- The stocks did mostly what I predicted last week and for the most part the markets stayed flat with modest gains throughout the week. In the end, the week was a positive one. Although the US trade data on Friday was somewhat disappointing on exports that declined. Earnings season kicked off last week with some movers including our stock of the week Monsanto as well as Wells Fargo, Alcoa and Ruby Tuesday.
- This week will be a huge week for stocks. Earnings season is in full force with the big financial stocks in the front of it. Now analysts have marked down the earnings season for the financials this quarter, and I believe they might be just talking down the stocks so they can beat their earnings this quarter. The hint was when Wells Fargo released their earnings, the beat it, the only problem was their interest rate for the future was cut. If Wells Fargo beat their earnings I believe the financial sector can beat theirs too. The notable financials releasing their earnings: Goldman Sachs, J.P. Morgan & Chase, American Express, Bank of America, Citigroup, and Morgan Stanley. It will be truly make or break for the financials to start off the season. If they do make or beat their earnings, then the financials could have an incredible rally for the rest of 2013, and if the financials break, they could still recover enough to make gains in the rest of year. (assuming Washington fixes the fiscal cliff and debt ceiling before the date in March)
- With earnings season in full force, there is still other notable earnings that might be a good investment if you want to avoid the financial sector this week. Johnson Controls, General Electric, Ebay, Intel, and United Health Corp. all release their earnings this week. Those might be great stocks to buy if you do not want to get into the financial sector this week. It is a gold mine for earnings investors because of all the earnings that are coming out, if you do enough research on these companies for the short term, look at their predicted earnings, compare them year-to-year and you might find a stock that is set to break its earnings report. I know Ebay is expected to have a big year, so that might be one to take a look at. Check out our article about earnings trading.
- Even with the earnings season taking up all the news, there is still important events in Washington to note for this week. Monday Bernanke talks after the stock markets close, this could have big impacts on the futures, or even foreign markets, it might have an impact on Tuesday's markets depending on what he says. December retail sales come out Tuesday. Home builders and consumer price indexes come out Wednesday. Housing starts for December come out Thursday. With all of the events going in Washington this week, some wont have a big effect on the markets compared to the earnings season this week but some data will have an impact on the markets enough to move it big time in either direction. Most of these indexes will likely effect the retailers the most. The retailers were expected to have a bad holiday season, and so the data from Tuesday, and even other reports will be big for the retail sector. It is expected to be bad but show some optimism in some data that could be good. The data that is expected to further its momentum from 2012 is the housing data. This data that comes out at the end of the week, should be a nice number which is good for the housing market, although with strong financials also releasing their earnings, the markets may focus on financials rather than the data from the housing, just like when any data from the housing markets were tuned out to listen to the gridlock in Washington about the fiscal cliff. The consumer spending data is a crucial part of the economy, and its outlook is dim this week as less shoppers were spending their discretionary income this year for the holidays.
This week is a big one that's no doubt, with a vast amount of information coming out from Washington and a dual threat with earnings season in full throttle this week, the financials and the rest of the market will be effected entirely by the earnings and economic indexes. Last week was very flat in terms of volatility and so this week depending on the data may be the opposite. If all of the data is good, and earnings surprise investors and soar, then the market will go soaring, if there is mixed data along with mixed earnings the markets could stall. Earnings will be crucial and I expect them to not be entirely bad, in fact most stocks will have some success this earnings quarter, and so the markets could rally, although the consumer spending data will be crucial and if that is bad then the markets could take a turn downwards. And if earnings are bad the markets could take a turn for the worst. If you are in the stock market now, keep your eyes peeled and do your research, their could be some good stocks this week, although this might not be a time to buy, instead just hold, unless you like to invest on earnings, then continue on with your research. This quarter was expected to be bad, but I truly have some optimism that not all of the stocks will have a terrible quarter, instead the markets could have a good week this week. It depends on the data, and these analysts do their research too, and are not that bad at their predictions. Although Wells Fargo data could hold the key to other financials' earnings this week. And so keep the optimism (until march) and do your research, invest with care.
My Own Investment Opinions, Not Responsible For Loses. Investment Opinions from a Minor.
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