Sunday, January 15, 2012

Some U.S. Economic Data and Corporate Earnings for Consideration

This past week in the U.S, 1) consumer confidence (based on the Thomson Reuters/University of Michigan index) increased to 74 from 69.9 at the end of December; 2) retailer sales (reported by the Commerce Department) rose less than projected in December suggesting a slowdown in consumer spending and 3) unemployment claims (reported by the Labor Department) increased by 24,000 to 399,000.  In addition, after the first week of earnings season, Alcoa Inc., JPMorgan Chase & Co, Infosys Ltd. and Tesco PLC provided mixed/poor earnings results and Chevron Corp. issued a profit warning.

Global markets have been resilient to negative and cautious news in recent weeks.  Interestingly, the U.S. dollar and equity markets have both moved higher in recent weeks (often they move in opposite directions); perhaps this is a flight to safety trade. Global players announcing earnings this week include Bank of America Corp., Coca-Cola Co., EBay Inc., General Electric Co., Google Inc., Goldman Sachs Group Inc., IBM Corp., Intel Corp., Microsoft Corp., Morgan Stanley, and Tata Consultancy Services Ltd.  The results from these companies and the forward outlook their managements provide will contribute to the next move in direction for global markets.

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