Banks, blue chips and big tech will be in focus this week as a slew of key companies report fourth-quarter earnings.
Bank of America (BAC), Morgan Stanley (MS), IBM (IBM), GE (GE), Goldman Sachs (GS), Google (GOOG) and Apple (AAPL) are just a sampling of names releasing results this week. And if last week's numbers are any guide, the market should have plenty of reasons to rally, says Jason Weisberg, managing director at Seaport Securities.
"Clearly, people are going to have all eyes on earnings and how they come in against estimated earnings," Weisberg says. "So far we've had two bellwether companies -- Intel (INTC) and JPMorgan Chase (JPM) -- with amazing, blowout numbers. I think that's just a sign of things to come."
Not Such Great Expectations
The market is riding a seven-week winning streak, thanks in no small part to strong bank earnings. Better-than-expected earnings from Dow component JPMorgan, the nation's second-biggest bank by assets, led a rally in financial stocks that could continue on more bullish earnings this week. The return of big-bank profits has raised the likelihood of dividend increases from the money-center banks, which would be a boon for pension funds and retirees.
True, Wall Street forecasts have been "lowered to above ground level," Weisberg adds, making it pretty difficult for companies to miss expectations, but he's still optimistic that stocks, particularly in oil services, consumer technology and apartment REITs, will enjoy a banner year.
"The earnings from last quarter are going to be terrific, and we're going to have a great year for equities," Weisberg says. Barring any big geopolitical surprises, the veteran trader thinks the Dow can get to 13,000 by year-end.
With Apple among those reporting earnings this week, one key thing to watch will be whether its expected healthy results can offset Apple investors' jitters over CEO Steve Jobs medical leave. Jobs's health has been a one of the few negatives Apple has had to deal with in recent years, and the possibility that it's again going to have an impact on the company is something to watch.
For more on Weisberg's take from the floor of the New York Stock Exchange (NYX), see the video above.
Basics Of The Stock Market
Stock Market 101 - everything you need to know but were afraid to ask!View Course »