For the week of October 3rd (in conjunction with Econoday)
Earnings season will officially kick off this week with Alcoa’s earnings on Thursday. On the whole, however, it’s a light week in terms of earnings. Economic data will dominate the week’s action particularly Friday’s job report. Let’s take a look at what’s on tap:
Factory Orders 10:00 AM ET
Factory orders edged up 0.1 percent in July, following a 0.6 percent decline in June. The durables component jumped 2.3 percent, led by transportation and by computers & electronics. The latest overall orders number was held back by no change in nondurables orders. More recently, new factory orders for durable goods in August dipped 1.3 percent and will keep overall orders soft for the month.
Factory orders Consensus Forecast for August 10: -0.3 percent
Pending Home Sales Index 10:00 AM ET
ICSC-Goldman Store Sales 7:45 AM ET
Redbook 8:55 AM ET
ISM Non-Mfg Index 10:00 AM ET
The composite index from the ISM non-manufacturing survey for August fell 3 points to 51.5—just a little above the breakeven level of 50. Looking ahead, they are mixed indications. This report’s new orders index also slowed, easing more than 4 points to 52.4, suggesting modest growth ahead for the non-manufacturing sector. More recently, the Chicago PMI rose significantly for September. The Chicago index includes responses from both manufacturing and non-manufacturing sectors.
The bottom line is that the non-manufacturing sector is showing very modest growth but is staying out of negative territory.
ISM non-manufacturing composite index Consensus Forecast for September 10: 52.0
MBA Purchase Applications 7:00 AM ET
Challenger Job-Cut Report 7:30 AM ET
ADP Employment Report 8:15 AM ET
EIA Petroleum Status Report 10:30 AM ET
Chain Store Sales
Monster Employment Index 6:00 AM ET
BOE Announcement 7:00 AM ET
ECB Announcement 7:45 AM ET
Jobless Claims 8:30 AM ET
Initial jobless claims for the September 25 week fell 16,000 to 453,000. The four-week average was down for a fifth straight week, at 458,000 which is lower by a convincing 30,000 from a month ago. Continuing claims fell 83,000 for the September 18 week to 4.457 million. The four-week average of 4.527 million was slightly higher than the month-ago reading.
Jobless Claims Consensus Forecast for 10/2/10: 450,000
EIA Natural Gas Report 10:30 AM ET
Consumer Credit 3:00 PM ET
Consumer credit outstanding contracted $3.6 billion in July, following a 1.0 billion dip the month before, to extend the latest string of declines to six months. For the latest month, revolving credit (mainly credit cards) fell $4.4 billion, offset in part by a $0.8 billion rise in nonrevolving credit (largely auto financing) that got a boost from July’s strength in car sales. We may not get support from the nonrevolving portion in August as motor vehicle sales dipped 0.6 percent for the month.
Consumer credit Consensus Forecast for August 10: -$4.0 billion
Employment Situation 8:30 AM ET
Nonfarm payroll employment in August slipped 54,000 after falling a revised 54,000 in July. A big part of the weakness was seen in the government sector, which still included layoffs of temporary Census workers. Government jobs dropped 121,000 after falling 161,000 in July. For the August drop, 114,000 were due to layoffs of temporary Census workers. In contrast, private nonfarm employment continued to rise, gaining 67,000 in August, following a revised boost of 107,000 the month before. Average hourly earnings improved to 0.3 percent from up 0.2 percent in July. The average workweek for all workers was unchanged at 34.2 hours in July. The market forecast was for 34.2 hours. Turning to the household survey, the unemployment rate came in at 9.6 percent, compared to 9.5 percent in July. Looking ahead, recent initial jobless claims have been slowly trending down, suggesting that private payroll jobs might hold to a modest gain. However, the unemployment rate is still at risk of re-entrants to the labor force outweighing employment gains, boosting the unemployment rate.
Nonfarm payrolls Consensus Forecast for September 10: 0
Private nonfarm payrolls Consensus Forecast for September 10: 85,000
Unemployment rate Consensus Forecast for September 10: 9.7 percent
Average workweek Consensus Forecast for September 10: 34.2 hours
Average hourly earnings Consensus Forecast for September 10: +0.1 percent
Wholesale Trade 10:00 AM ET
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.
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