For the week of September 27th (in conjunction with Econoday):
Earnings season is just around the corner, but the spotlight will remain on economic data this week. The back half of the week is loaded with market moving reports including GDP, jobless claims, personal incomes & outlays and ISM manufacturing. Let’s take a look at what’s on tap:
Monday – No market moving news.
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 rebounded to 53.5 in August from 51.0 in July. But it was still down almost 10 points from May. The jobs picture is what concerns consumers the most. Consumers were slightly less pessimistic about future employment prospects. Those expecting more jobs in the months ahead increased to 14.6 percent from 14.2 percent. The proportion of consumers expecting an increase in their incomes held steady at 10.6 percent.
Consumer confidence Consensus Forecast for September 10: 52.0
State Street Investor Confidence Index 10:00 AM ET
MBA Purchase Applications 7:00 AM ET
EIA Petroleum Status Report 10:30 AM ET
GDP 8:30 AM ET
GDP growth for the second quarter in the August release was downgraded by the Commerce Department to 1.6 percent annualized from the advance estimate of 2.4 percent. The downward revision was primarily due to a higher net export deficit and a smaller gain in inventories. Also getting downgrades were residential investment and government purchases. Partially offsetting were modest upward revisions to personal consumption and nonresidential fixed investment. Real final sales to domestic purchasers were revised up to 4.3 percent from the initial estimate of 4.1 percent while final sales of domestic product (net exports are included) were revised down to 1.0 percent from the advance figure of 1.3 percent. The GDP price index came at a relatively strong 1.9 percent—primarily due to the technical interaction of imports and exports. The price index for gross domestic purchasers was up only 0.1 percent.
Real GDP Consensus Forecast for third estimate Q2 10: +1.6 percent annual rate
GDP price index Consensus Forecast for third estimate Q2 10: +1.9 percent annual rate
Jobless Claims 8:30 AM ET
Initial jobless claims in the September 18 week, which did not include Labor Day, rose 12,000 to a higher-than-expected 465,000. The prior week, which included Labor Day, was revised 3,000 higher to 453,000. Adjustments factored in a low level of filings for the shortened week and a high level in the following week as government offices catch up on the work. The four-week average of 463,250 was down for the week and was down more than 10,000 from a month ago.
Jobless Claims Consensus Forecast for 9/25/10: 459,000
Corporate Profits 8:30 AM ET
Chicago PMI 9:45 AM ET
The Chicago PMI for August came in at 56.7, down sizably from 62.3 in July but still well above breakeven 50. September, however, may soften as August new orders posted at 55.0, down from July’s 64.6 for the slowest reading of the year.
Chicago PMI Consensus Forecast for September 10: 56.0
EIA Natural Gas Report 10:30 AM ET
Motor Vehicle Sales
Sales of domestic light motor vehicles slipped 3.8 percent August to an annualized 8.3 million from 8.7 million in July. Imports gained 8.8 percent to 3.1 million from 2.9 million in July. Net, consumers and fleet purchasing managers are still heading to the showrooms as total sales of domestics and imports of autos and light trucks for August came in at an annualized 11.5 million units, matching the July pace. If you want to be picky, it was 11.47 million in August, down 0.6 percent from 11.54 million in August. On the margin, sales are holding up. But without a doubt, the latest was sharply lower than the cash-for-clunkers jacked number of 14.2 million in August 2009.
Motor vehicle domestic sales Consensus Forecast for September 10: 8.6 million-unit rate
Personal Income and Outlays 8:30 AM ET
Personal income in July posted a 0.2 percent gain, following no change in June. More importantly, the wages & salaries component rebounded 0.3 percent after slipping 0.1 percent in June. This component would have been even stronger had it not been for a dip in government payrolls from the laying off temporary Census workers. Private industry wages and salaries gained 0.5 percent in July, following a 0.1 percent dip in June. Overall personal consumption increased 0.4 percent in July, following a flat number in June. Headline PCE inflation came in at plus 0.2 percent in July, following two months of down 0.1 percent. The core rate edged up 0.1 percent after a flat reading in June. Looking ahead, the wages & salaries component for personal income should be quite healthy in August as aggregate earnings jumped 0.6 percent in the employment report. Personal spending should be moderately strong as retail sales excluding autos jumped 0.6 percent. However, unit motor vehicle sales were flat in August. PCE inflation likely will be mixed as the headline CPI jumped 0.3 percent while the core CPI was unchanged for August.
Personal income Consensus Forecast for August 10: +0.3 percent
Personal consumption expenditures Consensus Forecast for August 10: +0.4 percent
Core PCE price index Consensus Forecast for August 10: +0.1 percent
Consumer Sentiment 9:55 AM ET
The Reuter’s/University of Michigan’s Consumer sentiment index for the mid-September reading fell 2.1 points to 66.6 to erase the gain made in August. The reading was the lowest since the 66.5 figure for July, a month when sentiment suddenly nose dived. Although the current conditions index for mid-September came in at 78.4 versus 78.3 for final August, the expectations index dropped to 59.1 from 62.9 in August. The latter is at its lowest reading of the recovery but at least somewhat above the recession low of 49.2. With initial jobless claims trending down and stocks up sharply, there could be modest improvement for the final reading for September.
Consumer sentiment Consensus Forecast for final September 10: 67.0
ISM Mfg Index 10:00 AM ET
The composite index from the ISM manufacturing survey came in at a stronger-than-expected 56.3 for a sizable eight tenths gain from July. The reading was well over 50 to signal month-to-month growth and also accelerating growth in the comparison with July. But September may ease a bit as August’s new orders index dipped four tenths to 53.1 for its lowest reading since the manufacturing recovery began early last year.
ISM manufacturing composite index Consensus Forecast for September 10: 54.5
Construction Spending 10:00 AM ET
Construction spending in July fell 1.0 percent, following a 0.8 percent drop in June. The dip in July was led by a 2.6 percent drop in private residential outlays, following a 2.0 percent decline the prior month. Public construction also fell-by 1.2 percent after a 0.6 percent gain in June. In contrast, the private nonresidential component rose 0.8 percent, following a string of declines. Looking ahead, August may show some improvement in the private residential component, based on the unexpected 10.5 percent surge in housing starts for the month.
Construction spending Consensus Forecast for August 10: -0.4 percent
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.