Here's Why Deere & Company Stock Rallied 14.4% In November But Is Already Losing Ground

The next few weeks will be critical for investors.


They have potential to reset a number of expectations, ranging from trade and economic data to earnings and valuation parameters.

On the economic front, we have a number of reports coming our way this week, which also sees a modest drop-off in the number of earnings reports -- to roughly 500 from just over 540 last week. Of those 500, 65 are S&P 500 companies, and come Friday, we should have quarterly results from 79% of those 500 in hand.

With the federal government open and running, at least for the near-term pending the outcome of congressional efforts to end the border-wall impasse and prevent another government shutdown, we will be able to fill in the blanks on several pieces of missing economic data this week. These include the December as well as January Retail Sales reports, which should put some perspective around the ongoing shift to digital commerce that is a key force behind our Trifecta Stocks position in Amazon (AMZN) .

We'll also get the January reports for both the CPI (Consumer Price Index) and PPI (Producer Price Index) as well as Industrial Production. Those three reports should bring further insight into the favorable economic data received in the recent January ISM Manufacturing report. We will be contrasting the results of those two inflation reports against what we hear early in the week from the NFIB Small Business Optimism Index, which in the last several months has pointed to employers being more willing to pay up to attract much-needed employees.

As we put those pieces of the domestic economic puzzle together and continue to assess the current tone of the domestic economy, we will also face another busy week of corporate earnings, albeit not as frenetic as this past one. These are among the key reports that we'll be digging into as we construct our overall investing mosaic:

-- With Restaurant Brands International (QSR) and Denny's Corp. (DENN) , we'll assessing the impact of higher minimum wages vs. the year-end increase in restaurant sales and price hikes that should raise average ticket sales.

-- We have received reports of declining beer sales, with consumers favoring spirits and wine; now we'll see if Molson Coors Brewing Co. (TAP) has been able to leverage its portfolio to grow market share.

-- As it rides the digital commerce wave, how does Shopify, Inc. (SHOP) see the velocity of that shift in 2019?

-- With Amazon, Alphabet/Google (GOOGL) , Microsoft (MSFT) and Apple (AAPL) rumored to exploring streaming game services, how does Activision Blizzard (ATVI) see this impacting its business?

-- Between 5G and gigabit fiber buildouts that should spur its visual networking forecast, what is Cisco Systems (CSCO) seeing in terms of equipment demand over the coming quarters?

-- Consumers continue to flock to organic and natural products, so is this translating into a product mix shift at International Flavors & Fragrances (IFF) ? If so, does it result in favorable pricing and margins for the company?

-- To what degree are Coca-Cola (KO) and PepsiCo (PEP) seeing pressure on their sugary and diet beverages? Will they continue to buy product companies that will hasten their "better for you" portfolios?

-- Consumers continue to ratchet up debt, and look to stretch their remaining disposable spending dollars. This should augur well for traffic and sales at Tanger Factory Outlet Centers (SKT) .

-- Wallboard and ceilings are a key part of residential and commercial building, which means parsing the 2019 forecast from USG Corp. (USG) .

-- We've seen, at best, mixed outlooks for chip companies this earnings season, and next week we will hear how Nvidia Corp. (NVDA) sees demand from its end markets.

-- Amid renewed uncertainties for U.S.-China trade talks, what is agricultural equipment company Deere & Co.'s (DE) outlook for the core crops -- corn, wheat and soybeans -- that drive farmer demand for its equipment?

This commentary is an excerpt from the Trifecta Stocks Roundup, a weekly feature sent to subscribers of Trifecta Stocks. Click here to learn more about this portfolio, trading ideas and market commentary product.

-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.

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