Sunday, April 16, 2006

Weekly Review (4/10/06 -- 4/13/06)

Earning, Earning…

The news, the bad ones, overcame the optimistic in this week. The market did not perform as we expected. This week, the Dow was up 0.16 percent and NASDAQ was down 0.55 percent.

The price of crude oil is nearly $70 now; the bound yields are above 5 percent; and the gold is above $600 per ounce. The inflation or Fed rate concern suddenly stand out and stirred the market. Besides that, there was no other shining point.

While, we better focus on the coming week. The next week is so important because some key companies will release their earning. Let’s take a look the earning calendar:

4/17: C
4/18: JNJ; MER; MOT; PBG; TXN; WM; WFC; YHOO
4/19: AAPL, ET, EBAY, HON, INTC, JPM, JNPR, KFT, NYX, PFE, KO
4/20: BAC, GM, GOOG, MRK, NOK, BK, NDAQ, UPS
4/21: F

In this list, we have Intel, Apple, Google, Yahoo, Motorola, Nokia, and eBay; we have Citigroup, JPMorgan Chase, Bank of America, Merrill Lynch, NYSE, NASDAQ and Bank of New York; we have Johnson & Johnson, Merck and Pfizer; we also have GE, Honeywell, UPS, Ford and Coca-Cola. Those companies’ earning result will drive next week’s market. Because of the better economy, most of them will give a better earning. The only question is: Can they on top of the expectation?

There are some events we need to know also:

4/18: The U.S. Producer Price Index and the minutes of the Federal Open Market Committee's March 27-28 meeting will be released
4/19: The U.S. Consumer Price Index will be released

We cannot guess what will be the outcome, but we can assume their total impact is neutral or little negative.

The fears of inflation and Iran will be there still. Most of the bad news have come. What else? How higher the oil price will be?

I reviewed and reviewed again. I think most of the earning results would be positive. Despite of the shadow of the bad news, the market of next week will still be lead by that good news and go up.

Instruction:
After the earning announcement, you should gradually reduce your positions. The option traders should catch this opportunity (Please referring to “Check the Earning and Bet on the Potential”).

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