Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The government shutdown and debt ceiling debate have most stock market investors laser-focused on large-scale economic issues and their potentially cataclysmic impact on the markets and the economy. The Dow Jones Industrials (DJINDICES:^DJI) are reflecting ever-changing assessments of whether lawmakers will resolve the crisis favorably, with opening losses of 100 points giving way to a substantial recovery, with the Dow down just 20 points as of noon EDT as ongoing negotiations continue.
Yet the Dow's earnings season starts in earnest this week, with almost a third of the Dow's components reporting. Tomorrow morning, we'll see reports from Coca-Cola (NYSE:KO) and Johnson & Johnson (NYSE:JNJ). Then, tomorrow afternoon, Intel (NASDAQ:INTC) becomes the first of the Dow's tech stocks to report this season.
Coca-Cola has a lot at stake in this quarter's report as it attempts to recover from a poor second quarter that saw short-term impacts like bad weather conditions and longer-term weakness in its core carbonated-drink business. Coke's 2020 Vision strategic plan relies on strength in emerging-market economies, seeing them as having high growth potential. But even some of those nations are looking seriously at measures to discourage sugary-drink consumption. If Coca-Cola can't see a recovery in its long-flagging North American market, trouble around the world could cause a big hit to the drink giant's prospects.
Investors will also eagerly await Johnson & Johnson's latest reading on the health care industry. J&J's diversified combination of pharmaceuticals, health-related consumer goods, and medical devices offers unique insight into the health of all three major segments. In particular, though, the drug space has had the most growth promise for J&J, yet it is also most likely to show volatile changes from quarter to quarter based on changing sales of new products and competition from potential adversaries. J&J might also need to respond to calls from institutional investors to break up the company in efforts to unlock shareholder value.
Lastly, Intel desperately needs to build on its latest mobile-related victories in order to sustain positive momentum and demonstrate its ability to compete in the mobile market. The company's purchase of Fujitsu Semiconductor Wireless should help it become a stronger player in mobile by boosting its ability to provide LTE connectivity within its chip offerings. Intel has also come out with several new chip lines, ranging from its tiny Quark chip to other products aimed at meeting the rising demand for cost-effective smartphones in emerging markets. If Intel can get developers to jump on board with its latest chips, the semiconductor giant could keep things moving forward.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Coca-Cola, Intel, and Johnson & Johnson. The Motley Fool owns shares of Intel and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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