Data, Earnings Collide in Coming Week - TheStreet

NEW YORK (

TheStreet

) -- Key macroeconomic data such as home sales, the

Federal Reserve's

rate decision and gross domestic product data compete for investors' attention with several big earnings reports in the coming week.

Concerns about President Obama's proposed restrictions on banks and tightened lending in China dominated investors' attention last week, during the stark, three-day selloff that saw the

Dow Jones Industrial Average

shed 552 points. Even though most economists aren't anticipating any interest rate or tone changes from the Federal Open Market Committee on Wednesday, investors may show extra caution ahead of the rate announcement in hopes of gaining some clarity on the direction of the economy.

"At this point, there really isn't a compelling reason for the Fed to move one way or another," said Brian Bethune, chief U.S. financial economist for Global Insight. "It's largely going to be a repeat of what they've been saying in terms of recent economic evidence showing some improvement but also that labor markets remain weak and inflation has been tame."

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Before the market can focus on the Fed announcement, it will get the most recent read on the housing market. The National Association of Realtors will report November existing-home sales on Monday, Case-Shiller and the Federal Housing Finance Agency report November home price indices Tuesday, and the Census Bureau will report December new-home sales on Wednesday.

Global Insight's Bethune said it's hard to get a real reading on housing, because it's being clouded by the home-buying tax credit.

"In spite of all of that noise, the good news is that inventories are declining, which is a positive for the housing market," he said.

Existing-home sales for December are expected to show a slight pullback to 6 million, after November's spike, at 6.54 million. New-home sales, meanwhile, are projected to show some improvement, reaching 370,000, from 355,000, previously.

Tuesday also brings a read on the consumer with the Conference Board's consumer confidence index. The market is looking for a slight decline in December, to 52.9, from 53.3 previously.

Along with the usual weekly jobless benefits number on Thursday, the Census Bureau releases December's durable goods orders. The report, which is closely watched as an important gauge of manufacturing activity, is expected to show a 2% surge in December, following November's 0.2% uptick.

Whatever the week brings, Friday's fourth-quarter GDP report could give the market a boost.

"Overall, next week's indicators looking pretty neutral -- except for GDP, which is definitely a positive," Bethune said. He expects to see 5.5% growth, which is better than the consensus estimate for an increase of 4.5%.

In addition to macroeconomic news, the market will have an influx of earnings releases to wade through with key reports expected from tech heavyweights

Apple

(AAPL) - Get Report

and

Microsoft

(MSFT) - Get Report

; big telecom names like

Verizon

(VZ) - Get Report

,

Motorola

(MOT)

and

Nokia

(NOK) - Get Report

; and several oilfield services companies. Integrated oil companies

ConocoPhillips

(COP) - Get Report

and

Chevron

(CVX) - Get Report

also report.

"Despite a 33% year-over-year rise in crude prices, we expect the European and U.S. integrated oils to post a 9% year-over-year fall in U.S. earnings in the fourth-quarter of 2009, as lower U.S. and European gas prices and global refining margins entirely offset the rise in oil prices," said Credit Suisse analyst James Neale.

ConocoPhillips, which reports on Wednesday, is expected to post a profit of $1.13 a share and Chevron, which reports on Friday, is slated to show earnings of $1.71 a share.

Apple will dominate the market's focus through the first half of the week with an after-the-close first-quarter earnings report on Monday followed by a highly anticipated product launch on Wednesday. Analysts are looking for earnings of $2.07 a share.

"We believe Apple enjoyed a better-than-expected holiday season," said Credit Suisse analyst Bill Shope, who recently raised his iPhone-shipping estimates to 9.01 million in the quarter, from 8.75 million, and his estimates on Mac units to 3.28 million, from 3.02 million.

Shope said Apple was his top "PC-centric pick."

"We believe investors should build on positions at current levels," he said. "The significant profit and cash flow contribution from the iPhone, coupled with a cyclical recovery in the Mac business, suggests consensus estimates and the stock should continue to rise."

Amazon

(AMZN) - Get Report

, which reports after the bell on Thursday, was another company with strong holiday sales, thanks to swift demand for its Kindle e-reader. Analysts are looking for a fourth-quarter profit of 72 cents a share.

Even with the load of new data set to flood the market next week, Banyan Partners Chief Market Strategist Robert Pavlik doesn't necessarily think the current week's concerns will disappear.

"Depending on how China reacts to its fast-growing economy, concerns about China could linger into next week, in which case, we'll continue to see pressure on commodity prices, commodity-related stocks and big international companies."

With market weakness persisting on through the end of the week, Pavlik voiced concern about market mentality heading into the next.

"Selling pressure could continue through next week if people look at recent weakness and begin to worry about a correction."

-- Written by Melinda Peer in New York

.