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For the week of September 13th (in conjunction with Econoday):

It’s a moderately heavy week on the news front.  We’ll get a trickle of important earnings including Best Buy and FedEx.  We also have important inflation reports, retail sales, industrial production and several local manufacturing reports.  Let’s take a look at what’s on tap:

Monday –

Treasury Budget 2:00 PM ET

The U.S. Treasury monthly budget report for July showed a deficit of $165.0 billion compared last July’s $180.7 billion. The fiscal year-to-date deficit came in at $1.20 trillion vs. $1.42 trillion the same time last year. Tax receipts are coming up short of estimates but are being offset by Federal Reserve remittances, which are at a year-to-date $61 billion vs. $21 billion a year-ago. Looking ahead, the month of August typically shows a deficit for the month. Over the past 10 years, the average deficit for the month of August has been $71.1 billion and $89.6 billion over the past five years.  The August 2009 shortfall came in at $103.6 billion.

Treasury Statement Consensus Forecast for August 10: -$95.0 billion

Tuesday – Best Buy (BBY) reports before the bell and will likely set the tone. 

ICSC-Goldman Store Sales 7:45 AM ET

Retail Sales 8:30 AM ET

Retail sales in July rebounded 0.4 percent, following a 0.3 percent decrease in June.  However, a large part of the strength came from the auto component.  Excluding autos, sales gained a more modest 0.2 percent, following a 0.1 percent downtick in June.  Certainly, the boost in auto sales was a positive, but the other source of strength – a spike in gasoline sales – likely was lifted by higher prices rather than higher demand. Without the jump in gasoline sales, consumer spending was soft. Sales excluding autos and gasoline slipped 0.1 percent, following a 0.2 percent boost in June.  Looking ahead, unit new motor vehicle sales in August were down 0.6 percent.  But price changes could overwhelm such a modest unit change—either bumping that up to a gain in the retail sales report or making the drop larger.  And chain store sales were somewhat favorable.

Retail sales Consensus Forecast for August 10: +0.3 percent

Retail sales excluding motor vehicles Consensus Forecast for August 10: +0.4 percent

Redbook 8:55 AM ET

Business Inventories 10:00 AM ET

Business inventories rose 0.3 percent in June while business sales dropped 0.6 percent. Inventories for the retail component jumped 0.8 percent but reflected a 3.2 percent build for autos & parts. For this component, the build was necessary given strong incentive-driven sales evident July retail sales. Excluding autos, retail inventories were unchanged.  Looking ahead, factory inventories jumped 1.0 percent in July while wholesaler inventories increased 1.3 percent, indicating overall inventories are likely to be up sharply for the month.

Business inventories Consensus Forecast for July 10: +0.6 percent

Wednesday –

Empire State Mfg Survey 8:30 AM ET

The Empire State manufacturing index in August was positive at 7.1, rising 2 points from July.  But details suggest slowing ahead, indicating that September may not be as strong as August. The new orders index fell into negative territory for the first time in more than a year, dropping to minus 2.7 from plus 10.1 in July. The unfilled orders and shipments were also negative.

Empire State Manufacturing Survey Consensus Forecast for September 10: 5.0

Import and Export Prices 8:30 AM ET

Industrial Production 9:15 AM ET

Industrial production in July jumped 1.0 percent, following a revised 0.1 percent down tick in June.   By components, manufacturing posted a 1.1 percent comeback, following a 0.5 percent decline in June. Rounding out industry group components for July, utilities output was up 0.1 percent while mining advanced 0.9 percent.  One sector that clearly is holding its own and even strengthening is the auto sector.  Assemblies of autos and light trucks jumped to an 8.4 million unit pace in July from 7.4 million the month before.  Capacity utilization improved to 74.8 percent in July from 74.1 percent the prior month.  Looking ahead, warning signs are mixed on August output.  Production worker hours were unchanged in August in the employment situation.  The ISM manufacturing index came in modestly positive at 56.3 (breakeven of 50).  Meanwhile, key regional indexes were on opposite sides of breakeven with Empire State at 7.1 and Philly Fed at negative 7.7 (breakeven of zero for both).

Industrial production Consensus Forecast for August 10: +0.2 percent

Capacity utilization Consensus Forecast for August 10: 74.9 percent

EIA Petroleum Status Report 10:30 AM ET

Thursday – FedEx (FDX) reports earnings before the bell.   Oracle (ORCL) reports after the close.

Producer Price Index 8:30 AM ET

The producer price index in July rebounded 0.2 percent, following a 0.5 percent fall in June. At the core level, the PPI gained 0.3 percent, following a 0.1 percent uptick in June.  For the latest month, energy costs posted a 0.9 percent decrease. Meanwhile, food prices jumped 0.7 percent. Bumping the core rate up were notable price gains for light trucks, autos, and pharmaceuticals.

PPI Consensus Forecast for August 10: +0.3 percent

PPI ex food & energy Consensus Forecast for August 10: +0.1 percent

Jobless Claims 8:30 AM ET

Initial jobless claims fell substantially in the September 4 week, dropping 27,000 to 451,000. This is the lowest level since July and the second lowest since May. The four-week average fell nearly 10,000 to 477,750 and is only slightly higher than a month-ago.  Continuing claims showed only fractional change for a second week, at 4.478 million in data for the August 28 week with the four-week average at 4.488 million. But there is a significant caveat regarding the improvement in initial claims—it may have been partially due to leading into a holiday weekend.  Workers laid off that week may have waited to file a claim until the next week. If there is not a significant bounce in claims for the September 11 week, that news will be confirmation that the September 4 drop was mostly real.

Jobless Claims Consensus Forecast for 9/11/10: 455,000

Current Account 8:30 AM ET

Treasury International Capital 9:00 AM ET

Philadelphia Fed Survey 10:00 AM ET

The general business conditions index of the Philadelphia Fed’s Business Outlook Survey for August fell to minus 7.7 from plus 4.1 in July to indicate month-to-month contraction in business activity.  Looking ahead, prospects are not good for September in the mid-Atlantic. The new orders index was in negative territory for the second month in a row, posting at minus 7.1 and worsening from July’s minus 4.3.  Also, unfilled orders extended a run of declines.

Philadelphia Fed survey Consensus Forecast for September 10: 3.8

EIA Natural Gas Report 10:30 AM ET

Friday –

Consumer Price Index 8:30 AM ET

The consumer price index in July rebounded 0.3 percent, following a 0.1 percent decline in June. Excluding food and energy, the CPI eased to a 0.1 percent gain after a 0.2 percent boost in June.  By components, energy increased 2.6 percent, following a 2.9 percent drop in June. Food prices dipped 0.1 percent after being flat the prior two months.  Within the core, shelter costs rose only 0.1 percent for the fourth month in a row.

CPI Consensus Forecast for August 10: +0.3 percent

CPI ex food & energy Consensus Forecast for August 10: +0.1 percent

Consumer Sentiment 9:55 AM ET

The Reuter’s/University of Michigan’s Consumer sentiment index worsened in late August,  dropping seven tenths from the mid-month reading to a final August reading of 68.9.  Because the survey sample is about evenly divided between the first half of the month and the second half, the implied reading for the second half of the month is 68.2, barely ahead of July’s final reading of 67.8. Weakness the last half of the month was centered in expectations.

Consumer sentiment Consensus Forecast for preliminary September 10: 70.0

Quadruple Witching

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