) -- Those double-dip recession fears have dissipated, and even the

Santa Claus rally

worked out pretty well, but that doesn't mean the market isn't still expecting another round of quantitative easing from the

Federal Reserve



new survey

by the Federal Reserve Bank of New York finds that it's the opinion of primary dealers -- the

21 banks that trade directly with the Fed

-- that there's a 60% probability that the central bank will start adding assets to its

own account

within the next year.

The other interesting finding from the survey was that sentiment among the primary dealers for an increase in the federal funds target rate doesn't build in a meaningful way until a 45% reading for the second quarter of 2014.

It's been a busy few days for the Fed with the central bank first unveiling its new super-open communications policy on Tuesday, then amping up the pressure on Congress to step up legislative efforts to heal the housing market on Wednesday.

The market yawned at the former and got a slight boost from the latter, but confirmation of another round of bond buying, which most economists expect will take place in 2012 as well, would be

another story


As for Thursday, the scheduled news will be dominated by reports on holiday sales from the retailers and a generous helping of employment data.


(ZUMZ) - Get Zumiez Inc. Report

got things off to a

strong start

after Wednesday's close by reporting December same-store sales jumped 10%, roughly double what Wall Street was expecting, and lifting its fourth-quarter earnings view.


Thomson Reuters

is expecting a 3.3% increase in its proprietary same-store sales index for December with the off-price retailers seen doing best.


(COST) - Get Costco Wholesale Corporation Report

is projected to post a 7.6% increase;


(M) - Get Macy's Inc Report

, a 5% rise;


(TGT) - Get Target Corporation Report

, a 3.1% increase; and


(KSS) - Get Kohl's Corporation (KSS) Report

, a 2.2% boost.

The luxury department store operators are also expected to do well with



seen posting a 5.8% increase;



, a 5.7% rise; and


(JWN) - Get Nordstrom, Inc. (JWN) Report

, a 5.1% increase.

"Store traffic increased closer to the holiday season, towards the last two weeks of the month," writes analyst Jharrone Martis-Olivo in a preview. "Still, value and promotions drove consumers to the malls. As a result, the discounters and luxury retailers are expected to post the strongest SSS gains."

UBS is bullish about December sales as well, although the firm notes that "as always it will be an expectations game." It sees Limited,

Ross Stores

(ROST) - Get Ross Stores, Inc. Report


American Eagle Outfitters

(AEO) - Get American Eagle Outfitters, Inc. Report


Urban Outfitters

(URBN) - Get Urban Outfitters, Inc. Report

, and

TJX Cos.

(TJX) - Get TJX Companies Inc Report

as likely winners, and


TheStreet Recommends

(GPS) - Get Gap, Inc. (GPS) Report

as a potential disappointment.

"We view GPS as the laggard given the aggressive promotions/less compelling product (though very easy comps)," UBS said in a research note released Tuesday.

The other big driver for trading on Thursday will be the latest wrinkles in the employment picture.

Because of the compressed holiday schedule this week, the market is getting a lot of data all at once. Thursday brings the monthly Challenger job cuts report at 7:30 a.m. ET, Automatic Data Processing's employment change number at 8:15 a.m. ET, and weekly initial and continuing jobless claims at 8:30 a.m. ET. Economists are expecting initial claims to dip down to 375,000 from last week's read at 381,000.

The improvement in the weekly initial claims of late -- a prolonged stretch below 400K that constitutes the best showing in more than 3 years -- has boosted expectations for Friday's employment report. The consensus is for nonfarm private payrolls to jump by 170,000 for December, up from 140,000 in November.

is expecting an even stronger number at 200,000.

Aside from the jobs data, the market will also get on Thursday the ISM services index for December at 10 a.m. ET, and weekly crude inventories at 11 a.m ET.

The big earnings reports on Thursday are

Constellation Brands

(STZ) - Get Constellation Brands, Inc. Class A Report





Shares of Constellation Brands, an alcohol distributor whose brands include Corona beer and Robert Mondavi wines, are down nearly 4% in the past year, but they've seen a 25%-plus bounce since scraping a 52-week low of $16.42 on Aug. 9. The company is reporting its fiscal third-quarter results, and investors will be looking to see if higher promotional spending in the U.S. was able to boost declining volumes and offset increased transportation costs.

The average estimate of analysts polled by

Thomson Reuters

is for earnings of 52 cents a share in the November-ended quarter on revenue of $720.4 million. The company has topped Wall Street's consensus view in the past eight quarters, including delivering an upside surprise of nearly 17% in the prior quarter.

Analysts are fairly lukewarm ahead of the report though with 7 of the 11 analysts covering the shares at either hold (6) or underperform (1). The median 12-month price target of $22 implies potential upside of 7.6% from Wednesday's close at $20.44. Auriga USA previewed the report on Tuesday, saying it's expecting "solid" results for the quarter, which typically benefits from purchases related to the holiday season.

"While we expect F3Q12 revenue to be down year over year due to the sale of overseasbusinesses earlier in 2011, we expect Constellation Brands to continue generating improved margins as the sold businesses had relatively low profitability," wrote the firm, which has a buy rating on the stock with a $25 price target. "Going into the results, we continue to view Constellation Brands shares as cheap, with a forward EV/EBITDA

enterprise value/earnings before interest, taxes, depreciation and amortization multiple round 8x and forward P/E around 10x."

Auriga has an above-consensus view on Constellation Brands, forecasting earnings of 53 cents a share on revenue of $759 million. The firm added that it believes the company plans to move away a bit from depending on M&A for growth but it could still see Constellation Brands jumping in for the right deal.


Under the current management, we believe the focused has shifted towards profitability and not necessarily increasing scale," the firm said, adding later: "While we believe that management would entertain the purchase of another wine brand, we believe it would have to be significant as well as accretive. We only envision a couple brands that management may be interested in, but these labels are not on the market."

If the right deal did come along, Auriga said it could see Constellation Brands possibly divesting Svedka vodka to fund the transaction.

As for Monsanto, the stock peaked for the past year in late October at $78.71, and this is a seasonally weak quarter for the company when it historically reports its lowest revenue total due to the winter lull in agriculture activities. The average estimate of analysts polled by

Thomson Reuters

is for a profit of 16 cents a share in the quarter on revenue of $2.05 billion. The shares closed Wednesday at $72.67, up 1.4%.

Other companies slated to report quarterly results include

A. Schulman

(SHLM) - Get A. Schulman, Inc. Report


Apollo Group



BSD Medical



Family Dollar Stores



Helen of Troy

(HELE) - Get Helen of Troy Limited Report


Ruby Tuesday


, and

Saba Software



The other

big mover in after-hours action

, aside from Zumiez, was

Seagate Technology

(STX) - Get Seagate Technology PLC Report

, which offered up a robust revenue and gross margin outlook for the December quarter. The hard drive maker now sees revenue of $3 billion to $3.1 billion and gross margin of at least 30.5%, ahead of respective consensus estimates of $2.8 billion and 28.1%.

The company attributed the forecast to strong execution, and that margin boost is impressive. The stock jumped nearly 7% in the extended session.


Written by Michael Baron in New York.

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Michael Baron


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