There are a few important economic reports and several significant corporate earnings reports scheduled for release this week. Economic reports this week include Consumer Credit, Wholesale Inventories, Import Price Index, Initial Jobless Claims, Monthly Budget Statement, Trade Balance, Producer Price Index and preliminary Univ. of Mich. Consumer Confidence. The Producer Price Index and Consumer Confidence reading both have market-moving potential.
Take-Two Interactive(TWO), Tommy Hilfiger(TOM), H&R Block(HRB), Martek Biosciences(MATK), Omnivision Technology(OVTI) and National Semiconductor(NSM) are some of the more important companies that release quarterly earnings this week. There are also a few other events that have market-moving potential. The CIBC Communications and Technology Food Chain Conference, Goldman Sachs Healthcare Conference, Deutsche Bank Media Conference, EEII Convention and Expo, the Fed's Kohn speaking to the National Economist Club, Pacific Growth Equities Life Sciences Conference, the Fed's Guynn speaking in Atlanta and Greenspan's testimony to an international monetary conference could all impact trading this week.
Bottom Line: I expect U.S. stocks to rise modestly this week on a continuation of the fall in energy prices and positive news from multiple conferences. As well, the relatively high Put/Call and ARMS readings and another fall in the AAII % Bulls last week also bodes well for stocks. However, any rise will likely be muted by resurfacing inflation fears and rising interest rates as I expect Producer Prices and Consumer Confidence to exceed expectations at the end of the week. My short-term trading indicators are still giving buy signals and the Portfolio is 125% net long heading into the week.