"Earnings Central" returns to CNBC this coming week with a blast of first quarter profit reports from major banks, big tech names, drug industry giants and other blue chips of all flavors. But on top of that, a key inflation report, a heavy dose of housing news and retail sales could keep the markets hopping.
Wall Street will also be shaking off a drenching weekend Northeaster that grounded hundreds of flights, dumped rain or snow across a wide area, and caused high winds and river and coastal flooding.
The Dow ended the week up 0.4%. That one down day last week when the Fed's minutes spooked the market ended the average's first eight day winning streak in four years, but the market regained its footing and the major indices all moved higher on the week. Nasdaq was up 0.8% for the week, and the S&P was up 0.6% for the week. The Dow is now just 175 points away from its record close hit on Feb. 20.
Our Bob Pisani says the factors that keep the buyers coming are still intact. These buyers, he says, keep pushing the market higher, no matter how worrisome things like inflation may have started becoming to some of the bears out there. Global demand for equities, merger and acquisition activity and corporate stock buybacks are all part of the incoming tide of support. "You put these three things together, and that's the underlying bid," he said.
Citigroup, Mattel, Eli Lily, Wachovia and Charles Schwab report Monday. On Tuesday, Johnson and Johnson, Coca-Cola, Wells Fargo, and Washington Mutual report. Big tech names IBM, Intel and Yahoo also report that day after the bell. CIT Group, Motorola, JP Morgan, Pfizer and United Technologies report Wednesday morning. eBay reports after the bell that day. On Thursday, the heavy hitters on a super busy earnings day include: Bank of America, General Motors, Merrill Lynch, Altria, American Express, First Data and Merck. Google weighs in after the bell. By Friday, Earnings Central still holds a few big names including the big blue chips, McDonald's and Caterpillar.
CPI and housing data could be the most important data points this week, but there's plenty of other reports that could get attention if they land outside of expected ranges. The week starts off with Monday's March retail sales report, the Empire state manufacturing index, and business inventories. At 1 p.m. that day, the NAHB housing market index of builder confidence is reported, and our Diana Olick will tell us what the latest report is saying about the housing market.
On Tuesday, CPI, the consumer level inflation report, is due, as are housing starts and industrial production. On Thursday initial jobless claims, leading indicators and the April Philadelphia Fed survey are reported.
Our Rick Santelli, who casts his eye across the global financial markets from the futures pits in Chicago, says markets will be watching the continue tale of growth versus inflation. "I think it's the continued yin yang of growth and inflation, viewed from a global standpoint and viewed from a domestic standpoint. Every industrialized country has a fear of higher expected inflation, except for Japan. Interest rates are moving up all over the world," he says.
"The other dynamic is growth. Domestically, we have growth slipping a bit with inflation worries. With Europe, their projected growth rate is holding up better, along with China and Japan and the U.K. It seems the U.S. is the one that has the issue, and it's due to housing and domestic manufacturing like autos," says Santelli. "As interest rates go up in Europe, they can say there that they are rising in a way that's good for stocks because they are partially fueled by domestic growth as well as inflation. In the U.S., our growth is slowing and inflation could rise, which would make our stock market the odd man out."
Investors in the stock market clearly don't want to be the "odd man" out. We saw the same worries hit stocks last week when the Fed's March minutes last Wednesday simply reiterated a message equities traders already knew: the Fed continues to keep a watchful eye on inflation and economic growth is showing signs of slowing.
There's plenty of opportunity to hear Fed officials speak this week, starting Monday with comments from St. Louis Fed President William Poole, speaking on trade imbalances in Brussels. Philly Fed President Charles Plosser speaks at the Global Interdependence Center's Monetary and Trade Conference in Philadelphia that day. Plosser speaks Tuesday on the economic outlook, while New York Fed President Timothy Geithner speaks at the Fed's "The Euro and the Dollar: Pillars in Global Finance" conference. San Francisco Fed President Janet Yellen speaks on community development Thursday in Los Angeles and Fed Governor Frederic Mishkin speaks Friday on global imbalances at Bard College in New York state.
Intrigue at the World Bank
The World Bank went about its usual business at the spring meeting this weekend, worrying over trade issues and urging donor countries to help poor countries. The headlines getting the most attention though were the ones regarding World Bank President Paul Wolfowitz and his handling of the promotion of his girlfriend. In an official statement, the World Bank Development Committee said the Wolfowitz situation is "a great concern to all of us." The committee also said the banks credibility and reputation must be maintained and that the bank is held to a higher standard of governance. Wolfowitz says his work at the bank is important and he intends to stay, and adhere to higher standards.
Oil fell one percent last week to $63.63 per barrel. Gasoline gained 2.4% last week in NYMEX trading. This weekend, Saudi Arabia's King Abdullah said, according to the Associated Press, that Saudi Arabia would like to increase its oil production so it can meet domestic and international demand while ensuring "fair" world prices. The king made the statement to the Consultative Council, the Saudi equivalent of a parliament.
Around the World
Nigeria's ruling party scored big this weekend in state elections preceding the April 21 presidential election. Violent protests erupted as members of the opposition party took to the streets, burning buildings, blocking streets and barricading election offices.
In Russia, the weekend brought a new wave of anti-Putin protests in Moscow and St. Petersburg. Police, wielding batons, broke up demonstrations and arrested some participants. Chess champion Gary Kasparov was among those detained. Kasparov has dedicated himself to overthrowing what he calls the authoritarian rule of Russian President Vladimir Putin.
France's presidential election is April 22 with contenders vowing to break with the past. As ever in France, economic and social issues are tightly intertwined in the race to replace French President Jacques Chirac. The front runners is far right candidate, Nicolas Sarkozy, followed closely by Ségolène Royal, the Socialist woman candidate. CNBC.com will give special coverage to this important race.