Flagging growth in China and emerging markets, geopolitical strife overseas, roiling energy markets -- all leavened by a strengthening U.S. economy and labor market -- add up to a "bad news/good news" recipe that's likely to fuel market volatility throughout the coming week. Below, I pinpoint the stocks to watch over the next few days.
Heightening the uncertainty this week will be releases of key economic data and the earnings reports of sector bellwether stocks that are capable of moving markets. Some particularly weak stocks are poised for a tumble. Amid this backdrop are lingering doubts about the direction of the Federal Reserve.
The intentions of the monetary mandarins in the Eccles Building are becoming clearer, as a strengthening jobs market makes it increasingly likely that the Federal Reserve will hike interest rates at its next meeting in mid-December.
But to borrow the infamous phrase of a certain CIA director, a rate hike is no "slam dunk." Wage growth still hovers below pre-recession levels, core inflation is under the Fed's 2% target, and the labor force participation rate remains disturbingly low and didn't change last month. That means it's entirely possible that the dove-dominated Feb will decide to sit tight.
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As investors calibrate their portfolios for the possibility of the first increase in interest rates in seven years, expect greater sector rotation. Financial stocks are likely to rise, lifted by expectations that higher interest rates will benefit banks, while rate-sensitive utility stocks will continue to get pummeled.
To be sure, last Friday's October jobs report from the U.S. Bureau of Labor Statistics was positive: the number of new jobs created (271,000) blew the doors off estimates (185,000), driving the unemployment rate down to 5% from 5.1% the month before.
But there's still a slew of important economic readings scheduled for release before the Dec. 15-16 FOMC meeting. Wall Street and monetary policymakers tend to place greater weight on the year's final pieces of key data.
All of this gives added importance to retail sales and consumer sentiment indicators that are due this week. The data will be closely watched, not merely as clues to the Fed's intentions, but also as harbingers of the strength of the holiday season.
This week, look for the quarterly earnings results and full-year guidance of retail giants Macy's (M) - Get Report and J.C. Penney (JCP) - Get Report , which will say a lot about expected retail activity during the annual shopping frenzy that's about to commence. The earnings release of Priceline (PCLN) also will shed light on the mood and wherewithal of consumers.
The media sector, which has taken a beating lately, also occupies center stage this coming week, with earnings reports due from such sector stalwarts as Scripps Networks Interactive (SNI) , Tribune Media (TRCO) - Get Report and Viacom (VIA) - Get Report , as well as China-based Internet leaders Weibo (WB) - Get Report and Youku Tudou (YOKU) .
In the technology sector, which has thrived lately on the strength of positive earnings from big-name leaders such as Apple (AAPL) - Get Report and Microsoft (MSFT) - Get Report , expect the much-anticipated quarterly report card from networking giant Cisco Systems (CSCO) - Get Report .
Meanwhile, we're probably due for another seesaw week in the energy patch, mirroring last week's volatility that saw oil prices sharply rise and then fall. U.S. crude closed out last week at about $44 a barrel, while Brent, the international benchmark, ended at about $48 a barrel. Petrobras (PBR) - Get Report will release earnings that are expected to be substantially lower because of depressed energy prices.
The overall market's roller-coaster ride isn't likely to end anytime soon, pushing stocks with weak balance sheets ever lower.
Let's take a look at the salient data that's scheduled for release in the week ahead.
Monday, November 9
Scripps Networks Interactive
Tuesday, November 10
Wednesday, November 11
Thursday, November 12
Friday, November 13
Tuesday, Nov. 10
NFIB Small Business Optimism Index
Thursday, Nov. 12
Bloomberg Consumer Comfort Index
Friday, Nov. 13
EIA Natural Gas Report
John Persinos is editorial manager and investment analyst at Investing Daily. At the time of publication, the author held no positions in the stocks mentioned.