Week Ahead: Earnings & Economics To Move Markets

The S&P 500 is down 0.5% so far this year — and stocks face another potentially volatile week ahead with a barrage of earnings from major corporations as well as economic indicators and news from the World Economic Forum in Davos, Switzerland.

After stocks rising more than 30% in a fantastic 2013, some market analysts are predicting a 10% correction in 2014 and worry that any major disappointments in earnings season might just be the trigger.

Starbucks, Johnson & Johnson, Microsoft, Verizon Communications, Texas Instruments, Procter & Gamble, McDonald’s, IBM, Unilever, Netflix and EBay are just some of the companies reporting earnings this coming week.

Investors will be looking for positive news because earnings from bell weather company Intel last Thursday that disappointed some investors cast a slight shadow over markets.

“While we believe long-term headwinds remain for the global PC market, demand for PCs and microprocessors appears to have stabilized in the near term,” was how Morningstar analyst Andy Ng interpreted the news from Intel.

About half of the 50 or so S&P 500 companies that have reported so far have beaten earnings forecasts, below the historical average of 63 percent, according to Thomson Reuters.

The U.S. stock market is closed on Monday for the Martin Luther King Jr Day holiday, but the rest of the week will be chock-full of market-moving news.

Tuesday will bring a crucial World Economic Outlook update from the International Monetary Fund in Washington, and earnings from Unilever, IBM, Texas Instruments, Verizon Communications and Johnson & Johnson.

Wednesday brings the start of the World Economic Forum in Davos, where policy makers and company executives from all around the world will meet for four days to discuss the world economy.

Also expected on Wednesday is the first major airwaves auction since 2008 by the U.S. Federal Communications Commission, and earnings from Netflix and EBay.

A slew of economic data is expected on Thursday, including U.S. existing home sales for December, The Conference Board’s U.S. index of leading indicators for December, U.S. initial jobless claims and the U.S. house price index for November.

Thursday will also bring an expected initial public offering from car finance company Santander Consumer USA Holdings, a U.S. Treasury bond auction, and earnings from McDonald’s, Microsoft, Starbucks, Hyundai and Nokia.

Friday brings earnings from Bristol-Myers Squibb and Procter & Gamble.