Trading Radar: The Earnings Floodgate Is About to Open

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The economic calendar is light next week, and some of the important items that are on deck (Wednesday's CPI and TIC reports, and Thursday's Industrial Production report) will not be released due to the government shutdown. If the government does reopen, we could get these, plus some or all of the reports we've missed lately, including August's trade balance, September's payroll report, business inventories, producer price indexes, retail sales, construction spending, and import/export prices.

October 17 is the technical deadline for the US to approve a debt ceiling increase that would avoid a default. Market participants seem to generally agree that, at the very least, a short-term solution will be approved to get the government back open and keep the Treasury solvent.

Outside of the showdown in Washington, earnings are likely to come into focus. Earnings season began with Alcoa's ( AA ) beat on Wednesday, but only really kicked into full force today with the third-quarter reports of megabanks JPMorgan ( JPM ) and Wells Fargo ( WFC ). Next week, the floodgates really open.

As it stands now, expectations for Q3 earnings remain fairly low. On October 1, research firm FactSet reported that S&P 500 (INDEXSP:.INX) companies hit a record high for negative guidance; for the third quarter, 89 companies issued negative guidance, breaking the record of 88 last seen in the second quarter. That compares to just 19 companies issuing positive guidance. In light of the S&P's 19% return year-to-date, and the 6% upward move since the second quarter, investors may start looking for earnings to catch up with stock prices.

Next week, we'll see key reports in a number of sectors, starting on Tuesday with important financials Citigroup ( C ) and Charles Schwab ( SCHW ). This will be followed up by Bank of America (BAC) on Wednesday and Goldman Sachs (GS) on Thursday. Financials reacted fairly positively to JPMorgan and Wells Fargo's mixed numbers due to somewhat muted expectations. Given how important financial stock performance is during bull markets, traders will be watching these upcoming reports closely.

The tech sector will also be in sharp focus. On Tuesday afternoon, semiconductor giant Intel (INTC) will deliver its report. This should give investors some forward-looking information on PC demand, which has been sluggish as of late. On Thursday, Internet king Google (GOOG) reports, and as always, it should set the tone for tech trading the following day.

Also, we'll start getting numbers from consumer staples names, with Coca-Cola (KO) and Johnson & Johnson (JNJ) issuing their third-quarter numbers on Tuesday. The consumer staples sector has had a rough year in terms of earnings and guidance, and we'll get an idea of whether or not that trend will continue.

Ultimately, however, it must be noted that the biggest potential market-mover remains Washington -- and even then, the outcome remains uncertain. With the S&P 500 having already risen over 3% off of Wednesday's intraday low, the market may already be discounting the government reopening soon, as is expected by many observers.


Monday, October 14

US Economics (Time Zone: EDT)

No major economic reports - Columbus Day holidays

11:00 Fed to purchase $2.75b-$3.5b notes in 7 to 10-year range
11:30 Treasury selling $35b 3-month bills, $30b 6-month bills

Global Economics (Time Zone: GMT)

CNY Foreign Direct Investment
00:30 AUD Home Loans
01:30 CNY CPI and PPI
09:00 EUR Eurozone Industrial Production

Earnings

Before:

KMG Chemicals (KMG)

After:

Brock & Brown (BRO)
Packaging Corp. (PKG)
Wintrust Financial (WTFC)


Tuesday, October 15

US Economics (Time Zone: EDT)

08:30 Empire Manufacturing - consensus 8.00, prior 6.29
11:00 Fed to purchase $1.25b-$1.75b bonds in 23 to 30-year range

Global Economics (Time Zone: GMT)

00:30 AUD Minutes of RBA's Oct Meeting
04:30 JPY Industrial Production
08;30 GBP PPI and CPI
09:00 EUR Eurozone ZEW Economic Sentiment Survey
13:00 CAD Existing Home Sales
21:45 NZD CPI

Earnings

Before:

Charles Schwab ( SCHW )
Citigroup ( C )
Coca-Cola (KO)
Johnson & Johnson (JNJ)
Mosaic (MOS)
Omnicom (OMC)

After:

CSX (CXS)
Interactive Brokers (IBKR)
Intel (INTC)
Linear Tech (LLTC)
Yahoo! (YHOO)


