Wall Street: Devil is in the details
Impatient investors want to know the specifics of what Team Obama is cooking up to soften the blow of the recession. The week ahead brings several opportunities.
NEW YORK (CNNMoney.com) -- A lack of clear communication between the government and Wall Street last week left investors scratching their heads and dumping their stocks. The week ahead brings a chance for a rapprochement.
President Obama is expected to sign into law Tuesday the much debated $787 billion economic stimulus package. Obama and his team are also expected to outline specifically why the plan will help soften the blow of the recession when other government efforts over the last year have had little impact.
The plan combines tax relief, aid and spending, and was passed in both the House of Representatives and the Senate last week with very little Republican support. (Full story)
Later in the week, Obama is expected to provide details on the administration's plan to modify home loans in a bid to limit foreclosures.
"We need specifics," said Joe Arnold, wealth manager at Dawson Wealth Management. "The market is back down near the November lows because we don't know specifically how and when these plans are going to have an impact."
Enthusiasm has waned as investors have realized that the economic stimulus plan and the bank bailout plan can only help so much when the economy is weakening, company profits are declining and layoff announcements are a near-daily occurrence. These issues sent stocks tumbling last week, with the Dow losing 5.2%, the S&P 500 losing 4.8% and the Nasdaq losing 3.6%.
"People are realizing that the recession is not going to end this year," said Ben Halliburton, chief investment officer and founder at Tradition Capital Management.
"We have a big problem and the government programs won't be able to fix it with due haste," he said. "And Wall Street is not known for its patience."
Monday: All financial markets are closed for Presidents Day. President Obama is expected to sign into law the $787 billion economic stimulus package approved by the House Friday. The Senate approved the bill Friday evening.
Tuesday: Wal-Mart Stores (WMT, Fortune 500) reports quarterly results before the start of trade. The retailer is expected to have earned 99 cents versus $1.04 a year ago, according to earnings tracker Thomson/Reuters.
Also before the start of trade, the NY Empire State survey is due. The regional reading on manufacturing is expected to have fallen deeper into recessionary territory, falling to 24.0 in February from 22.2 in January.
Wednesday: Housing market reports are due before the start of trade. January housing starts are expected to have fallen to a 530,000 annual unit rate from a 550,000 rate in December. January building permits fell to a 525,000 annual unit rate from a 547,000 annual unit rate.
President Obama is due to announce the home loan modification plan during the day Wednesday. In anticipation, the White House warned against "unreasonable expectations" regarding the plan - a nod to the buildup and letdown surrounding Treasury's revised bank bailout plan announced last week.
Federal Reserve Chairman Ben Bernanke will speak at 1:00 p.m. ET at the National Press Club in Washington, D.C. about the Fed's lending programs and balance sheet.
The minutes from the last Federal Reserve policy meeting are due to be released in the afternoon.
Hewlett-Packard (HPQ, Fortune 500) reports results after the close of trade. HP is expected to have earned 93 cents per share versus 86 cents a year ago.
Thursday: General Motors (GM, Fortune 500) is expected to report quarterly results before the start of trade. GM likely lost $7.39 per share versus a profit of 8 cents a year ago.
The Producer Price Index (PPI) is due before the start of trade. The measure of wholesale inflation is expected to have risen 0.2% in January after falling 1.9% in December. The so-called Core PPI, which strips out volatile food and energy prices, is expected to have risen 0.1% after rising 0.2% in the previous month.
The weekly jobless claims report is also due before the start of trade. The number of Americans filing new claims for unemployment is expected to have dipped moderately to 615,000 from 623,000 in the previous week, still near a 26-year high.
The Philadelphia Fed index is due Thursday after the start of trading. The regional manufacturing report is expected to have fallen deeper into recessionary territory, dropping to 25.0 in February from 24.3 in January.
Also after the start of trading, the index of leading economic indicators is due. January LEI is expected to show no change after rising 0.3% in the previous month.
Also Thursday, the European Central Bank meets to discuss interest rates.
Friday: A pair of retailers are expected to report earnings before the start of trading. Lowe's (LOW, Fortune 500) is expected to have earned 12 cents per share versus 28 cents a year ago. JC Penney (JCP, Fortune 500) is expected to have earned 92 cents versus $1.93 a year ago.
Also Friday, the Consumer Price Index (CPI) for January is due. CPI, a measure of consumer inflation, is expected to have risen 0.3% after falling 0.7% in December. Core CPI is expected to have risen 0.1% in January after a flat reading in December. 
