Monday
Earnings Announcements: Novellus (NVLS)

Tuesday
Economic Reports: Core PPI, PPI, Retail Sales

Will this be the month that we finally see inflation take hold? If expectations come true, it very well could be. PPI is anticipated to show an increase of nearly 1%. Core PPI (which excludes food and energy costs) is expected to show an increase of 0.10%. Retail Sales are expected to post a surprising increase. Most reports I have seen show that retailers are still struggling. I don’t expect this report to beat expectations.

Earnings Announcements: Goldman Sachs (GS), Johnson and Johnson (JNJ), Yum Brands (YUM)

Wednesday
Economic Reports: Core CPI, CPI

The CPI is expected to show an increase of 0.60%, and Core CPI an increase of 0.10%. If both CPI and PPI meet expectations, we could be in for the start of a long bout of inflation.

Earnings Announcement: Abbott Labs (ABT)

Thursday
Economic Report: Philadelphia Fed

If we meet expectations this month with the Philadelphia Fed report, it will mark 19 out of the last 20 months showing a negative reading. Last month we almost saw a positive reading, but this month we slipped back a little bit. The good news is the decline is slowing and has bounced back considerably in the past few months.

Earnings Announcement: Baxter Int’l (BAX), Harley-Davidson (HOG), JPMorgan Chase (JPM), Google (GOOG), IBM (IBM)

Friday
Economic Calendar: Building Permits, Housing Starts

Housing this week is a mixed bag. Permits are expected to increase and starts are expected to decrease. I would expect both reports to miss estimates. While we are in the midst of the traditional building season in the northern states, I just can’t see the housing industry adding more inventory.

Earnings Announcements: Bank of America (BAC), Citigroup (C), General Electric (GE)

Respectfully,

Christian Hill