What The Market Wants: Can Earnings Jockey Global Drama For The Win?

Includes: CRNT, CRZO, GBX, TWI
by: David Brown

By Walter Gault, Guest Author

Once again, the market has found itself subject to eurozone woes. Today, the S&P 500 closed down nearly a percent and the DJI fell over 100 points after news that Greece is struggling to cut its budget and Spain's interest rates continue to hover at an "unsustainable" level. Furthermore, China's expansion is predicted to slow further. And, if that wasn't enough, McDonald's (NYSE:MCD) earnings miss has put an unpleasant taste on investors' palates.

Greece's problems aren't new. How many times can we cry wolf? Greece has been bad news for the last two and half years. Now that it has succeeded in securing loans, it needs more (can't say I'm surprised) because the budget was not cut in time to cover a 3.8 billion loan due August 20. Anywhere from 10-50 billion euros are needed to keep Greece from sinking into the Mediterranean (at least we're dealing with factors of five now). Unfortunately, or maybe fortunately, depending on how you view a Greek exit, Germany and the IMF may not be prepared to reach into their coffers to prevent default. T-minus four weeks until another day of reckoning.

Earnings season received another obstacle from this morning's news: An advisor to China's central bank has predicted the nation's expansion will slow to 7.4% due to falling exports. He also hinted that the labor situation in China may become severe. Essentially, it is not known where China's economy will land.

Since 2009's comeback, the global economy is in its most precarious state. Are any of the powerful countries in a position or "state of mind" to rescue anybody? Or can they not afford to refuse?

With 175 companies reporting earnings from the S&P 500 alone this week, let's hope there's enough positive forward guidance to carry the market along.

Market Stats. Large-caps fared the best last week. Energy was a strong standout, up nearly 2%, followed by Technology at 1.4%. Financials were the weakest at -2%. But if the global economy is stimulated, the banks have the most to gain.

Here are the market stats.

4 Stock Ideas for this Market

This week, I used the hidden gem preset search in MyStockFinder. Here are four small-caps you may find interesting:

Greenbrier Companies (GBX) - Industrials

Titan International (TWI) - Cyclical Consumer

Ceragon Networks LTD (CRNT) -Technology

Carrizo Oil & Gas Inc. (CRZO) - Energy

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.