The Greek's Week Ahead (Oct 16 06)
"The Greek's Week Ahead" is designed to help you prepare for the market moving events of the week so you and your portfolio are not caught off guard. Whether it helps you to prepare strategy or just raise your awareness of important factors that may move markets, we hope you find it useful. This week is not short of market moving information in the least. The economic schedule and earnings calendar are both heavy this week. A dozen of the 30 stocks that make up the Dow index are scheduled to report.
The week starts off quiet on Monday, with the brightest lights on the radar screen coming from speeches of several Fed representatives. Fed Chairman Ben Bernanke will address the American Bankers' Association Forum in Phoenix, via satellite from Washington. Fed Presidents William Poole and Janet Yellen will deliver speeches as well. On the earnings front, Mattel, Eaton and Marshall & Ilsley will report. The most powerful impact to the market is more likely to be delivered by the news from OPEC, which has scheduled an emergency meeting for October 19th in Qatar. Venezuela and Iran are playing the devil's advocate, as they both would like to see prices higher, adding pressure to the U.S., but they are skeptical of losing market share to countries like Saudi Arabia, which is believed to be producing above formal quota. The 11 members will meet to work out the details of a planned 1 million barrel per day cut in order to provide clarity to the market. We suspect that the reduction will not impact prices on a "news basis" alone, as it is well understood at this point. OPEC would do well by surprising the market with a greater than expected production cut, but that seems unlikely. Even so, a floor may be supported by the reduction and clarity provided. Crude prices touched a new low at $57 and change last week before rallying on Friday.
On Tuesday, the news flow will kick it up a notch. First and foremost, on the economic front, the government reports the producer-price index for September, a key measure of inflation, at 8:30 EDT. Economists polled by Reuters forecast that the overall PPI fell 0.6 percent in September (a Bloomberg poll showed consensus at 0.7% decline), while they see the core PPI, excluding volatile food and energy prices, up 0.2 percent. In August, overall PPI rose 0.1 percent and core PPI fell 0.4 percent. Also on Tuesday, The Johnson Redbook retail sales index will help the market gauge consumer spending strength. Likely less important, the government will release its latest data on U.S. industrial production and capacity utilization. Bloomberg consensus shows expectations for a 0.1% drop for industrial production and a 82.2% measure for capacity utilization. This measure's importance is diminished because of service sector dominance in the U.S. economy. The Treasury reports foreign purchases and sales of U.S. assets in August. This measure may increasingly be valuable in measuring the world's confidence in the future of America. Heading the Fed's tour, Governor Susan Bies will be participating in the Economic Outlook strategy session before the American Bankers Association's Forum.
On the earnings front, Intel, Johnson & Johnson, Office Depot, IBM, Motorola and Yahoo! are scheduled to report. Yahoo! shares have not kept up pace with other large-cap Internet shares of late, and have an opportunity to make up the lost ground if they can report a positive outlook. At $24.42 YHOO shares are well off their 52 week high of $43.66.
On Wednesday, the Mortgage Bankers Association will report on its most recent refinancing index. Its previous report showed strong refinancing activity that we speculated was driven by mortgage bankers pushing variable rate loan holders into fixed rate mortgages. Also, the National Association of Home Builders will release its index for sales of new, single-family homes for October. Bloomberg's poll finds consensus at 1.64 million, down from 1.67 million in August. The Consumer Price Index for September will be reported at 8:30 AM. According to Reuters and Bloomberg polls, economists forecast the overall CPI fell 0.3 percent in September, while core CPI, which excludes volatile food and energy prices, is seen up 0.2 percent by Reuters. In August, both overall and core CPI rose 0.2 percent. The Energy Department will provide its weekly update on U.S. crude-oil, distillate and gasoline stocks. The earnings scene remains hot on Wednesday, with reports from Abbott Laboratories, Aztar, eBay, JP Morgan Chase, Apple Computer and AMR Corp.
On tap for Thursday, the Labor Department will release its recent data on weekly U.S. jobless claims. The Conference Board, a private research group, will post its composite index of leading indicators for September. The index represents a gauge of future economic activity, and is expected to measure 0.3%. With all the information becoming available this week, the market will weigh one against another in an attempt to gauge what the Fed will do with rates the following week, but more importantly, it will feel out the depth of economic slowdown and date of arrival of recovery. Also on Thursday, The Federal Reserve Bank of Philadelphia will report on its business-conditions index for October, a measure of the region's manufacturing sector's health. In September, an unexpected contraction of 0.4 sparked rallies in stocks and bonds. An expansion of 7.0 points is expected this period, according to Bloomberg. Reporting earnings, Google, Coca Cola and Baxter International highlight the schedule.
Friday, American behemoths Caterpillar, Merck and Schlumberger report earnings. On the international front, Vladimir Putin meets in Finland with European Union member nations, with energy expect to headline the schedule. North Korea's response to newly imposted sanctions will be telling for markets as well, as it will act as a gauge of the North's bite versus a loud bark. If North Korean ships are boarded, the actions of the Stalinist state will decide how the market discounts related risk. If North Korea starts sinking Japanese fishing vessels, markets are likely to tank, but if it responds with words alone, the markets should recover any lost confidence.
