The Last Week in Review:

The stock market could struggle for the next few months. This doesn't mean there won't be opportunities to make money. Interest rates and inflationary pressures are beginning to make the market turn more bearish. The economic data and corporate earnings should begin to slow as these pressures are digested.

The Fed is going to keep raising rates until growth slows and the overall market will have a hard time making any progress. Therefore investors must stay focused on quality companies that are reasonably valued. In other words, do your homework.

The broad indexes showed little change last week, as investors tried to determine the course of interest rates and inflation. Solid Q1 earnings reports from Dow components helped the Dow add 20 points for the week, raising its year-to-date gain to 6.1%.The NASDAQ however lost 20 points, reducing year-to-date gains to 5.3%, thanks to an 11% sell-off in shares of Microsoft after they missed earnings targets and warned of lower than expected earnings for Q2. The S&P was fairly stable last week and lost less than a point and held on to its year-to-date gain of 5.0%. The Russell 2000 had a 7.5 point decline last week, but continues to hold on to its 13.6% return year-to-date.

The Week Ahead:

Q1 earnings season continues with a large number of companies reporting this week. On Tuesday, Verizon (VZ), Alcan Aluminum (AL), Archer-Daniels (ADM), Emerson (EMR) and Starbucks (SBUX) announce results. Wednesday Procter & Gamble (PG), Time Warner (TWX), Alltel (AT) and Prudential (PRU) will all report their results. On Thursday, Tyco (TYC), DirecTV (DTV) and McKesson (MCK) will report. Homebuilder Toll Brothers (TOL) releases results before the opening bell on Friday. Conferences this week include a Real Estate conference held by Merrill Lynch in New York starting on Tuesday, while Deutche Bank Securities sponsors its 31st Annual Health Care Conference also on Tuesday in Boston. Bank of America holds its two-day 2006 Basic Industries Conference in New York and Morgan Stanley holds a three-day Health Care Conference in Miami, both starting on Wednesday.

Economic reports this week include the widely followed March ISM Index which will be released on Tuesday. Also Tuesday, the U.N. Security Council's five permanent members discuss how to address the Iraq situation. Wednesday March Factory Orders will be announced and on Thursday, Q1 Productivity will be reported, along with April sales from leading retailers. On Friday, the Department of Labor will release its Employment Report for the month of April. Consensus is for 198,000 new jobs to have been created, with the Unemployment Rate expected to be reported at 4.7%.

In summary: Investors need to focus on the continuing earnings reports this week and the Employment Report for the month of April.