January Second-Half Fade: Won’t Be Long Now
Kevin Flynn | Jan 13, 2013 01:30AM ET
A common event in January is the second-half fade. Stocks often burst out of the gate on a wave of new money and fresh calendar optimism. Halfway through the month, they get too far out over their skis and end up taking a tumble or two to a more sedate pace.
Given the lukewarm rise of the week just past, though, the fade is more uncertain. On the one hand, it’s clear that the market is trying to go higher. consumer credit report . This is going to come back to haunt us, but as usual we will wait until it’s past critical mass to react.
French industrial production was a little better than expected in November, German a little worse. The former is down 3.6% year-on-year, the latter 2.9%. A visitor from another planet might conclude that if only the declines would accelerate, European stocks could really take off. It just goes to show the value of sophistication. The EU will report its December production estimate Monday morning.
China’s trade balance was better than expected and so its market rose (global growth!), but inflation was worse and then it fell (no stimulus!). The country is scheduled to report industrial production, GDP and retail sales data.
This coming week has both the economic and earnings calendar heating up. The highlight for the former should be the January retail sales report, scheduled to be released on Tuesday. The bar is low: consensus is for a gain of only 0.2%. In manufacturing, we’ll get the Industrial Production report for the same month on Wednesday, bracketed by the New York Fed survey on Tuesday and the Philadelphia Fed survey on Thursday. The Fed’s Beige Book of regional reports is Wednesday afternoon.
Housing, which has very much been on the market’s mind, reports the homebuilder sentiment index on Wednesday and housing starts on Thursday. Inflation, which hasn’t been at all, reports the Producer Price Index (PPI) on Tuesday and the Consumer Price Index (CPI) on Thursday.
Some of the bigger Dow companies start to report this week, which could set the tone for the latter half of the month, in particular for the financials. After Wells Fargo’s report on Friday, featuring lower net interest margins, the other Gang of Four banks report on Wednesday (JP Morgan (JPM)) and Thursday (Citigroup (C), Bank of America (BAC)). The two big investment banks, Goldman Sachs (GS) and Morgan Stanley (MS) also report on Wednesday and Thursday respectively.
On the industrial side, there’s Intel after the close on Thursday, followed by GE, Johnson Controls (JCI) and Schlumberger (SLB) on Friday before the market open.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.