-- RPT-Wall St Week Ahead-High season for corporate confessions --
(Repeating column initially transmitted late Friday)
By Brian Kelleher
NEW YORK, Dec 15 (Reuters) - Wall Street is gearing up for
"confession season," as companies use the week before Christmas to
detail their New Year's expectations. But investors hope it won't
spell a stocking full of coal for their portfolios.
It's prime time for companies to issue earnings outlooks, just
before the traditionally slow holiday week.
"Given where we are in the calendar, we might also start to
see some confessional season activities for the fourth quarter,"
said Philip Orlando, chief investment officer of Value Line Asset
Management, which oversees $6 billion.
"It would be prudent for companies to provide us with
guidance" this week, "rather than the following week, which is
Christmas week, or the following week, which is New Year's week."
It may not be Christmas cheer. Analysts expect fourth-quarter
earnings at companies in the Standard & Poor's 500 <.SPX> to rise
14.9 percent from the year-ago period, according to market
researcher Thomson First Call. That's down from expectations of a
19.9 percent climb at the beginning of October.
So far, about 1,272 companies have offered their outlooks for
the fourth quarter, according to Thomson First Call. Almost 555,
or about 43 percent, have warned they will miss analysts' targets,
while roughly 330, or 26 percent, have forecast a better fourth
quarter than Wall Street had predicted.
"Most money managers ... are just hoping for the year to end
at this point," said Charles White, president of Avatar
Associates.
For the past week, the blue-chip Dow Jones industrial average
<.DJI> and the broader S&P 500 each slipped 2.5 percent. The
tech-laden Nasdaq composite index <.IXIC> dropped 4.2 percent.
With little more than two weeks left in the year, the Dow is
down 16 percent, the Nasdaq is off 30 percent, and the S&P 500 is
down 23 percent.
INVESTMENT BANK SCORECARDS
Market watchers are keeping a close eye on four of Wall
Street's biggest banks -- Goldman Sachs Group Inc. <GS.N>, Morgan
Stanley <MWD.N>, Lehman Brothers Holdings Inc. <LEH.N> and Bear
Stearns Cos. Inc. <BSC.N> -- which report fiscal fourth-quarter
earnings this week.
"I don't have any expectations that the past is anything to
write home about," Orlando said. "More to the point will be the
guidance that the companies provide us with.
"If they come out and tell us they're each cutting 1,000
investment bankers, and cutting their trading desks in half, that
tells us they're expecting the environment to remain sluggish," he
said.
Most analysts expect the banks to post improved results. But
that's partly due to the fact that their year-ago fiscal fourth
quarter included a four-day U.S. stock market shutdown after the
Sept. 11 attacks.
DATA TO WATCH
On the economic front, the market faces a number of
indicators, including the consumer price index, or CPI, a closely
watched measure of inflation. The overall November figure, which
will be released on Tuesday, is expected to rise 0.1 percent. Core
CPI, excluding volatile food and energy, is forecast at up 0.2
percent, according to economists polled by Reuters. These
projections are below last month's gain of 0.3 percent in overall
CPI and 0.2 percent in the core figure.
Housing starts are also on Tuesday's data calendar.
"Housing has been an important element of the (economy's)
recovery. It's held up very well," said John Davidson, president
and chief executive at PartnerRe Asset Management, which oversees
$4 billion in assets.
"A lot of the consumer indicators are really coincident with
the market action," he said. "When the market goes up, people feel
a little bit better."
November housing starts are predicted to have risen slightly
from October's pace.
((Additional reporting by Denise Duclaux))
(( Brian Kelleher, Financial News Desk, 646 223 6124))
((Wall St Week Ahead appears every week. Comments or questions on
this one can be e-mailed to brian.kelleher@reuters.com))
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Symbols:
US;SPX US;GS US;MWD US;LEH US;BSC US;SPL US;COMP US&DJI DE;GOS
15-Dec-2002 15:42:45 GMT
Source RTRS - Reuters News |
