EmailThe S&P 500 increased 0.1% last week. It is a miniscule gain at first glance, yet it factors big from an historical standpoint in that it marked the seventh straight weekly gain for the S&P 500. According to a CNBC report, the last time the S&P 500 started a year with seven straight weekly gains was 1967.
The bid for an eighth straight week of gains begins today and the early bias is positive.
The S&P futures are trading 0.2% above fair value, with gains in European markets and additional merger speculation providing a foundation of support.
Germany (+1.2%) is a foreign standout following a report there showing investor sentiment hit its highest level since April 2010. The ZEW Sentiment Index reached 48.2 in February. That was well ahead of the 31.5 reading for January and a Reuters consensus estimate of 35.0.
The ZEW report has unleashed some animal spirits in Europe where most major bourses are up at least 1.0%.
On the heels of the Heinz (HNZ) buyout announcement last week, there were reports over the weekend that Office Depot (ODP) and OfficeMax (OMX) are exploring an all-stock merger.
M&A news tends to excite the market, but the real world implication of a tie-up between the two companies is that it is likely to lead to job losses given the need to consolidate overlapping stores.
Both stocks are trading sharply higher in premarket action.
The retail sector will be a closely-watched sector this week with Wal-Mart (WMT) due to report its quarterly results before the open on Thursday. Wal-Mart was a center of attention on Friday following a Bloomberg article discussing internal emails among Wal-Mart executives that talked about February sales getting off to a very poor start.
Wal-Mart downplayed the tone of the emails; nonetheless, it was enough to highlight the issue of rising gas prices and the higher payroll tax as big headwinds for consumers.
Dell (DELL) will report after today's close. Its report will also be closely watched for insight on PC sales trends, as well as for information that could affect the deal to take the company private.
Express Scripts (ESRX) and Medtronic (MDT) reported this morning. The former company checked in with results that were in-line with the Capital IQ consensus estimate while the latter company topped the Capital IQ consensus estimate by two cents.
The NAHB Housing Market Index for February (Briefing.com consensus 48; prior 47) is the lone economic release today. Results will cross the wires at 10:00 a.m. ET. The Housing Starts and Existing Home Sales report follow later in the week along with the PPI, CPI, and Leading Indicators reports.
The FOMC Minutes from the January meeting will be released on Wednesday. The market will be keenly interested to see if there is any notable leaning to tightening monetary policy sooner rather than later and will probably read too much into any hawkish-sounding views.
