Yet another regional manufacturing data point indicated trouble Monday, with the Dallas Federal Reserve Bank’s posting of its Manufacturing Survey results. The bank’s General Business Activity Index dropped to negative 13.2 in July, after climbing to positive territory in June (+5.8). It was the measure’s lowest reading in 10 months, and followed a slew of other regional warnings over recent weeks.
Overseas, Greek politicians gathered to find places to save money in their 2013 and 2014 budgets.
The corporate wire had important earnings from Active Power (Nasdaq: ACPW), Acxiom (Nasdaq: ACXM), Advanced Energy (Nasdaq: AEIS), Advent Software (Nasdaq: ADVS), Aegion (Nasdaq: AEGN), Allison Transmission (Nasdaq: ALSN), American Financial Group (NYSE: AFG), Amerisafe (Nasdaq: AMSF), Ames National (Nasdaq: ATLO), Anadarko Petroleum (NYSE: APC), Anadigics (Nasdaq: ANAD), Aqua America (NYSE: WTR), Armstrong World Industries (NYSE: AWI), Arrow Electronics (NYSE: ARW), Asiainfo Linkage (Nasdaq: ASIA), Asset Acceptance (Nasdaq: AACC), Astex Pharmaceuticals (Nasdaq: ASTX), Avid Technology (Nasdaq: AVID), BCD Semiconductor (Nasdaq: BCDS), BNC Bancorp (Nasdaq: BNCN), Boardwalk Pipeline (NYSE: BWP), CafePress (Nasdaq: PRSS), Cal-Maine (Nasdaq: CALM), CapitalSource (NYSE: CSE), Capitol Federal Financial (Nasdaq: CFFN), Celadon (NYSE: CGI), Cirrus Logic (Nasdaq: CRUS), CIT Group (NYSE: CIT), CNA Financial (NYSE: CNA), Cognex (Nasdaq: CGNX), Community West Bancshares (Nasdaq: CWBC), Compass Minerals (NYSE: CMP), Comstock Resources (NYSE: CRK), Corporate Executive Board (Nasdaq: EXBD), Danaos (NYSE: DAC), Dendreon (Nasdaq: DNDN), Diebold (NYSE: DBD), DSP Group (Nasdaq: DSPG), Eastman Chemical (NYSE: EMN), Elecsys (Nasdaq: ESYS), Enbridge Energy Management (NYSE: EEQ), First Connecticut Bancorp (Nasdaq: FBNK), First Financial (Nasdaq: THFF), Fiserv (Nasdaq: FISV), Flowserve (NYSE: FLS), Forest Oil (NYSE: FST), Franklin Resource (NYSE: BEN), General Cable (NYSE: BGC), German American Bancorp (Nasdaq: GABC), Gladstone Investment (Nasdaq: GAIN), Greenlight Capital Re (Nasdaq: GLRE), Heartland Financial (Nasdaq: HTLF), Herbalife (NYSE: HLF), Hertz Global (NYSE: HTZ), HF Financial (Nasdaq: HFFC), HFF (NYSE: HF), Hologic (Nasdaq: HOLX), HomeStreet (Nasdaq: HMST), Humana (NYSE: HUM), Independent Bank (Nasdaq: IBCP), Integrated Device Technology (Nasdaq: IDTI), Jacobs Engineering (NYSE: JEC), Kadant (NYSE: KAI), Kona Grill (Nasdaq: KONA), Lincoln Electric (Nasdaq: LECO), Loews (NYSE: L), Lufkin Industries (Nasdaq: LUFK), magicJack Vocaltec (Nasdaq: CALL), Martha Stewart (NYSE: MSO), Masco (NYSE: MAS), Meadowbrook Insurance Group (NYSE: MIG), Mercury General (NYSE: MCY), Monolithic Power (Nasdaq: MPWR), National Financial Partners (NYSE: NFP), NewMarket (NYSE: NEU), Northeast Utilities (NYSE: NU), Old National Bancorp (NYSE: ONB), Old Point Financial (Nasdaq: OPOF), Osiris Therapeutics (Nasdaq: OSIR), Partnerre (NYSE: PRE), Pathfinder Bancorp (Nasdaq: PBHC), Peapack-Gladstone Financial (NYSE: PGC), Plum Creek Timber (NYSE: PCL), PMC-Sierra (Nasdaq: PMCS), Pope Resources (Nasdaq: POPE), Provident Financial (Nasdaq: PROV), Quaker Chemical (NYSE: KWR), RealD (NYSE: RLD), Roper Industries (NYSE: ROP), Rudolph Technologies (Nasdaq: RTEC), Seagate Technology (NYSE: STX), State Bank Financial (Nasdaq: STBZ), Suffolk Bancorp (Nasdaq: SUBK), Summit State Bank (Nasdaq: SSBI), Sunshine Heart (NYSE: SSH), Superior Energy (NYSE: SPN), Texas Roadhouse (Nasdaq: TXRH), TFS Financial (Nasdaq: TFSL), TGC Industries (NYSE: TGE), THL Credit (Nasdaq: TCRD), Tim Participacoes (NYSE: TSU), TriMas (NYSE: TRS), Unilife (Nasdaq: UNIS), UniPixel (Nasdaq: UNXL), UNS Energy (NYSE: UNS), USA Mobility (Nasdaq: USMO), Vector Group (NYSE: VGR), Vertex Pharmaceuticals (Nasdaq: VRTX), Virtusa (Nasdaq: VRTU), W&T Offshore (NYSE: WTI), Wausau Paper (NYSE: WPP), Westmoreland Coal (NYSE: WLB), Wpcs International (Nasdaq: WPCS) and others.
The big FOMC meeting kicks off Tuesday and should dominate market discussion until the monetary policy release Wednesday.
The report that interests me most Tuesday is the Personal Income & Outlays Report for June. Personal spending disappointed last month, when consumer spending was unchanged. Economists forecast just a 0.1% increase for June, with the range of views extending from 0.0% to 0.3%, according to Bloomberg’s survey. Consumer confidence has been feeling the heat this summer, and so this tangible measure of spending is important. Personal income is expected to have risen by 0.4%. The Core PCE Price Index, the Fed’s favored inflation measure, is forecast to rise 0.2% in the latest period.
The S&P Case Shiller Home Price Index is due for report Tuesday before the market open. The group’s 20-city composite index surged 0.7% on a seasonally adjusted basis in April, marking the third straight month of price increase. Economists are looking for a 0.5% price rise for May. Foreclosures have been reported on the increase more recently, as regular sales have tracked off, so things may change when the report catches up to the present.
The International Council of Shopping Centers (ICSC) reports on weekly same-store sales in the pre-market Tuesday. Last week’s report showed sales rose by 1.0% in the week ending July 21. On a year-over-year basis, sales were up 3.3%, marking a pickup from the prior period. Redbook reports as well, and last week showed a 1.3% sales increase for the same period.
The Employment Cost Index will be reported for the second quarter this morning. After increasing 0.4% in the first quarter, employment costs are seen 0.5% higher in Q2. Given the employment situation, there remains a headwind against employment cost rise along with all other price increase.
The very important Chicago Purchasing Managers Index (PMI) will offer an important look at the state of manufacturing in the Chicago area. After marking a 33-month low in May, the index edged higher in June to a mark of 52.9 on the Business Barometer Index. Economists see slippage in July to a mark of 52.5, but I am concerned we could see worse, given what’s been developing in other parts of the nation. The economists’ consensus range extends as low as 49, with 50 delineating between contraction and expansion.
The Conference Board’s Consumer Confidence Index is set for 10:00 AM EDT reporting. Last week, the Michigan/Reuters sentiment measure inched higher to 72.3. The Conference Board’s take last time around offered a second month of decline. The Confidence Index fell to 62.0 in June, down from 64.4 in May. Economists see the index falling to 61.5 in this latest check.
