If you're feeling battered by this market, you aren't alone -- and the next few trading sessions aren't likely to make you feel much better. "We get these momentary signs that the bulls jump all over and think perhaps the worst is behind us, but this positive feeling doesn't seem to have a shelf life of more than 48 hours, when we revert back to the negative bias," says Ted Weisberg, floor trader at Seaport Securities. "When it gets this hard, usually the best thing to do is just push yourself away from the table and wait," he continues. "The risk is that by doing that, you'll miss something. But the risk of being proactive is greater if something were to change dramatically." Despite many individual-session moves that exceeded 1%, or even 2%, the major averages finished last week little changed. Over the five sessions, the Dow fell 0.4% to 11,326.32, the S&P 500 gained 0.2% to 1260.31, and the Nasdaq Composite Index crept 0.43 point higher to 2310.96. "Depending on where you live and what businesses you're in, the economy looks OK or it looks like the sky is falling," Michael Cuggino, president and portfolio manager at Permanent Portfolio Family of Funds, says. "It's confusing even to money managers, which is why you see such big moves." The real action this next week, unless the Federal Reserve does something really unexpected in its meeting on Tuesday, is going to still be on the corporate side, as the crush of earnings continues. According to a Brown Brothers Harriman report, the S&P 500 companies overall are expected to see profits decline by about 24%, year over year, for the second quarter. Excluding financials, that rises to a positive 6%.
Two of the biggest names to report will be Fannie Mae ( FNM) on Monday and Freddie Mac ( FRE) on Thursday. Of course, the many woes of these two massive government-sponsored entities have been in the news a lot lately, with talk of a possible taxpayer bailout looming large. "Quarterly earnings don't matter" for these GSEs, Cuggino says. "The biggest issue is, what's their place in the world, how are they going to be governed and regulated and capitalized. In the past, efforts to further regulate them have gone by the wayside." Dow component American International Group ( AIG), as well as Blackstone Group ( BX), both of which release earnings Wednesday, should be another look into the financial and insurance sector. But, for the most part, companies in that space are done reporting, so most of their second-quarter pain is already in the public arena. Toyota ( TM) also reports earnings on Monday. Given the automaker's unexpectedly poor June sales report, and in the wake of General Motors' ( GM) awful profit report on Friday, this could be a stock to watch. A number of retailers report their results, as well, such as Kenneth Cole ( KCP) on Tuesday, Polo Ralph Lauren ( RL) Wednesday, and Liz Claiborne ( LIZ) and Crocs ( CROX) on Thursday. Retail sales keep holding up fairly well, despite dire consumer-sentiment surveys. Dow component Procter & Gamble ( PG) announces its earnings on Tuesday, and readings on the upscale consumer should come from Ruth's Chris Steak House ( RUTH) and Whole Foods ( WFMI) on Tuesday. Discount chain 99 Cents Only ( NDN) comes out Thursday. A number of tech and telecom companies will also report, with Cisco Systems ( CSCO) on Tuesday, and Qwest ( Q) and Sprint Nextel ( S) on Wednesday.
Other notable releases will come from Humana ( HUM) on Monday; MGM Mirage ( MGM) and Molson Coors ( TAP) on Tuesday; Nasdaq ( NDAQ) and Time Warner ( TWX) on Wednesday; and Blockbuster ( BBI) and Sirius XM Radio ( SIRI) on Thursday. The Federal Open Market Committee meets on Tuesday, but there's expected to be little in the way of action on that front. Overwhelmingly, market observers think the Fed is going to keep interest rates steady. "There's a hope that the
post-meeting statement will sound a little more open-minded and less strident about inflation" than previous statements have, says James Glassman, senior economist at JPMorgan. But apart from that, he says, "the Fed has basically become a nonissue this year." "What is hard to reconcile is, if you look at the fed funds contracts for next year, the market is pricing in something like 100 basis points of tightening," he says. "If things were really as bad as the talk has it, it seems a little odd to be assuming the Fed's going to be tightening next year -- and odd that oil prices are as high as they are now." Most of the other economic data for the week will be about the consumer, with personal income and personal spending numbers from the Department of Commerce on Monday, and consumer credit data from the Fed on Wednesday. Pending home-sales data come out on Thursday, and with many people still convinced that things won't steady out until the real estate sector turns around, it will be on the must-watch list. "Fundamentally, you need to see some positive traction in the economy, in particular, in the housing area," for markets to gain traction, Weisberg of Seaport Securities says. "And I don't see that happening anytime soon."