With the Swiss franc stirring Europe’s market pot, oil prices swirling toward a bottom and a seasonal post-holiday spending consumer focused more on paying those bills than charging ahead, the global markets (including our own) seem a little bit more prone to a soft patch/slowdown.
On the Swissie, I think the summary point is that they feared that the ECB was going to deliver enough of a stimulus package next week to further weaken the euro and make it harder for the Swiss to defend their currency’s value. The European bourses enjoyed a surge on that assumption (with maybe a dusting of hope that a soaring Swiss franc would make their exports less competitive and zone imports into Switerzland sell like hotcakes … or whatever it is that the Swiss serve with their cocoa).
On the eurozone, I remain constructively optimistic that economic and political self-interest could combine to dictate stimulus measures on a scale that would have effects akin to our own.
Now, the eurozone is a very different place than here — we’re more like a blanket to their patchwork quilt of squabbling interests. But the thread that holds them together is like our own … to fund social aspects of one’s realm, you need to get capitalism right to fund them.
At least for one quarter, Charles Schwab Corp (SCHW) did, posting better than expected earnings on better than expected asset management fees and trading revenue.
Countering that good news, the first real tear in the oil patch came in the form of Schlumberger Limited (SLB), the bellwether oil services company, saying, “In response to lower commodity pricing and anticipated lower exploration and production spending in 2015, Schlumberger decided to reduce its overall headcount to better align with anticipated activity levels for 2015.”
Laying off 9,000 workers (about 8% of their workforce) signals the end to assumptions that the recent slide in oil prices in a temporary trade.
Earnings to Watch
Next week is a holiday-shortened trading week, but here’s a look at the earnings I’ll be watching:
- Coach Inc (COH): High-end consumer spending
- Halliburton Company (HAL): To see if there’s any confirmation of Schlumberger’s take on the oil patch
- International Business Machines Corp. (IBM): Business IT spending
- M&T Bank Corporation (MTB): Consumer lending
- American Express Company (AXP): Consumer and small-business spending
- Ebay Inc (EBAY): Not sure I really care much about this one anymore, but I’ll still look to see if it reflects holiday spending in some fashion
- United Rentals, Inc. (URI): Equipment rentals as construction/infrastructure gauge
- Capital One Financial Corp. (COF): Consumer spending — and at some point, all these consumer spending companies become interesting form a consumer repayment and delinquency rate view, but not yet
J B Hunt Transport Services Inc (JBHT): Road transports = economic activity
Southwest Airlines Co (LUV): Fuel prices and travel
Arctic Cat Inc (ACAT): Blue-collar bling
General Electric Company (GE): Global barometer of consumer and business activity
Economic Reports to Watch
- Homebuilders confidence
- Housing starts
- Home prices
- Existing home sales
- Jobless claims
- Leading indicators
Between now and then, enjoy the long weekend!