Bulls Put Faith in Company Earnings

NEW YORK ( TheStreet) --- From Alcoa ( AA) on Monday to Bank of America ( BAC) and General Electric ( GE) on Friday, the week is all about earnings. And those earnings are predicted to lift the stock market, according to our latest sentiment survey.

As of 5 a.m. EDT Monday, participants who were bullish in the TheStreet's Bull vs. Bear poll tallied 570 votes, or 57.8%, of the 987 votes cast. Those who were bearish scored 295 votes, or 29.9% of the total. Survey-takers who were neutral on the stock market this week came in at 122 votes, or 12.4%.

The commercial banks sector was seen by polltakers as the most likely to rise this week. JPMorgan Chase ( JPM) and Citigroup ( C) also report quarterly earnings this week.

The precious metals sector, by a slim margin over the homebuilding sector, was seen as the sector most likely to post declines.

Premarket futures were forecasting Wall Street to open lower on Monday. Shares across the globe were trading mostly higher.

The major U.S. stock markets rallied last week. The Dow Jones Industrial Average gained 5.3%, the S&P 500 rose 5.4% and Nasdaq climbed 5%. If earnings come in strong this week, the question, of course, is whether investors will take that as a sign that an economic recovery is taking hold and push stocks even higher.

> > Bull or Bear? Vote in Our Poll

The poll closes at 9:15 a.m.

Here's a wrap-up of our other polls:

BP ( BP) is resurgent, but the same can't be said for the owners of its individual BP-branded gas stations, who are feeling the oil spill pain in greater numbers.

In the last two weeks, BP's share price rallied by 24%. Its bonds have come climbing back from dangerous trading levels. BP's relief well drilling is ahead of schedule, and its oil spill containment effort is finally nearing its maximum oil spill capture rate of 53,000 barrels per day. Yet owners of individual BP-branded gas stations have switched or are looking to switch away from the BP brand due to lost business. Some estimates claim that BP-branded gas station owners have lost anywhere from 10% to 40% of business due to boycott BP activity.

The "Boycott BP" campaign has gone viral. There is a Boycott BP Facebook page with more than 800,000 friends. There is a diverse group of music celebrities -- from Lady GaGa to Rob Zombie and the Back Street Boys -- supporting the "Boycott BP" theme. There has been a concerted attack from Washington D.C.-based non-profit group Public Citizen, which has called for a three-month BP boycott. And of course, there have been the individual encounters: customers not at the pumps, but in the faces of individual BP gas station owners -- when not vandalizing the stations -- all across the U.S.

The Boycott BP campaign has become an issue that BP corporate top brass can't ignore.

So we asked readers of TheStreet, Are you boycotting BP? And if so, what exactly does a BP boycott mean to you?

The response from readers overwhelmingly showed that a BP boycott, even if done with the best of intentions, can't really hit the right target. Over 40% of survey-takers said that boycotting the individual gas station owners, in particular, was unfair.

Roughly 32% of survey respondents went further, saying that the issue is just too complicated, making a BP boycott useless.

>>Click here for full results and analysis of our BP Boycottt poll

After a tearing run, gold and 10-year Treasury notes are off their highs over the past week, as investors regain an appetite for risk that has cooled demand for the traditional safe havens.

A degree of confidence has returned to the markets, with better news from the eurozone and optimism about earnings performance for the second quarter. Investors appear to be shifting to riskier assets and taking profits in gold and treasury notes.

But the bigger question as sovereign debt crisis fears ebb is which of the assets make a better investment as the focus shifts back to the U.S. economy.

Both assets attracted safe-haven investors concerned about the European debt crisis. But their long-term performance would likely be determined by inflation expectations, an issue that divides gold bulls and Treasury note investors.

Gold prices rise when inflation expectations are high, while investors buy Treasury notes when they expect deflation or a prolonged period of low interest rates. Naturally, only one of these two factions can be correct, which is why the simultaneous rally in gold and Treasury notes is not expected to last.

Thus, last week, in light of all this, we asked readers of TheStreet the question: Gold versus Treasuries: What's your pick?

The result was surprisingly decisive.

A 60% majority said they would pick gold, because the U.S. will print too much money, stoking inflation.

>>Click here for full results and analysis of our gold vs. treasuries poll

The past week's trading began with big fears of a double-dip recession, but in the end the markets shrugged of the nattering nabobs of negativity. The three major U.S. equity indices -- the Dow, S&P 500 and Nasdaq -- all finished with weekly gains over 5% by the close of Friday trading. The price of crude oil surged above $76 on Friday, and crude also gained over 5% for the week, its largest weekly gain since May.


In short, what was a bad start for the July 4 holiday-shortened week, ended as one of the market's best weeks of trading in 2010.

Still, it wasn't a week without mixed messages for the markets. Chain store retail sales, for example, was the proverbial mixed bag, with some retailers outperforming, while other retail sales reports buttressed fears of weak consumer spending. The positive economic data from the past week did turn the tide of some negative economic data points from late June. Existing home sales were down. New home sales were down. Private sector job growth was weak. The most recent Institute of Supply Management manufacturing and non-manufacturing indexes both declined, the manufacturing index more substantially.

The last of those negative reports was released on Tuesday, the ISM non-manufacturing index, and it was released on the only negative day of the week. However, the ISM data wasn't an easy case to close. Some market economists thought that as long as the reading stayed above the 50 point level that is the bare bones indicator of economic growth -- which it did -- all systems were still go, even if the growth rate might be modest.

Others contended that the decline in the ISM data was just the latest in a long line of double-dip recession poster children.

Those seeking the middle ground contended that regardless of the double dip, stocks had been oversold and deserved a minor relief rally.

Indeed, after the typical market data overload, and even with the equities and crude oil rally of above 5% this week, only a fool -- or maybe a Cleveland Cavaliers owner -- would claim the double-dip recession as a dead issue. In fact, when we asked readers of TheStreet over the past week for their views on the double dip recession dilemma, the results indicated that the case will remain open.

When all was said and done, the double-dip recession club won out, with roughly 36% of survey-takers saying that a double dip is ahead.

>>Click here for full results and analysis of our double-dip recession poll


According our recent poll, users of TheStreet believe that the cheapest consumer goods stock that we featured in our undervalued stocks story over the week is Altria ( MO).

The stock garnered 33.8% of the votes in a survey asking, "Which consumer goods stock do you think is most undervalued?" Procter & Gamble ( PG) came in second, with 27.6% of the votes.

>>Click here for full results and analysis of our undervalued consumer goods stocks poll

-- Written by Joseph Woelfel and Ty Wenger in New York.