A wide spectrum of earnings reports and a fresh round of economic data are likely to be the prime market movers this week, Prudential’s Chief Market Strategist Quincy Krosby said Monday in her weekly “Connecting the Dots” outlook.
Among the companies reporting earnings this week are General Electric Corp., Honeywell International Inc., Goldman Sachs Group Inc., Bank of America Corp. and Johnson & Johnson. So far, earnings reports generally have been better than expected, Krosby said.
“As we move deeper into the earnings season with more sectors reporting, we should see positive, upside surprises helping the near-term tone of the market,” she said. Particularly important is top-line growth, or sales, she added.
Economic data being released this week includes the beginning of a new round of manufacturing surveys starting to be released this week along with housing data. The National Association of Home Builders Housing Market Index on Tuesday and June housing starts on Wednesday.
“This will be very important because not only is it about the housing, it is also about all the sectors and subsectors that do well when the housing numbers come in strong,” she said.
Also this week, European Central Bank President Mario Draghi will speak and investors are paying attention to his assessment of the Eurozone economy, Krosby said. Any remarks concerning timing the winding down of the quantitative easing program will be important.
“He doesn’t want to cause even a mini taper-tantrum in global bond markets, nor does he want to push the euro higher,” Krosby said. “We expect him to be balanced and careful in his remarks.”
Even with the economic data and Draghi’s remarks this week, the earnings reports are the most important factor, she said.
“At the end of the day for this market, it is about earnings; it is about earnings expectations; it is about what these companies are telling us that they see,” she said.
To talk to Quincy about her views of the market, contact Lisa M. Bennett or Dara Scerbo.
Read Quincy Krosby’s full Q3 Market Commentary: Third Quarter Checkup
Lisa M. Bennett
The views and opinions are those of the author at the time of publication and are subject to change at any time due to market or economic conditions. This solely for informational purposes. This is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.