Stock markets shrugged off Friday’s confusingly low U.S. job creation numbers – so let’s see how they cope with an onslaught of news this coming week in the shape of big company earnings, economic indicators, Federal Reserve speeches and ongoing theater in Washington over a budget.
Big U.S. shares gained roughly 30 percent in 2013, and stocks made trillions of dollars for investors around the world, but some skeptics now expect a correction some time this year and desperately want to know what the trigger for that correction might be.
Doll told investors: “Expectations of high single digit or low double digit gains are not unreasonable (for 2014), but we also think a noticeable pullback is likely to be caused by overbought and deteriorating technical conditions. We would use corrections as buying opportunities since most fundamentals continue to improve.”
Many large companies will report earnings this coming week, including Intel, Goldman Sachs, JPMorgan Chase, Bank of America, General Electric, BlackRock, Citigroup, Taiwan Semiconductors, UnitedHealth, American Express, Morgan Stanley and Schlumberger.
As if that weren’t enough for investors to digest, big economic indicators out this coming week will include a read on retail sales, consumer prices, housing starts, weekly jobless claims and industrial production.
Further, Federal Reserve officials, including outgoing chairman Ben Bernanke, will speak in public. Investors will watch for any clues on the pace of the Fed’s “taper” or reduction in its unconventional monthly bond-buying stimulus program.
Fasten your seatbelts for what just might be a choppy ride.
Monday could bring updates on final negotiations in Washington over a Federal Government budget deal to avoid a shutdown of the Government on January 15, and also a speech by Atlanta Fed President Dennis Lockhart.
On Tuesday, earnings are expected from JPMorgan Chase and Wells Fargo and retail sales and business inventories numbers are scheduled to be released. Philadelphia Fed President Charles Plosser and Dallas Fed President Richard Fisher are expected to give speeches.
On Wednesday, Bank of America will provide the big earnings news, economic data will come from the U.S. Producer Price Index and the Fed’s regional “Beige Book,” and speeches are expected from Chicago Fed President Charles Evans and the Atlanta Fed’s Dennis Lockhart.
Thursday brings the busiest earnings day with results from a slew of companies including BlackRock, Citigroup, Goldman Sachs, Taiwan Semiconductors, UnitedHealth, BB&T, Charles Schwab, First Republic Bank, American Express, Intel, PNC Financial, Capital One and Sallie Mae.
Thursday’s economic indicators are expected to include the U.S. Consumer Price Index and weekly jobless claims.
Friday should provide a read on housing starts, industrial production, a preliminary reading on U.S. consumer sentiment from the Thomson Reuters/University of Michigan Surveys of Consumers, and a speech by Richmond Fed President Jeffrey Lacker.
General Electric, Morgan Stanley, Schlumberger and Bank of NY Mellon will provide Friday’s earnings news.