There's no such thing as a summertime lull when earnings season is upon us. Even if you don't feel like alerting the "sell in May and go away" camp of investors, there are plenty of headlines to be written about.
Here are five things that will shape the way the market acts in the week ahead.
1. Home Wreckers
It's not easy being a homebuilder these days. Home prices continue to slip in most markets, and there's still a glut of existing homes. Throw in the nugget that many homeowners owe more on their mortgages than the residences are currently worth, and you have a recipe for disaster for companies with zoned plots of land to build on in the suburbs.
It's under this unappetizing climate that a few residential developers will step up to post their latest quarterly results. D.R. Horton (DHI) and Pulte (PHM) report Thursday. Meritage Homes (MTH) checks in Friday. All three are expected to post sharply lower quarterly results than they did a year earlier, when homebuyer tax credits expired. The news is likely to be particularly grim for Pulte and Meritage, as analysts see modest profitability last year wiped out by small losses this time around.
2. Searching Overseas
Google (GOOG) may be the search engine of choice in the United States and throughout several major countries, but it's not the top dog in every market. Baidu (BIDU) is China's leading search engine, serving up more than two-thirds of the country's queries. The recently gone-public Yandex (YNDX) operates Russia's most popular search provider.
Now that all of the stateside search stars have reported, it's time for Baidu and Yandex to show the world how their latest quarter played out. Baidu is expected to nearly double its profitability when it reports Monday. Yandex will deliver its first quarterly report on Thursday since going public two months ago.
3. Now You Cius, Now You Don't
Is the world ready for a Cisco (CSCO) tablet?
The instinctive answer may be "heck no," given Cisco's recent layoffs and its move to kill the once-popular Flip digital camcorder.
However, Cisco's Cius isn't aiming for the consumer market at all. Cisco knows better than to challenge the iPad in your living room, so it's squarely aiming at the enterprise market with a rich Android-fueled tablet that incorporates Cisco's WebEx virtual meeting platform and its TelePresence videoconference offering.
Several weeks ago, the widely reported shipping date for the tablet was July 31, and even Verizon (VZ) threw its wireless carrier weight behind the Cius. Recent press releases and company blog posts have shied away from a firm release date so you may -- or may not -- see the Cius next week.
4. Mutual Interest
The mutual fund industry was rocking through the 1980s and 1990s, as individual investors discovered the joys of playing the stock market with small initial investments. Letting a professional money manager lose sleep over buy and sell points in exchange for reasonable management fees was a win-win deal.
Mutual funds still offer great propositions, though the popularity of index-based exchange-traded funds and dirt cheap commissions from discount brokers have taken some of the shine off the industries. You don't see as many rock star fund managers on CNBC as you did a decade ago.
Next week we'll get a great glimpse into the state of the industry. T. Rowe Price (TROW), Invesco (IVZ), and Legg Mason (LM) will report their quarterly results. Morningstar (MORN), the research specialist that became popular for its mutual fund dissections before moving on to analyzing individual stocks and sectors, will also be reporting.
Maybe this industry isn't as tired as it seems. All four of these companies are expected to post healthy year-over-year gains in profitability.
5. Apple Steps on the Gas
Apple's (AAPL) blowout quarter this week helped send the tech giant's stock to new highs. More to the point, as the country's second most valuable company in terms of market capitalization, Apple is gaining ground on ExxonMobil (XOM).
There are no guarantees that Apple will continue to close the gap, which now stands at a mere $60 billion. However, ExxonMobil does report Thursday. A disappointing report or any major setbacks in pesky prices at the pump can result in the oil and gas giant meeting Apple halfway.
Rick Munarriz does not own shares in any of the companies in this story. The Motley Fool owns shares of Cisco, Google, Morningstar, T. Rowe Price, and Apple.
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