The Dow Jones Industrials lost 140 points on the week, much of which on Friday where the average was down over 123 points on disappointing results from Amazon.com and tepid guidance from credit card processor VISA, a Dow component. The S&P 500 was virtually flat on the week and the NASDAQ moved higher by 0.39%, but volume was low – even for the summer months. Geo-political tensions are countering any positive earnings news and I don’t expect a significant change to the script anytime soon. Energy – despite lower crude prices and inventory build-ups – , technology and healthcare stocks were the strongest groups, but utilities, consumer staples and industrials fared poorly over the past five trading sessions. Thebuttonwoodproject choices were somewhat mixed on earnings, revenue and guidance, but long-term trends appear in tact for now; so no “knee-jerk” reactions based on a quarter or two. But conservative candidate Coca-Cola and income choice McDonald’s are stocks to watch, as these two giants are running into some significant “growth” headwinds domestically and in pockets of some of their other more developed markets.
In the week ahead, the forever waffling Federal Reserve’s Open Market Committee issues its policy statement on the heels of an ADP employment report and signals of rising inflation. Any hints of moving interest rates higher sooner than later will send shock waves throughout the market. Also, there are still a number of big companies yet to report on their most recent quarters including American Express, Chevron, Procter & Gamble, MasterCard, ExxonMobil and Merck. As for blog followers, we will hear from Newmont Mining on Tuesday with earnings of (hopefully not less than) $0.19 vs. $0.45 last year and United Parcel Service ($1.25 vs. $1.13) and Colgate-Palmolive ($0.73 vs. $0.70) will report on Thursday; although expectations from analysts are always optimistic, revenue and guidance from all those reporting will take center stage versus the bottom-lines.
And finally, Wall Street lost one of its most famous traders of the past fifty years as Alan “Ace” Greenberg passed away at the age of 86. Greenberg, who rose from a trading room clerk to the head of Bear Stearns, was the quintessential, cigar-chomping Wall Streeter and still working at J.P. Morgan, will be missed.