NEW YORK (TheStreet) -- This week is a key for the stock market as we dissect fourth quarter earnings from eight companies including five Dow components and 12 regional banks. In my first post for today, I provided my buy-and-trade' profiles for 12 regional banks including the four 'too big to fail' money center banks. These 20 earnings reports should set the tone for both the pulse of global economic growth and the sustainability of an overvalued overbought stock market.
Last week I profiled nine corporate earnings reports on Jan. 6 in Alcoa, Family Dollar, Micron Signal Earnings Season and on Friday I provided a scorecard in Micron Tech, Constellation Brands Pop on Earnings Reports and six of the nine traded lower on the week. If this pattern continues following this week earnings reports sustainable economic growth will be tested and the stock market could begin a correction.
On Wednesday afternoon we find out whether or not railroad company CSX (CSX) is still carrying full loads in and out of Florida. The Dow transportation average set a new all-time intra-day high on Friday at 7468.05 but the transportation sector is 30.2% overvalued with an underweight rating, as 76.5% of the 170 companies in the sector have sell or strong sell ratings according to www.ValuEngine.com.
On Thursday afternoon Intel (INTC) will disclose how it is growing sales of semiconductors in a world of weakening demand for personal computers. The computer and technology sector is 34.6% overvalued with an overweight rating, as 52.5% of the 1127 companies in the sector have buy or strong buy ratings.
On Friday morning earnings from General Electric (GE) will add a clue on the strength of the global economy. The multi-sector conglomerates sector is 33.5% overvalued with an overweight rating, as 37.3% of the 51 companies in the sector have buy ratings and only 3.9% have sell ratings.