Earnings season picks up next week, with a handful of financial and tech companies among the first wave to report fourth-quarter and full-year results.
Meanwhile, House lawmakers are to vote next week on a bill repealing the sweeping health-care law, a week after the matter was delayed in the wake of the shooting in Arizona.
A slump in trading volume, especially within fixed income, currencies and commodities, is expected to weigh upon profits for investment banks Goldman Sachs Group Inc. (NYSE:GS) and Morgan Stanley (NYSE: MS).
Other financial companies expected to report their latest results include Charles Schwab Corp. (NASDAQ:SCHW) and Citigroup Inc. (NYSE:C) on Tuesday; Bank of New York Mellon Corp. (NYSE: BK), U.S. Bancorp (NYSE:USB) and Wells Fargo & Co. (NYSE: WFC) on Wednesday; and Capital One Financial Corp. (NYSE:COF) and PNC Financial Services Group Inc. (NYSE:PNC) on Thursday.
Tech giants Apple Inc. (NASDAQ:AAPL), International Business Machines Corp. (NYSE:IBM), EBay Inc. (NASDAQ: EBAY) and Google Inc. (NASDAQ:GOOG) all report this week, providing a broad view of consumer and business spending patterns.
Analysts expect Apple to once again beat its quarterly guidance as it provides color about sales during the iPad's first holiday season. The company is also expected to report strong sales of its popular iPhone and provide key details about its new partnership with Verizon Wireless.
IBM is expected to benefit from the continuing upswell in enterprise spending that began last year and is seen to continue throughout 2011. The company typically issues full year guidance during its Q4 earnings call. Hardware sales are expected to remain strong, but trends in services signings may offset some of the optimism. IBM will also for the first time report operating earnings and issue EPS guidance in the same format.
Analysts anticipate eBay will report a slight increase in earnings and revenue, and they will be looking for signs the ecommerce company's plans to turn around its core marketplaces business are taking hold. EBay has also continued to push its mobile business, introducing Paypal software to make cell phone payments easier and buying a mobile application developer.
Google is once again expected to report a sharp jump in earnings and revenue, and investors will look for any updates that help them gauge the growth of the search giant's mobile unit and display advertising business. These are key areas of focus as investors worry about the pace of growth in Google's core search advertising business. This quarter will also be the first to fully include the Google Instant feature, which shows immediate search results as users type queries into the search box.
President Barack Obama will welcome Chinese President Hu Jintao for a state visit on Wednesday, as the leaders plan to discuss a range of economic and national security issues.
House lawmakers are to vote next week on a bill repealing the sweeping health-care law, said House Majority Leader Eric Cantor (R., Va.), a week after the matter was delayed in the wake of the shooting in Arizona.
Top U.S. regulators are set to weigh new rules next week that would limit speculative trading by banks and subject other financial institutions to heightened oversight. The Financial Stability Oversight Council, established by the Dodd-Frank financial regulation bill and led by the Treasury, is expected to review studies on the so-called Volcker rule and designation of nonbank financial firms at its meeting on Tuesday.
Several U.S. housing data reports--including housing starts, building permits and existing home sales--are due for December next week. The housing market is a sore spot within the economy, which is growing steady out of the recession.
The United States will observe Martin Luther King Jr. Day on Monday, Jan. 17, this year two days after the civil rights leader's birthday. As a result of the federal holiday, markets, banks, some businesses and government offices will be closed.