Next week marks the first big week of second-quarter earnings, and it is sure to bring both joy and misery to Wall Street.
Investors will concentrate on market fundamentals after weeks when Federal Reserve policies have dominated the market. If they see companies are still struggling, stocks could take a fall.
"We're in the terminal stages of a Bernanke-driven bubble," said Walter Zimmerman, technical analyst at United-ICAP in Jersey City, New Jersey.
The S&P's 17.8 percent advance in 2013 is largely attributable to the central bank's accommodative policies. The major indexes made impressive gains in the week: the Dow <.DJI> up 2.1 percent, the S&P <.SPX> 3 percent higher and the Nasdaq <.IXIC> up 3.5 percent. It was the third straight week of gains for all three, and the best week for the S&P and Nasdaq since early January.
"The Fed has been able to prevent a big selloff so far, but eventually the economy will have to catch up to the market or the market will fall back to match the economy," said Scott Armiger, who helps oversee $5.6 billion as portfolio manager at Christiana Trust in Greenville, Delaware.
Next week about 70 S&P 500 companies will report results. If the results indicate that companies' earnings are still weak despite intervention by the world's major central banks, shares could slump.
Companies can appear to look good when they beat a lowered earnings bar, but signs of weakness will hurt a market that is hovering near all-time highs and seeking new catalysts to spur further gains.
Geen opmerkingen:
Een reactie posten