We hope this information proves useful to your weekly strategy and trading efforts, and helps improve your sense of preparedness. (disclosure)
The week starts off quiet on Monday, with the brightest lights on the radar screen coming from speeches of several Fed representatives. Fed Chairman Ben Bernanke will address the American Bankers' Association Forum in Phoenix, via satellite from Washington. Fed Presidents William Poole and Janet Yellen will deliver speeches as well. On the earnings front, Mattel, Eaton and Marshall & Ilsley will report. The most powerful impact to the market is more likely to be delivered by the news from OPEC, which has scheduled an emergency meeting for October 19th in Qatar. Venezuela and Iran are playing the devil's advocate, as they both would like to see prices higher, adding pressure to the U.S., but they are skeptical of losing market share to countries like Saudi Arabia, which is believed to be producing above formal quota. The 11 members will meet to work out the details of a planned 1 million barrel per day cut in order to provide clarity to the market. We suspect that the reduction will not impact prices on a "news basis" alone, as it is well understood at this point. OPEC would do well by surprising the market with a greater than expected production cut, but that seems unlikely. Even so, a floor may be supported by the reduction and clarity provided. Crude prices touched a new low at $57 and change last week before rallying on Friday.
On Tuesday, the news flow will kick it up a notch. First and foremost, on the economic front, the government reports the producer-price index for September, a key measure of inflation, at 8:30 EDT. Economists polled by Reuters forecast that the overall PPI fell 0.6 percent in September (a Bloomberg poll showed consensus at 0.7% decline), while they see the core PPI, excluding volatile food and energy prices, up 0.2 percent. In August, overall PPI rose 0.1 percent and core PPI fell 0.4 percent. Also on Tuesday, The Johnson Redbook retail sales index will help the market gauge consumer spending strength. Likely less important, the government will release its latest data on U.S. industrial production and capacity utilization. Bloomberg consensus shows expectations for a 0.1% drop for industrial production and a 82.2% measure for capacity utilization. This measure's importance is diminished because of service sector dominance in the U.S. economy. The Treasury reports foreign purchases and sales of U.S. assets in August. This measure may increasingly be valuable in measuring the world's confidence in the future of America. Heading the Fed's tour, Governor Susan Bies will be participating in the Economic Outlook strategy session before the American Bankers Association's Forum.
On the earnings front, Intel, Johnson & Johnson, Office Depot, IBM, Motorola and Yahoo! are scheduled to report. Yahoo! shares have not kept up pace with other large-cap Internet shares of late, and have an opportunity to make up the lost ground if they can report a positive outlook. At $24.42 YHOO shares are well off their 52 week high of $43.66.
On Wednesday, the Mortgage Bankers Association will report on its most recent refinancing index. Its previous report showed strong refinancing activity that we speculated was driven by mortgage bankers pushing variable rate loan holders into fixed rate mortgages. Also, the National Association of Home Builders will release its index for sales of new, single-family homes for October. Bloomberg's poll finds consensus at 1.64 million, down from 1.67 million in August. The Consumer Price Index for September will be reported at 8:30 AM. According to Reuters and Bloomberg polls, economists forecast the overall CPI fell 0.3 percent in September, while core CPI, which excludes volatile food and energy prices, is seen up 0.2 percent by Reuters. In August, both overall and core CPI rose 0.2 percent. The Energy Department will provide its weekly update on U.S. crude-oil, distillate and gasoline stocks. The earnings scene remains hot on Wednesday, with reports from Abbott Laboratories, Aztar, eBay, JP Morgan Chase, Apple Computer and AMR Corp.
On tap for Thursday, the Labor Department will release its recent data on weekly U.S. jobless claims. The Conference Board, a private research group, will post its composite index of leading indicators for September. The index represents a gauge of future economic activity, and is expected to measure 0.3%. With all the information becoming available this week, the market will weigh one against another in an attempt to gauge what the Fed will do with rates the following week, but more importantly, it will feel out the depth of economic slowdown and date of arrival of recovery. Also on Thursday, The Federal Reserve Bank of Philadelphia will report on its business-conditions index for October, a measure of the region's manufacturing sector's health. In September, an unexpected contraction of 0.4 sparked rallies in stocks and bonds. An expansion of 7.0 points is expected this period, according to Bloomberg. Reporting earnings, Google, Coca Cola and Baxter International highlight the schedule.
Friday, American behemoths Caterpillar, Merck and Schlumberger report earnings. On the international front, Vladimir Putin meets in Finland with European Union member nations, with energy expect to headline the schedule. North Korea's response to newly imposted sanctions will be telling for markets as well, as it will act as a gauge of the North's bite versus a loud bark. If North Korean ships are boarded, the actions of the Stalinist state will decide how the market discounts related risk. If North Korea starts sinking Japanese fishing vessels, markets are likely to tank, but if it responds with words alone, the markets should recover any lost confidence.
We hope this information proves useful to your weekly strategy and trading efforts, and helps improve your sense of preparedness. (disclosure)
Labels: Week Ahead
posted by The Greek | 9:49 PM
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