Monday was President’s Day in the U.S. so securities markets were closed.
A slow start to a short week will begin with news from overseas. The Bank of Japan (BOJ) is due to publish the minutes of its January meeting. With the markets attuned to the stealth currency war many believe is happening despite the recent reassurances of major central banks, this news will be worthy of some attention. Japanese finance and economic ministers will hold a news conference as well Tuesday. In a second bit of international data, Spain will auction treasury bills on the day.
In the U.S., the National Association of Homebuilders (NAHB) is due to report its Housing Market Index Tuesday morning at 10:00 AM ET. This report for February is expected to show improvement according to Bloomberg’s survey of economists. The consensus expectation is for an index reading of 48 this month, versus 47 in January. Anything below 50 means that there are still more homebuilders with a pessimistic view of the market than a positive one. However, significant improvement has been noted in this index over the past two years.
Tuesday’s corporate wire has UPS (NYSE: UPS), Perry Ellis (Nasdaq: PERY) and Cardinal Health (NYSE: CAH) holding an investor meetings. American Electric Power (NYSE: AEP) is having an investor meeting in Japan. The Consumer Analyst Group of New York Conference highlights presentations by Sysco (NYSE: SYY) and ConAgra Foods (NYSE: CAG). Look for earnings reports from Dell (NYSE: DELL) - which we had something to say about recently, Medtronic (NYSE: MDT), Analog Devices (NYSE: ADI), Nabors Industries (NYSE: NBR), Actavis (NYSE: ACT) and Sealed Air Corp. (NYSE: SEE).
The most important data on the day will without a doubt arrive at 2:00 PM ET when the Federal Reserve releases the minutes of the January FOMC meeting. Investors will have keen interest in whether the Fed intends to alter its quantitative easing strategy and/or when it might edge off its low rate policy.
We will also get more housing data on Wednesday, when Housing Starts are reported for January at 10:00 AM ET. The annual pace of starts are seen increasing this month, to 914,000, up from 954,000 in December. Builder Permits are expected to edge up to a pace of 920,000 in January, up from 903,000 in December. Good news is built into housing stocks at this point, so any disappointment could meaningfully affect industry shares.
Wednesday produces the Weekly Applications Survey, the Mortgage Bankers Association (MBA) report on weekly mortgage activity. Mortgage application activity decreased last week by 6.4%, as effective rates mostly increased across mortgage types. We recently wrote about the impact of a lender supply shortage on mortgage rates. These holiday and weather affected weeks are hard to read, so investors will want to look forward to beyond the next report as well for a clear read on activity.
The premarket also produces the Producer Price Index for the month of January. Economists expect the PPI to increase 0.3% this time around, after decreasing by 0.2% in December. Excluding food and energy prices, the Core PPI is expected to rise by 0.2% in January after edging up by just 0.1% the month before. As this report precedes the FOMC minutes, it could inspire some discussion and concern if it shows significant price increase at the producer level.
Weekly Same-Store Sales will be reported on Wednesday this week due to the holiday. Last week’s data from the International Council of Shopping Centers (ICSC) showed sales decreased by 2.5% in the period ending February 9. That compared against the prior week’s increase of 2.4%. On a year-over-year basis, sales gained by 2.1% last week. Redbook had the yearly comparison at plus 2.4%.
Wednesday’s corporate wire has investor/analyst meetings at Genpact (NYSE: G) and Triumph Group (NYSE: TGI). The Barclay’s Industrial Select Conference highlights presentations by Danaher (NYSE: DHR) and Praxair (NYSE: PX). The day’s earnings schedule highlights news from DENTSPLY (Nasdaq: XRAY), Devon Energy (NYSE: DVN), Newfield Exploration (NYSE: NFX), DTE Energy (NYSE: DTE), Ameren (NYSE: AEE), Toll Brothers (NYSE: TOL), Akzo Nobel (OTC: AKZOY) and Fluor (NYSE: FLR).
