Week Ahead - 2 Speeches Zero Hope
Markets are closed in the U.S. and Canada Monday for the informal end to summer (the season formally ends on September 21-22). Hey though beachgoers, you’ll find no shelter for your hedge funds on Shelter Island while Europe disintegrates this week. After setting markets back Friday with a report that Greek economic activity was worse than expected (nobody should be surprised considering the steep austerity measures enacted), the IMF is supposed to end its Greek performance review this week ahead of another supposed disbursement. Markets will also seek the comments of the ECB chief, when Jean-Claude Trichet and Mario Draghi talk about the lessons learned from the financial crisis. Considering the current state of affairs, maybe the boys should go back to school.
As if we needed to give Standard & Poor’s another reason to churn their feeble think-tank, Portugal’s central bank issues statistics on its bank borrowings from the European Central Bank (ECB). Not wanting to leave concerns about Chinese growth on the back-burner, perhaps some news will come from the conclusion of World Bank President Robert Zoelick’s visit to China. In North Africa, Egyptians might get rowdy again as they hold up their former military hero to trial for killing his own countrymen during his recent goodbye party.
In stock news, and there actually is some, IPO lockup concludes for HCA Holdings (NYSE: HCA). Toyota Motors (NYSE: TM) sets its new Camry sedan loose in Japan. Earnings reports are scheduled for Argan (AMEX: AGX), Delta Natural Gas (Nasdaq: DGAS), Deswell Industries (Nasdaq: DSWL), Epoch Holding (Nasdaq: EPHC), Global-Tech Advanced Innovation (Nasdaq: GAI), Gramercy Capital (NYSE: GKK), GreenHunter Energy (AMEX: GRH), MFRI (Nasdaq: MFRI), Navistar International (NYSE: NAV), Origin Agritech (Nasdaq: SEED), Qiao Xing Mobile (NYSE: QXM), Qiao Xing Universal Resources (Nasdaq: XING), Seven Arts Pictures (Nasdaq: SAPX), Streamline Health (Nasdaq: STRM), Virco Manufacturing (Nasdaq: VIRC) and several other companies.
The first day of trading states-side offers turmoil born from Europe. The largest trade union in Italy has called a one-day general strike to protest new Italian austerity plans. Meanwhile, the French Parliament votes on a budget amendment that accounts for the French portion of European aid to Greece. Finally, Swedish and Australian central banks gather to contemplate monetary policy.
In America, the Institute for Supply Management (ISM) publishes its Non-Manufacturing Index. Economists surveyed by Bloomberg expect the service sector measure to deteriorate further to 51.0, from 52.7 in July. A mark of 50 defines the line between contraction and expansion. ISM’s Manufacturing Index was reported last week and exceeded expectations in falling to 50.6.
Minneapolis Fed President Narayana Kocherlakota addresses the Carlson School of Management in Minneapolis. Kocherlakota is one of the FOMC dissenters.
Regarding stocks, IPO lockup restrictions expire on Magnachip Semiconductor (NYSE: MX). The earnings schedule includes reports from Altera (Nasdaq: ALTR), KongZhong (Nasdaq: KONG), Pike Electric (Nasdaq: PIKE), Verifone Systems (NYSE: PAY), FuelCell Energy (Nasdaq: FCEL), Mecox Lane (Nasdaq: MCOX), Mobile Telesystems (NYSE: MBT), Pep Boys (NYSE: PBY), Pike Electric (Nasdaq: PIKE), US Global Investors (Nasdaq: GROW) and a few more.
Yet another day dawns with its focus across the Atlantic. An important German court ruling is expected, and it will weigh whether the German government broke the law when it issued bailout aid to Greece and the euro zone. In Asia, the Bank of Japan concludes its monetary policy meeting and announces its current policy. The Bank of Canada is also meeting Wednesday.
