Traders in the coming week will be forced to soak up a flood of economic data, while also poring over earnings reports from some of the Street's biggest banks. "Next week is a huge week for data, and it is likely to show continued economic growth and inflation well under control," says Jason Schenker, economist at Wachovia. According to Schenker, one potential cloud in next week's otherwise sunny economic outlook would be Tuesday's current account deficit coming in much wider than anticipated. Economists surveyed by Thomson First Call expect the fourth-quarter deficit to have stretched to $217.9 billion from $195.8 billion in the previous quarter. Schenker says such a scenario would weigh negatively on the dollar, and that would in turn push up oil prices. Retail sales data for February also arrive on Tuesday. Analysts anticipate a 0.7% drop in retail sales, compared with growth of 2.3% in January. Traders may remain focused, however, on the current retail environment. "For the next two weeks, the weekly retail sales will be important in light of the warmer weather, which should induce solid sales," says Randy Diamond, sales trader at Miller Tabak. "Anything less than solid sales would be a red flag, but we do not expect that to happen." Business inventories for January will be announced on Tuesday as well. Economists are predicting an increase of 0.3%, down from 0.7% the month before. Wednesday brings a slew of data, including import/export prices, crude inventories and the Fed's beige book. Treasury International Capital data for January also will be released, with net foreign purchases expected to come in at $56.6 billion. The New York Empire State index will be released on Wednesday and should offer some insight into the state of Northeast manufacturers. Economists expect the index to fall to 18 from 20.3 in February.
The report that likely will have the biggest impact on the market will be Thursday's consumer price index for February. The CPI is expected to rise 0.1% after increasing 0.7% in January. The core CPI, which excludes food and energy, is projected to be up 0.2%. "Due to the Fed's preoccupation over inflation pressures, next Thursday's CPI report will be the main focus, but the obsession over global central bank rate hikes should subside because there is nothing major on the next week's calendar," says Diamond. That's in sharp contrast to last week, when the Bank of Japan moved on quantitative easing, and two weeks ago, when the European Central Bank hiked rates. Finally, capacity utilization and industrial production for February will be released on Friday, along with the preliminary Michigan consumer sentiment for March.
double-digit growth for their first quarters. Goldman Sachs ( GS) will kick off the brokerage parade Tuesday. Analysts surveyed by First Call expect the company to post earnings of $3.29 a share, up from the $2.94 it earned last year, on revenue of $7.19 billion. Lehman Brothers ( LEH) will be the headlining investment bank on Wednesday. Analysts project earnings of $3.17 a share, up from $2.91 a year earlier, on revenue of $4.17 billion. Bear Stearns ( BSC) will be Thursday's broker du jour, and analysts are targeting earnings of $2.95 a share and revenue of $2.05 billion. The company had comparable earnings of $2.64 a share last year. Aside from the big financial firms, several other companies will step up to the plate with profit reports this week. On Monday, the market will digest earnings releases from Dendreon ( DNDN), Sonus Networks ( SONS) and the newly public Chipotle Mexican Grill ( CMG).
Among those companies taking the stage on Tuesday will be Churchill Downs ( CHDN), Pride International ( PDE) and DepoMed ( DEPO). Wednesday will see reports from retailers Gymboree ( GYMB), Hot Topic ( HOTT) and Charming Shoppes ( CHRS). Booksellers Borders Group ( BGP) and Barnes & Noble ( BKS) will report results Thursday, along with AutoBytel ( ABTL) and Winnebago ( WGO).