Wall Street is looking ahead to a week jam-packed with earnings and important economic data. And that should make for some hectic trading action.
"With all the data being released next week, we should expect a continuation of the volatility we saw this week," says Paul Mendelsohn, chief investment strategist at Windham Financial Services.
Wednesday morning will kick things off with June import/export prices and May trade balance data. Economists expect the U.S. trade deficit to narrow to $56 billion from $57 billion in April.
On Wednesday afternoon, the Treasury budget for June will be made public. Analysts are looking for an increase to $28 billion from $19.1 billion in May.
Thursday morning the action should really heat up. The June consumer price index is due to be released before the bell. Economists expect the CPI to swing to a 0.1% rise from a 0.1% drop in May. The gain in the core CPI, which excludes food and energy, is expected to rise to 0.2% from 0.1%.
Retail sales for June are also on tap for Thursday. Analysts expect an increase of 0.9%, vs. a drop of 0.5% the prior month.
Traders should prepare for a busy Friday morning. As well as business inventories for May, the N.Y. Empire State Index and capacity utilization and industrial production figures for June will be released.
The June producer price index will hit the market on Friday too. Economists are looking for a 0.2% increase after a drop of 0.6% in May. Economists expect the core PPI to rise 0.2%, up from 0.1% the prior month.
All that said, company profit reports will be getting much more attention next week as second-quarter earnings season opens.
"Investors will have digested what happened overseas by next week and will have turned their attention to earnings," says Robert Pavlik, portfolio manager at Oaktree Asset Management. "The bigger names will obviously set the tone for the market, but I expect trading to be volatile. Thursday and Friday will be important because the consumer will have a better picture of any inflationary pressures after the release of the CPI and PPI data."
The earnings parade will pick up the pace as a number of the market's heaviest hitters march into the spotlight.
(AA:NYSE) earnings was a little bit of a surprise," says Vincent Ambrose, senior trader at Fox Investments. "It could be a sign of things to come, and I expect the market to trade higher on the strong earnings growth that we will see."
On Monday, biotech heavyweight
(DNA:NYSE) reports quarterly results. Analysts expect the company to earn 26 cents a share, up from 19 cents last year, on revenue of $1.48 billion.
Companies scheduled to take the earnings stage on Tuesday include
(PEP:NYSE) will also report second-quarter results on Tuesday. Wall Street expects the soft drink giant to earn 67 cents a share, up from 61 cents, on sales of $7.55 billion.
The hits continue on Wednesday with companies such as
Advanced Micro Devices
(YUM:NYSE) reporting quarterly results.
(AAPL:Nasdaq) is also slated to report on Wednesday. The consensus estimate for the iPod manufacturer's fiscal second quarter is 31 cents, up from 9 cents last year, on revenue of $3.31 billion.
Thursday will be the biggest day for earnings, with more than 40 companies reporting results. Among the companies releasing quarterly information will be
Fifth Third Bancorp
Other companies reporting include
(LUV:NYSE) also will be releasing results on Thursday. Analysts expect the discount airline to earn 18 cents a share, up from 15 cents last year, on revenue of $1.92 billion.
(GE:NYSE) highlights Friday's earnings releases. Wall Street expects GE's second quarter to come in at 44 cents a share, up from 38 cents last year, on revenue of $41.5 billion.
"The numbers we get from this earnings cycle will almost be more important than the new economic data coming out," Mendelsohn says. "This will be a critical earnings season because we will see if the second-quarter earnings match up with the positive economic data that has been released the last few months."