Permanent Value

Week in Review 2/17/14

Bruce Doole
February 17th, 2014

Worst over for stocks?

After a bumpy January, stocks have roared back to life this month.

Thanks to a strong rally last week, the S&P 500 is now down only slightly for the year while the Nasdaq is up nearly 2%.

Will stocks keep climbing this week? That will all hinge on a batch of earnings from several blue chip companies.

The U.S. stock market is closed Monday for Presidents Day. So earnings from Coca-Cola (KO, Fortune 500) ahead of the bell Tuesday will be the first to be in focus.

The beverage company’s global footprint makes it a good barometer for consumer spending around the world, including emerging markets.

Investors may also be looking out for more details on Coke’s recently announced partnership with Green Mountain (GMCR).

Retailers will also be in the spotlight, following a lackluster report on January retail sales that added to concerns that a colder-than-normal winter is putting a damper on the economy.

The Federal Reserve will also be in focus. The central bank releases minutes from its last meeting on Wednesday. At that late January meeting, the Fed decided to further reduce, or taper, its monthly bond purchases. That was also Ben Bernanke’s final meeting as Fed chairman.

Though last month’s decision to continue to cut back on its stimulus measure was unanimous among the Fed’s 10 voting members, investors will be looking for hints on how the Fed may act in future months.

New Fed chair Janet Yellen strongly suggested in testimony before the House last week that she was likely to stick with the Fed’s current plan to gradually taper. The market liked what it heard, as stocks soared on the day of her appearance on Capitol Hill.

 

This  Week’s Economic Data

  • Retail sales slipped 0.4% in January, missing Wall Street expectations.
  • Industrial production fell 0.8% in January. It was the biggest decline since May 2009.
  • Weekly jobless claims rose by 8,000 to 339,000.

 

Source: CNNMoney/ Ivy Funds