This Week's Pact Between Friends
The Employment Situation Report falls on the Friday before Labor Day weekend. That creates quite a predicament. Who in their right mind would leave their trading desk early in such a situation? But, what if we made a little pact? Nobody trades after 1 PM! Can I count on you?
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This Week's Pact
Oh who am I kidding?! Everybody knows The Greek hasn't been able to vacation for five years now. How much do you think bloggers really make anyway? At this point, you all must be well-aware of the potato famine on the Upper East Side right? Do you think I drink Natural Ice beer for the taste? Do you think I would pay for graphics this bad? Just kidding... I'll catch you on Shelter Island (more like the homeless shelter). Save the mojitos, stock picks and cans of beans for me. I might be a little late, while I enjoy the arbitrage opportunity that your empty trading desks avail to me, or as I rob your empty trading desks (or as I write another prescient report for free). Do I sound bitter? Have me with your tequila then.Monday
Personal Income & Outlays were reported Monday for the month of July. Income increased 0.1% month-to-month, while spending rose 0.4%. The Core PCE Price Index, the Fed's favorite inflation gauge, increased 0.1%, in line with expectations.
Markets in the UK were closed Monday. St. Louis Fed President James Bullard addressed a group Monday afternoon. Yeah, you get the picture. The most exciting thing about Monday was that it was Warren Buffet's 80th birthday, but all his favorite holdings spoiled the party.
Catch the replay of the conference call regarding Sanofi-Aventis' non-binding offer to acquire Genzyme (Nasdaq: GENZ). BioLase Technology (Nasdaq: BLTI) held a conference call to discuss its corporate restructuring. The earnings schedule offered news from Astrotech (Nasdaq: ASTC), Donaldson (NYSE: DCI), Elbit Imaging (Nasdaq: EMITF), Empressa Nacional del Petroleo (Nasdaq: ENAP), KU6 Media (Nasdaq: KUTV), Marshall Edwards (Nasdaq: MSHL), Origin Agritech (Nasdaq: SEED), Partner Communications (Nasdaq: PTNR), PowerShares Dynamic Software (PCX: PSJ), Prospect Capital (Nasdaq: PSEC), SWS Group (NYSE: SWS), Winn-Dixie (Nasdaq: WINN) and a few more.
Tuesday
Tuesday is a busy day, with six total reports scheduled. Look for the S&P Case Shiller Home Price Index at 9:00 AM. We expect that eventually the metrics covering home pricing will show a double-dip has begun in real estate. Perhaps this latest data for the month of June might be the one to set the blaze.
Look for the latest same-store sales figures from the International Council of Shopping Centers (ICSC) Tuesday morning. Last week's report covering the period ended August 21 showed sales fell 0.4%. Warning sirens sounded on the news, and even the year-over-year comparison only gained 2.3% last week. Redbook concurred, with the yearly gain decelerating (trend) to a +2.6% rate.
The Chicago Purchasing Managers Index is due for report at 9:45 AM. Economists see the Chicago PMI's Business Barometer Index marking 56.0 in August. That would spot a drop from July's spike up to 62.3. Economists were likewise looking for 56 last month. New Orders came in strong last month too, so the economists' consensus is in question. That said, the highest economists' estimate sets the ceiling at 58.5 (floor at 54.1).
At 10:00 AM, the Conference Board will report on Consumer Confidence again. The measure fell to 50.4 in July, and economists are looking for a similarly dismal 51.0 in August.
State Street (NYSE: STT) reports on Investor Confidence at 10:00 AM as well. Last month's read saw global confidence increase 4.8 points to 96. Investor confidence improved in North America as well, rising 5.4 points to 99.9.
At 2:00 PM, the Federal Open Market Committee (FOMC) posts its meeting minutes for its latest gathering. The August 10 meeting purportedly featured some heated debate over starting up Bernanke's helicopter. This should make for an interesting read, as investors mull over the need for more help from the Fed.
Canada reports its Q2 GDP figures Tuesday. This news might garner some attention for a change, as the market looks for signs of North American weakness. Oh Canada... I'll stop there, while I still have places to stay in BC and Toronto.
Morgan Stanley's (NYSE: MS) Global Industrials Conference kicks off Tuesday. Look for presentations from Boeing (NYSE: BA), Honeywell (NYSE: HON), Northrop Grumman (NYSE: NOC), Danaher (NYSE: DHR) and Goodrich (NYSE: GR). H.J. Heinz (NYSE: HNZ) has a shareholders meeting scheduled.
