By Theresa Sheehan
PRINCETON (SMRA) – The week ahead is a busy one. The stream of
economic data is not that heavy, but there is a lot going on around the
releases, which will cumulate in Friday’s September non-farm payrolls
report.
Four major central banks make their respective routine monetary
policy announcements, and a few Federal Reserve officials will be giving
speeches.
The IMF/World Bank fall meetings take place Friday through Sunday,
and with G7/G20 finance ministers and central bankers usually meeting on
the sidelines. The release of earnings reports for the third quarter
kicks off during the week, with industry leader Alcoa to report on
Thursday.
With the exception of the employment report, none of the economic
data particularly stands out.
The bond market does not close early on Friday in spite of the
upcoming Columbus Day observance on Monday, October 11. However, trading
floors will probably have only skeleton staffs in place once the
employment data is released.
There is a steady stream of economic data releases over the week,
but nothing likely to capture more than passing market interest until
Friday’s release of September data on payrolls and unemployment at 8:30
ET. Early expectations for the report look for no change in August
payrolls, and the unemployment rate to remain at 9.6%.
September is the last month there is likely to be any noticeable
impact from the departure of temporary Census workers. There is also
something of a wild card in how temporary workers at polling stations
will be counted.
Technically they are supposed to be on payrolls at Boards of
Elections, but local governments have not always counted them as such.
This year the IRS has insisted on conformity with tax law, and there may
be sufficient numbers to throw off the seasonal factors for state and
local government payrolls.
Other September economic data related to the labor market include
the Challenger layoff intentions report Wednesday at 7:30 ET, the ADP
National Employment Index at 8:15 ET Wednesday, and the Monster.com
Employment Index in the early hours of Thursday.
Only the ADP data is significant, and it has had difficulty
matching up to the payroll numbers of late due to factors like the
hiring and firing of temporary Census workers and volatility in the
level of unemployment claims.
Other labor market data include the initial jobless claims for the
week ended October 2 Thursday morning, and later at 10:00 ET the Job
Openings and Labor Turnover Survey (JOLTS) for August.
The ISM Non-manufacturing Index for September at 10:00 ET Tuesday
will add to expectations for the upcoming payrolls report in its
employment component, as well as shape perceptions of overall conditions
in the service sector.
The report on Factory Orders for August is out mid-morning Monday,
and will follow the lead of the durable goods report which had a 1.3%
decline in the month. Data on Wholesale Trade for August is set for
release on Friday at 10:00 ET. The inventory numbers in the two reports
will feed into the overall report on Business Inventories to be released
on Friday, October 15.
Same-store sales comparisons for fiscal September will be released
as available on Thursday. Weekly data on retail activity were choppy for
the month, but year-over-year comparisons remained favorable.
The NAR’s Pending Home Sales Index for August at 10:00 ET Monday
will help define the outlook for the housing market for the next few
months. The data is likely to stabilize a bit more after the plunge in
May that followed the end of the homebuyer tax credit program, but it is
unlikely to signal any significant pick up in home buying.
Consumer Credit Outstanding for August at 15:00 ET on Thursday
should be more of the same. Consumers are unwilling to take on new
credit, and lenders are reluctant to make new loans.
Four major central banks have policy announcements on the calendar
for next week. The Bank of Japan governors meet Monday and Tuesday, and
some further stimulus measures are likely to be announced. The Reserve
Bank of Australia’s post-meeting statement is expected in the overnight
period from Monday to Tuesday, and no change is anticipated.
The Bank of England Monetary Policy Committee has a two-day meeting
Wednesday and Thursday, and here also no change is expected. Finally,
the ECB makes its post-meeting comments on Thursday and rates and
current policies are expected to be maintained.
There are a few Fed officials on the public speaking calendar for
the week. On Monday New York Fed Markets Group Head Brian Sack will
address a CFA Institute Conference on “Fixed Income Management 2010″ in
Newport Beach, CA.
Thursday, Dallas Fed President Richard Fisher will be in
Minneapolis, MN to give a luncheon speech to the Economic Club of
Minnesota on the topic of current economic conditions. Kansas City Fed
President Thomas Hoenig will be in Norfolk, NB to address an economic
forum hosted by the Kansas City Fed’s Omaha branch.
Friday, New York Fed President William Dudley will speak to the
Institute of International Finance annual membership meeting in
Washington, DC.
The IMF/World Bank fall meetings will take place October 8-10. As
an adjunct, the G7/G20 finance ministers and central bankers will have
an opportunity to meet.
The next round of coupons will be the final leg of the third
quarter refunding package. New 3-year notes, and reopenings of the
10-year note and 30-year bonds will be announced on Thursday, to be
auctioned on the following Tuesday through Thursday, respectively. The
next refunding will be on Wednesday, November 3.
The third quarter earnings season begins. Typically, the release of
earnings by Alcoa is viewed as the start, and this quarter’s report is
on Thursday. It will be preceded by a few other big names, such as Yum!
Brands on Tuesday. On Wednesday, reports are expected from Costco,
Marriott International, Monsanto, and Wyeth. Thursday’s other reports
include Pepsico.
** Stone & McCarthy Research Associates **
[TOPICS: M$$FI$,M$U$$$,MAUDS$]
