These are the biggest issues for the play book this week as far as US investors are concerned.  There are literally a few hundred companies reporting earnings, and this week and next week will be a non-stop barrage of earnings.  These are the key earnings and political-economic issues on deck, or at least these are the ones that you can expect to take the largest amount of news coverage.

1/22 MONDAY
Texas Instruments (TXN) consensus $0.38/$3.4 Billion; As goes Texas Instruments, as goes the chip cycle for all the gadgets that fit in your hand.  This will give the feel for cell phones (already deemed weak because of price wars), PDA’s, MP3 players and the other gadgets.

Pfizer (PFE) $0.42/$12.25 Billion.   Is it 3,000 or 4,000 that will find out about their job layoffs? This will mark the first (actually the second) of the layoffs in big pharma.  We’ll also get to hear about the pipeline for the first time in 6-weeks since the last blow-up in the hugely expected heart drug. 

1/23 TUESDAY
Bank of America (BAC) consensus $1.18/$18 Billion; Maybe we’ll hear if they are really trying to raise the deposit base ceiling as it was already indicated by outside reports.

Yahoo! (YHOO) consensus $0.13/$1.22 Billion; Panama has been out a month roughly and Semel has managed to hang on.  Semel is still and will remain one of the 10 CEO’s that need to go, and the stock has been trading more like a buyout candidate or like a restructuring candidate than it has a search winner.  We’ll see, but all the secondary calls will be on Google after the Yahoo! numbers.  And what about the larger and larger percentage of TAC (Traffic Acquisition Costs) to total revenues? At what point does that become an issue too?

J&J (JNJ) consensus $0.79/$13.7 Billion; with consensus EPS growth for 2007 expected to be 8% to $4.04 and revenue growth expected at 5% to $56.1 Billion, we’ll have to see if they say the ongoing mega-mergers are still a part of the company. 

Advanced Micro Devices (AMD) consensus $0.10/$1.72 Billion; they already warned and we already know the Intel & AMD processor price war is still going.

State of the Union: President Bush delivers one of his last pertinent State of the Union speeches, but with all the Presidential candidates already having thrown in their names the real focus is already going to be toward how the candidates react and act during and after his speech.

1/24 WEDNESDAY
eBay (EBAY) consensus $0.28/$1.67 Billion; it’s up big off last year’s lows and they rallied on the news of their last price hike instead of falling and being criticised like the previous price hikes.  Even Meg Whitman has managed to get out of the hot seat, so we’ll have to see.  It has actually slid off recovery-highs by 10% so this one’s a coin toss.

Qualcomm (QCOM) consensus $0.42/$2.05 Billion; as a reminder they usually beat because of how they do their conservative guidance mid-quarter.  If this turns out to be another disappointment on 2007 guidance then the younger Jacobs might be one step closer to needing to go, although when he was named on the list of CEO’s he was still noted as having quite a bit of time before throwing him to the wolves.

McDonalds (MCD) consensus $0.61/$5.675 Billion; Chipotle is gone and Boston Chicken is being set up to go. It’s up roughly 30% since summer and up about 75% in 18-months.  It’s been too good of a ride to call the top, but how much more can they keep posting these monster same-store-sales growth numbers and then keep following up with stronger and stronger earnings?  This one has been amazing and surprising even to the bulls.

1/25 THURSDAY
AT&T (T-NYSE) consensus $0.59/$21.3 Billion, but earnings hardly matter since the merger just closed.  Now it all points toward our first real combined guidance for 2007 to 2008 and the cost savings and capital expenditures (Cap-Ex). As AT&T reports, perhaps the largest thing to watch now is the cap-ex plans for 2007 and beyond now that BellSouth, AT&T, and SBC are all under the AT&T name.  This will also formalize more of the Cingular plans.

Microsoft (MSFT) consensus $0.23/$12.05 Billion.  Sure you’ll have Zune and Xbox360 numbers, but everyone really only cares about Vista and new projections for 2007 and 2008.  The street is expecting a lot with the stock close to multi-year highs, so ahead of time with three trading days it seems to expect the critics to be more convincing than the cheerleaders.

Ford (F) earnings expected -$0.97/$34.5 Billion, estimates vary greatly and it doesn’t really matter.  If you can find someone very optimistic here, then he must be named Pangloss.

Existing Home Sales for December; 6.25 million annualized estimate; this may move housing stocks the most even though it’s "used homes" instead of new homes as this is the first outside government recorded evidence of December housing outside of what the builders have really said.

AeroVironment Inc. (AVAV) IPO; this is the one Cramer touted on Friday from Goldman Sachs as the one to watch.  This one was going to do well on its own, but now Cramer has possibly added even more premium to it.

1/26 FRIDAY
Durable Goods for December expected approximately 3.0%; new Home Sales for December expected approximately 1,050,000 annualized.

Caterpillar (CAT) consensus $1.34/$10.5 Billion; Cramer said as goes CAT and its outlook as goes the economy, we’ll see.  As a reminder, they usually give conservative guidance.

Jon C. Ogg
January 22, 2007

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