Look for EPS from ABM Industries (NYSE: ABM), Accuray (Nasdaq: ARAY), Applied Signal Technology (Nasdaq: APSG), Baldwin Technology (AMEX: BLD), Bank of Nova Scotia (NYSE: BNS), China Gerui Advanced Materials (Nasdaq: CHOP), Concurrent Computer (Nasdaq: CCUR), CPI Corp. (NYSE: CPY), Culp (NYSE: CFI), Danaos (NYSE: DAC), Dollar General (NYSE: DG), DSW (NYSE: DSW), Energy Conversion Devices (Nasdaq: ENER), Envestnet (NYSE: ENV), Funtalk China (Nasdaq: FTLK), Isle of Capri Casinos (Nasdaq: ISLE), K-SEA Transportation (NYSE: KSP), L&L Energy (Nasdaq: LLEN), Lukoil (OTC: LUKOY.PK), Polski Koncern ADR (OTC: PSKNY.PK), Silicon Graphics (Nasdaq: SGI), Chemical & Mining Co. of Chile (NYSE: SQM) and Unify (Nasdaq: UNFY).
Wednesday
Wednesday starts the monthly employment data parade. Challenger's Job-Cuts Report comes first in the early AM hours. There is no forecast available for this data. Last month's report for July showed announced corporate layoffs totaled 41,676, and compared against June's 39,358.
The market will be more interested in ADP's Private Employment Report for August. Once again, there is no economists' consensus forecast for the data-point. It will instead be compared against forecasts of the Labor Department's data, which will be released Friday. July's report showed private employment increased by a net 42,000, or rather it estimated it did.
Look for the Mortgage Bankers Association's Weekly Applications Survey in the premarket. Last week's report covering the period ended August 20 showed the Market Composite Index of mortgage applications increased 4.9%. The gains came mostly on the 5.7% increase of the Refinance Index, which benefited from lower contracted mortgage rates. On average, fixed rate mortgage rates for 30-year and 15-year mortgages fell to 4.55% (from 4.6%) and 3.91% (from 3.99%), the lowest in recorded history (1990). Purchase Applications increased 0.6%.
Look for ISM's Manufacturing Index data at 10:00 AM. The report for August is seen showing the index easing further this month, to 53.0, from 55.5 in July. And the manufacturing slide slips on...
Construction Spending will be reported at 10:00 AM as well. This data covering the month of July is expected to show spending fell 0.6%, as activity suffers in the absence of the housing tax incentive.
Motor Vehicle Sales will be reported throughout the day. Economists expect the aggregate level of domestic vehicle sales to run at an annual rate of 8.7 million. That would match July's sales rate, which had increased from June's 8.4 million. Combined light truck and auto sales of domestic and imports gained to 11.5 million in July.
At 10:30, look for the EIA's Petroleum Status Report. The latest data covering the period ended August 20 showed crude oil inventories increased by 4.1 million barrels. Total motor gasoline inventories increased by 2.3 million barrels. Both crude and gasoline continued to mark above the average range for this time of year.
The Fed speaker of the day will be Dallas Federal Reserve Bank President Richard Fisher, with an address scheduled for 12:30. The Fed's Neighborhood Stabilization Summit kicks off in Washington, as the power mongering independent organization takes on home foreclosures this day.
In corporate news, Apple (Nasdaq: AAPL) will introduce a few more blockbuster new products and services Wednesday in its usual grandiose fashion. Presenting at the Morgan Stanley Global Industrials Conference, Lockheed Martin (NYSE: LMT), General Dynamics (NYSE: GD), Raytheon (NYSE: RTN), Rockwell Collins (NYSE: COL) and Roper Industries (NYSE: ROP). Heinz (NYSE: HNZ) has its EPS conference call.
The EPS schedule includes H.J. Heinz (NYSE: HNZ), SAIC Inc. (NYSE: SAI), Brown-Forman (NYSE: BF-A, NYSE: BF-B), Borders Group (NYSE: BGP), Collective Brands (NYSE: PSS), Express (Nasdaq: EXPR), American Software (Nasdaq: AMSWA), Casella Waste Systems (Nasdaq: CWST), Charming Shoppes (Nasdaq: CHRS), China Green Agriculture (NYSE: CGA), FuelCell Energy (Nasdaq: FCEL), Genesco (NYSE: GCO), G-III Apparel (Nasdaq: GIII), Global Crossing (Nasdaq: GLBC), Greif (NYSE: GEF), Hovnanian (NYSE: HOV), IntraLinks (NYSE: IL), Joy Global (Nasdaq: JOYG), LTX-Credence (Nasdaq: LTXC), Magal Security Systems (Nasdaq: MAGS), Martek Biosciences (Nasdaq: MATK), Oxford Industries (NYSE: OXM) and Trintech (Nasdaq: TTPA).
Thursday
Thursday's labor market data arrives from Monster World Wide (NYSE: MWW) and the Labor Department. Premarket radar will be fixated on the Weekly Jobless Claims Report, given recent tidal play. Last week's data offered low water, with new benefits filers receding to 473K, down from the prior week's high tide of 504K (revised). Economists always play it safe with this weekly forecast, and the consensus is therefore stuck at 470K (guesswork).
