This week brings several important economic events, including the Federal Open Market Committee (FOMC) meeting and policy decision Tuesday. You will not want to miss the Treasury Budget, International Trade, Retail Sales and Consumer Sentiment readings either.
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This Week: FOMC, International Trade, Retail Sales Key
With no economic reports scheduled for Monday, most will ease into the summer week. The day's corporate news schedule highlights presentations by EMC (NYSE: EMC) and Citrix Systems (Nasdaq: CTXS) at the Pacific Crest Securities Technology Leadership Forum. The day's earnings schedule highlights reports from King Pharmaceuticals (NYSE: KG), Tyson Foods (NYSE: TSN), Scripps Networks (NYSE: SNI), Acadia Pharmaceuticals (Nasdaq: ACAD), Anika Therapeutics (Nasdaq: ANIK) and Avi BioPharma (Nasdaq: AVII).
Tuesday's news will key on the Federal Open Market Committee (FOMC) meeting, a one-day version of it this time around. Thus, the day will result in a decision by the Fed men. The market is hopeful Bernanke and crew will produce some sort of expansionary magic, and so if the meeting only results in talk of potential action, then stocks should take a hit. The market might also benefit from some sort of follow through here by the Fed as well. Look for the FOMC Announcement at 2:15 PM ET.
There will be plenty of news ahead of the Fed release, including the government's Productivity and Costs Report. The premarket release covering activity in the second quarter is expected to show Nonfarm Productivity stayed put in Q2, with no change from Q1 2010. Unit Labor Costs are expected to have increased though, by 1.5%. Q1 Productivity increased 2.8%, while ULC declined 1.3%.
Surely Bloomberg Radio will have Bill Dunkelberg on for the release of the NFIB Small Business Optimism Index Tuesday morning. We are a fan of Bill's here at the blog, since he was the Dean of Temple's University's business school and presided over The Greek's undergraduate graduation ceremony there. He gave a great speech I'll never forget. Readers may have interest in our old report, "Small Business: The Little Engine that Could," which covers both Bill and small business.
Wholesale Trade will be reported at 10:00 AM ET. The consensus of economists sees June Wholesale Trade Inventory increasing 0.4%, as compared to May's 0.5% monthly increase.
The International Council of Shopping Centers (ICSC) data for the period ended July 31 showed same-store sales fell 0.1% week-to-week. Sales were 3.9% higher compared to the prior year period.
In DC town, Congress will be up to something other than the sanctioning of its members. The House considers a bill to provide another $26 billion in aid to states. Colorado and Georgia will be holding primary votes as well, and Linda McMahon of WWE (NYSE: WWE) fame is seeking a role to play in Connecticut.
Overseas, the Bank of Japan (BOJ) closes out its own meeting Tuesday. There is some speculation that the BOJ might move on the strengthening yen via monetary policy easing. The neighboring Chinese will be reporting on economic activity, including inflation and exports.
The corporate news schedule includes Akamai's (Nasdaq: AKAM) presentation to the Pacific Crest Securities conference. Honeywell (NYSE: HON) and Avery Dennison (NYSE: AVY) will both present to the Jefferies & Co. Global Industrial and A&D Conference. The earnings schedule highlights news from Walt Disney (NYSE: DIS), CareFusion (NYSE: CFN), AirCastle (NYSE: AYR), Apollo Commercial Real Estate (NYSE: ARI) and Applied Industrial Technologies (NYSE: AIT).
Expect to hear a lot about the budget on Wednesday, since the government will issue its Treasury Budget Report for the month of July at 2:00 PM ET. Bloomberg's consensus of economists shows expectation for a monthly deficit of $170 billion for July. That will follow June's $68.4 billion deficit. June's result took the year-to-date deficit to $1.004 trillion, which in comparison to last year's $1.086, ain't bad?
International Trade also gets a look see on Wednesday at 8:30 AM. Despite a counter impact from petroleum goods, the trade gap widened to $42.27 billion in May on strong imports; though exports also increased. Economists expect the deficit to have expanded modestly further in June, to $42.35 billion.
The Mortgage Bankers Association reports on mortgage application activity weekly. Last week's report covering the period ended July 30 showed the Market Composite Index increased 1.3%. Mortgage rates backed down last week, taking the average contracted rate on 30-year fixed rate mortgages down to 4.6%, from 4.69% the week before. The Refinance Index showed benefit, rising 1.3%. Purchase activity also gained, as the Purchase Index rose 1.5%.
The EIA will post its Weekly Petroleum Status Report at 10:30 as usual. While inventory activity has varied week to week, both crude oil and total motor gasoline inventory remain above the upper limit of the average range for this time of year.
In corporate news, Rockwell Collins (NYSE: COL) presents at the Jefferies & Co. Conference. The big EPS releases come from Macy's (NYSE: M), Cisco Systems (Nasdaq: CSCO), Computer Sciences (NYSE: CSC), Advanced Life Sciences (Nasdaq: ADLS), Aegean Marine Petroleum (NYSE: ANW) and AirMedia Group (Nasdaq: AMCN).
Weekly Initial Jobless Claims kick off your Thursday. Last week's report covering the period ended July 31, produced an increase of 19K claims, to a total of 479K. The four-week moving average remained troubling, and it got worse, rising 5,250 last week to 458,500. Economists are looking for a reading of 460K this week, which would only nudge the average higher.
The Import/Export Prices data for July are due for release at 8:30 AM. Looking back at June's data, export prices fell 0.2% while import prices fell 1.3%. Excluding volatile energy prices, export prices still fell, and prices of imported finished goods also dipped, which should be attributable to the stronger dollar. Economists are looking for a 0.4% increase in import prices for July.
The EIA reports on natural gas inventory at 10:30 AM ET. The latest report for the period ended July 30 showed natural gas stores increased by 29 Bcf. Natural gas stocks were 221 Bcf above the five-year average for this time of year.
When the FOMC meeting is through, Fed governors hit the speaking tour. At 12:30 Thursday, look for Governor Elizabeth Duke to speak on the Community Reinvestment Act in Chicago.
Four reports flood your Friday morning. At 8:30, in the premarket, look for the Consumer Price Index (CPI)Report. Economists expect the Headline CPI to have increased 0.2% month-to-month in July. That compares against June's 0.1% price decline. The Core CPI, excluding food and energy prices, is expected to have risen by 0.1% in July. The Fed will have already taken some sort of action or not ahead of this report, but it will still have its eyes keenly attuned to the data here for signs of price deflation.
Retail Sales are due for the month of July at 8:30 AM. After falling by 0.5% in June, economists expect a bounce of 0.5% in July. When excluding autos, retail sales should have risen by 0.2%, according to economists.
At 9:55 AM ET, look for the Consumer Sentiment reading from the University of Michigan/Reuters. The final reading for the month of July showed a modest increase in the index, to 67.8; this occurred after a sharp drop in confidence before that. Economists are looking for a reading of 69.0 this time around.
At 10:00 AM ET, look for Business Inventories for the month of June. After increasing by 0.1% in May, business inventories are seen increasing by 0.2% in June.
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