On a day when both economic news and trading volume are light (Monday), you must look for near-term indicators to trade this market. I’ve put together a Cheat Sheet of interesting facts to keep in mind as these markets chart their course ahead:
7) The World Cup: ESPN and ABC (NYSE:DIS) are projecting an average of 400 million soccer fans will watch each of the 64 games that it will televise during the 2010 World Cup. Only 106.5 million people watched the Super Bowl in February 2010, an all-time record for NFL football (source: ESPN, Nielsen).
6) Company News: Best Buy (NYSE:BBY), FedEx (NYSE:FDX), Discover Financial (NYSE:DFS) and Kroger (NYSE:KR) share their earnings reports this week and provide a preview to 2nd quarter earnings slated to begin on July 12th.
4) Summertime Stocks: The 3 summer months (June/July/August) have produced an average total return loss of 0.4% for the S&P 500 stock index over the last 20 years (1990-2009). Yet, the stock index was up +11.7% during the 3 summer months in 2009. Through the end of May 2010, the S&P 500 was down 1.5% YTD on a total return basis (source: BTN Research).
3) 2nd Quarter Earnings Expectations: The actual profits of the companies in the S&P 500 during the 2nd quarter 2010 are projected to be +14% higher than they were during the 2nd quarter 2009 (source: S&P).
2) Treasuries: The yield on the 10-year Treasury note closed last Friday (6/11/10) at 3.23%. 20 years ago today (6/14/90), the yield was 8.38% (source: Treasury Department).
1) Upside or Downside: Since 1950, economic expansions have lasted 6 times as long as economic contractions. Economic expansions are defined as “trough to peak” periods and economic contractions are defined as “peak to trough” periods. The average expansion has lasted 62 months while the average contraction has lasted 10 months (source: National Bureau of Economic Research).
Disclosure: Author is long MSFT; no positions in the other companies mentioned.