Wednesday, October 16

US Economics (Time Zone: EDT)

07:00 MBA Mortgage Applications
08:30 Consumer Price Index - prior 0.1% (subject to govt shutdown0
09:00 Total Net TIC Flows - prior $56.7B (subject to govt shutdown)
09:00 Net long-term TIC flows - prior $31.1B (subject to govt shutdown)
10:00 NAHB Housing Market Index - consensus 57, prior 58
2:00 Fed's Beige Book

Global Economics (Time Zone: GMT)

08:30 GBP Employment Change
09:00 CHF ZEW Survey of Economic Expectations
09:00 EUR Eurozone CPI (final estimate)

Earnings

Before:

Abbot Labs (ABT)
ASML (ASML)
Bank of America (BAC)
BlackRock (BLK)
BNY Mellon (BK)
Comerica (CMA)
Keycorp (KEY)
M&T Bank (MTB)
Mattel (MAT)
Northern Trust (NTRS)
Pepsico (PEP)
PNC (PNC)
St. Jude Medical (STJ)
Stanley Black & Decker (SWK)
US Bancorp (USB)
W.W. Grainger (GWW)
Watsco (WSO)

After:

Albemarle (ALB)
American Express (AXP)
Crown Holdings (CCK)
eBay (EBAY)
IBM (IBM)
Kinder Morgan Partners (KMP)
Noble Corp (NE)
Sallie Mae (SLM)
SanDisk (SNDK)
Steel Dynamics (STLD)
United Rentals (URI)
Universal Forest (UFPI)
Xilinx (XLNX)


Thursday, October 17

US Economics (Time Zone: EDT)

08:30 Initial Jobless Claims - consensus 310k, prior 308k
08:30 Continuing Claims - consensus 2863K, prior 2925K
09:15 Industrial production (subject to govt shutdown)
10:00 Philly Fed - consensus 15.0, prior 22.3
11:00 Fed to purchase $1b-$1.5b TIPS in 5 to 30-year range

Global Economics (Time Zone: GMT)

00:30 AUD NAB Business Confidence Index
06:00 JPY Machine Tool Orders (final estimate)
08:30 GBP Retail Sales
23:50 JPY Japanese Investors Buying of Foreign Stocks/Bonds

Earnings

Before:

Alliance Data (ADS)
Amphenol (APH)
Baxter (BAX)
BB&T (BBT)
Blackstone (BX)
Danaher (DHR)
Dover (DOV)
Fifth Third (FITB)
Goldman Sachs (GS)
Hubbell (HUB)
Huntington Bancshares (HBAN)
Nucor (NUE)
NVR (NVR)
Peabody Energy (BTY)
Penn National Gaming (PENN)
Phillip Morris International (PM)
PPG Industries (PPG)
Quest Diagnostics (DGX)
Snap-On (SNA)
Sonoco Products (SON)
Supervalue (SVU)
Taiwan Semiconductor (TSM)
Union Pacific (UNP)
UnitedHealth (UNH)
Verizon (VZ)

After:

Advanced Micro Devices (AMD)
Capital One (COF)
Chipotle (CMG)
Google (GOOG)
Hub Group (HUBG)
Intuitive Surgical (ISRG)
Las Vegas Sands (LVS)
Stryker (SYK)
Valmont (VMI)
Werner Enterprises (WERN)


Friday, October 18

US Economics (Time Zone: EDT)

10:00 Leading Indicators
11:00 Fed to purchase $1.25b-$1.75b bonds in 23- to 30-year range

Global Economics (Time Zone: GMT)

02:00 CNY GDP
02:00 CNY Industrial Production
02:00 CNY Retail Sales
12:30 CAD CPI

Earnings

Before:

Baker Hughes (BHI)
General Electric (GE)
Genuine Parts (GPC)
Honeywell (HON)
Ingersoll-Rand (IR)
Interpublic (IPG)
KC Southern (KSU)
Laboratory Corp. (LH)
Morgan Stanley (MS)
Parker-Hannifin (PH)
Schlumberger (SLB)
SunTrust Banks (STI)
Textron (TXT)


Twitter: @Minyanville



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: AA , C , JPM , SCHW , WFC

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