By Theresa Sheehan

PRINCETON (MNI) – The week ahead is shortened by the Federal
holiday Monday for Presidents Day. While this is not universally
observed, retailers will take the opportunity to extend the weekend and
capture a few more sales through heavy discounting.

Traditionally this is a strong period for electronics when
leftovers from the holidays are moved out in favor of newer — and
hopefully more profitable — models. This is also the last push for
clearing winter merchandise before spring items hit the shelves.

Earnings season is far from over, but this is the last week we will
highlight the release of the larger companies’ reports. At this point
most of the industry leaders will have stated fourth quarter earnings,
and the tone for the season has been well established.

Even without the holiday on Monday, the economic data release
calendar is thin for major numbers. What are likely to prove the
standout are the reports on sales of existing homes and new
single-family housing.

The NAR data on sales of existing homes for January Wednesday at
10:00 ET may show some loss of momentum after the turn of the year, but
probably will not be far off the 4.1 million unit (SAAR) pace in
December. Historically low mortgage rates, affordable prices, and
improvements in the labor market are combining to give some support to
sales. The real challenge in buying an existing property is establishing
a price and getting a mortgage.

Sales of new single-family homes in January at 10:00 ET Friday will
probably show that the pace of sales continues to bump along near the
300,000 level as it has since around May 2010.

However, smaller inventories of existing properties, and new
properties better sized for the current marketplace are helping keep
sales of new construction moving along, and the aforementioned
historically low mortgage rates all offer some potential for increases
in the spring months.

The FHFA House Price Index for December at 10:00 ET Thursday could
eke out another small increase in the index level. Home sales were
stronger towards year-end, and it may have resulted in firmer prices.

The final reading of the Reuters/University of Michigan Consumer
Sentiment Index for February at 9:45 ET Friday probably will not be much
revised from the preliminary 72.5. However, rapid rises in gasoline
prices in the last few weeks could well sap some of the improved
optimism due to gains in the labor market.

Initial jobless claims for the week ended February 18 at 8:30 ET
Thursday will provide the survey week comparison data for February from
January. The overall trend for claims is working towards a lower trend
level near the mid-300,000s. If the comparison week shows a decline from
the prior month, it will raise expectations for another solid employment
report when it is released on Friday, March 9.

This will also be a quiet week for comments from Fed policymakers.
There is nothing currently on the calendar until Saturday, February 25.
On that day the University of Chicago Booth School of Business will hold
its 2012 U.S. Monetary Policy Forum Initiative on Global Markets in New
York.

The morning session will have a panel on monetary policy, housing,
and the recovery that will feature participation from San Francisco Fed
President John Williams and St. Louis Fed President James Bullard.

The afternoon discussion on international fiscal policy challenges
will feature participation from Philadelphia Fed President Charles
Plosser and New York Fed President William Dudley. Bank of Canada
Governor Mark Carney will delivery the forum’s opening remarks.

There are no major central bank routine monetary policy
announcements on the calendar until the first full week in March.

The Treasury will auction new 2-, 5-, and 7-year notes Tuesday,
Wednesday, and Thursday, respectively. All will settle Wednesday,
February 29.

Although the pace of earnings report releases is still quite brisk,
it is harder to find real standouts. Still, there are a few this week
that will be of first importance to markets. Retailers and consumer
foods are among them, particularly industry giant Walmart. The Fannie
Mae and Freddie Mac will also report their respective earnings.

Monday – Choice Hotels International, Federal Home Loan Mortgage
Corporation (Freddie Mac), Federal National Mortgage Association (Fannie
Mae), and Sears Holdings.

Tuesday – Cheesecake Factory, Chesapeake Energy, Chiquita Brands,
Dell, Dollar Thrifty Automotive Group, Kraft Foods, Macy’s, Saks,
Walmart, and Winn-Dixie.

Wednesday – Boston Beer Company, Daimler, Dollar Tree, Hertz Global
Holdings, Hewlett Packard, Limited Brands, and TJX Companies.

Thursday – Ellie Mae, GAP Inc., Healthsouth, KBR, Kohl’s,
Officemax, Royal Bank of Scotland Group, Safeway, and Target.

Friday – Dillard’s, JCPenny, and the Washington Post.

Note: the Overview for the week of February 27 will not be
published until Monday, February 27 due to vacation schedules.

** Stone & McCarthy Research Associates **

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