Coming Week: Exxon Marks Spot
With earnings season over and the February payroll number in the books, traders won't have much to guide them in the coming week -- except for those stubbornly high oil prices.
The "Goldilocks" February jobs gain of 262,000 spurred the stock market on Friday, sending both the
S&P 500
and the
Dow
to new highs for the year. Although the final jobs tally beat the consensus estimate by 37,000, the market opined that the result wasn't lopsided enough that it would encourage the
Fed
to put its "measured" rate-hike policy on hold in favor of a plan to raise rates at a speedier clip.
Bonds were also boosted by the payroll number, as the yield on the 10-year Treasury fell to 4.31% from 4.38%. Prices and yields move in opposite directions.
The threat of higher bond yields has proven to be the stock market's chief nemesis this year, undoing many rallies before they even get started.
"The jobs number solves questions about economic growth -- at least for the next month," says Paul Mendelsohn, strategist at Windham Financial.
Mendelsohn says it will be a light week for economic data, but he does plan to tune into the trade balance numbers set for release next Friday, which he says should give some "direction to the dollar." The greenback's slump this year has also acted as a headwind to the market. A pair of
Treasury
auctions slated for Wednesday and Thursday should also give some additional information about foreign demand in the once-almighty dollar.
But aside from the Fed's beige book, which will be released on Wednesday, and Friday's trade numbers, analysts say the only piece of the wall of worry left for the market to climb is oil prices, which landed firmly in $50 territory last week.
"A pullback in oil would ignite the market, but if oil gets too comfortable in the mid-$50 range it could spell trouble," says Paul Nolte, market strategist at Hinsdale Associates. (Nolte's alternative plan for the slow news week is to "see what Martha Stewart does in her first full week of freedom."
Martha Stewart Living Omnimedia
(MSO)
fell close to 10% on her first day out of prison.)
Also on the oil front, Nolte points out that the
Nasdaq
has not rallied along with the other major indices as momentum players have left tech and moved into oil.
"The semis have been trading sloppily, but look at the string of upgrades in the oil sector," says Nolte. "
ExxonMobil
(XOM) - Get Report
has become a mini-tech stock."
While most analysts are optimistic heading into next week based on the tailwind provided by the jobs number, Richard Yamarone, chief economist at Argus Research, warns against reading too much into it.
"This is really the first impressive result from a primary indicator this year," says Yamarone. "All the other major economic numbers released to date have been below consensus."
And while we may be closer to warnings season than earnings season, there are still some companies releasing quarterly results next week.
On Monday, comic book collectors and traders of all ages can look forward to results from
Marvel Enterprises
( MVL). The consensus earnings estimate for Marvel is 16 cents, up from 12 cents a year ago.
Tuesday sees
Las Vegas Sands
(LVS) - Get Report
posting its first set of results since going public in December. Analysts expect the casino company to report profits of 16 cents in the fourth quarter.
Some of the heavily traded names releasing earnings on Wednesday include
American Tower
(AMT) - Get Report
,
Blockbuster
( BBI) and
Chinadotcom
( CHINA).
Finally, retail returns to the spotlight for a final bow on Thursday, as
Aeropostale
(ARO)
,
Ann Taylor
(ANN)
,
Borders Group
( BGP) and
Bon-Ton Stores
(BONT)
report results.