A busy day for economic data offers two important reports in the premarket. First, investors will be attuned to the Weekly Jobless Claims data, though they could be blizzard impacted. The economists’ consensus sees an increase in claims to 359K, up from the 341K reported last week. Also at 8:30 AM ET, look for the latest Consumer Price Index report for the month of January. The economists’ consensus sees the CPI up slightly by 0.1%, versus December’s absence of change. Excluding food and energy prices, the Core CPI is seen higher by 0.2% this month, versus the 0.1% increase in December.
Two lightly followed data points reach the wire next. The Markit PMI Manufacturing Index is up at about 9:00 AM. The consensus view is for a slight deterioration in February, with the index seen falling to 55.5, down from 55.8 in the final reading for January. This report is the “flash” reading or first reading of the index for February. At 9:45 AM ET, we’ll get the latest Bloomberg Consumer Comfort Index. This weekly measure of consumer sentiment rose slightly last week to -35.9. It’s down though from highs reached toward the end of last year.
We’ll have another manufacturing data point at 10:00 AM Thursday when the Philadelphia Federal Reserve Survey is produced. This regional index is expected by economists to have improved in February to a mark of 1.1. In January, the index read negative 5.8, which marks contraction, so such a change would be meaningful. At the close of last week, the NY Fed Index improved substantially and broke well into expansionary territory.
Leading Economic Indicators are due for January at 10:00 AM ET. In December, the LEI posted a solid 0.5% increase, but the index was definitely impacted positively by Hurricane Sandy, which set Weekly Jobless Claims lower. Economists are looking for the LEI to rise by 0.3% in this report. This is an important data point given the Q4 GDP contraction of 0.1% noted earlier this month.
Also at 10:00 AM, Existing Home Sales will be reported for January. Economists surveyed by Bloomberg see this measure of the used home market showing an annual pace of sales of 4.9 million, which is down just slightly from December’s pace of 4.94 million.
Both of the weekly EIA energy reports will be released Thursday, with the Natural Gas Report first up at 10:30 AM ET. The Petroleum Status Report is second at 11:00 AM ET.
A slew of Federal Reserve Bank presidents are scheduled to speak Thursday, including James Bullard (St. Louis Fed), John Williams (San Francisco) and Richard Fisher (Dallas).
The corporate wire includes some big names Thursday. Analyst and investor meetings are scheduled for ReachLocal (Nasdaq: RLOC) and WGL Holdings (NYSE: WGL). The Barclays (NYSE: BCS) Industrial Select Conference highlights presentations from Tyco International (NYSE: TYC) and Boeing (NYSE: BA). The Consumer Analysts Group of New York Conference highlights presentations by Procter & Gamble (NYSE: PG) and PepsiCo (NYSE: PEP). The day’s earnings schedule highlights reports from Hewlett-Packard (NYSE: HPQ), Wal-Mart (NYSE: WMT), American International Group (NYSE: AIG), Safeway (NYSE: SWY), Nordstrom (NYSE: JWN) and Chesapeake Energy (NYSE: CHK).
The European Commission (EC) just published its fourth quarter GDP estimates last week. On Friday, the EC will issue its interim economic forecasts.
In America, the SEC Chairman and its commissioners participate in SEC Speaks.
More Federal Reserve representatives are set to speak on Friday, including Fed Governors Daniel Tarullo and Jerome Powell, as well as Boston Fed President Eric Rosengren.
The corporate news wire has analyst/investor meetings at Rock-Tenn Shared Services (NYSE: RKT) and InnerWorkings (Nasdaq: INWK). 3D Systems will split its shares 3-for-2 at the close. The Consumer Analyst Group of New York Conference highlights presentations from Coca-Cola (NYSE: KO) and Estee Lauder (NYSE: EL). The earnings schedule highlights reports from Interpublic Group (NYSE: IPG), Abercrombie & Fitch (NYSE: ANF), Pinnacle West Capital (NYSE: PNW), The Washington Post (NYSE: WPO), Barnes Group (NYSE: B) and Charter Communications (Nasdaq: CHTR).
The Italian elections begin on Sunday, and Sergio Berlusconi may emerge from the dead to regain power. Don’t forget to catch the Academy Awards Sunday evening.
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