The Monster Employment Index is due for release before sunrise. This metric of online job demand last showed deterioration of three points, to a mark of 138. The decrease was reportedly due to construction and the leisure industry, which makes perfect sense we suppose.
Several other reports will keep media rooms pumping out the interviews Thursday. Retailers will be reporting chain store sales for the month of August throughout the day. With Labor Day again pushed out a bit, the results might not be top of the class this back-to-school season. July's data was mixed, but the total pace of sales left something to be desired. Same-store sales were up only 2% in July.
The Productivity & Costs data is due for release at 8:30. Given the deceleration in Q2 GDP, economists are looking for a decrease in productivity of -1.9%, quarter-over-quarter. As a result, unit labor costs are expected to rise by 1.2%.
Factory Orders will be reported for the month of July at 10:00 AM. Orders fell 1.8% in May and another 1.2% in June. Economists are looking for an increase of 0.3% for July, based on Durable Goods Orders data. Still, the range of views vary widely, with the highest expectation at +0.5% and lowest at -1.2%.
After dropping 2.6% in June, July's Pending Home Sales Index could fall even further, given the sad state of affairs since the expiration of government stilts, err tax incentive. We would look for the index to fall below July's 75.7 level.
The European Central Bank (ECB) is expected to keep rates unchanged at 1.0% at its latest monetary policy meeting. Cleveland Federal Reserve Bank President Pianalto will address the Fed's neighborhoods conference. Remember, Ohio was hard hit by the forced downsizing of the US auto industry.
The EIA reports on Natural Gas Inventory again at 10:30 Thursday. For the week ended August 20, natural gas stocks increased 40 Bcf, and measured 177 Bcf above the five-year average for this time of year. However, they were 198 Bcf below last year's level.
On the corporate schedule, Limited Brands (NYSE: LTD) gives its prerecorded sales call. Salesforce.com (NYSE: CRM) appears on the Caris & Co. Bus Tour. Continental Resources (NYSE: CLR) presents at the Hodges Capital Management Investment Forum.
The EPS schedule highlights news from H&R Block (NYSE: HRB), Aspen Technology (Nasdaq: ASPN), Del Monte Foods (NYSE: DLM), SeaChange International (Nasdaq: SEAC), Sycamore Networks (Nasdaq: SCMR), ArcSight (Nasdaq: ARST), Blyth (NYSE: BTH), Cascade Corp. (Nasdaq: CASC), Finisar (Nasdaq: FNSR), Gazprom (OTC: OGZPF.PK), Krispy Kreme Doughnut (NYSE: KKD), Layne Christensen (Nasdaq: LAYN), Methode Electronics (NYSE: MEI), Movado (NYSE: MOV), Quiksilver (NYSE: ZQK), Take-Two Interactive (Nasdaq: TTWO), The Cooper Cos. (NYSE: COO), Toronto Dominion Bank (NYSE: TD), Ulta Salon Cosmetics & Fragrance (Nasdaq: ULTA), UTi Worldwide (Nasdaq: UTIW), Vimpel-Communications (NYSE: VIP), Wimm-Bill-Dann Foods (NYSE: WBD).
Friday
You probably don't need me to tell you that Friday will be all about jobs. The Labor Department will release its latest Employment Situation Report at 8:30 Friday morning. Unlike "The Situation" from MTV's makes-me-wonder-about-society hit show Jersey Shore, the employment situation should not be rich.
Once again due to the laying off of temporary census takers, the labor market is expected to shed jobs in July (80K). The range of economists tops out at +75K and the most dire forecast sees a decrease of 160K, based on Bloomberg's survey.
Economists see the unemployment rate edging back up to 9.6%, from 9.5% in July (on suspect labor force shrinkage). Maybe that invisible nation will return to the data count this month. What's important here is that most expect bad news, but if we get worse news, it would still play a role in a lightly traded market ahead of the three day weekend. Friday could be choppy folks, so you might want to get your volatility plays into action. Of course, if we come in right in line, perhaps you'll be able to leave the office early. Maybe we can make a pact or something; nobody buy or sell after 1 PM. Somehow I get the feeling some greedy souls among us will take advantage of the pact for profit, don't you...? Yeah, you go ahead; I'll be right there...
ISM's Non-Manufacturing Index is due at 10:00 AM Friday. It measures the critical service sector, so don't take it too lightly. The index improved in July, rising slightly to 54.3, but economists see it back-tracking in August to 53.0. I think this might get uglier than that. After all, if one out of every six Americans really are getting some sort of government support, then we can't expect folks are getting manicures can we? Or bikini waxes? Are you ladies sacrificing these services? Gosh, I hope not...
Atlanta Fed President Lockhard speaks at 10 AM. Have a nice weekend folks.
Friday's EPS schedule includes news from Campbell Soup (NYSE: CPB), OceanFreight (Nasdaq: OCNF) and a few others.
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