By Theresa Sheehan
PRINCETON (SMRA) – Although there are plenty of closely-watched
economic data releases scheduled during week ahead, there are
also numerous Federal Reserve officials out making speeches, as well as
a meeting of Group of 20 finance ministers and central bankers in
Korea.
Among the economic data, the report on housing starts and permits
issued in September at 8:30 ET Tuesday will probably be the most
pertinent to the upcoming FOMC meeting on November 2-3. The dismal state
of the housing market is one of the main factors behind the
consideration of further easing in monetary and credit policy.
Housing starts and permits will probably continue their gradual
comeback in the aftermath of the homebuyer tax credit program, but
levels are still quite low.
The NAHB/Wells Fargo Housing Market Index for October at 10:00 ET
Monday will probably continue to hover near recent readings. The 13 that
held in August and September may improve slightly. Builders may be a
little more optimistic at the prospects of fewer foreclosures coming on
the market in the next few months, and therefore have a better outlook
for the near-term with less supply to compete with.
The Philadelphia Fed’s Business Outlook for October out Thursday at
10:00 ET will help shape up expectations for conditions in the
manufacturing sector in the current month. The Fed’s report on
industrial production and capacity utilization for September at 9:15 ET
Monday should reflect small gains for manufacturing offset by softness
in mining and utilities.
The initial jobless claims data for the week ended October 16 at
8:30 ET Thursday will likely decline after a brief turn upward in the
prior week due to the quarter-end effect. As a quarter draws to a close,
claimants usually delay applying for benefits until the start of a new
quarter when benefits may be higher. This will be the survey comparison
week for October from September, and some decline should be evident.
The BLS September data for mass layoff activity and for state and
regional unemployment will be released 10:00 ET Friday. While government
layoffs continue to dominate large-scale job cuts, this category is
declining after the peak in July. Unemployment data for states and
regions will provide more detail, but probably not contribute much to
the overall knowledge of labor market conditions.
The Conference Board’s Leading Economic Indicator for September at
10:00 ET Thursday should present a more hopeful picture of activity.
Positive contributions are expected from interest rates, claims, money
supply, stocks, permits, plant and equipment, and new orders.
The September TICS data at 9:00 ET Monday will give some details of
demand for U.S. debt and equities abroad.
The release of the Fed’s Beige Book Wednesday at 14:00 ET will take
an anecdotal look at conditions in the 12 Federal Reserve Districts over
approximately the six weeks, from the beginning of September to
mid-October. The tone should be somewhat stronger than it was during the
latter part of the summer.
There are numerous Fed officials on the public engagement calendar
next week. This is the last week before the press blackout period in
advance of the November 2-3 FOMC meeting, and it is expected that the
issue of large-scale asset purchases will be touched on repeatedly.
Most policymakers have already let their positions be known on the
matter, but some adjustments could be made after Chairman Bernanke’s
Friday speech in Boston.
The Bank of Canada is scheduled to make its routine monetary policy
announcement 9:00 ET Tuesday. The Bank has been one of the few raising
rates from historic lows, and the overnight rate now sits at 1.00% after
three 25 basis point moves in the last three meetings. However, further
increases are in doubt. The September 8 statement said, “Any further
reduction in monetary policy stimulus would need to be carefully
considered in light of the unusual uncertainty surrounding the outlook.”
G20 finance ministers and central bankers will meet in Gyeongju,
Korea on Friday and Saturday. One of the issues likely to be discussed
is the prospect of a “currency war.”
Most leaders have dismissed it, and the consensus from the G7
finance ministers meeting was, as Japanese Finance Minister Yoshihiko
Noda said, “that currency moves should reflect economic fundamentals,
and that emerging economies with current account surplus should move
towards a more flexible currency system,” consistent with previous
language.
The Treasury will announce four coupon offerings on Thursday. There
will be a reopening of the most recent 5-year TIPS notes, as well as new
2-, 5-, and 7-year nominal notes. These will auction on Monday through
Thursday, respectively of the following week. This is the last coupon
offering before the quarterly refunding to be announced on November 3,
except for a reopening of 10-year TIPS notes on Monday, November 1.
The third quarter earnings season is picking up steam. Monday sees
reports from Apple, Citigroup, Halliburton, Hasbro, and IBM. On Tuesday,
there are few reports are expected, of which Goldman Sachs and Johnson &
Johnson are probably the biggest names. Reports from Altria, BlackRock,
Delta Air Lines, eBay, Manpower, Morgan Stanley, Netflix, Robert Half
International, Seagate, Stanley Black & Decker, Boeing, United
Technologies, US Airways, and Wells Fargo are expected on Wednesday.
The fast pace of reports continues on Thursday with Air Products,
Amazon.com, American Express, AT&T, Caterpillar, Chipotle Mexican Grill,
Chubb, Eli Lilly, Fifth Third Bancorp, GlaxoSmithKline, Goodrich,
McDonald’s, Nokia, Philip Morris, Reynolds American, Sonoco, Southwest
Airlines, The Travelers, UPS, and Xerox.
The pace slows on Friday, but there are still numerous reports that
include Honeywell, Ingersoll-Rand, Schlumberger, Snap-on, T. Rowe Price,
and Verizon.
** Stone & McCarthy Research Associates **
[TOPICS: M$$FI$,M$U$$$,MAUDS$]