The State Street (NYSE: STT) Investor Confidence Index is due at 10:00 AM as well. Last month’s report produced an improvement in confidence as the index increased 7 points. Investors in North America added to risk holdings, with the regional index up 5.7 points. Needless to say, I expect the environment to change in the months ahead.
The latest monthly Agricultural Prices Report reaches the wire at 3:00 PM EDT Tuesday. The report shows the prices received by farmers through the month. Thus, it should be interesting to see the effects of the latest drought conditions in parts of the country.
The corporate earnings schedule has Acorda Therapeutics (Nasdaq: ACOR), Aetna (NYSE: AET), Affymetrix (Nasdaq: AFFX), Allstate (NYSE: ALL), Archer Daniels Midland (NYSE: ADM), Arthur J. Gallagher (NYSE: AJG), Atmel (Nasdaq: ATML), Bankrate (Nasdaq: RATE), Black Box (Nasdaq: BBOX), BMC Software (NYSE: BMC), Career Education (Nasdaq: CECO), CBRE Group (NYSE: CBG), Coach (NYSE: COH), Con-way (NYSE: CNW), Cummins (NYSE: CMI), Denny’s (Nasdaq: DENN), Dentsply (Nasdaq: XRAY), Digital River (Nasdaq: DRIV), DineEquity (NYSE: DIN), DreamWorks (NYSE: DWA), Dynamic Materials (Nasdaq: BOOM), Ecolab (NYSE: ECL), Edison Int’l (NYSE: EIX), Electronic Arts (NYSE: EA), Entergy (NYSE: ETR), Female Health (Nasdaq: FHCO), FMC Corp. (NYSE: FMC), Fresh Del Monte (NYSE: FDP), Frontier Communications (NYSE: FTR), GAIN Capital (Nasdaq: GCAP), Genworth Financial (NYSE: GNW), Geron (Nasdaq: GERN), Hanesbrands (NYSE: HBI), Harris Corp. (NYSE: HRS), Harsco (NYSE: HSC), Headwaters (NYSE: HW), Heartland Payment Systems (NYSE: HPY), Holly Energy Partners (NYSE: HEP), Kulicke & Soffa (Nasdaq: KLIC), LCA-Vision (Nasdaq: LCAV), Life Technologies (Nasdaq: LIFE), LIN TV (NYSE: TVL), Liquidity Services (Nasdaq: LQDT), Louisiana Pacific (NYSE: LPX), Marathon Petroleum (NYSE: MPC), Market Leader (Nasdaq: LEDR), Martin Marietta Materials (NYSE: MLM), MDC Holdings (NYSE: MDC), NiSource (NYSE: NI), Northeast Bancorp (NYSE: NBN), Oil States International (NYSE: OIS), ONEOK (NYSE: OKE), Optimer Pharmaceuticals (Nasdaq: OPTR), Papa John’s (Nasdaq: PZZA), Peet’s Coffee (Nasdaq: PEET), Pfizer (NYSE: PFE), Pioneer Natural Resources (NYSE: PXD), PolyOne (NYSE: POL), Polypore (NYSE: PPO), Public Service (NYSE: PEG), QEP Resources (NYSE: QEP), RenaissanceRe (NYSE: RNR), Revlon (NYSE: REV), Sun Healthcare (Nasdaq: SUNH), Take-Two Interactive (Nasdaq: TTWO), Techne (Nasdaq: TECH), The Chefs’ Warehouse (Nasdaq: CHEF), Goodyear (NYSE: GT), TRW Automotive (NYSE: TRW), Tyco Int’l (NYSE: TYC), United States Steel (NYSE: X), Valero Energy (NYSE: VLO), WebMD (Nasdaq: WBMD), Yandex (Nasdaq: YNDX) and Zebra Technologies (Nasdaq: ZBRA).
What a day, with so many heavy hitting data points reaching the wire. The headliner will be the Federal Reserve’s FOMC Monetary Policy Statement, scheduled for 2:15 PM EDT release.
