NEW YORK ( TheStreet) -- Stocks stalled out to start the week, even as market strategists opined about where equities are headed next in this post-election world of fiscal cliff worries. Sam Stovall, chief equity strategist at S&P Capital IQ, noted a rather disturbing similarity between Wall Street's reaction to President Barack Obama winning a second term and Harry Truman's surprise victory in 1948. "Both 1947 and 2011 were pre-election years in which the market ended the year almost exactly where it started," he wrote in emailed commentary on Monday. "Cooperation between Congress and the President was rare, and the traditional third-year 'priming of the economic pump' before the election was absent. As a result, 1947 and 2011 are the only pre-election years since 1900 that recorded 0.0% price changes, versus the more normal 11.1% gain, which is twice the average return for years 1, 2 and 4 of the presidential cycle." In 1948, after Truman was famously able to overcome Thomas Dewey, the S&P 500 lost 11.7% through the end of the month, erasing its 9.7% year-to-date gain prior to the election, a fact that doesn't bode well for the index's performance this November. "In 2012, the S&P 500 advanced 13.6% year to date through Election Day, on a projected 12-month improvement in the global economy and corporate earnings, and Wall Street‟s hoped-for replacement of a seemingly unpopular Democratic president or the swing to a Republican majority in the Senate," Stovall said. "Wall Street got neither election outcome, so it took its ball and went home." He continued: "Should the market experience a 1948-style response to this year‟s election outcome, the S&P 500 could fall to 1261, or only four points above where it started the year. In that case, let's just hope the historical comparison plays out, as the S&P 500 advanced 3.1% in December 1948 and 10.3% for all of 1949." Meantime, Deutsche Bank's David Bianco was sticking to his guns after last week's ugly sell-off, reiterating a 12-month target for the S&P 500 of 1500 and advising investors to use this recent dip to scoop up growth stocks with the potential to lift their dividends. "We still believe that the fiscal cliff will be averted with compromise legislation, but President Obama's reelection and a larger Democrat majority in Senate raise the likely amount of tax hikes vs. spending cuts in the new legislation," he said, adding later: "Political rhetoric may extend the sell-off, but a correction (S&P less than 1320) is unlikely unless negotiations fall apart." Wall Street seems set to take the temperature on fiscal cliff talks on a daily basis from here, meaning a rocky end to 2012 is likely in store because negotiations like these tend to go down to the wire. While the feeling remains that level heads will prevail and a solution will be hammered out, the waiting around for that solution may live up to its billing as being the hardest part for investors to deal with.
As for Tuesday's scheduled news, Home Depot ( HD) is slated to report its third-quarter results before the opening bell. The average estimate of analysts polled by Thomson Reuters is for earnings of 70 cents a share from the Atlanta-based home improvement products retailer on revenue of $17.92 billion. Shares of Home Depot closed Monday at $61.16, up nearly 60% in the past year. Credit Suisse, though, sees the potential for further upside from here. "We continue to want to be most exposed to housing, followed by good companies with easy compares," said the firm, which doesn't necessarily expect a blowout quarter though from Home Depot, which has topped Wall Street's profit expectations in seven of the past quarters. Cisco ( CSCO) is the big earnings report after the close. Wall Street is looking for a profit of 46 cents a share on revenue of $11.78 billion in the networking giant's fiscal first quarter ended in October. The stock has fallen more than 10% in the past year and trades at a relatively cheap forward price-to-earnings ratio of 8.1X vs. 13.4X for the S&P 500 as of Friday's close. Shares closed Monday at $16.85. Credit Suisse reiterated an outperform rating on the stock on Monday with a price target of $25 ahead of tomorrow's print. Based on how earnings season has progressed so far, the firm is anticipating "soft" results from Cisco but it believes this scenario is already priced into the shares. "While we expect near-term operating weakness related to the macroeconomic environment, we reiterate our Outperform rating and continue to see favorable risk-reward for CSCO's shares," the firm said. "CSCO appears to be embracing its evolution from a 'growth' to a 'value' company, with a corresponding shift in focus to earnings and cash flows. This commitment together with a greater than 3% div. yield and greater than 10% FCF
free cash flow yield should help narrow the current discount to CSCO's large cap tech peers." Check out TheStreet's quote page for Cisco for year-to-date share performance, analyst ratings, earnings estimates and much more.
Other companies slated to report on Tuesday include Bluefly ( BFLY), Crown Crafts ( CRWS), Dick's Sporting Goods ( DKS), Heelys ( HLYS), Michael Kors Holdings ( KORS), Plug Power ( PLUG), Renren ( RENN), Saks ( SKS), Superconductor Technologies ( SCON), and TJX Cos. ( TJX). The economic calendar is fairly light with the National Federation of Independent Business's small business optimism survey for October due at 7:30 a.m. ET; the usual weekly ICSC-Goldman Sachs and Johnson Redbook reads on retail sales due before the open; and the Treasury Department budget for October on tap at 2:00 p.m. ET. And finally, Cornerstone OnDemand ( CSOD) was advancing in Monday's extended session after the Santa Monica, Calif.-based learning software company topped Wall Street's revenue expectations in its latest quarter. The company posted a non-GAAP loss of $3.6 million, or 7 cents a share, in the September-ended period on revenue of $31.2 million, a jump of 54% from last year. The average estimate of analysts polled by Thomson Reuters was for a loss of 6 cents a share in the quarter on revenue of $30.2 million. The stock was last quoted at $28.74, up 9.2%, on volume of more than 180,000, according to Nasdaq.com. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron.