Week Ahead: The Street Earnings Marathon

Best Growth Stock – This week we experienced how the market lost some of it’s year gains despite great earning calls from some of the street’s favorite stocks, Google and Apple. The Friday trading days was full of bad news from Bank of America and inflation concerns in Asia and Europe. At the same time the market has not settle it’s movement into the bulls or bears. Despite this apathy from the market to the earning season the weak ahead does not look in particular any better.

With the probably the busiest week for the earning quarter and having one the most important companies in the street reporting, the market may turn up and down with profit taking trading dominating the week. We will have Amazon, McDonald’s, Obama, GDP and China dominating the market and the week headlines.

McDonald’s should be reporting strong earnings with the dominance of it’s food chain overtaking the Asian market. Also the rapid expansion over India and developing countries will keep boosting it’s earnings. In the mean time in the well established market such as the USA the integration of the menu to other offerings such as the Starbucks coffee business will also keep the earnings strong for the rest of the year. The question remaining in the table is whether or not the street will move to sell the stock and take some profits. But on the long term the stock will keep it’s status as a BUY among the best funds in the street.

Amazon does continue it’s dominance as the number one online store in the world. The Christmas season was great as more people shopped online than any other year. This should boost their last quarter earnings and easily they will beat street estimates. But we saw how this week even after beating the street Apple and Google went down in a profit taking move from the market. Also, a recent acquisition in Europe of the entertainment chain love film and expansions of its hosting service confirms that the company is moving into having a stronger presence in online entertainment. We can see in the future more about Amazon delivering streaming content to it’s users at home and compete with other providers such as Netflix.

President Obama will be addressing the nation on Tuesday. The state of the Union address should be in a consolatory tone with conservatives and it will be focus on the economy and job creations. Still to be defining by the legislative and executive power how the deficit and spending will be cut without affecting consumer spending or economic growth. As inflation not been seen as a problem to tackle it should be presumed that the government would keep it’s stimulus in the economy to help it fully recover from the recession. But bad numbers from the housing industry and GDP report might affect the message by the end of the week.

With rumors circulating about China’s rate hike on its interest rates to deal with their high inflation problems can cause the market to fell. The cool down of the Chinese economy at this point will make more damage than good to the global economy that has come to depend on the Chinese exports for it’s consumptions.

In review the coming week will be a very busy one in which the market more than likely will keep the same ups and downs that we experienced this week. Anything in the news that is not expected can dive the market further down in a bigger than expected market correction.