The week offers an important new reading of the economy, the second quarter GDP report. Economists are looking for slower growth than the twice revised lower first quarter pace of 2.7%. Consumer Confidence gets two new inspections on Tuesday and again on Friday, and we are not expecting good news. Finally, Must-See TV returns, as CSPAN will very likely cover the Congressional Ethics Panel trial of one NY Representative Charlie Rangel.
New Home Sales were reported for the month of June at 10:00 AM Monday morning. The annual pace of sales ran at 330K through the month, better than economists' expectations for 310K. June's 23.6% rebound followed May's 36.7% drop on the conclusion of the tax incentive program for first-time buyers. Inventory improved on the increase in sales pace, but prices fell 1.4% on the median home sale. June's sales pace still marks one of the slowest on record.
EU, IMF and ECB officials arrived in Greece this week to begin a review of the troubled nation's implementation of austerity measures. Greece's capital-backers want to see their money going toward effective cause. Greece may face ouster from the European Monetary Union if it fails to follow through on its promises, though you will not hear EU representatives say as much.
Besides an extensive earnings list, Monday offers a good amount of corporate events. The ITC will rule Monday on a patent dispute between Rambus (Nasdaq: RMBS) and Nvidia (Nasdaq: NVDA). An examiner will be named in Washington Mutual's bankruptcy case; he will be charged with investigating a settlement in the sale of the thrift to J.P. Morgan Chase (NYSE: JPM). Also, a report will be filed with regard to Sam Zell's led buyout of the Tribune. The IPO lockup curbs expire on Invesco Mortgage Capital (NYSE: IVR) and Southwest Bancorp (Nasdaq: OKSB).
Five economic reports are on tap for Tuesday, but only one will garner the market's attention. Consumer Confidence will be reported by the Conference Board at 10:00 AM. Confidence dropped nearly 10 points in June, when the index fell to a level of 52.9. Normally it would take some sort of event to cause such a shock inspired decline. Surprisingly, economists forecast confidence will slip further in this July reading, to a mark of 51.0. The conclusion of certain stimulus efforts, and the threatened conclusion of unemployment benefit extensions likely inspired the sharp drop-off in confidence in June.
State Street (NYSE: STT) will report on Investor Confidence at 10:00 AM. State Street's measurement of investors' portfolio risk held managed a 1.3 point gain in June. The index rose to 89.7, as improvement in Europe and Asia offset a sharp decline in the US. Still, the reading below the 100 mark signifies risk aversion.
The Case Shiller Home Price Index is due for release at 9:00 AM. This follows last week's price data seen in the Existing Home Sales Report and the FHFA House Price Index. Both those reports noted increased prices, but Monday's New Home Sales Report stated prices of new homes had fallen, based on the median price of new homes sold. Last month's report for April showed a 0.3% price increase in Case Shiller's 10-City Index, after seasonal adjustment. The Greek sees new price declines on the way, and would not be surprised to see a drop as early as within the May data.
The International Council of Shopping Centers (ICSC) reports on Weekly Same-Store Sales again Tuesday morning. Last week's report covering the period ended July 17 showed week-over-week sales increase of 1.4% and a year-on-year gain of 4.2%. The ICSC attributed the jump in sales to a parallel increase in temperatures across the country.
A Senate panel will take up the deepwater-drilling moratorium, perhaps by no coincidence, on the same day BP (NYSE: BP) is scheduled to report its second quarter results. BP is also expected to declare its estimates on its Gulf of Mexico clean-up costs and well repair work.
In regulator matters, an FDA panel will review Medtronic's (NYSE: MDT) Matrix device for disc disease. Also, a New York court will hear arguments on the Galleon Group insider trading case.
Durable Goods Orders headlines Wednesday's morning wire. June's Orders are seen increasing 1.0% after slipping 0.6% in May. Excluding transportation, orders actually rose 0.6% in May. Durable Goods Orders often fluctuate wildly due to the hefty price tag attached the segment's goods. Survey our "Economic Reports" thread to find our coverage of last month's data.
The Mortgage Bankers Association publishes its Weekly Applications Survey again in the pre-market Wednesday. Last week's report covering the period ended July 16 showed the Market Composite Index gained 7.6% week-to-week. Mortgage rates dropped to the lowest marks on record, driving activity in both refinancings and new purchase mortgage origination.
For the week ended July 16, the EIA reported crude oil inventory increased by 0.4 million barrels, while gasoline stores increased by 1.1 million barrels. Both crude and gas stocks were above the upper limit of the average range for this time of year.
In corporate news, the FDA will review AstraZeneca's (NYSE: AZN) heart drug. Charles Schwab (Nasdaq: SCHW) will offer its latest business update. Molycorp is expected to price its IPO for $17 a share, raising approximately $476 million.
Just the two regulars Thursday, as far as economic reports are concerned. Look for the Department of Labor's Weekly Jobless Claims data at 8:30 AM. Last week's report covering the period ended July 17 produced a 37K increase in new benefits filers, to 464K. This week, economists see a reading of 460K, but remember, with this weekly data, economists will forecast close to the prior result.
The EIA reports on Natural Gas at 10:30 AM ET. The report for the period ended July 16 showed natural gas inventory increased 51 Bcf. At the latest level, natural gas storage stood 261 Bcf above the average mark for this time of year. High temperatures for July has increased air conditioner and electricity usage, which is partly powered by natural gas fueled power plants. Perhaps, if temperatures continue this torrid trend, we might start to see more pressure on nat gas inventory along with pricing. Coming off a spike in June, prices seem to us on a rising trend since mid-March.
Must-see TV schedules the House Ethics Panel trial on charges against Rep. Charles Rangel, who happens to represent my neighboring region here in NYC. The Senate Foreign Relations Committee will examine BP's role in the release of the Lockerbie bomber, who by the way is surviving his mortal illness thus far.
Your worst nightmare meets your Friday, so plan for a late departure to the beach house. Five economic reports are set to run through the length of the day. First and foremost, look for the Advance Report on Q2 GDP. Q1's growth was revised down from 3.2%, to 3.0% and finally to 2.7%. We've mostly seen economic data slipping over the last three months, and so the economists' forecast for Q2 GDP growth of 2.5% seems a bit high. However, economists' forecasts range from +1.0% to +3.4%. Look for the GDP data at 8:30 ET. The Price Index is expected to increase by 1.0%.
The Employment Costs Index is also due for 8:30 report. After increasing 0.6% in Q1, economists expect Q2 costs to rise 0.4%.
The Chicago Purchasing Managers Index (PMI) is due for reporting at 9:45 ET. All signs point toward moderation in the Chicago PMI reading. It slipped slightly at last check, to a still strong 59.1. We expect July's reading to drop further, and economists forecast the metric to hit 56.0 when reported Friday morning. Of course, that still marks economic expansion for the Midwest region's manufacturing segment. Look for the slip to take it lower than economists expect, in my view.
The University of Michigan/ Reuters Consumer Sentiment reading is due at 9:55 AM. It dropped precipitously in the mid-July reading, to a mark of 66.5. Economists surveyed by Bloomberg are looking for a slight improvement to 67.0 in this last monthly read. Again, the odds seem skewed towared a lower reading than that.
The Department of Agriculture is scheduled to report on Farm Prices at 3:00 PM ET.
Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.
Inquiries about Wall Street Greek content and advertising services can be emailed to Advertise @WallStreetGreek.com. Article sponsored by Blessed Miracle.