In the States, the Federal Reserve releases its Beige Book of economic indicators at 2:00 PM ET. Kansas City Fed President Thomas Hoenig is scheduled to speak. Hoenig is retiring and so may be more loose of the tongue. The Fed President of San Francisco, John C. Williams, will speak on Fed policy and the economic outlook at 4:00 PM ET.
Recently, weekly same-store sales have been reflecting the diving sentiment of consumers. For instance, last week’s ICSC Reuters Same-Store Sales data covering the period ending August 27 showed a 0.1% sales increase over the immediately preceding week. Sales were up 3.0% against the prior year period, but if we adjust for inflation, that’s not impressive at all. Redbook reported year-over-year sales up 4.0% for the same period.
Weekly Mortgage Applications are due in the morning Wednesday (check for any rescheduling due to the holiday). Last week’s report covering the period ending August 26 showed mortgage applications fell 9.6%. Contracted average fixed rate mortgage rates rose a bit through the period, and so refinancing activity dropped off significantly.
In the evening, catch the Republican presidential primary debate, with Tea Party theme. The debate takes place in California.
Markets will be closed in Brazil. In the U.S., the Dahlman Rose Global Transportation Conference runs in New York City. Also, look for presentations from the Citi (NYSE: C) Global Technology Conference, with presenters including Dell (Nasdaq: DELL), EMC (NYSE: EMC), Altera (Nasdaq: ALTR), Symantec (Nasdaq: SYMC). Catch Wal-Mart (NYSE: WMT) at the Goldman Sachs Global Retailing Conference (NYSE: GS). Look for Cardinal Health (NYSE: CAH) at the Robert W. Baird Health Care Conference.
The day’s EPS schedule includes news from Aerovironment (Nasdaq: AVAV), Chinaedu (Nasdaq: CEDU), Conn’s (Nasdaq: CONN), Evolution Petroleum (AMEX: EPM), G-III Apparel (Nasdaq: GIII), Hi-Tech Pharmacal (Nasdaq: HITK), Hooker Furniture (Nasdaq: HOFT), Hovnanian Enterprises (NYSE: HOV), Lannett (AMEX: LCI), Layne Christensen (Nasdaq: LAYN), Matrix Service (Nasdaq: MTRX), Mediware Information Systems (Nasdaq: MEDW), Men’s Wearhouse (NYSE: MW), Mitcham Industries (Nasdaq: MIND), NCI Building Systems (NYSE: NCS), SeaChange International (Nasdaq: SEAC), Smith & Wesson (Nasdaq: SWHC), Spartech (NYSE: SEH), Sparton (NYSE: SPA), Standex (NYSE: SXI), Stewart Enterprises (Nasdaq: STEI), Sycamore Networks (Nasdaq: SCMR), Talbots (NYSE: TLB), VimpelCom (NYSE: VIP) and a few more.
Two major speeches key Thursday. Federal Reserve Chairman Bernanke addresses the economic outlook at 1:30 PM ET. At 7:00 PM, President Obama will present his ballyhooed and rescheduled jobs and debt plan via a televised address to Congress.
The Bank of England (BOE) and the European Central Bank (ECB) will dictate trading in the early going, as both central banks issue monetary policy. Each bank is expected to hold rates steady, but the chatter that comes through the ECB chief’s press conference will distribute a ton more tradable information, perhaps mostly keyed on terms like “recession” and fiat currency devaluation. Speaking of such sins, the IMF Chief John Lipsky is due to speak at a book rollout on public sector debt. And packing in the info, the OECD publishes its interim economic forecast.
Catch the International Trade Report for July before the bell Thursday. The trade gap widened in June to $53.1 billion. Economists surveyed by Bloomberg see the trade deficit narrowing to $51.9 billion this time around.
Weekly Initial Jobless Claims fell 12,000 to 409K in the week ended August 27. Look for the latest count on Thursday at 8:30.
