Last week we finally saw what may be the beginning of the pullback that some have been calling for since Dow 8000. The S&P broke through not only its major trendline but its 50-day Moving Average as well. Though some believe that this recent downward activity is little more than a hiccup on the way to continuation of the larger uptrend, market sentiment certainly appears more hesitant now than it has in recent memory.
In a week that may very well dictate whether the market can sustain its uptrend or experiences a full-blown correction, a handful of consumer companies that are reporting quarterly earnings may help tip the scale, for better or worse.
Mastercard (MA)
MA had a strong October, trading as high as $232 and change after beginning the month in the mid-190’s. This was due in large part to its largest competitor, Visa (Symbol: V), which beat earnings estimates and painted a rosy outlook for the future of credit card transactions early in the month. Both companies are pure plays on transactions, benefiting from the worldwide shift from cash to plastic. Expect a volatile move after MA reports on Tuesday before the bell.
Analyst Estimates (High/Mean/Low): 3.12 / 2.94 / 2.60
Ralph Lauren Corp. (RL)
RL has traded mostly sideways since mid-September and should give us a bit of insight into the state of mid- to high-end retailers when it reports Tuesday before the bell. Though we know from Amazon (AMZN) that Internet retailing has been coming back, the jury is still out on the brick-and-mortar side of the business. RL tested its 50-day Moving Average last week but bounced back up, indicating at least moderate support at current levels.
Analyst Estimates: 1.43 / 1.31 / 1.19
Ambev (ABV)
ABV is the largest producer and distributor of beer, carbonated soft drinks and other non-alcoholic and non-carbonated products in Latin America. It had a fairly strong October, and when it reports on Thursday before the bell, it should give us some insight into the health of the consumer sectors of LATAM and, to a lesser extent, Canada (where it also has operations). ABV’s report may help move the needle, especially in emerging markets such as Brazil, where it is headquartered.
Analyst Estimate (Mean): 2.23
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