This Week: Feds Slap Market's Fannie

We're halfway through July, the year and the baseball season. So, with the All-Star Game taking place this week, we thought it was ironic how the Feds slapped the market's fat Fannie (NYSE: FNM) concerns.

Despite Alcoa's EPS news last week, the current period welcomes the true start to earnings season, with a slew of regional banks reporting in a flurry of activity that peaks on Thursday. We have major reports to look forward to, including those from giants of American industry: Citigroup, Merrill Lynch and Google. Thus, earnings related data is more likely to drive the overall market through the period, but we are also anticipating critical inflation info so hold onto your caps, or your rear if you prefer...

Monday

Other than the market-settling press releases from the Federal Reserve, Treasury and SEC, there was no scheduled economic data on the slate for Monday. French markets were closed for Bastille Day, and workers at Brazil's Petrobras (NYSE: PZE) were set to strike.

While earnings season has officially begun, the reports will still be just trickling in for much of the week. Monday's schedule includes AMREP (NYSE: AXR), Associated Banc-Corp (Nasdaq: ASBC), Equity Lifestyle Properties (NYSE: ELS), Flagstar Bancorp (NYSE: FBC), Genentech (NYSE: DNA), M&T Bank (NYSE: MTB), Macatawa Bank (Nasdaq: MCBC), Mechel OAO (NYSE: MTL), Northern Financial (Nasdaq: NSFC), Novellus Systems (Nasdaq: NVLS), Ocean Power Technologies (Nasdaq: OPTT), PacWest Bancorp (Nasdaq: PACW), Peregrine Pharmaceuticals (Nasdaq: PPHM), Qiao Xing Universal Telephone (Nasdaq: XING), Royal Philips Electronics (NYSE: PHG) and Stanley Furniture (Nasdaq: STLY).

Tuesday

Tuesday starts with a major announcement from the Far East. The Bank of Japan is seen holding its key interest rate steady, though Barron's reports it could adjust its economic forecast lower. The Bank of Canada is also scheduled to announce its key rate decision on Tuesday morning.

Not to be outdone by our friendly foreigners, and just one week after testifying before a House panel, Ben Bernanke is scheduled to testify before the Senate Banking panel on Tuesday. Be sure to see the testimony live via our stock market news website. Simply use the CSPAN link found on our site. In any event, it should be interesting to see how Bernanke tries to quell concerns about the GSEs, because the testy Congressmen are likely to ask. CSPAN might soon afford a second camera, considering all the interesting events they'll follow this week. Also on Tuesday, a House committee will mull over a recommendation that the Air Force hold new bidding on the $35 billion air tanker contract.

Besides the usual ICSC and Redbook consumer measures, Retail Sales will be reported for the month of June at 8:30 AM ET. Bloomberg's consensus of economists anticipates a 0.5% rise, and 1.0% increase when excluding ailing autos. Remember, we've seen clear benefit from stimulus distribution, so greater growth is possible on the ex-auto number. We doubt it would lift the market though, since the stimulus benefit is widely known and well-discounted.

The first of the week's two big inflation reports comes on Tuesday at 8:30 when the Producer Price Index is offered up for the month of June. Powered by energy price momentum, the economists' consensus sees a 1.4% monthly rise. Excluding food and energy, the consensus expects a still important 0.3% increase (index increased 0.2% in May and 0.4% in April). We've seen enough anecdotal evidence of price hiking to begin to anticipate hotter measurements from the PPI and CPI core figures.

We'll be curious to see if manufacturing deteriorated further in July, after worse than expected Northeastern measurements last month. The Empire State Manufacturing Survey is due, and economists are looking for a reading of -7.0 in the New York area General Business Conditions Index. That's not far off from last month's take at negative 8.7.

At 10:00 AM, Business Inventories are expected to show a 0.4% increase in May, versus an April rise of 0.5%. Finally, OPEC will make its regular monthly report on the state of the oil market; this comes a week after it posted its 2008 Outlook, which was a monster of a report by the way.

