Weekly US Market Update and Outlook
U.S. stocks brace for more earnings; jobs on tap
Energy sector may steal show; GM, Verizon, Disney also on earnings deck
U.S. stocks brace for more earnings; jobs on tap
Energy sector may steal show; GM, Verizon, Disney also on earnings deck
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Marketwatch: The market will try to regain some momentum next week, another week heavily loaded with earnings, with investors also awaiting the June jobs report and second-quarter growth figures for an update on the health of the economy. "Next week is another peak weak, with 118 S&P 500 companies reporting earnings," said John Butters, an analyst at Thomson Financial. Overall, year-on-year earnings for S&P 500 companies are now expected to have fallen 17.9%. The rate of decline worsened from 17.1% expected last week as results from companies including Washington Mutual and American Express missed expectations. But the market may have a chance to look past ailing financials. Meanwhile, the employment report on Friday is expected to show that the economy lost another 70,000 jobs in July, with the unemployment rate ticking higher to 5.6% from 5.5%. Ahead of this, investors will also monitor a survey of private-sector employment due Wednesday and weekly jobless numbers on Thursday. Also on Thursday, the GDP report is expected to show the economy still grew 2.1% in the second quarter, with a slumping dollar helping to boost exports.
A week to forget
Investors will also try to look past renewed concerns over ailing financials, which once again took the market for a rough ride this past week, erasing optimism over sliding crude-oil prices and government help for mortgage lenders Fannie Mae "A week that began with such promise ended with a whimper," said Ken Tower, chief market strategist at Covered Bridge Tactical. "As Thursday's 6% decline in the financial sector demonstrates, the market is still trying to navigate this bond market minefield." Ailing financial firms posted more dismal results this week. But their shares still rallied through the first half of the week, partly due to investor belief that financial stocks have fallen too much and that a stream of write-downs linked to bad home loans will eventually end. The market was brought back to reality Thursday after news that sales of existing homes sank to their lowest level in a decade in June. As the Dow industrials slumped more than 280 points Thursday, shares of Washington Mutual fell 13% after the bank posted a quarterly loss of $3.33 billion. Still, stocks finished on a positive note Friday, thanks to a better-than-expected report on sales of new homes in June and a continued slide in crude oil prices, which fell 1.8% on the day and nearly 5% on the week to end slightly above $123 a barrel. The Dow rose 21 points to 11,370 on Friday but still fell 1.1% for the week. The S&P 500 index gained 5.2 points to 1,257 on Friday but lost 0.2% on the week. Meanwhile, the Nasdaq Composite managed to gain 30 points, or 1.3%, to 2,310 on Friday and rose 1.1% on the week. The market's ability to look past news Friday that S&P may downgrade Fannie Mae's and Freddie Mac's credit ratings might again lead investors to believe that for now, the worst has already been priced in for financial stocks. The sector is also nearly done reporting results, which might help investors shift focus. Still, with disappointing results from American Express this week, the market will look for signs of how consumer credit is faring when credit card firm Visa reports Wednesday, followed by MasterCard on Thursday.
Will energy steal the show?
Meanwhile, energy might steal the show next week. The sector has fallen hard in recent weeks as crude-oil prices slid, but it managed to eke out gains Friday. Besides Exxon and Chevron, a slew of energy companies are due to report starting with BP PLC on Tuesday. Wednesday will bring results from Allegheny Energy. On Thursday, Chesapeake Energy.
Marketwatch: The market will try to regain some momentum next week, another week heavily loaded with earnings, with investors also awaiting the June jobs report and second-quarter growth figures for an update on the health of the economy. "Next week is another peak weak, with 118 S&P 500 companies reporting earnings," said John Butters, an analyst at Thomson Financial. Overall, year-on-year earnings for S&P 500 companies are now expected to have fallen 17.9%. The rate of decline worsened from 17.1% expected last week as results from companies including Washington Mutual and American Express missed expectations. But the market may have a chance to look past ailing financials. Meanwhile, the employment report on Friday is expected to show that the economy lost another 70,000 jobs in July, with the unemployment rate ticking higher to 5.6% from 5.5%. Ahead of this, investors will also monitor a survey of private-sector employment due Wednesday and weekly jobless numbers on Thursday. Also on Thursday, the GDP report is expected to show the economy still grew 2.1% in the second quarter, with a slumping dollar helping to boost exports.
