Round Three Earnings And The Rally - By Charles Payne

Jul. 22, 2013 9:54 AM ET

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Long/Short Equity, Portfolio Strategy

Seeking Alpha Analyst Since 2009

Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political, and general opinions by several prestigious news organizations. Currently, Mr. Payne is a contributor to the Fox News Network and Fox Business Network. He also hosts his own radio show on KFIAM 640 every Saturday from 2-4pm PST. Mr. Payne recently released his first book entitled Be Smart Act Fast Get Rich. Our all-star analytical team is called first when the media needs to know. We are regularly featured on several well respected finance-oriented radio and television programs such as Fox, CNBC, BNN, WSJ to name a few and widely recognized in the media as a leaders in the analyst community. In addition, Wall Street Strategies is part of Thomson-Reuters Consensus Estimates. Brian Sozzi is an equity research analyst specializing in the softline/hardline goods sectors of the retail industry for Wall Street Strategies Inc. Mr. Sozzi graduated Summa Cum Laude from Dowling College, receiving his Bachelors of Business Administration with a concentration in Finance and Accounting. Routinely sought after as a trusted point of reference for opinions and insight on the global economy and retail sector stock evaluation, Mr. Sozzi is a frequent on air contributor to CNBC, Fox Business Network, and Bloomberg, and is cited regularly by online/print publications that include Forbes, Bloomberg, The Wall Street Journal, Thestreet.com, CBS Marketwatch, Reuters, Seekingalpha, Associated Press, Crain’s NY Business, Fortune, Barron’s, AOL Finance, and the Financial Times. In 2009, Mr. Sozzi became recognized by Starmine as a top-ranked equity research analyst for stocks under coverage in such categories as EPS Estimate Accuracy and Industry Excess Return. Carlos Guillen is an Equity Research Analyst providing coverage of the technology sector for Wall Street Strategies, Inc. Mr. Guillen has had experience working in both the sell side and the buy side. Prior to working as an analyst, he was a Design Engineer for Lambda Electronics. Mr. Guillen holds an M.B.A. from NYU’s Stern School of Business, and he has a B.S. in Electrical Engineering from Manhattan College. David Urani is a research analyst with concentrations on the homebuilding, staffing, medical devices, and logistical services industries. Along with providing institutional clients with up-to-date reports of individual stocks within his industry coverage, David assists the rest of the Wall Street Strategies research desk with timely analysis of vital economic data. A graduate of the A.B. Freeman School of Business at Tulane University, David earned a Bachelor of Science in Management while majoring in finance. With prior training experience running small businesses, he has an eye for key fundamentals that keep Companies running efficiently. David’s insight has been featured in several outside sources, including the Fox Business Network, MarketWatch, and SeekingAlpha. Carlos Guillen is an Equity Research Analyst providing coverage of the technology sector for Wall Street Strategies, Inc. Mr. Guillen has had experience working in both the sell side and the buy side. Prior to working as an analyst, he was a Design Engineer for Lambda Electronics. Mr. Guillen holds an M.B.A. from NYU’s Stern School of Business, and he has a B.S. in Electrical Engineering from Manhattan College.

Question of the Day

Should the federal government step up to bail out Detroit from its current woes?

Yes
No
Not sure

Click here to vote and let us know what you think

I'll be Hosting Cavuto on Fox Business tonight at 8:00 p.m.

Now that market bias has re-shifted to the upside, there is a sense a big breakout move could be in the offing. Yet, this move might be as stealthy as this rally has been since bottoming in March 2009. Stocks have made an amazing move without fanfare. This week I suspect corporate earnings will move the needle more than economic data, but news on the housing front is critical. It's not an official mandate, but Bernanke has made it clear that housing is the key-people must feel like the transition is complete:

> From traditional money pit
> To money machine 2000-2007
> To owner's greatest nightmare
> To ... (fill in the blank)

There are 896 companies reporting this week, and what I suspect is that investors will get a chance to further differentiate winners from losers. I'm not talking based on moves in the share price, but instead which companies have real business momentum. I have to say thus far I haven't seen the kind of guidance that promises a great second half of the year-that was the narrative for earnings from the first quarter, an otherwise horrendous earnings season.

The week before the next jobs report needs momentum built on economic recovery. Even Fed junkies understand the economy has to heal faster or the party is over.

Paris is burning

By the way, I will be following Detroit closely for many reasons, including that is it is a cautionary tale for the rest of the nation, although it could be too late. To hear the same kind of knuckleheads that led the debacle complain about the federal government going back to Reagan, the state and other factors without admitting this is largely a self-inflicted wound is baffling but worrisome, too. Manufacturing left Detroit along with most productive citizens as the town became a feeding frenzy for special interests, including public and private sector unions.

The Paris of the Midwest is burning ... is America next?

Today's Session

The big earnings report of the day is a dud as McDonald's has come up short of the Street's expectation, with the biggest factor being same store sales in the United States. The news slowed the upward drift of equity futures, but the market seems eager to allow more news to pour in before deciding on a true direction.

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