Market participants will be watching equities closely next week to see if they can hold onto gains made in the last eight sessions, and that could depend on the U.S. data releases, which include final fourth quarter GDP, new and existing home sales and durable goods data.
Jimmy Tintle, a futures broker at Transworld futures.com, said he thinks equities will continue to be range bound since the economic data is expected to remain weak - with the S&P bouncing between 700 and 800.
I don't think we will have enough momentum to break through 800, he said. If the data is worse than expected, I think we could call back down to 750 or even 700 pretty quickly.
Tintle said the one report that could support equities is the GDP data. He added that if economic growth isn't as weak as everyone expects, then equities could see a move higher.
Mike McCarty, senior options and equities trader at Meridian Equities, said that along with the economic data, he will also be looking for any pre-guidance reports from companies ahead of the first quarter earnings season.
Early April will signal the start of the earnings season and in preparation some companies could try to prepare markets for another poor quarter, McCarty said. He added that if the guidance has a positive tone, it could provide more momentum to the bear market rally.
I think if companies come out and say that performance in the first quarter was bad but they expect to see improvement in the future, then equities could move higher, he said. Any negative outlook will hurt this rally.
Colin Cieszynski, market analyst from CMC Markets, said he doesn't expect to see too many surprises next week. He pointed out that people already know the economy is in a recession.
I think the big surprise of the week would be if companies didn't come out and downgrade their guidance, he said.
Currency markets will also be watching stocks to determine if the recent weakness in the U.S. dollar is just a short-term move or a longer-term change in sentiment.
Neil Mellor, currency strategist from the Bank of New York Mellon, said the biggest risk for EUR/USD is a sharp drop in equities. If the U.S. dollar can make only marginal gains in risk adverse environment, then this will confirm in our minds that a sea-change in sentiment in the foreign exchange markets has indeed transpired, he said.
All times in EDT:
8:30 CA Leading Indicators (M/M) February Exp: -0.9% Prior: -0.8%
10:00 US Existing Home Sales February Exp: +4.45M Prior: +4.49M
10:00 US Existing Home Sales (M/M) February Exp: -0.9% Prior: -5.3%
10:00 US Fed's Rosengren Testifies on Accessing Credit at House Panel
13:00 US Treasury to Sell $31B 3-Month Bills
13:00 US Treasury to Sell $29B 6-Month Bills
18:00 US Geithner, Lagarde, Rudd Address Wall Street Journal Conference
6:00 US Fed's Evans Speaks on Economic Outlook at Czech National Bank
10:00 US House Price Index (M/M) January Exp: -0.9% Prior: +0.1%
10:00 US Richmond Fed Manufacturing Index March Exp: -52 Prior: -51
10:00 US Bernanke, Geithner Testify About AIG
11:30 US Treasury to Sell 4-Week Bills
13:00 US Treasury to Sell $40B 2-Year Notes
14:35 US Bullard Speaks at Cass Business School in London
17:00 US ABC Consumer Confidence W/E March 22 Prior: -47
7:00 US MBA Mortgage Applications Prior: +21.2%
8:30 US Durable Goods Orders February Exp: -2.2% Prior: -5.2% Revised: -4.5%
8:30 US Durables Ex Transportation February Exp: -2.1% Prior: -2.5% Revised: -3.0%
10:00 US New Home Sales February Exp: +300K Prior: +309K
10:00 US New Home Sales (M/M) February Exp: -2.9% Prior: -10.2%
10:30 US DOE U.S. Crude Oil Inventories W/E March 20 Prior: +1942K
10:30 US DOE U.S. Gasoline Inventories W/E March 20 Prior: +3195K
10:30 US DOE U.S. Distillate Inventory W/E March 20 Prior: +112K
10:30 US DOE U.S. Heat Oil Inventories W/E March 20
10:30 US DOE U.S. Refinery Utilization W/E March 20 Prior: -0.57%
12:20 US Fed's Pianalto Speaks in Maumee, Ohio, on Economic Recovery
13:00 US Fed's Yellen Speaks in New York on U.S. Economy, Policy
13:00 US Treasury to Sell $34B 5-Year Notes
5:00 US Fed's Lockhart Speaks at Banque de France Conference
8:30 US GDP (Q/Q) (Y/Y) Q4 Final Exp: -6.6% Prior: -6.2%
8:30 US Personal Consumption Q4 Exp: -4.4% Prior: -4.3%
8:30 US GDP Price Index Q4 Exp: +0.5% Prior: +0.5%
8:30 US Core PCE (Q/Q) Q4 Exp: +0.8% Prior: +0.8%
8:30 US Initial Jobless Claims W/E March 20 Exp: +650K Prior: +646K
8:30 US Continuing Claims W/E March 14 Exp: +5458K Prior: +5473K
9:25 US Fed's Lacker Speaks to students at College of Charleston
10:00 US Geithner Testifies to House Financial Panel on Regulation
10:30 US EIA Natural Gas Storage Change W/E March 20 Prior: -30
12:00 US Fed's Fisher speaks on the global economic crisis
12:30 US Fed's Lacker speaks on economic outlook in South Carolina
13:00 US Fed's Stern speaks in Minneapolis on `Too Big to Fail'
13:00 US Treasury to Sell $24B 7-Year Notes
8:30 US Personal Income February Exp: -0.1% Prior: +0.4%
8:30 US Personal Spending February Exp: +0.2% Prior: +0.6%
8:30 US PCE Deflator (Y/Y) February Exp: +0.8% Prior: +0.7%
8:30 US PCE Core (M/M) February Exp: +0.1% Prior: +0.1%
8:30 US PCE Core (Y/Y) February Exp: +1.6% Prior: +1.6%
10:00 US University of Michigan Consumer Sentiment March Final Exp: +56.6 Prior: +56.6
By Neils Christensen, firstname.lastname@example.org , edited by Stephen Huebl, email@example.com