Can US Stocks Hold Onto Gains Next Week?

Both the Dow [[dia]] and the S&P 500 [[spx]] ended the week slightly up. The Dow was up 0.33% for the week and the S&P 500 was up 0.54% for the week. Boeing [[ba]] and Ford’s [[f]] positive earnings showed that major US companies have found ways to show good profits despite the economic slowdown in the US. These earnings came despite losses from all the major US airlines and continually increasing oil prices. American Express, [[axp]] also reported better than expected earnings on the back of more card member spending. This should be encouraging as it shows that at least some consumers have increased spending.

The Nasdaq [[qqqq]] also managed to end 0.83% up for the week although it was down on Friday due to disappointing numbers from Microsoft [[msft]] which may hint at slowing consumer technology purchases. As if to defy that, Apple [[aapl]] blew past estimates though, leading some to think that the slowdown of Microsoft’s Windows sales may be due in part to Apple expanding the market share of its Mac computers. Apple did give a dreary outlook for the rest of the year which put a damper in its excellent earnings. Amazon [[amzn]] also beat expectations, then gave a warning that its margins may get slimmer.

Next week will bring a slew of important news releases. The Fed will announce its interest rate decision and GDP data will be published on Wednesday, then on Friday there will be the all important payroll announcement that will reveal how many jobs were indeed lost in this last quarter. The estimate is somewhere around 75,000 lost jobs, and a better figure could be a sign that the US economy is stabilizing.

On the other side of the Atlantic, the Eurozone is beginning to show a few cracks in its “strong” economy. Spain, once the star performer, is now thought to be suffering from the terrible ailment of stagflation, as the housing market looks ready to implode yet rates can’t be lowered due to high inflation. Germany’s IFO numbers were pretty bad last week and as for Italy, one just has to look at Alitalia (AZA.MI) and their ailments. Only France seems to be going strong so far, and we’ll have to see how much longer that can continue for with such a high Euro.

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