The second most important report on the day, in my view, will be the ISM Manufacturing Index. Last month, this index went underwater, indicating contraction in the manufacturing sector. We penned our article, “The Report that Changed Everything,” in response. This month, economists are looking toward an improvement, with the consensus forecast set above water, at 50.1, versus the 49.7 mark set in June. Since ISM, we’ve seen regional index after regional index deteriorate, showing signs of recession. Thus, this report could prove interesting. Markit will post its PMI Manufacturing Index as well, at 9:00 AM.
The first of the monthly employment reports reaches the wire Wednesday morning with Challenger Gray & Christmas’ Job-Cuts Report. In June, job cuts dropped to a 13-month low. Announced corporate layoffs were down 39%, to 37,551.
ADP’s Private Employment Report reaches the wire at 8:15 AM. Last month’s report showed ADP’s estimate for private employment growth was off a bit. The company estimated private employment increased by 176K in June, but the Employment Situation Report showed private employment actually rose by 84,000. This month, economists’ are looking for ADP to show a 120K private employment increase. Interestingly, economists see the Employment Situation Report showing a 110K increase for the same data point, based on Bloomberg’s survey.
Motor vehicle makers Ford (NYSE: F), General Motors (NYSE: GM) and others will be reporting their sales for July. Domestic vehicle sales are expected to again post growth, with the annual pace of sales seen rising to 11.0 million, up from 10.8 million in June. However, total vehicle sales are expected to decrease to a pace of 14.0 million, from 14.1 million in June.
The Mortgage Bankers Association (MBA) reports its Weekly Applications Survey again Wednesday. Despite record low rates, though, increases in mortgage applications tied to the purchases of homes have not shown life. While we are on real estate, Construction Spending will be reported at 10:00 AM. Economists see spending increasing 0.5%, after it rose 0.9% in May.
EIA’s Weekly Petroleum Status Report is due for release at 10:30 AM. Last week’s report covering the period ending July 20 showed crude oil inventories increased 2.7 million barrels, and were above the upper limit of the average range for this time of year. Total motor gasoline stocks increased by 4.1 million barrels, but were in the lower half of the average range for this time of year.
The corporate earnings schedule has news from Alamo Group (NYSE: ALG), Allergan (NYSE: AGN), Amdocs (NYSE: DOX), Amerigroup (NYSE: AGP), ArthroCare (Nasdaq: ARTC), Automatic Data Processing (NYSE: ADP), Avis Budget Group (NYSE: CAR), Avon Products (NYSE: AVP), BOK Financial (Nasdaq: BOKF), Booz Allen Hamilton (NYSE: BAH), Box Ships (NYSE: TEU), Burger King (NYSE: BKW), Cal Dive (NYSE: DVR), Comcast (Nasdaq: CMSCA), DaVita (NYSE: DVA), Devon Energy (NYSE: DVN), Diana Containerships (Nasdaq: DCIX), Dollar Thrifty (NYSE: DTG), Dominion Resources (NYSE: D), El Paso Electric (NYSE: EE), Energizer (NYSE: ENR), First Solar (Nasdaq: FSLR), FTI Consulting (NYSE: FCN), Garmin (Nasdaq: GRMN), Genco Shipping (NYSE: GNK), Green Mountain Coffee (Nasdaq: GMCR), Harley-Davidson (NYSE: HOG), Hillenbrand (NYSE: HI), Hospira (NYSE: HSP), Huntsman (NYSE: HUN), Hyatt Hotels (NYSE: H), Intercontinental Exchange (NYSE: ICE), Intrepid Potash (NYSE: IPI), Jamba (Nasdaq: JMBA), Johnson Outdoors (Nasdaq: JOUT), LeapFrog (NYSE: LF), MAKO Surgical (Nasdaq: MAKO), Marathon Oil (NYSE: MRO), MasterCard (NYSE: MA), Metlife (NYSE: MET), Murphy Oil (NYSE: MUR), Onyx Pharmaceuticals (Nasdaq: ONXX), Overseas Shipholding (NYSE: OSG), Owens Corning (NYSE: OC), Prudential Financial (NYSE: PRU), R.R. Donnelley (NYSE: RRD), Radian Group (NYSE: RDN), Speedway Motorsports (NYSE: TRK), Sturm Ruger (NYSE: RGR), Tesoro (NYSE: TSO), Tetra Tech (Nasdaq: TTEK), The Boston Beer Co. (NYSE: SAM), The Hanover Insurance (NYSE: THG), The Hartford Financial (NYSE: HIG), Time Warner (NYSE: TWX), Transocean (NYSE: RIG), Unum Group (NYSE: UNM), Vonage (NYSE: VG), Weight Watchers (NYSE: WTW), Williams Cos. (NYSE: WMB), Yelp (Nasdaq: YELP) and more.
