For the week of August 16th (in conjunction with Econoday):
Earnings will be heavy with retailers this week. We could get a better idea of how well the consumer is handling the difficult economy. In addition we’ll get a number of important economic reports. Let’s take a look at what’s on tap this week:
Monday – Lowes (LOW) reports earnings before the bell.
Empire State Mfg Survey 8:30 AM ET
The Empire State manufacturing index reported an abrupt slowdown in growth for July, falling nearly 15 points to 5.08. However, this was still above breakeven of zero and reflected modest growth. Looking ahead, the July new orders index also slowed—to 10.13 from 17.53 in June. This indicates moderate growth for new orders and a likely modestly positive Empire State index for August.
Empire State Manufacturing Survey Consensus Forecast for August 10: 8.0
Treasury International Capital 9:00 AM ET
Housing Market Index 10:00 AM ET
Tuesday – Home Depot (HD) and WalMart (WMT) report earnings before the bell.
ICSC-Goldman Store Sales 7:45 AM ET
Housing Starts 8:30 AM ET
Housing starts fell again in June as homebuilders are still trying to figure out how to balance inventories to meet expected sales after the end of expired tax incentives. Homebuilders again slowed the pace of ground breaking as housing starts in June declined 5.0 percent after a 14.9 percent plunge in May. Multifamily starts plunged 21.5 percent in the latest month as the single-family component only slipped 0.7 percent. But we could get a little bounce in July for starts as housing permits rebounded a revised 1.6 percent in June (originally 2.1 percent), following a 5.9 percent drop in May.
Housing starts Consensus Forecast for July 10: 0.565 million-unit rate
Producer Price Index 8:30 AM ET
The producer price index fell 0.5 percent in June, following a 0.3 percent drop in May. Lower food costs were the main reason for the June dip but a decline in energy costs also helped. At the core level, the PPI eased to 0.1 percent from a 0.2 percent boost in May. Looking ahead, the headline number for July will likely rebound on higher energy costs. We have already seen energy or petroleum prices jump in July’s CPI and in import prices.
PPI Consensus Forecast for July 10: +0.2 percent
PPI ex food & energy Consensus Forecast for July 10: +0.1 percent
Redbook 8:55 AM ET
Industrial Production 9:15 AM ET
Industrial production in June edged up 0.1 percent, following a 1.3 percent gain the prior month. But there was some false strength in the latest number. The bump up in output was led by a 2.7 percent surge in utilities output—likely weather related. In contrast, manufacturing fell 0.4 percent in June, following a 1.0 percent jump in May. Much of the manufacturing decline was due to a drop in auto assemblies. Overall capacity utilization was unchanged at 74.1 percent in June. Looking ahead, we should see a rebound in the manufacturing component of industrial production as production worker hours rebounded 0.5 percent in July.
Industrial production Consensus Forecast for July 10: +0.6 percent
Capacity utilization Consensus Forecast for July 10: 74.5 percent
Wednesday –Target (TGT) and Deere (DE) report earnings.
MBA Purchase Applications 7:00 AM ET
EIA Petroleum Status Report 10:30 AM ET
Thursday –HP (HP) reports earnings.
Jobless Claims 8:30 AM ET
Initial jobless claims for the August 7 week rose 2,000 to 484,000 – the highest level since February. The four-week average, up a steep 14,250 to 473,500, is also the highest since February. In a partial offset, continuing claims fell 118,000 in data for the July 31 week. The four-week average fell 64,000 to 4.519 million.
Jobless Claims Consensus Forecast for 8/14/10: 480,000
Leading Indicators 10:00 AM ET
The Conference Board’s index of leading indicators fell 0.2 percent in June. This was the second dip in three months as May had rebounded 0.5 percent after slipping 0.1 percent in April. The factory workweek was the single biggest negative for the report followed by vendor performance. On the upside, the interest rate spread was the strongest component with a 0.32 percent contribution to the overall index’s monthly change. The index of coincident economic indicators also lost strength, slowing to unchanged in June following a run of gains.
Leading indicators Consensus Forecast for July 10: +0.1 percent
Philadelphia Fed Survey 10:00 AM ET
The general business conditions index of the Philadelphia Fed’s Business Outlook Survey eased to 5.1 in July indicating a slower rate of growth than June’s 8.0 reading. Breakeven is zero instead of 50 as with the ISM reports. But there is a possibility of decline in August as the new orders index fell to minus 4.3 to mark an end to a year long string of growth.
Philadelphia Fed survey Consensus Forecast for August 10: 7.0
EIA Natural Gas Report 10:30 AM ET
Friday –No market moving news.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.