Stocks Weekly Forecast

Earnings season is coming and after last week's gains how will the market react this week?

Here is your stocks weekly forecast

- Last week was a relief and dramatic end to the infamous and overly talked fiscal cliff. Or was it? The fiscal cliff got a deal that would push the date back to March. And with the debt ceiling crisis and government spending in question Washington basically made a huge effort to deal with everything in March. Making the market react all happy in the time being. Well last week during the shortened trading week because of new years, the deal getting done reacted to the futures gaining huge percentage numbers, and Wednesday the markets soared. Thursday and Friday were more modest and edged out slight gains, but overall the week was a success. The S&P reached its highest level in more than 5 years.

- This week should be an interesting one. Earnings season is hitting soon and so the majority companies will release their quarterly earnings in a matter of weeks. This should be the next catalyst to judge stocks by with the fiscal cliff averted for now.

- Earnings season is critical for a stocks success, but with recent economists and analysts cutting their expectations this quarter, the earnings season is expected to be below par. This may cause many stocks to have bad earnings, and so a bad quarter might be expected. The financials and technology sectors as well as materials will be hit the hardest. With that being said, their is still stocks that could be set to beat expectations, if you do enough short term research and look back at quarterly sales, then their is still a chance that earnings trading could work.

- The earnings this week that are notable are Monsanto, Alcoa, Ruby Tuesday, and Wells Fargo. Ruby Tuesday might not have great earnings as well as Wells Fargo, but Monsanto could have earnings that may beat expectations.

- The events this week that might be crucial for the markets are the wholesale inventories number and small business index. These economic indicators could have a large effect on the markets.

       All in all this week should not be terrible. Economic indicators and some earnings might shake up the market a little bit but if all of the economic numbers turn out ok and keep rising then the market may do the same. Although this week may be a good week for the markets, the whole fiscal cliff deal and debt ceiling crisis is still not solved, and so March could be a rough month for the markets. I would expect the market to do what it was doing the last few months leading to the fiscal cliff, and that was mostly stalling with some good gains here and there. But, come March, keep your eyes peeled and hope Washington does not mess this one up.
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