A week to forget
Investors will also try to look past renewed concerns over ailing financials, which once again took the market for a rough ride this past week, erasing optimism over sliding crude-oil prices and government help for mortgage lenders Fannie Mae "A week that began with such promise ended with a whimper," said Ken Tower, chief market strategist at Covered Bridge Tactical. "As Thursday's 6% decline in the financial sector demonstrates, the market is still trying to navigate this bond market minefield." Ailing financial firms posted more dismal results this week. But their shares still rallied through the first half of the week, partly due to investor belief that financial stocks have fallen too much and that a stream of write-downs linked to bad home loans will eventually end. The market was brought back to reality Thursday after news that sales of existing homes sank to their lowest level in a decade in June. As the Dow industrials slumped more than 280 points Thursday, shares of Washington Mutual fell 13% after the bank posted a quarterly loss of $3.33 billion. Still, stocks finished on a positive note Friday, thanks to a better-than-expected report on sales of new homes in June and a continued slide in crude oil prices, which fell 1.8% on the day and nearly 5% on the week to end slightly above $123 a barrel. The Dow rose 21 points to 11,370 on Friday but still fell 1.1% for the week. The S&P 500 index gained 5.2 points to 1,257 on Friday but lost 0.2% on the week. Meanwhile, the Nasdaq Composite managed to gain 30 points, or 1.3%, to 2,310 on Friday and rose 1.1% on the week. The market's ability to look past news Friday that S&P may downgrade Fannie Mae's and Freddie Mac's credit ratings might again lead investors to believe that for now, the worst has already been priced in for financial stocks. The sector is also nearly done reporting results, which might help investors shift focus. Still, with disappointing results from American Express this week, the market will look for signs of how consumer credit is faring when credit card firm Visa reports Wednesday, followed by MasterCard on Thursday.
Will energy steal the show?
Meanwhile, energy might steal the show next week. The sector has fallen hard in recent weeks as crude-oil prices slid, but it managed to eke out gains Friday. Besides Exxon and Chevron, a slew of energy companies are due to report starting with BP PLC on Tuesday. Wednesday will bring results from Allegheny Energy. On Thursday, Chesapeake Energy.
Weeky KLCI Update and Outlook
I Capital on daily KLCI. After testing the influential support level of 1,090, the KLCI has staged a mild recovery this week following the plunge in the overheated oil price. Coupled with the mild curving up of its MACD and DMI, the RSI has also shown a failure-swing point, suggesting that a potential breakout ahead. On top of this, the technical indicators like the RSI, Demand Index, etc are all flashing BULLISH DIVERGENCES, whether on a daily or weekly basis. Are investors simply too pessimistic? I Capital thinks so.
I Capital on daily KLCI. After testing the influential support level of 1,090, the KLCI has staged a mild recovery this week following the plunge in the overheated oil price. Coupled with the mild curving up of its MACD and DMI, the RSI has also shown a failure-swing point, suggesting that a potential breakout ahead. On top of this, the technical indicators like the RSI, Demand Index, etc are all flashing BULLISH DIVERGENCES, whether on a daily or weekly basis. Are investors simply too pessimistic? I Capital thinks so.
* "Perdana" Mentri Badawi wants to take this opportunity to "kompressed" the Terengganu MB further? Bad blood. Again tit- for-tat? (Discussed here before)
* Is an Olympic medal so important to Malaysia? Gold -RM1m, Silver -RM300,000 and a Bronze -RM100,000. If the country is going to spend such money during such an economic climate, I rather the sportsmen and sportswomen come back from Beijing empty handed.
* Star: Top Cat says "The country's economy seems to face "attacks" every 10 years". He said these attacks could either coincidental or attempts by "unseen hands" to sabotage the economy. Hey frend, care to elaborate "unseen hand" to sabotage the economy? The economic condition we are facing is not only happening here but worldwide. The main reason we are facing a much slower growth and higher inflation than it should be is "self inflicted" as you raised the gasoline prices by 41% suddenly(not to mentioned electricity tariff). As discussed earlier in my postings, we are the ones that are accelerating or "fast forwarding" the inflation situation and as a result slowing down growth tremendously. I am very surprise our Top officials sounded so "unsubstantiated" in their claims.
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