Corp. (CSX), McMoRan Exploration Co. (MMR)
- Wednesday: Bank of America (BAC), Ebay (EBAY), Logitech International (LOGI), Morgan Stanley (MS), Starbucks (SBUX), U.S. Bancorp. (USB), Wells Fargo & Company (WFC)
- Thursday: American Express (AXP), Burlington Northern Santa Fe (BNI), Capital One Financial (COF), Fifth Third Bancorp (FITB), Freeport-McMoRan Copper & Gold (FCX), Goldman Sachs (GS), Google (GOOG), Southwest Airlines (LUV), Union Pacific (UNP), Xerox (XRX)
- Friday: BB&T (BBT), General Electric (GE), McDonalds's (MCD), Schlumberger (SLB), Suntrust (STI)
Scroll down to find the Economic Report or Earnings Details of your choice.
The late trading week will start in a hurry Tuesday morning as C and MMR are scheduled to announce earnings before the market open. Citigroup has been plagued by sub par lending standards and may miss the expected -0.33 EPS due to higher defaults and weaker Commercial Real Estate fundamentals, cited in JP Morgan's results on Friday. MacMoRan will likely have benefited from higher oil prices over the quarter, perhaps beating the -0.26 EPS consensus, yet the forward momentum for drilling and exploration of crude oil could be dampened by the recently wavering price of the commodity. The Treasury's International Capital report will hit wires at 9:00 AM, and should give some clarity to the Treasury market that has moved inversely with equities as investors seek safety and speculators look to capitalize on future supply-demand gaps of the U.S. debt. At 1:00 PM home builders' sentiment will be judged by the results of January's Housing Market Index, which weakened from 17 to 16 in the previous month. Following the close, rail carrier CSX Corp. will announce earnings, where the estimated result stands at -0.76 EPS.
The usual weekly suspects MBA Mortgage Applications (7:00 AM), ICSC Goldman Store Sales (7:45 AM), and Redbook Sales (8:55 AM), may be overshadowed by financial earnings this Wednesday. Wells Fargo (WFC) (-0.02 EPS est.) and Morgan Stanley (MS) (0.36 EPS est.) will announce Q4 results at 8:00 AM,U.S. Bancorp (USB) (0.29 EPS est.) will release numbers before the open, and Bank of America (BAC) (-0.52 EPS est.) will keep traders guessing but vow to show their grades by day's end. While BAC and WFC expect losses, USB has the most to lose if results miss the optimistic estimates. In a quarter where JP Morgan announced an additional $2 billion of loan loss provisions for 2010 Q1 and Q2, the financial sector may reveal some skeletons. US Bancorp.doesn't have the trading arm to profit from market movement fees like BAC, MS or JPM and share a closer fate to their loan portfolio. The PPI and Housing Starts data will cross tickers at 8:30 AM, and are expected to show virtually no change for on either statistic, suggesting that any big moves from these reports will impact markets. Consumer names EBAY (0.40 EPS est.), LOGI (0.27 EPS est.) and SBUX(0.27 EPS est.) will announce and be judged in after hours trading; begging attention to after-market consumer goods, communication tech spending, and consumer discretionary outlays, respectively.
While Jobless Claims will demand an audience at 8:30 AM, following an unexpected 11,000 jump in initial claims to 444,000 last week, earnings reports will steal the pre-market show. First by Fifth Third Bancorp (FITB) (-0.31 EPS est.) at 6:00 AM, second with Xerox (XRX) (0.22 EPS est.) at 7:00 AM, and accompanied by Goldman Sachs (GS) (5.19 EPS est.) and Union Pacific (UNP) (1.04 EPS est.) some time before the opening bell. FITB will add clarity to consumer lending and commercial real estate, XRXwill mirror businesses investment, GS will tell how well the best traders on the planet fared, and UNP will keep tabs on the manufacturing sector's recovery via transportation of goods.
The Leading Indicators report, due at 10:00 AM, is expected to ease from the 0.9% November growth to 0.7% growth in December but may be weakened by recent negative surprises from labor and spending in the tail end of 2009. Simultaneously the Philadelphia Fed will release their survey of economic conditions within their respective district, which is also expected to show decelerating growth as the indicator drops from the previous high of 20.4 in December, to 18.0 in January. The EIA Petroleum Status report has been pushed from Wednesday to Thursday this week, and will be closely watched for total supply changes (currently 330 million barrels) as well as distillate stock draws and refinery capacity rates.
Reporting after the close are Burlington Northern Santa Fe (BNI) (1.22 EPS) at 4:00 PM and Capital One Financial (COF) (0.45 EPS est.) at 4:05 PM, while American Express (AXP) (0.55 EPS est.) and Google (GOOG) (6.43 EPS est.) will release earnings sometime after the bell. BNI will be an interesting post-close story to compare to UNP as traders look for moves in the transport sector, just before Capital One walks investors through an average U.S. credit portfolio. Amex will unveil the strength of their high end consumer credit book and small business arm, while Google will most definitely stomp estimates, as on-line advertising continues to gain traction. Finally, Southwest Airlines (LUV) (0.06 EPS est.) will announce results at an unknown time; a testament to consumers' marginal propensity to fly rather than drive.
On a day where there is literally no economic data to be released, Friday's market action will be acutely focused on earnings. Before the market open BB&T (BBT) (0.21 EPS est.), General Electric (GE) (0.27 EPS est.), McDonald's (MCD) (1.02 EPS est.), and SunTrust (STI) (-0.69 EPS est) will make highlights. Most of the banking sector will have reported at this stage, however results from BB&T and SunTrustwill reflect loan quality and economic activity in the South Eastern states where these banks have a dominant presence. Similarly, GE and MCD will boast or bleed by changes in consumer demand for household appliances and premium priced meals at fast food restaurants. Capping off the list of noteworthy market moving events, Schlumberger (SLB) (0.63 EPS est.) will announce their Q4 2009 earnings as the only scheduled release on Friday, while it happens to be the earliest at 6:00 AM. The strength of the offshore oil explorer and driller will be influenced by spiking crude prices throughout the quarter, yet expectations for the price/barrel moving forward could have a greater effect on the stock than the corporate track record.
Keep a close eye on earnings and economic data in this short yet furious week of market moving events. Oil is moving lower and the MACD is showing a bearish cross, leading us to make a high conviction call in our next piece that you won't want to miss.