Monday, July 11, 2011

The Week Ahead - This AM's noteables

Watching the following stocks below with positive news this AM for a possible minus to plus impulse with the overall market weakness:

Fossil Inc. (FOSL)
Upgraded to Overweight from Neutral at JP Morgan - Price target raised to $150 from $110., Inc. (AMZN)
Target raised to $246 at The Benchmark -  The Benchmark Company raises their AMZN tgt to $246 from $212

Callaway Golf Company (ELY)
Barron's(7/11) Weekday Trader: Even In The Rough, Callaway Looks Solid

Netflix Inc. (NFLX)
Tgt increased to $330 from $300 at Goldman (Stock Price: 295.14)

Devon Energy Corporation (DVN) - Barron's(7/11) Riding An Aging Bull - Recommended by a fund manager in Barrons

Floor Chatter - Week Ahead:

A huge week is on tap for the markets in the week ahead. Earnings reports will start as a trickle, with Alcoa kicking off reporting season after the bell Monday. Other notable reports this week will come from JP Morgan, Citibank and Google. Next week these earnings reports will build into a tidal wave. Estimates have been ratcheted down considerably over the past few weeks as the Japanese tsunami and the European debt crisis have caused analysts to ratchet down expectations. Will this lowered bar give the markets a reason to rally over the short term? According to Thompson Reuters, estimates have been lowered approximately 6% over the past month. Financial estimates have been lowered over 30% over that same time frame. This action should be interesting to watch over the next few weeks. The US debt situation is reaching the top of the stretch. When the elected officials are talking about $2 trillion versus $4 trillion, does it really matter? They throw around the Trillions like they are talking about tossing quarters into a public fountain. A meeting between the House Speaker and the President is scheduled as they try to hammer out a deal once and for all. Speaking of defaults, the Greeks have been given the second tranche of aid. The newly minted head of the IMF was talking tough about how the Greeks have to play by the rules or else! Pretty funny after the $3.2 billion is released everyone wants to scold them and tell them they better hold up their end of the deal. The Europeans are calling an emergency meeting in Brussels tomorrow after the Italians are now in the cross-hairs. Their assets saw a sharp sell off on Friday, and an unstable government may quickly turn this into a much tougher situation for the European Union to figure out. All of this whipsawing in the markets have dented the hedgies once again. I am sure they are wanting to get off this ride by now. Do not fret the annual Jackson Hole conference is mere weeks away and Helicopter Ben may have the perfect venue to announce QE III. This is turning into a bad Friday the 13th sequel. Earnings, sovereign debt, US debt ceiling, plus stress test out of the EU on Friday could have this market in a very contemplative mood this week. Stay alert. Speakers and data will be flying from all directions this week ahead. Have a great week!

Asia- Three key reports which may have the markets attention to kick off the week. New Zealand will release Card Spending, Japan Money Stock and Australian Home Loans to be specific.

Asia- A heavy data dump out of China with Foreign Exchange Reserves and New Loans data on tap. The former may get the administration and members of Congress in a tizzy if the are way out of line. The Bank Of Japan will hold a interest rate policy meeting as well.
Europe- UK House Prices and a speech by German Chancellor Merkel should highlight on the Continent as well as headlines which flow from the emergency meeting about the Italians from Brussels. 
North America- Canadian Housing starts along with the Alcoa report after the bell.

Asia- quiet outside of the reverberations from the BOJ policy decision
Europe- Heavy data day out of the U.K. with Consumer Confidence, CPI(3.3%), Retail Sales and Trade Balance data. German CPI will be watched as well. Expectations are for 2.3%.
North America- NFIB Small Business Optimism (90.6), US Trade Balance(-$44 billion), plus the June minutes of the FOMC meeting will be on tap. A heavy night of data from China will follow after the closing bell, GDP (9.3%), Industrial Production and Retail Sales will surely highlight.
Events- RIMM shareholder meeting at 6:30pm, MU @ SAL, DELL @ RBC & APA @ WFC

Asia- Digesting the Chinese data plus Japan's Industrial Production will be the goal of the session.
Europe- Germany will release Wholesale Price data. The UK Unemployment rate with expectations of 7.7% along with the Euro-Zone's Industrial Production (4.8%) will all highlight. Earnings from Burberry and Marks and Spencer will also have the markets attention. 
North America- MBA Mortgage Applications, Import Price Index plus DOE Crude data are on tap here in the States. The Bernakster is on the Hill giving two days of testimony about the state of the economy.
Events- GIS will host an analyst meeting. LEN @ JMP, ORCL @ LAZARD and earnings from YUM! Buyback declarations from YUM should be closely watched as they have become ever-present in the market place.

Asia- New Zealand GDP and Japan's Machine Tool Orders are on tap
Europe- Euro-Zone CPI will highlight with a estimate of 1.5% for the core rate. Be cognizant that Italy will head to the auction block after last Fridays sell off.
North America- US- Advanced Retail Sales ex Auto's & Gas is looking for 0.4%. PPI data is also on tap with estimates in the 2.2% area. Initial/Continuing Claims as well as Business Inventories (0.8%) are also expected.
Events- Earnings- JPM,MAR,NG & GOOG will pick up the pace of key reports. Shareholder meetings for IVZ and VZ are also on the agenda.

Asia- Quiet to end the week
Europe- Euro-Zone Trade Balance is scheduled to come in at -3.3 billion. More Importantly the release of European stress test data after trading will be heavily on the mind of the markets.
North America- CPI is slated to come in at 1.6%. Also on the agenda, Empire Manufacturing (4.2), Industrial Production & Capacity Utilization (0.3%,77%), University Of Michigan Sentiment (72.5%).
Events- SNE,MAT,C & GPC

-Eric J Schumacher

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