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The surge is over, but this is what's up next for stocks

Stocks could keep up their slow march higher in the coming week as energy and the consumer remain top themes for the economy and markets.

There is an important stream of economic reports, including inflation reports, housing data and two key Fed surveys from the New York and Philadelphia regions. Inflation data and details from the Fed's last meeting are likely to get the most focus.

The consumer price index is expected to decline 0.1 percent when reported Thursday, as falling oil prices filter through the economic data. Already, retail sales for October saw a boost as consumers spent less on gasoline, but bought more other goods. Besides inflation data, there is housing starts Wednesday, home sales Thursday and the minutes from the last Fed meeting on Wednesday afternoon.


Traders on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders on the floor of the New York Stock Exchange.

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"I don't think that you have huge market moving data coming out, so I think (stocks) will stay relatively range bound as far as the overall market goes," said Andrew Burkly, head of institutional equity strategy at Oppenheimer Asset Management. "This is the pattern over the last year and a half—you have these big surges, then move sideways for about six weeks."

Retailers, like Home Depot, Target and Best Buy report earnings in the week ahead, and they too will be watched for any direct sales impact from lower gas prices.

"People will be listening for the those kinds of (gasoline related) comments and any insights into holiday sales. Online sales in the retail sales data were pretty good which is a good indication of holiday sales kicking in (already) in October," Burkly said.

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Barclays senior economist Michael Gapen said the drop in gasoline prices should continue to show up in the economy, helping lift GDP slightly by boosting consumption. "The pass through is quick. Lower oil to lower gas to consumption. It tends to be very quick," he said. But the benefits could be outweighed by negatives ultimately.

"The stronger dollar story may weigh on growth and also lower oil prices may weigh on (oil industry ) cap ex," he said, noting the positives could net out longer term. The dollar has been partly behind the drop in energy prices. "The stronger dollar, weaker trade balance and cut in cap ex could offset the boost to consumption."

Fed ahead – Did doves capitulate?

The minutes of the last Fed meeting Wednesday are expected to be somewhat newsy, after the Fed changed the language in its statement and indicated after its October meeting that the labor market is improving. The Fed ended quantitative easing at that meeting, so every comment made about the state of the economy, particularly labor and inflation, will be scrutinized for what it might imply about when the Fed will raise short term interest rates.

The Fed retained language in its statement about how it expects to keep rates low for a "considerable" time. "I want to hear from them on what it was that changed their view" on labor,
Gapen said. "We do think they will drop 'considerable time' language in December so my guess is there would be discussion of that at this meeting. I want to see how they assess what were the downside risksthe global growth story, the rising dollar."

Adrian Miller, director of fixed-income strategy at GMP, said he is expecting a more hawkish tone in the minutes to match the tone in the statement. "The policy statement was a little more hawkish by the committee actually going out of its way to make a point to see a substantial improvement in the outlook for the labor market," he said. "In my opinion, it was the doves' capitulation that things are moving forward. Let's see what the minutes have to say about what the underlying positions were at the meeting. That's what people will be looking for."

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Burkly expects stocks to continue to move higher into the end of the year, and he notes that investors are becoming interested in the energy sector, which has been hit hard with the 30 percent drop in oil prices since June. The energy sector was down 2 percent for the week. One of the best performing sectors was one that benefits from lower fuel—consumer discretionary, up 1.8 percent.

"I think people are generally looking for when is there a contrarian buy signal coming in here," said Burkly. "Clients are talking about when is it so bad, it's interesting. It's pretty bad, and there's no sign of less bad. We'd like those when the pattern of analysts cutting estimates really subsides and we've seen no sign of that."

Deal talks between Baker Hughes and Halliburton could stir some interest in the sector as lower oil prices force other energy companies to merge.

Also in energy, TransCanada's Keystone XL Pipeline is up for a vote in the Senate and is expected to be approved on Tuesday. It's unclear whether President Obama will sign the legislation or veto the controversial pipeline. Dan Clifton, head of policy research at Strategas said Obama's comments Friday in Burma make it seem unlikely he will sign it.

Obama said he has had to "constantly push back against this idea that somehow the Keystone pipeline is either this massive jobs bill for the United States or is somehow lowering gas prices."

Obama is also at G-20 this weekend in Australia. Russia and Ukraine will stay center stage, as leaders discuss the situation there, with Russian President Vladimir Putin in attendance.

What to Watch

Monday

Earnings: JD.com, Tyson Foods, Urban Outfitters, Agilent

8:30 a.m. Empire State survey

9:15 a.m. Industrial production

10:00 a.m. Chicago Fed President Charles Evans

Tuesday

Earnings: Home Depot, TJX Cos, Dick's Sporting Goods, Jack-in-the-Box, La-Z-Boy, PetSmart, Manchester United

8:30 a.m. PPI

9:00 a.m. TIC data

10:00 a.m. NAHB survey

1:30 p.m. Minneapolis Fed Narayana Kocherlakota

Wednesday

Earnings: Lowe's, Staples, Target, Williams-Sonoma, L Brands, JM Smucker, Keurig Green Mountain

8:30 a.m. Housing starts

2:00 p.m. FOMC minutes

Thursday

Earnings: Best Buy, Gap, Dollar Store, The Buckle, Ross Stores, Gamestop, Autodesk, Intuit, Marvel Tech, Mentor Graphics, Renren, Splunk

7:45 am Fed Gov. Daniel Tarullo

8:30 am Initial claims

8:30 a.m. CPI

10:00 a.m. Existing home sales

10:00 a.m. Philadelphia Fed survey

10:00 a.m. Leading indicators

1:30 p.m. Cleveland Fed President Loretta Mester

8:30 p.m. San Francisco Fed President John Williams

Friday

Earnings: Foot Locker, Ann