"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. A slew of economic data, including the highly anticipated inflationary metrics, PPI and CPI, meet the market this week. Also, the minutes from the most recent Fed meeting will be released, and they typically contain a cautionary tone. Also, significant retail sales data hits the newswires this week, as well as corporate earnings reports from several key retail and technology companies.
Monday brings little outside of concern for the economic data to follow later in the week. Lighting a fire of concern for retailers, Wal-Mart announced broad reaching holiday price cuts on Monday that may prove damaging to a variety of retail competitors.
U.S. Commerce Secretary Carlos Gutierrez is leading a delegation to China. Also possibly impacting Asian markets, Australia's Reserve Bank will report on its monetary policy. The S&P/ASX 200 Index closed 0.34% lower Monday and the NIKKEI slipped 0.56%. In Japan, banks continue to lead shares lower on recently weak economic data.
In the U.K., the FTSE 100 Index was down approximately 0.28% into the afternoon Monday, driven by weakness in metals and mining shares as metals prices including aluminum, nickel, zinc, copper, silver and gold were all falling Monday. Concern for global economic growth has begun to impact commodity concerns across the board. Last week, expectations were reduced for Chinese crude oil demand through 2007. Now with concerning news out of Japan, the world's second largest economy, commodities are starting to pay attention. Today, copper inventory monitored by the London Metals Exchange gained 2.1%, reaching the highest level since April 2004. Concerns are rising that 2007 could bring an inventory glut.
Markets in the U.S. rose Monday across the Dow, S&P 500 and NASDAQ indices. U.S. markets are gearing up for the key economic data beginning Tuesday. Tyson Foods releases fourth quarter earnings on a quiet day for releases generally.
Tuesday starts the economic data roll, as the October Producer Price Index is expected by economists polled by Briefing.com to show a 0.4% drop. The drop is significantly impacted by lower energy prices, but Core PPI, which excludes volatile food and energy prices, is expected to rise 0.1%. A second barometer of economic strength, October's retail sales data will be released, and is seen decreasing by 0.4%, according to Bloomberg. Decreasing retail sales is concerning, as the consumer has been a stalwart of the American economy over the years. Decreasing sales results may be indicative of wallet constraint due to rising consumer debt and debt expenses as credit card providers squeeze already money tight mortgage holders. Also, and not to be ignored, the retail environment may be saturated, and due for some capacity reduction.
Finally, a third piece of important data will reach the market Tuesday. The minutes of the October meeting of the Federal Reserve have the ability to drive markets, as its content is closely screened to provide reading for future Fed action and concerns. Tuesday also brings September Business Inventories, seen by Bloomberg rising 0.5%, versus a 0.6% rise in August.
Other interesting bits of information that seem set to take a back seat to the economic releases of the day, still hold the potential to headline the news. Ford Motor is expected to file its delayed 10-Q with the SEC on Tuesday. The delay was attributed to accounting error and restatement. One might read into Ford's recent change of CEO as portending a certain depth of bad news within the release. Thus, Ford's release and its conference call at 10 AM could move markets.
St. Louis Fed Chief William Poole will address the Chartered Financial Analysts Society in Wilmington, Delaware. The New York Society of Securities Analysts will holds its banking conference Tuesday. Finally, not to be ignored, internationally, India and Pakistan will resume their peace talks.
Reporting earnings Tuesday, look for Wal-Mart, Home Depot, Target, Staples, Agilent Technologies, TJX Companies, Analog Devices, American Eagle, DR Horton, Abercrombie & Fitch, Ross Stores and Saks Incorporated.
Wednesday brings important data, most important likely being internationally sourced. The release of three economic indicators on China by the Milken Institute have the potential to impact markets, and include data on the renminbi, Chinese IPOs and debt. In the U.K., the Bank of England will release its report on inflation. Finally, likely grabbing some attention by the likes of CNN, ex-CIA director James Woolsey will speak at an American Foreign Policy Council confab on "Understanding the Iranian Threat."
Wal-Mart executives will address the Morgan Stanley Consumer & Retail Conference in New York. Reporting earnings Wednesday are: Tyco International, Applied Materials, Network Appliance, Limited Brands Inc., Petsmart Inc. and UGI Corp.
Thursday rings the economic warning bells again with the release of the Consumer Price Index. Economists surveyed by Briefing.com see the index decreasing 0.3%, but they see a rise of 0.2% for the Core CPI measure (Bloomberg's survey sees a 0.3% rise). October Industrial Production is also on the schedule Thursday, with expectations for a 0.2% rise, according to Briefing.com (Bloomberg's survey sees a 0.3% rise). October Capacity Utilization is seen at 82% by both polls, compared to 81.9% last period. Finally, the November Philly Fed Survey is seen measuring between 5.0 to 5.5.
Overseas, the Bank of Japan ends its two-day meeting, and will issue its decision on interest rates. The European Central Bank will convene as well, but is not expected to issue a rate decision.
Fed Governors Randall Kroszner and William Poole will address the Cato Institute conference on Fed Policy in the Face of Crises, while Fed Governor Susan Bies speaks at an EU/U.S. banking forum in Washington D.C. One more talking head of note takes the podium Thursday, Financial Accounting Standards Board Chairman Robert Herz will address the Financial Executives International Conference in New York.
Reporting Earnings on Thursday, Hewlett-Packard, Dell, Starbucks, Sears Holdings, Gap, Autodesk, Williams-Sonoma, Hillenbrand Industries, Barnes & Noble, Helmerich & Payne, Claire's Stores and Big Lots.
Friday finishes the data parade, with the release of October Housing Starts, seen by a Bloomberg survey of economists at 1.68 million, versus 1.77 million in September. Perhaps just as important, new housing permits data will be announced, and is seen by Briefing.com's survey of economists as totaling 1.625 million, versus 1.619 million in September. The tone of large U.S. home builders provides concern, and we believe the data will fall below consensus estimates, driving down housing stocks that have risen from lows. Cleveland Fed President Sandra Pianalto speaks at the Fed's Universities, Innovation and Economic Growth conference. Reporting earnings on Friday are Foot Locker, Smucker JM Company, and Anntaylor Stores.
We hope you enjoyed "The Greek's Week Ahead," and remind you to look for "Today's Morning Coffee" from Tuesday through Friday for a closer look at what will move markets each day. See Wall Street
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