By Theresa Sheehan

PRINCETON (SMRA) – The week-ahead is a fairly slow one for
economic data. The highlight of the week should be the report on retail
and food sales for April to be released Friday.

Public engagement calendars for Fed officials are somewhat busier,
and the U.S. Treasury will be auctioning off 3- and 10-year notes as
well as 30-year bonds as part of the quarterly refunding.

Monday, May 10:

The Bank of England Monetary Policy Committee makes its routine
monetary policy announcement after a two-day meeting that began Friday,
May 7. The Bank shifted the usual Wednesday-Thursday meeting to
accommodate the timing of the General Election.

Minneapolis Fed President Narayana Kocherlakota will address the
Economic Club of Minnesota on “A Practical Approach to Financial
Re-Regulation.” Although the newest of the District Bank presidents,
Kocherlakota has given a number of speeches on this topic and also on
the challenges in reducing the Fed’s holdings of MBS. He is an alternate
in this rotation of FOMC voters.

Dozens of first quarter earnings reports are expected over the
course of the day. Wal-mart will certainly top the list in market
importance.

Tuesday, May 11:

The ICSC/Goldman-Sachs Weekly U.S. Retail Chain Store Sales
Snapshot will be for the week ended May 8. Compared to a year ago,
measures of retail activity are doing well, but on a week-to-week basis
remain generally sluggish.

Richmond Fed President Jeffrey Lacker will address the 2nd Annual
Piedmont-Triad Economic Development Summit at an event sponsored by The
University of North Carolina at Greensboro, Bryan School of Business and
Economics.

Wholesale Trade data for March will provide the next piece of the
inventory puzzle for the upcoming Business Inventories on Friday, May
14. Inventories for factories were already reported up 0.3%.

Data on Job Openings and Labor Turnover (JOLTS) for March should
follow the recent trends of fewer separations, slightly higher numbers
of openings, and tentative gains in hiring. This would be consistent
with other labor market data that indicates unemployment is creeping
down.

The U.S. Treasury will announce the auction results of the 3-year
notes as part of the quarterly refunding package.

Atlanta Fed President Dennis Lockhart is to deliver welcoming
remarks at the Atlanta Fed’s 2010 Financial Markets Conference, the
topic of which is “Up from the Ashes: The Financial System after the
Crisis.”

Philadelphia Fed President Charles Plosser will moderate a panel on
“Structured Finance.” The description said, “This session explores the
creation of various forms of structured finance, addressing particularly
its role in the recent financial crisis, the future of structured
products, and a possible role for regulation.”

The ABC Consumer Comfort Index for the week ended May 9 is facing
some unsettling news from abroad with worries about Greece and other
sovereign debt problems, unsettling news nearer home with oil spills and
failed terrorist attacks, and higher gasoline prices at home.

First quarter earnings reports include InterContinental Hotels
Group, Toyota, Vivendi, and Walt Disney.

Wednesday, May 12:

Data on the international trade balance for March will help firm up
expectations for the second estimate of GDP in the first quarter 2010,
where net exports were weaker than expected in the advance estimate.
Imports are on the rise, and US exports are not keeping pace.

Boston Fed President Eric Rosengren will moderate a panel on “Too
Big to Fail: What Should We Do?” at the 2010 Atlanta Fed 2010 Financial
Markets Conference.” A description of the panel said, “This discussion
examines the risks of continuing current TBTF and
too-interconnected-to-fail safety nets and various proposals for scaling
them back, including increasing market discipline, achieving orderly
resolution, and reducing spillovers from failure.”

Atlanta Fed President Dennis Lockhart will then give the closing
remarks at the Atlanta Fed conference. Most of Lockhart’s recent
comments have focused on his expectations for a sluggish recovery and
slower than desirable decreases in unemployment. He may have something
else to say about conditions in the financial markets as he sums up the
conference. Certainly the topic of financial system reform will be an
important one for Fed policymakers in the coming months.

The U.S. Treasury will announce the auction results for the 10-year
notes as part of its quarterly refunding package.

St. Louis Fed President James Bullard will discuss the U.S. economy
at an event at the Tennessee Department of Financial Institutions.
Bullard is a voter in the FOMC this rotation, and is generally viewed as
one of the more hawkish in his outlook. He is a supporter of ending “Too
Big to Fail” and has had seems to share the general outlook for a slow
recovery accompanied by only gradual declines in unemployment.

The number of first quarter earnings reports being released are
dropping off rapidly. The highlights for Wednesday are Cisco Systems,
Fortis, ING Groep NV, Macy’s, ThyssenKrupp AG, and Whole Foods.

Thursday, May 13:

Initial jobless clams levels for the week ended May will probably
be consistent with recent trends, and fall a little more, but overall
the levels remain stubbornly high. The psychologically important 400,000
mark has yet to come within reach as claims decline.

The April Import and Export Price Indexes are likely to reflect
some volatility in commodities prices. Oil costs were up, as well as
other commodities like metals and lumber. The value of the U.S. dollar
was little changed from the prior month, and probably will not have much
impact on costs of imports or exports.

Vice Chairman Donald Kohn is to speak at a Carleton University
conference on the economic and financial crisis. His topic will be
“Monetary Policy and Lender of Last Resort.” Kohn is little more than a
month away from his retirement on June 23, 2010.

Minneapolis Fed President Narayana Kocherlakota will be in Altoona,
WI to give a speech to a group of business leaders. Kocherlakota has
been one of the most articulate policymakers on the topic of how to deal
with selling MBS from the Fed’s enormous balance sheet.

The U.S. Treasury will announce the results of the auction of
30-year bonds as part of the quarterly refunding package.

Chicago Fed President Charles Evans will deliver the keynote
luncheon speech to Illinois Wesleyan University Associates.

Earnings reports for the first quarter continue to wind down. The
big names are likely to be Kohls, Nordstrom, Prestige Brands Holdings,
Sony, Stanley Furniture, and Wendy’s/Arby’s Group.

Friday, May 14:

Data on retail and food sales for April will add to expectations
for the economy’s performance in the second quarter 2010. Weekly
measures of retail activity show some modest strength. Warmer weather
probably helped sales of building materials and outdoor supplies, as
well as contributing to generally more vigorous activity. Prices were up
for gasoline. Sales were solid for motor vehicles.

Industrial production and capacity utilization for April should
reflect more robust output for motor vehicles in addition to wider gains
for manufacturing. Utilities production was probably soft during a
period of warmer than usual weather.

The preliminary reading of the Reuters/University of Michigan
Consumer Sentiment Index will capture consumer attitudes during early
May. Consumers appear to be regaining some measure of optimism in regard
to the labor market, although they remain very wary.

Business inventories for March will complete the picture for
inventories with new data on retail stocks. Those for factories and
wholesalers will already be available.

Release of earnings reports for the first quarter continues to
taper off. The big names on Friday should be JCPenny and Mizuho
Financial Group.

** Stone & McCarthy Research Associates **

[TOPICS: M$$CR$,M$$FI$,M$U$$$,MMUFE$]