Business News

Waiting for Wall Street data

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by Peter Switzer

Wall Street has investors in two minds with company reporting impressing on the high side just when the economic readings are softening. And making the task of share prices to head up even harder has been the solid gains over the past week, where the US market indexes put on around seven per cent in a short time.

And remember, the Dow Jones index was up seven days on a trot!

As George Boubouras from UBS said on my Sky News Business Channel program this week: “It would have been better if those gains did not come so quickly…”

Keep an eye on company data

Still, I do like the way the run of company data is putting a bit of a floor under how far the Yanks are prepared to sell off at the moment.

The bears are definitely apprehensive that their doomsday scenarios and double-dip talk has been overdone. But the doubters are still there in numbers and so there could be selling into this rally if the corporate profit reporting doesn’t remain impressive.

Overnight JPMorgan Chase reported and, while beating expectations, the bank didn’t excite analysts. The company’s boss Jamie Dimon was not very upbeat with his forecast and that took a bit of wind out of the bulls’ sails.

Financial stocks are also facing some headwinds from the financial regulations bill now close to getting across the line in the US Senate.

Economic reports

On the economic front, there were two ordinary reports on manufacturing out of New York and Philadelphia from the respective Fed offices showing a slowing down of activity.

However, industrial production went up 0.1 per cent in June, which is neither good nor bad news. I must admit, I don’t like monthly figures because they can be influenced by one-off or seasonal factors.

What I did like were IDC numbers showing the global PC shipments spiked up 22 per cent in the second quarter.

Market drama next week

Tomorrow morning should bring some interesting market driving news with the release of profits reports from GE, Citigroup and Bank of America. There will also be a consumer sentiment reading.

Next week will be a big week for company profit news and will have a big bearing on where share prices will be heading. I can’t wait for the drama to unfold.

For advice you can trust, contact Switzer Financial Services.

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Published on: Friday, July 16, 2010