Financial markets will have plenty of news to feast on in the coming week although the markets generated enough headlines on their own in the first days of January with just a few big stories to chew on.
The second week of January is quite busy. We're looking forward to some of the most important and newsy industry conferences of the year, plus the start of earnings season, an important Fed speech, and some fresh economic data. And of course, the new CNBC primetime program, "Fast Money" debuts Monday in its new daily time slot at 8 pm.
COMMODITIES CONUNDRUM: Whoosh. We will all be watching commodities markets next week. The sell off in copper picked up speed in the first trading days of the year while oil skidded down its own slippery slope on concerns warm weather will crimp demand. But our Erin Burnett picks out the drop in gold, a late comer to the selling spree, as a real sign of capitulation in commodities. "Technical analysts say $595 is a crucial level to watch. If gold goes below that, we could see significant selling." Burnett says. Gold fell three percent Friday, and 4.8 percent for the week to close at $604.90 an ounce.
Oil finished the week down nearly 8 percent at $56.31 per barrel after fending off a technical breakdown at the $55 level late Friday. Our Sharon Epperson, from her perch at the NYMEX, went back to the analysts she surveyed for her 2007 energy outlook. Despite the big decline, they are sticking to their forecasts that oil will average $60 to $65 this year. We'll see what happens Monday once traders are back at work after a balmy weekend with near 70 degree temperatures in New York City.
Stocks meanwhile turned in a gut wrenching performance in the first week of the year. After turning somersaults during the shortened, three day week, the Dow ended down just 65 points or 0.5 percent. It also scored another intraday high of 12,580 Wednesday and is now 112 points below its record close. The S&P 500 fell 0.6 percent for the week, but the Nasdaq rose 0.8 percent, lifted by Thursday's tech rally. The S&P information technology sector was the week's top gainer, up 1.5 percent. The energy sector was the biggest loser, down 4.8 percent for the week as shares of companies tied to commodities and energy took a real bruising.
Copper, leading the decline in commodities, fell 11.6 percent for the week and is at a nine month low. Traders tell us hedge funds have been among the sellers, and the sellers in oil are now selling gold in an across the board rotation. The big question is whether the sell off signals a coming global economic slowdown as some market pundits are saying. We may see a bumpy ride when these markets reopen. Our Larry Kudlow thinks there could be more selling, but he thinks the prediction of a global economic slowdown is too severe.
He says prices were too high and the decline is due. "Copper got way too high," he says. "I like to see the prices falling. It's a disinflation sign."
WORTH WATCHING: Wise words from the Fed will be welcome after the release of the FOMC December meeting minutes wreaked havoc in the stock market last Wednesday. On Monday, Fed Vice Chairman Donald Kohn speaks on the economic outlook at the Rotary Club of Atlanta and will take questions from the audience. The Fed leadership has been relatively quiet lately so traders will watch his comments closely. Our Steve Liesman will be there, and you can watch Kohn's talk stream live on cnbc.com at 12:45. "Kohn is increasingly perceived as the intellectual pulling guard for (Fed Chairman Ben) Bernanke," says Liesman. "He gets out front and clears the way."
BIG EVENTS: From San Francisco to Detroit to Las Vegas, our correspondents will crisscross the country this week to cover some of the biggest industry trade shows and conferences of the year. They will show us new products, interview corporate executives, and gather intelligence on what could generate profits and move stocks in the coming year.
Starting Sunday, our Phil Lebeau will be reporting (and blogging) from the Detroit Auto Show. On Monday, he will interview the CEOs of the big three U.S. auto makers on "Squawk Box," plus provide day long coverage of the premier U.S. auto show. We'll see the new models and meet the executives who drive the global car industry.
Our Jim Goldman leaves Silicon Valley and heads to Las Vegas where he will report (and blog) this weekend and Monday on the new products being unveiled at the annual Consumer Electronics Show. Anchor Bill Griffeth and his executive producer Ramona Schindelheim join him when "Power Lunch" airs live from the show Monday. Watch for a lot of buzz around hand held mobile devices that do everything you currently can do on your desk top. Companies like Microsoft ,Sony ,Palm ,Samsung , Nokia and Motorola will be there. Though more than a few investors may not be feeling good about Motorola right now after its late night earnings warning Thursday.
Missing from that crowd is Apple . But Apple has a big event of its own. Goldman makes his way back to the bay area for Tuesday's Mac World, where analysts expect Apple to unveil a host of new products, including the much heralded iphone and itv.
Nearby, JPMorgan holds its annual health care conference in San Francisco. This is the first and biggest healthcare investment conference of the year. More than 300 companies and 7000 investors attend. There's hardly an hour that goes by without market moving headlines from that annual event, which is in its 25th year. Our Mike Huckman will be there starting Monday, along with some of the biggest names in pharma and biotech. On Tuesday, Huckman will interview executives from Amylin ,Cytokinetics , Celgene , Biogen Idec and Mylan , to name a few.
Last Thursday's chain store sales may have disappointed investors watching for a strong December but it doesn't make watching retailers in January any less interesting. There are two major conferences in the coming weeks and our Margaret Brennan will take us there. First, Brennan heads to Dana Point, Calif. for the ICR retail conference. She will report from there on Wednesday. Private equity interest in retailers will no doubt be one of the themes she will examine. Starting next weekend, Brennan will cover the National Retail Federation convention and expo in New York city.
PROFIT PICTURE: This week also brings the start of the fourth quarter earnings season. As usual, Alcoa will be the first Dow component to report. Its earnings are released after the bell Tuesday. Genentech earnings are Wednesday, and KB Homes reports Thursday. Earnings reporting picks up real momentum the following week.
DATA POINTS: The markets will be looking forward to any news that will help explain what's going on in the economy after Friday's better than expected jobs report. Due this week is consumer credit Monday and the trade balance and wholesale inventories Wednesday. Import prices, retail sales and business inventories are due Friday. Other Fed speakers out this week are New York Fed President Timothy Geithner, at the Council of Foreign Relations in New York Thursday morning and Fed Governor Susan Bies, also speaking that morning on enterprise risk management and mortgage lending in Washington.
FAST MONEY Here's wishing Dylan Ratigan and his buddies on "Fast Money" a great first week.