-0.69%
-0.80%
We will be capping off another busy earnings week today which likely marks the height of the earnings season. Still, while Fridays are normally slow reporting days, we will get several important earnings reports today such as Ford Motor (F), Altria (MO), Honeywell (HON), Proctor & Gamble (PG), and Chevron (CVX).
As I mentioned earlier this week, I expect the market to be moving in a non-volatile range. That is indeed what has happened despite the plethora of earnings – good, band and in-line that were delivered this week as well as a finely orchestrated FOMC announcement on Wednesday. This sideways movement allows us to work down a technically overbought condition.
I suspect that we are beginning to pull back but I am not expecting a retracement with the velocity that we were accustomed to in 2011. Slow soft profit taking will likely move the markets down 2 – 3% between now and the early/middle part of February.
Also we get a first peek at 4th quarter 2011 GDP. I expect that the economy will continue to exhibit improvement. Frankly the market and media will be obsessed with how the report fares versus “economist” expectations. That is just a guessing game. Look at GDP as a data series as you would other macro economic data points. The trend is what is important with a data series rather than a single data point.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC was long MO stock and Ford Warrants (F-WS) — although positions can change at any time.
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant and agricultural stocks. You can subscribe at www.restaurantstox.com
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