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kdakota630 (29.64)

The Week Ahead

Recs

7

January 17, 2009 – Comments (2)

Fully 25% of the companies that comprise the Dow Jones Industrial Average and 10% of those in the Standard & Poor’s 500 Index will announce their quarterly results next week.

Technology will be a dominant theme, with some of the biggest names in the sector reporting.

Apple (AAPL) reports on Wednesday and the health of founder and Chief Executive Officer Steve Jobs will probably garner more attention than profits. Analysts are predicting a slightly higher revenues, but lower earnings.

Other tech giants reporting are IBM (IBM) on Tuesday, and Microsoft (MSFT) and Google (GOOG) on Thursday.

Economic bellwether General Electric (GE) reports on Friday and analysts are predicting bad news. A Barclays analyst has speculated that GE may report earnings at the low end of already low projections.

In the health care sector, Johnson & Johnson (JNJ), which reports Tuesday, is expected to post higher earnings despite delays on drug approvals last quarter and growing generic competition to one of its blockbuster medications.

Abbott Laboratories (ABT), in the news this week for its acquisition of Advanced Medical Optics (EYE) for $1.36 billion, reports on Wednesday. Higher profits are expected.

Several railroad companies, also seen as economic bellwethers, will report next week, as well. CSX Corp. (CSX) reports Tuesday, Burlington Northern Santa Fe (BNI) on Wednesday, and Union Pacific (UNP) on Thursday.

Airlines reporting are AMR Corp. (AMR), parent of American Airlines, and UAL Corp. (UAUA), parent of United, both on Wednesday, and Southwest Airlines (LUV) on Thursday.

Economic reports are slim, but housing will take center stage as the National Association of Home Builders releases its January builder sentiment index on Wednesday, and the government reports on December housing starts on Thursday.

The data are expected to be ugly.

2 Comments – Post Your Own

#1) On January 17, 2009 at 1:20 PM, HansHauge (32.86) wrote:

kdakota - I cant help but wonder if this isn't a great time to catch a market bounce. Seems like after dissappointing earnings are posted the market goes up (lately at least). I guess the reasoning behind this would be that the values of the stocks are extra low just in case it's worse information than expected. Even poor earnings are good news to us in these times.

Here's one breif example. I have been short retail through the holidays and into this new year. As expected retail was a total flop...but if you look at the S&P 500 Retail index (XRT) for the last two months and it's balls to the walls (pardon my french).

http://finance.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chdet=1232216300652&chddm=15309&cmpto=INDEXSP:.INX&cmptzos=-18000&q=NYSE:XRT&ntsp=0

Since the last crash in November XRT has outperformed the S&P500 by 17%....not exactly what I had expected when my guess about a terrible retail season was actually correct (not that I was the only one betting on that of course).

Thoughts?

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#2) On January 18, 2009 at 12:27 PM, kdakota630 (29.64) wrote:

I guess that depends on your investment time-frame.  I do expect to see a market bounce that will last until March-April, and then continue downward.  You could try to time the bounce or play it safe and sit on the sidelines a little while longer.

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