All eyes will be on Europe Thursday, as the European Central Bank (ECB) sets its monetary policy. Look for the release in the morning followed by a press conference.
Retailers report monthly Chain Store Sales Thursday. By that time, though, we will have had good preparation for news. Retail sales slumped a couple weeks ago, and this week’s consumer confidence and personal spending data will have primed the market this week. Also, the Bloomberg Consumer Comfort Index fell last week to -38.5, and will be reported again Thursday morning.
Weekly Initial Jobless Claims have been a hot mess in July, due to adjustments to the data for plant closings that proved hard to predict. Maybe this week’s news will offer some new insight. You would expect layoffs to be light in the heat of summer, but with several economic data points showing employer discomfort with their labor counts, maybe not. Last week’s report showed claims fell 35K, to 353K.
Factory Orders will be reported at 10:00 AM. Orders rose 0.7% in May, and economists expect 0.7% growth in June too, according to Bloomberg. Economists will be keenly attuned to the report, considering the direction manufacturing appears to be heading in lately.
The EIA reports on natural gas inventory at 10:30 AM. The last report covering the week ending July 20 showed inventory increased by 26 Bcf, rising to 435 Bcf above the five year average for this time of year.
The corporate wire has news from Activision Blizzard (Nasdaq: ATVI), adidas AG (ADS.DE), AllianceBernstein (NYSE: AB), Ameren (NYSE: AEE), AIG (NYSE: AIG), American Science and Engineering (Nasdaq: ASEI), Apache (NYSE: APA), Apartment Investment and Management (NYSE: AIV), Autobytel (Nasdaq: ABTL), Aveo Pharmaceuticals (Nasdaq: AVEO), Becton Dickinson (NYSE: BDX), Blue Nile (Nasdaq: NILE), BNP Paribas (BNP.PA), Cadence Pharmaceuticals (Nasdaq: CADX), Calamos Asset Management (Nasdaq: CLMS), Cardinal Health (NYSE: CAH), CBS Corp. (NYSE: CBS), Checkpoint Systems (NYSE: CKP), Cigna (NYSE: CI), Diana Shipping (NYSE: DSX), DIRECTV (NYSE: DTV), Duke Energy (NYSE: DUK), Eagle Materials (NYSE: EXP), FEI Co. (Nasdaq: FEIC), Fluor (NYSE: FLR), Fortress Investment Group (NYSE: FIG), Furniture Brands Int’l (NYSE: FBN), General Motors (NYSE: GM), Gentiva Health (Nasdaq: GTIV), Gibraltar Industries (Nasdaq: ROCK), Haemonetics (NYSE: HAE), Henry Schein (Nasdaq: HSIC), hhgregg (NYSE: HGG), Hornbeck Offshore (NYSE: HOS), IDACORP (NYSE: IDA), Kellogg (NYSE: K), Kenneth Cole (NYSE: KCP), Kodiak Oil & Gas (NYSE: KOG), Kraft Foods (NYSE: KFT), Kratos Defense and Security (Nasdaq: KTOS), LinkedIn (Nasdaq: LNKD), Main Street Capital (Nasdaq: MAIN), MasTec (NYSE: MTZ), MGIC Investment (NYSE: MTG), Mohawk (NYSE: MHK), Molycorp (NYSE: MCP), Monster Worldwide (NYSE: MWW), National Fuel Gas (NYSE: NFG), Ocwen Financial (NYSE: OCN), OfficeMax (NYSE: OMX), Parker Drilling (NYSE: PKD), Parker Hannifin (NYSE: PH), PerkinElmer (NYSE: PKI), Pinnacle