Bloomberg’s Consumer Comfort Index hits the wire at 9:45 AM ET. Last week’s report covering the period ending August 28 showed consumer confidence deteriorated, as the index slipped to negative 49.1, from minus 47.0 the week before.
At 10:00 AM ET, find the Quarterly Services Survey report, a look at the information and technology industry, as it reaches the wire.
At 3:00 PM ET, look for Consumer Credit data. Economists are looking for an expansion in credit by $6.0 billion in July. That compares against the $15.5 billion credit expansion that occurred in June. June’s increase was driven by a $10.3 billion expansion in non-revolving credit, on motor vehicle sales gains.
We’ll have the Petroleum and Natural Gas Reports together Thursday. In their last reporting, covering the week ending August 26 for petroleum, crude oil inventory increased by 5.3 million barrels. Oil inventories are above the upper limit of the average range for this time of year. Gasoline stocks fell by 2.8 million barrels, but remain in the upper limit of the average range for this time of year. Natural gas inventory increased by 55 Bcf in the week ending August 26, though stores were 60 Bcf below the five-year average.
The CFTC is set to vote on proposals to raise the bar on swaps oversight.
On the corporate wire, Johnson & Johnson (NYSE: JNJ) hears from an FDA panel on its stroke-prevention drug. The Barclays Capital Back to School Consumer Conference (NYSE: BCS) lines up presenters Procter & Gamble (NYSE: PG) and Coca Cola (NYSE: KO). There are analysts and/or shareholder meetings at General Dynamics (NYSE: GD), Ariba (Nasdaq: ARBA), Ecolab (NYSE: ECL), Covidien (NYSE: COV) and Photronics (Nasdaq: PLAB). Look for EPS reports from ABM Industries (NYSE: ABM), Cherokee (Nasdaq: CHKE), Ditech Networks (Nasdaq: DITC), Globecomm Systems (Nasdaq: GCOM), Korn Ferry (NYSE: KFY), Lakeland Industries (Nasdaq: LAKE), LightPath Technologies (Nasdaq: LPTH), Myrexis (Nasdaq: MYRX), Smithfield Foods (NYSE: SFD), Titan Machinery (Nasdaq: TITN), TRC Cos. (NYSE: TRR), Ulta Salon (Nasdaq: ULTA), United Natural Foods (Nasdaq: UNFI), Verint Systems (Nasdaq: VRNT) and ZBB Energy (AMEX: ZBB).
The Wholesale Trade Report for July is due Friday at 10:00 AM ET. Economists expect wholesale inventories increased by 0.8%, versus the 0.6% increase in June. We’ll be watching wholesaler sales as well of course, as it’s an unnatural divergence in growth that raises suspicion about the health of the segment.
G-7 finance ministers and the globe’s most important central bankers are gathering in France, so beware. On Saturday, George Papandreou, Greece’s Prime Minister delivers a speech on the state of the Greek economy.
The corporate wire has an FDA panel looking at several osteoporosis drugs, including medicine from Merck (NYSE: MRK) and Novartis (NYSE: NVS). There are analysts and shareholder meetings scheduled for The Washington Post (NYSE: WPO), Auxilium Pharmaceuticals (Nasdaq: AUXL) and National Fuel Gas (NYSE: NFG). Spectranetics (Nasdaq: SPNC) is presenting at the Stifel Nicolaus & Co. Healthcare Conference. The EPS schedule has news from Aceto (Nasdaq: ACET), Duckwall-ALCO Stores (Nasdaq: DUCK), Kroger (NYSE: KR), Limoneira (Nasdaq: LMNR), Ocean Power Technologies (Nasdaq: OPTT), Peregrine Pharmaceuticals (Nasdaq: PPHM), Piedmont Natural Gas (NYSE: PNY) and a few others.
Sunday is the tenth anniversary of September 11, and my heart continues to break for the families of my colleagues and brothers from the financial district, who have lost loved ones and a part of themselves due to the ignorance of a few misguided, disgraceful, sacrilegious, workers of iniquity.
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