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Time to Focus on the US

Today's market rally: muddling through may be good enough for today, but sustainability is an issue.

Two issues:

1) high potential for sovereign downgrades from rating agencies, particularly Standard and Poor's. Indeed S&P has already said they expect to "resolve" its credit watch status shortly after the EU Summit concludes. 2) not enough firepower for the European rescue funds.

The EFSFis deploying, but with only a little more than 200 billion euros in uncommitted funds, fast tracking of the ESM to July 2012 is happening, but it has only 500 billion euros. Europe contributing an additional 200 billion euros to the IMF is a positive, but not clear how that will be deployed.

Time to turn our attention to the U.S.

1) A number of big U.S. companies will give us insight into the U.S. — and global — economies next week. Here's what's on my radar screen:

Monday: CSX annual meeting

Tuesday: GE* Investor day, AMR bankruptcy hearing

Thursday: FedEx earnings; investor meetings for Honeywell and United Technologies ; Zynga IPO (expected to price 100 million shares at $8.50-$10)

2) speaking of earningswarnings — everyone is focused on the immediacy of the euro crisis, but there's been less emphasis on what we still have to deal with: a world with slowing growth and contraction.

Dupont sees de-stocking and slower economic growth, Lattice Semi , big in wireless and video chips, talks of softening demand in communication, Texas Instrument talks of weak demand, Altera , big in telecom and wireless, lowers revenues.

3) Washington: a) Congress is likely to make a decision on extension of the payroll tax cut, b) the Federal Reserve meeting is Tuesday.

4) dividend increases. GE and Waste Management (WM) both raise dividend today. Been a good year for dividends...payments up 17 percent in the S&P 500, and almost back to the historic highs back in June 2008.

Still, some high dividend paying stocks — a huge play earlier in the year — have not panned out as investments. The big cahuna in this space — AT&T , with a nearly 6 percent dividend yield — should announce next week, but it has been one of the weaker performers in the Dow, down about 2 percent this year.

Others have done much better. Verizon with a yield of 5.2 percent, up 7.2 percent, Lilly , with a 5 percent dividend yield, up 12 percent.

* GE maintains a minority ownership of NBCUniversal, CNBC's corporate parent.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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