Here are the market influences we'll be watching for the week of January 12-16.
External Impact
Oil -- Oil prices are likely to remain volatile. While it's my opinion that the price of oil is having only a marginal impact on the market to date, and that other factors have generated the high volatility, there are many pundits that say otherwise. Be aware that we have yet to see oil either stabilize or rebound, so volatility in that commodity remains in play.
European Weakness -- The closer we get to the January 22 meeting of the European Central Bank, the greater the influence the weak European economy will have on the market. There is a possibility that the ECB will announce their own version of QE in that meeting, so expect market volatility leading up to it.
Greek Elections -- With the Greek's leftist Syriza Party holding the lead heading into the January 25th elections, there is significant uncertainty into that nation's economic future and the impact it will have on the Eurozone in general. Syriza favors renegotiating the 240 Billion Euro bailout Greece received from the ECB and IMF, and they also want to cancel a portion of that debt. Expect increased volatility to ride the wave into the Greek elections.
Options Expiration / Martin Luther King Day -- Friday will see January options expiration at market close, and that tends to generate some extra volatility. The market will be closed the following Monday - Martin Luther King Day - so we can expect to see even more volatility and potentially some downward pressure at the close on Friday as short-term traders take money off the table for the long weekend.
Earnings to Watch
JPMorgan Chase (JPM) reports Wednesday, 1/14 at 7:00 AM.
Wells Fargo (WFC) reports Wednesday, 1/14 at 8:00 AM.
Bank of America (BAC) reports Thursday, 1/15 at 7:00 AM.
Charles Schwab (SCHW) reports Thursday, 1/15 before the open.
Citigroup (C) reports Thursday, 1/15 before the open.
Intel (INTC) reports Thursday, 1/15 after the close.
Goldman Sachs (GS) reports Friday, 1/16 before the open.
Significant Economic Data Releases
Monday - 12 January
No data reported.
Tuesday - 13 January
The Treasury Budget report will be released at 2:00 PM. This report, however, is typically not of any significance related to market action.
Wednesday - 14 January
Retail Sales (8:30 AM) - This is the big one for Wednesday. This will tell us how well retail stores did in December, and will provide insight into broad consumer spending patterns.
Export Prices, Import Prices, and Business inventories are also reported, however they are not watched as closely as the retail sales announcement.
Thursday - 15 January
Producer Price Index (8:30 AM) -- This is Thursday's big one. This report identifies the wholesale costs of goods. The number we're most interested in is the Finished Goods number as that most closely tracks what consumers will ultimately pay for the product.
Philly Fed Manufacturing Business Outlook Survey (10:00 AM) -- This is a survey of manufacturers in the Philadelphia Fed's regional jurisdiction. It provides insight into the economic trends including wages, earnings, inventories, etc. specific to that region.
Friday - 16 January
Consumer Price Index (8:30 AM) -- The CPI is the most widely cited measure used for inflation. With QE3 over and the market waiting for some indication as to when the Fed will begin raising interest rates, this number will be watched very closely.
Industrial Production / Capacity Utilization (9:15 AM) --These numbers are also used by the Fed to gauge inflationary pressures, although the utility component can be very weather dependent and thus highly volatile. Still, as the market tries to read the Fed's mind regarding interest rates, this number will be closely watched.
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