It's Bright Week, but we do not expect it to be a bright week for the dollar or rising commodity prices, especially oil.
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Bright Week offers the ISM Nonmanufacturing Report, Pending Home Sales, Consumer Credit, Chain Store Sales, RBC Cash Index and Wholesale Trade data. The Fed will release its latest meeting minutes, while the ECB, Bank of England and Bank of Japan will offer new monetary policy. It looks like the dollar will not see new highs, after the EU offered support to member states and thereby also supported the euro. Demand for commodities is also renewing, and prices were on the rise even without a softening dollar. Still, with a weakening dollar, look for new inflation concerns to hold stocks in check.
The start of the Bright work week brings with it the start of the baseball season, as the New York Yankees face the Boston Red Sox at Fenway. In New York, catch the Easter parade down Fifth Avenue.
Markets remain closed in Europe, Australia, Hong Kong, China, and Taiwan for Bright Monday or Easter Monday. President Obama gets the National League season in swing, as he throws out the first pitch at the Washington Nationals home opener against the National Champion Philadelphia Phillies.
We have two important economic reports on tap for Monday, so we hope you did not overdo the lamb chops. At 10:00 AM, look for the ISM NonManufacturing Index for March. Economists surveyed by Bloomberg see the measure rising to 54.0, from 53.0 in February. Since February New Orders activity was solid, an improved reading looks likely for March.
The National Association of Realtors (NAR) will report on February's Pending Home Sales at 10:00 a.m. Barron's notes expectations for a decrease, which agrees with the generally poor housing activity we have reported here over the past few months. A February decline would follow the 7.6% decline in January, as the index dipped to 90.4. However, the First-Time Homebuyers Tax Credit seems to be kicking in, so a rise in sales is more likely.
A slew of overseas economic activity dominates the day's wire. First, look for Australia's central bank to likely raise its cash rate. The Bank of Japan closes out its two-day policy meeting, and so prepare for the BOJ's statement. The Bank of England will begin its meeting. Finally, the World Economic Forum on Latin America kicks off in Cartagena, Colombia.
The American Federal Reserve and Treasury will be active Tuesday as well. The Fed will publish the minutes of its most recent Federal Open Market Committee (FOMC) meeting. Treasury Secretary Timothy Geithner will visit India, where he will introduce a financial partnership with the Indian Finance Minister in New Delhi. At 1:00 PM, Minneapolis Federal Reserve Bank President Narayana Kocherlakota will address the Minnesota Chamber of Commerce in Bloomington, Minnesota.
The International Council of Shopping Centers (ICSC) is due to report on Weekly Same-Store Sales in the premarket. Last week's data covering the period ended March 27 showed a weekly sales gain of 0.6% and year-to-year improvement of 3.2%. Expect a robust rise for the latest week, as this year's Easter holiday falls a week ahead of last year's.
Overseas news will again have a lot to say about the direction of stocks here at home. It seems the EU is having a tough time taming certain member state populations. For some strange reason, the citizenry of Ireland and Sweden are acting out against recent government reins. Ireland's biggest union is scheduled to start a two-day strike against pay cuts at several Dublin hospitals. In Sweden, food workers are expected to also strike for higher pay.
Japan will publish its Current Account for February, with expectations for a narrowing balance. Machine Orders for the same month are seen increasing about 4.1% month-to-month.
The Mortgage Bankers Association reports on Weekly Mortgage Applications in the premarket. Last week's data, covering the period ended March 26, showed modest growth in the Market Composite Index, driven by a 6.8% increase in Purchase Activity. We wrote on the pages of the blog last week that this is a sign the First-Time Homebuyers Tax Credit deadline will indeed have an impact before the end of April. Look for another gain this week, though of greater magnitude.
The Financial Crisis Inquiry Commission begins its public hearing with Alan Greenspan and Citigroup executives testifying until April 9.
At 10:30 AM, look for the EIA's weekly Petroleum Status Report. Last week's data, covering the period ended March 26, showed crude oil inventory increased by 2.9 million barrels. Gasoline stores rose by just 0.3 million barrels. Both stood above the upper limit of the average range for this time of year.
At 12:15, New York Federal Reserve Bank President William Dudley will address The Economic Club of New York. At 1:30, Federal Reserve Chairman Ben Bernanke speaks on "Economic challenges: Past, Present and Future" to the Dallas Regional Chamber. Finally at 2:00 PM, Kansas City Federal Reserve Bank President Tom Hoenig will address the meeting of the Denver branch board of directors in Santa Fe, New Mexico.
At 3:00 PM, the government will produce its Consumer Credit Report for February. January's increased credit of $5.0 billion broke a string of 11 consecutive months of credit crunch. Still, revolving credit (credit cards) declined by $1.7 billion, as potential borrowers are facing tighter scrutiny given recent consumer protection legislation that makes it harder for lenders to make up for weak credit scores with unfair penalties.
President Obama and counterpart Dmitry Medvedev will meet to sign a landmark nuclear arms reduction treaty that will reduce each nation's nuclear arms levels by a third. Tiger Woods makes his return to golf with the start of The Masters in Augusta.
Given the degree of trouble across the pond, both the European Central Bank (ECB) and Bank of England (BOE) are expected to keep interest rates steady in Thursday announcements.
Weekly Jobless Claims are due for the period ended April 3rd. Last week's report offered nothing new, as new benefits filers numbered 439K, and the four-week moving average only moved modestly lower. Economists forecast this week's figure will measure 436K, again not much changed.
Individual retailers will report Chain Store Sales for the month of March starting today. Sales rose 3.7% (ICSC) in February, surprising analysts. March sales may have found some benefit from the earlier falling Easter this year, so another gain could be on tap.
The RBC Cash Index is due at 9:00 AM. March's measure of confidence levels produced a boost of 18.8 points, to 58.2. However, this metric has shown volatility and confidence could easily give way at any moment, given the still high level of unemployment. The stock market recovery and other data should help confidence to hold this month though, in our opinion.
The EIA Natural Gas Report is due at its usual 10:30 AM time slot. Last week's data, covering the period ended March 26, offered an increase in storage of 12 Bcf. Natural gas levels stand a little lower than last year at this time, but higher than the five-year average for this time of year.
At 12:45, Minneapolis Federal Reserve President Narayana Kocherlakota addresses the Helena, Montana, Business Leaders Luncheon. At 4:00 PM, the soon to retire Federal Reserve Vice Chairman Donald Kohn speaks about the economic outlook at the Community Leaders Luncheon at the San Francisco Fed. In the evening, Federal Reserve Chairman Ben Bernanke talks on the topic of "Economic Policy, Lessons from History," to the Center for the Study of the Presidency and Congress's 43rd Annual Alexander Hamilton Awards Dinner, in Washington.
In Asia, look for the South Korean central bank to make its policy announcement after its first meeting with new Bank Governor Kim Choong-soo.
At 10:00 AM, look for the reporting of March's Wholesale Trade Report. Economists forecast March's wholesale inventory rose 0.4%, versus the 0.2% decline in February.
Friday's short list of earnings reports includes Blyth, Inc. (NYSE: BTH), Constellation Brands (NYSE: STZ) and Shaw Communications (NYSE: SJR).
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