H-P’s CEO meeting, economic data to also get investors attention
By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) — Investors are expected to keep their eyes on the oil market in the coming week, as the unrest in Libya and the Middle East threatens to lift gasoline prices, and Japan deals with the after-effects of Friday’s massive earthquake.
There will also be a fair amount of U.S. economic data, Congress battling over funding the federal government and the appearance of Hewlett-Packard Co. (HPQ 41.75, +0.02, +0.05%) Chief Executive Leo Apotheker at a company-sponsored “summit” meeting with reporters and analysts to get some of the market’s attention after the weekend.
The impact of Friday’s magnitude-8.9 earthquake, and subsequent tsunami on Japan initially sent crude-oil future prices down as much as $3 a barrel in Friday’s market session. Crude for April delivery (CLJ11 100.59, -2.11, -2.06%) edged back upward to close at $101.16, down $1.54 for the day.
For the week, the Dow Jones Industrial Average (DJIA 12,044, +59.79, +0.50%) gave up 1%. The S&P 500 Index (SPX 1,304, +9.17, +0.71%) was down 1.3% and the Nasdaq Composite Index (COMP 2,716, +14.59, +0.54%) shed 2.5% on the week.
“Oil is going to continue to be in the spotlight,” said Mike Zarembski, senior commodities analyst with OptionsXpress in Chicago. “Initially, when word got out about Japan’s refineries having to shut down, the price of oil dropped.”
Zarembski said that if Japan’s refineries remain shut down, the market could see the country having to import more oil than usual to meet its demands.
The ongoing turmoil in North Africa and the Middle East will continue to impact prices at the gas pump, as fighting rages in Libya, and Saudi Arabia and Bahrain deal with protests of varying levels.
However, Sean Kraus, senior vice president and chief investment officer at Citizens Trust in Pasadena, Calif., said that even with the turbulence in the Middle East, oil is showing some signs of stabilizing at around $100 a barrel, which should calm some fears about crude’s impact on the global economy.
“It seems to be coming back down, along with other commodities, from the peak in February,” Kraus said. “For long-term investors, that’s positive and we feel global expansion can continue at around $100 [a barrel].”
Apotheker’s meet and greet
In addition to the oil watch, tech investors will see what H-P CEO Leo Apotheker has to say at a meeting the company is holding with reporters and analysts on Monday in San Francisco.
Peter Goldmacher, an analyst with Cowen and Co., said expectations for Apotheker’s appearance “are muted” due to Wall Street’s recent poor opinion of H-P’s board and management.
In a research note, Goldmacher said he sees two possible business routes for H-P to take: one is a “me too” approach to building out its high-end IT offerings that leaves it “in a distant third place behind Oracle and IBM”, the other focused on low-cost software offerings.
The U.S. Congress is expected work on another short-term spending bill to keep the government in operation after March 18. Also, economic reports slated for the week include the next statement on the economy from the Federal Open Market Committee, due on Tuesday, housing-starts figures on Wednesday and jobless claims for the week of March 12, which come out on Thursday.
Kevin Schackofsky, co-manager of the Alpine Dynamic Dividend Fund (ADVDX 4.78, +0.02, +0.42%) , said the summit of European nations about the state of the euro and bailouts of member nations could also impact how investors feel about the U.S. markets.
Schackofsky said the main issues involve Germany and what it wants euro nations such as Ireland and Greece to do in order to receive bailout packages.
“The critical thing is can they make a deal?” Schackofsky said. “They [Germany] have the ability and will to lead a bail out, but they do want to exact a price.”
Late Thursday, euro-zone leaders meeting in Brussels produced an agreement on a competitiveness pact calling for far-reaching reforms, according to Dow Jones Newswires. Read more on what's expected from Brussels.
