The earnings season is coming to an end – and that suggests investors will have to shift their focus from earnings reports to hard economic data. Is worth pointing out that the earnings reports, which fueled the rally and often contained a few negative spots, helped the stock market had its best July in 20 years. The rally shaped July into the best month for the blue chips since October 2002 and the best July since 1989. Stocks finished out the month with a more than 7% gain.
In the week ahead, investors will be tested with July jobs report, due out Friday. Many economist expect the U.S. unemployment rate to tick higher to 9.7%. With the economic recovery on everyone’s mind, the latest jobs data will most likely have the potential to dictate investors’ mood. New-vehicle sales will also be important when they are reported Monday. Auto July sales are expected to post the highest annual sales rate of 2009, helped by the $1 bln and highly popular “cash for clunkers” program. On Friday the House of Rep. approved expanding the program by an additional $2 billion.
Other economic data expected in the coming week includes, personal income, NAR’s pending home sales report, June construction spending, ISM July report on manufacturing activity, data on June factory orders, ADP’s employment report and consumer credit.
Earnings season continues with three INDU components expected to post results (Kraft Foods (NYSE:KFT) due Tuesday, Procter & Gamble (NYSE:PG) and Cisco Systems (NASDAQ:CSCO) set for Wednesday) along with nearly 40 co.’s in the S & P’s 500 Index. Other notable companies reporting next week include: Anadarko Petroleum (NYSE:APC); Chesapeake Energy (NYSE:CHK); Tyson Foods (NYSE:TSN); Polo Ralph Lauren Corporation (NYSE:RL); SandRidge Energy (NYSE:SD); D.R. Horton (NYSE:DHI); CBS Corporation (NYSE:CBS); Whole Foods Market (NASDAQ:WFMI); Pulte Homes (NYSE:PHM) ; Baker Hughes (NASDAQ:BHI); Marsh & McLennan Companies (NYSE:MMC), and Prudential Financial (NYSE:PRU).
Unrelated to earnings: Shareholders of Merck (NYSE:MRK) and Schering-Plough Corporation (NYSE:SGP) are scheduled to meet separately on Friday (Aug. 7) to vote on the drug makers’ proposed $41.1 bln merger. Shareholders of Merck are to meet at 8:30 a.m. in Bridgewater, N.J., at the Bridgewater Marriott. Shareholders of Schering-Plough will then meet at 1:30 p.m. in Boston, at The Conference Center at Harvard Medical.
Some more highlights on the week ahead from MarketWatch’s Stacey Delo.
