For the week of May 24th (in conjunction with Econoday):
Earnings slow to a trickle this week so economic data will be front and center. Investors are likely to continue honing in on the concerns abroad. Let’s take a look at what’s on tap:
Existing Home Sales 10:00 AM ET
Existing home sales in March rose 6.8 percent to an annual rate of 5.35 million from February’s 5.01 million. Gains were evenly distributed across regions. For the U.S., the year-ago pace improved to 16.1 percent from 6.8 percent in February. Supply fell back to 8.0 months from February’s 8.5. First-timers were 44 percent of total sales, up 2 percentage points from February. Because existing home sales are based on closings (instead of contract signings), we may still see a bump up in sales for April as the end of that month was the deadline for closings to qualify for special tax credits for homebuyers.
Existing home sales Consensus Forecast for April 10: 5.600 million-unit rate
ICSC-Goldman Store Sales 7:45 AM ET
Redbook 8:55 AM ET
S&P Case-Shiller HPI 9:00 AM ET
Consumer Confidence 10:00 AM ET
The Conference Board’s consumer confidence index in April posted its second consecutive strong gain, rising about 5-1/2 points to 57.9. The gain was led by the expectations subcomponent which jumped 7 points to 77.4, reflecting rising optimism over the outlook for business conditions and easing pessimism on the outlook for employment and income. The assessment of the present situation also improved with the index rising more than 3-1/2 points but to a still severely depressed level of 28.6. But we could see some slippage for May, given the stall in improvement in initial jobless claims and the sharp drop in stock prices. Already, we have seen a stall in the mid-May consumer sentiment index which showed only marginal improvement from April.
Consumer confidence Consensus Forecast for May 10: 59.0
State Street Investor Confidence Index 10:00 AM ET
James Bullard Speaks 11:15 AM ET
MBA Purchase Applications 7:00 AM ET
Durable Goods Orders 8:30 AM ET
Durable goods orders in March dipped a revised 1.2 percent after gaining 0.5 percent in February. But the headline number was pulled down by a sharp drop in nondefense aircraft orders—a very volatile series. Excluding the transportation component, however, new durables orders actually spiked a revised 3.7 percent, following a 2.1 percent rebound in February. The March surge in ex-transportation was the biggest since a 5.3 percent spike in August 2005. Looking ahead, key manufacturing surveys suggest a healthy new orders figure for April. The ISM, Philly Fed, and New York Fed manufacturing surveys showed a strengthening in their new orders index for April.
New orders for durable goods Consensus Forecast for April 10: +1.5 percent
New Home Sales 10:00 AM ET
New home sales in March surged 26.9 percent to a 411,000 annual rate, bumping up the year-ago pace to up 23.8 percent from down 8.5 percent in February. The boost in sales whittled supply down and to 228,000 units from 233,000 in February. Relative to sales, homes on the market eased to a 6.7 months’ supply from 8.6 in February. Clearly, the pending expiration of tax credits helped boost sales—transactions had to close by the last day of April to qualify. Since new home sales are based on contract signings instead of closings, there likely will be a sharp drop in April as homebuyers front loaded contract signings in March to assure enough time to close by April 30. Signings in April would risk not qualifying for tax credits.
New home sales Consensus Forecast for April 10: 425 thousand-unit annual rate
EIA Petroleum Status Report 10:30 AM ET
GDP 8:30 AM ET
GDP growth slowed in the first quarter to an annualized 3.2 percent, following a fourth quarter surge of 5.6 percent. But real final sales to domestic purchasers rose an improved 2.2 percent in the first quarter after an anemic 1.4 percent rise the period before. Inflation was still soft as the GDP price index rose an annualized 0.9 percent, following a 0.5 percent increase in the fourth quarter. Analysts will be focusing on revisions to final sales as that is now needed to keep the recovery going.
Real GDP Consensus Forecast for second estimate Q1 10: +3.5 percent annual rate
GDP price index Consensus Forecast for second estimate Q1 10: +0.9 percent annual rate
Jobless Claims 8:30 AM ET
Initial jobless claims jumped 25,000 in the May 15 week to 471,000. The disappointment included a 2,000 upward revision to the prior week. There were no special factors to explain the latest week’s jump. The 471,000 level is the highest in five weeks. But the four-week average of 453,500 does show improvement from mid-April’s 461,000.
Jobless Claims Consensus Forecast for 5/22/10: 450,000
Corporate Profits 8:30 AM ET
EIA Natural Gas Report 10:30 AM ET
Personal Income and Outlays 8:30 AM ET
Personal income strengthened in March, gaining 0.3 percent, following a 0.1 percent rise the prior month. The heavily-weighted wages & salaries component increased 0.2 percent in March after edging up 0.1 percent in February. However, the highlight of the report was that personal spending outpaced income with PCEs posting a 0.6 percent boost in March, following a 0.5 percent jump the month before. The headline PCE price index firmed to up 0.1 percent after no change in February. The core rate also edged up 0.1 percent in March after no change the month before. Looking ahead, personal income in April should be boosted at least by the wages & salaries component as aggregate weekly earnings jumped 0.9 percent for the month, according to the jobs report. PCEs should be moderately healthy as retail sales excluding autos rose 0.4 percent. But the auto component is a question as unit new motor vehicle sales declined but the auto component in retail sales gained—likely a price effect. PCE inflation should be subdued as the April CPI fell 0.1 percent and the core CPI was flat.
Personal income Consensus Forecast for April 10: +0.5 percent
Personal consumption expenditures Consensus Forecast for April 10: +0.2 percent
Core PCE price index Consensus Forecast for April 10: +0.1 percent
Chicago PMI 9:45 AM ET
The Chicago PMI rose 5 points in April to 63.8—moving further above the breakeven level of 50. Strength was centered in new orders which rose more than 3 points to a very strong 65.2, suggesting another robust number for May. Production was also strong at 63.1 for a more than 2-1/2 point gain.
Chicago PMI Consensus Forecast for May 10: 62.0
Consumer Sentiment 9:55 AM ET
The Reuter’s/University of Michigan’s Consumer sentiment index for mid-May rose 1.1 points to 73.3, showing strength relative to April but remained down compared to March and February when the index in both months came in at 73.6. A recent firming in initial jobless claims and a plunge in stock prices could bump down consumer sentiment for May’s final reading.
Consumer sentiment Consensus Forecast for final May 10: 73.3
Farm Prices 3:00 PM ET