West Capital (NYSE: PNW), Pitney Bowes (NYSE: PBI), Progressive (NYSE: PGR), Quanta Services (NYSE: PWR), Radio One (Nasdaq: ROIA), Reis (Nasdaq: REIS), ResMed (NYSE: RMD), Rowan (NYSE: RDC), SBA Communications (Nasdaq: SBAC), SCANA (NYSE: SCG), Scripps Networks (NYSE: SNI), Sealed Air (NYSE: SEE), Sempra Energy (NYSE: SRE), Spectra Energy (NYSE: SE), Sunoco (NYSE: SUN), Sunrise Senior Living (NYSE: SRZ), The Clorox Co. (NYSE: CLX), Time Warner (NYSE: TWC), ValueClick (Nasdaq: VCLK), World Wrestling Entertainment (NYSE: WWE), Zipcar (NYSE: ZIP) and more.
It’s all about the Employment Situation Report Friday. The news was bad in June, but not terrifying. Still, the market will be anxious enough about July’s report. Unemployment stuck at 8.2% in June and economists seeing it staying there in July too. Nonfarm Payrolls are expected to edge up to 100K for July, though, which is better than June’s 80K increase. This data could make or break the market for the next few weeks or longer, and so is worth all the attention. Unfortunately, I see labor deteriorating in the months ahead.
The Monster Employment Index (MEI) takes back seat to the government data, and is released in the early AM. The MEI measures online job search activity and so is an important measure of labor, though I haven’t found it insightful outside of its anecdotal play.
ISM reports its Non-Manufacturing Index at 10:00 AM, with expectations set for a slight decline to 52.0, from 52.1 in July. This report is more important than ISM’s manufacturing data, because 90% of the American economy is driven by the service sector.
The corporate earnings schedule has news from Procter & Gamble (NYSE: PG), Viacom (Nasdaq: VIAB), NYSE Euronext (NYSE: NYX), The Washington Post (NYSE: WPO), EOG Resources (NYSE: EOG) and Agrium (AGU.TO). Look also for earnings from Alliant Energy (NYSE: LNT), Allianz SE (ALV.DE), Artio Global Investors (NYSE: ART), Assisted Living Concepts (NYSE: ALC), Beazer Homes (NYSE: BZH), Buckeye Partners (NYSE: BPL), Cowen Group (Nasdaq: COWN), Dresser-Rand (NYSE: DRC), Elster Group (NYSE: ELT), Entercom Communications (NYSE: ETM), EPAM Systems (Nasdaq: EPAM), Exelis (NYSE: XLS), Exide Technologies (Nasdaq: XIDE), Federal Signal (NYSE: FSS), First Federal of Northern Michigan Bancorp (Nasdaq: FFNM), Gartner (NYSE: IT), Gray Television (NYSE: GTN), GSE Holdings (NYSE: GSE), Health Net (NYSE: HNT), Immunogen (Nasdaq: IMGN), ITT (NYSE: ITT), IXYS Corp. (Nasdaq: IXYS), Lightbridge (Nasdaq: LTBR), Marlin Business Services (Nasdaq: MRLN), Novavax (Nasdaq: NVAX), PNM Resources (NYSE: PNM), RBC Bearings (Nasdaq: ROLL), Royal Bank of Scotland (NYSE: RBS), Shenandoah Telecommunications (Nasdaq: SHEN), Sirona Dental (Nasdaq: SIRO), Telephone & Data Systems (NYSE: TDS), Tsakos Energy Navigation (NYSE: TNP), UIL Holdings (NYSE: UIL), Wellcare Health Plans (NYSE: WCG) and WGL Holdings (NYSE: WGL).
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