The market has shifted to rally mode and analysts don't expect the momentum to diminish. That is, of course, as long as oil prices continue to fall and the housing market stays hot.
rose 3% and the
added 5% over the past week, so analysts are excusing Friday's slight selloff as merely a case of the market taking a breather. Al Goldman, chief market strategist at A.G. Edwards, expects the market to continue to digest some of its big gains early next week before taking off again.
"After 32 months, the bull market is long in the tooth, but it's not ready for a resuscitator yet," says Goldman, who adds that the shift in market sentiment has grown quite clear.
Paul Nolte, director of investments at Hinsdale Associates, also sees the momentum flowing in favor of the bulls -- especially if commodity prices keep falling.
"The economic numbers may not be terrific, but that means demand for commodities and, in turn prices, will drop, which will be a boon for the economy," Nolte says.
"It's like the weather here in Chicago -- you wait long enough and it will inevitably change," says Nolte.
The bull stampede may be gathering steam, yet there will still be enough economic indicators arriving next week with the capacity to dampen the mood.
Existing-home sales and the minutes from the
early-May meeting will be released on Tuesday. Fed minutes are always critical for traders engaged in a never-ending quest for insight into the future of interest rates. Many market watchers believe last week's rally in equities -- and bonds -- was due to a growing belief that the Fed's tightening cycle may end sooner than expected.
And mixing FOMC minutes with housing data seems all the more appropriate now that even Fed Chief Alan Greenspan says he sees "a little froth" in the housing market.
"When the housing market is directly linked to the consumer's ability to spend, then any information on housing or mortgage activity becomes important," says Paul Mendelsohn, strategist at Windham Financial Services in Vermont.
Traders will get additional information on the housing sector Wednesday, when new-home sales are released along with durable goods orders.
Preliminary first-quarter GDP numbers will be released Thursday. Most economists that have looked at the economic data over the past few weeks say GDP growth will be revised upward from 3.1% to the 3.6% to 3.8% range.
"Their thinking is that the so-called soft patch may not have been as soft as originally thought," says Mendelsohn.
Oh, there are earnings, too. After a light day on Monday, Tuesday features a few names worth checking out, including medical device maker
and Net storage outfit
will also post quarterly results on Tuesday. Analysts expect the company to earn 19 cents a share, up from 18 cents a share last year, on revenue of $719 million.
More retailers report on Wednesday, such as
Dollar Tree Stores
Investors can see how much people have been spending on their vehicles Wednesday, when auto parts retailer
reports. The consensus estimate for the company is $1.80, up from $1.68 last year, on sales of $1.37 billion.
There's still more retail earnings in store for investors on Thursday, when companies like
Another notable name scheduled to take the spotlight on Thursday is homebuilder
. Analysts expect the company to benefit from the scorching housing market with quarterly profits of $1.89, up from 89 cents last year, on sales of $1.26 billion.