This week's stock market schedule highlights the G-20 meeting, several economic reports and a slew of EPS reports.
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The economic report schedule is free of data Monday, but several news making events could impact trade. President Obama is in Asia, starting with India, for a weeklong tour that is hoped might help the US efforts to level the international trade playing field. The week will conclude with the G-20 meeting in Seoul, South Korea, and President Obama's venture to the Asia Pacific Cooperation meeting in Japan.
Government agents might make some news Monday in the US as well. FDIC Chairwoman Sheila Bair will address a securities industry trade group, and Dallas Federal Reserve President Richard Fisher is scheduled to make an address; Fisher is generally considered a hawk. All Fed official commentary will be closely watched over the next few months, given the unsteady support for QE2 in the Fed's house.
The corporate wire is heavy Monday. Oracle's (Nasdaq: ORCL) star CEO Larry Ellison is slated to testify against SAP (NYSE: SAP) in a software theft trial. Monsanto (NYSE: MON) is scheduled to review crop yield data. Nissan Motor (Nasdaq: NSANY) is supposed to launch a new minivan. Canadian Oil Sands will meet with analysts, and the IPO lockup curbs run out on Express (Nasdaq: EXPR) and Roadrunner Transportation (Nasdaq: RRTS). Riverbed Technology (Nasdaq: RVBD) will split its shares 2 for 1.
Mixed Chain Store Sales data characterized October's reports released by retailers last week. The industry offers both a shopper's and stockpicker's market (in other words, some will rise and some will fall). Companies reported there was a pickup in sales toward the end of October, as shoppers looked toward cold weather items. Weekly Same-Store Sales, as reported by the International Council of Shopping Centers (ICSC) though, have offered reason for concern. As we've reported here regularly, year-over-year sales comparisons are softening as the prior year comparables normalize off early year extremes. Last week's same-store sales data reported by the ICSC, covering the period ended October 30, showed year over-year-sales increased just 2.0%. The week-to-week comparison offered just a 0.1% increase. Look for new ICSC data in the premarket Tuesday. Redbook, which also reports on year-to-year sales each Tuesday, showed a 2.5% gain for the latest period. The holiday shopping season looks precarious at best for retailers.
The NFIB Small Business Confidence Index hits the wire Tuesday morning. Small businessmen have not been inspired by the Administration's tax-driven incentives for hiring. This latest query offers insight into the minds of small businessmen, and very likely a guide into the general economic forecast.
Look for the Wholesale Trade Report for the month of September at 10:00 AM Tuesday. Based on Barron's, Wholesale Inventory levels are forecast to have increased 0.6% in September, versus a 0.8% increase in August. The August report showed that wholesalers' sales only rose by 0.5% though, not keeping pace with inventory. The inventory-to-sales ratio stayed at home, at 1.16, which still compares favorably to the August 2009 mark of 1.24. The long-term trend continues on its path of efficient process.
President George W. Bush publishes his memoir, Decision Points, Tuesday. It should garner the full attention of the press, and look for the controversial leader to hit the talk show circuit discussing the work and his time in charge.
US Commodity Futures Trade Commission (CFTC) Chair Gary Gensler speaks to the National Economists Club on the economy Tuesday.
The corporate wire highlights the shareholder meetings of Hasbro (NYSE: HAS), AMD (NYSE: AMD) and National Fuel Gas (NYSE: NFG). The Goldman Sachs Techtonics Conference gets going with presenters like EMC (NYSE: EMC). The Wells Fargo Securities Technology, Media & Telecom (TMT) Conference offers presentations by Sprint Nextel (NYSE: S) and more.
The Veteran's Day holiday shifts the schedule for several of the week's economic reports. Wednesday will definitely be the busiest day of the week, with several economic reports complementing a regular earnings schedule.
Weekly Initial Jobless Claims should attract the most attention, given last week's focus on the Employment Situation Report and the recent dip in this data point. Last week's reported data covering the period ended October 30 produced a 20K increase in jobless claims, to 457K. The four-week moving average sits at 456K, nearly flat on the psychological 450K mark. When we started toward 400K, the market gained significant enthusiasm. This is the mark we established as critical to market rally.
Apropos to the week, given the President's journey to Asia and current tensions with regard to China trade, we look forward to the International Trade Report and the monthly Import and Export Prices data. Economists expect September's trade data to show a $45 billion trade deficit, which represents a narrowing from the $46.35 billion deficit in August. The thing is that an expansion of trade deficit would be a sign of a normalizing economy now, because American demand for imports would be on the rise. When the deficit narrowed tightest was when the economy hit rock bottom. August's report showed imports increased by $4.1 billion, while exports rose just $0.3 billion over July.
The Import/Export Price data for October is due at 8:30 AM. Economists are looking for import prices to show a 1.2% rise, aided some by a weaker dollar. Import prices fell 0.3% in September though, on lower fuel prices. Energy prices tend to skew imports, while agricultural prices can impact exports. Exports rose 0.6% in September.
The Mortgage Bankers Association reports on mortgage activity Wednesdays in the premarket. Last week's report covering the period ended October 29 indicated mortgage activity decreased. The Market Composite Index of activity decreased 5%. The Purchase Index, which measures mortgage activity tied to home acquisitions, increased 1.4%. The Refinance Index, however, fell 6.4%. We suspect anticipation for QE2 kept real estate players on the sidelines through the period, as they waited to see how Fed action might impact long rates. 30-year fixed rate mortgage rates on the average contract increased to 4.28%, from 4.25% in the measured period.
Because of the holiday Thursday, the EIA will report on both Petroleum Status and Natural Gas on Wednesday. The Natural Gas Report is first up at 10:30 AM. Last week's report covering the period ended October 29 showed natural gas stores increased by 67 Bcf. Stocks were 37 Bcf above the level marked this time last year and 353 Bcf above the five-year average. The EIA's report on crude oil inventory reaches the wire at 11:00 AM Wednesday. For the period ended October 29, crude oil stocks increased by 2 million barrels; total motor gasoline stores fell by 2.7 million barrels. Both oil and gasoline remain above the upper limit of the average range for this time of year.
At 2:00 PM, look for the Treasury Budget Report for the month of October. Economists are looking for a deficit of $148 billion, which represents month-over-month deficit expansion from September's $34.5 billion shortfall. The economists' expectation for the month is about twice as much as the average for the last five years.
It's Veteran's Day, so government offices will be closed and thus no economic reports are slated. However, the Chinese are expected to report several important data points Thursday, including PPI, CPI, retail sales, and industrial production. At the G-20 summit, President Obama is expected to have a side meeting with China's President Hu Jintao. Given all that hangs in the balance, this may be the most important one-on-one President Obama will have during his tenure.
The G-20 concludes Friday, and most agree that little productive result should be seen. Look for some sort of win from recent dealings with China, though the question remains whether the Chinese will follow through sincerely or not. The Treasury Secretary is waiting on response from China before issuing his report on trading partners.
The economic schedule includes the University of Michigan's Consumer Sentiment reading. Economists forecast sentiment will rise to 69.0, from 67.7at the end of October. The difference is negligible and so a reading slightly higher should not be overdone in true market action. That said, further deterioration would alert traders to intensifying trouble ahead of the important holiday shopping season, and potentially start a slide in stocks.
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