American Eagle Outfitters (NYSE: AEO) will address investors on Tuesday. The day's earnings schedule includes Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), State Street (NYSE: STT), US Bancorp (NYSE: USB), VF Corp. (NYSE: VFC), ADTRAN (Nasdaq: ADTN), Altera (Nasdaq: ALTR), AmeriServ Financial (Nasdaq: ASRV), BOK Financial (Nasdaq: BOKF), Cintas (Nasdaq: CTAS), Consumer Portfolio Services (Nasdaq: CPSS), CoStar Group (Nasdaq: CSGP), Christalerias de Chile S.A. (AMEX: CGW), CSX Corp. (NYSE: CSX), Dearborn Bancorp (Nasdaq: DEAR), Eaton Corp. (NYSE: ETN), First Mariner (Nasdaq: FMAR), JB Hunt (Nasdaq: JBHT), Joe's Jeans (Nasdaq: JOEZ), Palm Harbor Homes (Nasdaq: PHHM), Polaris Industries (NYSE: PII), Renaissance Learning (Nasdaq: RLRN), Renasant Corp. (Nasdaq: RNST), RLI Corp. (NYSE: RLI), Seagate Technology (NYSE: STX), Spansion (Nasdaq: SPSN), Suffolk Bancorp (Nasdaq: SUBK), Tanzanian Royalty Exploration (AMEX: TRE), W.W. Grainger (NYSE: GWW), Trustco Bank (Nasdaq: TRST) and Westamerica Bancorporation (Nasdaq: WABC).

Wednesday

The week's hump day also marks the month's this time around. At 8:30, the world and then some will be attentively awaiting the Consumer Price Index (CPI) for June. We expect price increases are trickling through while they can, but if and when the stimulus runs dry, the restaurant/retail sector could turn into a barren wasteland. Many economists are looking for that demand deterioration to help ease inflation. However, inflation would dissipate at the cost of American industry, especially in the consumer sector.

Yours truly ate at P.F. Chang's (Nasdaq: PFCB) this past weekend, a stock I initiated into coverage shortly after its IPO. We noted the usual lines outside the door. In a couple months though, we expect restaurant lines could be replaced by queues waiters outside local unemployment offices. In any event, consumer prices are expected to jump 0.8% due to the rise in energy. Excluding that so-called phantom factor (energy), and food as well, prices are expected to increase just 0.2%, which compares to the 0.2% rise in May. And oh by the way, we're not in the camp that expects the economic cooling to stop inflation, at least not as far as food and energy are concerned, though it should have that effect under normal conditions. This is too big a topic for brief mention alone here. We'll try to do something with this in the near future.

The Housing Market Index touched a new low of 18 when last checked, and we're not expecting much better this month. The Mortgage Bankers Association issues its regular Purchase Applications Report in the early AM, and at 9:00, look for the Treasury International Capital Report to be released. The TIC data tracks the flow of foreign investments in long-term U.S. securities. Last month, the report showed an increase of $115.1 billion.

Industrial Production follows at 9:15, with expectations set to see no change in production, and capacity utilization deteriorate a tenth of a percentage point to 79.3%. Last month's measurement of utilization fell short of expectations, and it has continued to deteriorate throughout the year... as would be expected.

Ben Bernanke will spend his Wednesday testifying to the House in what has already been an exhaustive week for the poor fellow. The Fed will issue its June meeting minutes later in the day. Rounding out an especially busy schedule for the Federal Reserve on Wednesday, Kansas City Fed President Hoenig is scheduled to address general economic topics before an audience.

In a topic currently relevant to yours truly, an FDA panel is reviewing a pneumonia drug that has been in the works at Johnson & Johnson (NYSE: JNJ). Overseas, the Bank of Thailand is expected to raise its key rate. Finally, the EIA issues its regular Petroleum Status Report...oh by the way, the report has been posting drastic draws from inventory of late. However, the market is much more concerned about Iran, or it seems it would otherwise take some profits in oil.

Rio Tinto (NYSE: RTP) will report on its quarterly output and Fluor (NYSE: FLR) is scheduled to split 2-for-1. Wednesday's earnings schedule includes Abbott Laboratories (NYSE: ABT), Delta Airlines (NYSE: DAL), eBay (Nasdaq: EBAY), Wells Fargo (NYSE: WFC), Yum! Brands (NYSE: YUM), Alliance Data (NYSE: ADS), AMB Properties (NYSE: AMB), AMR Corp. (NYSE: AMR), ASML Holdings (Nasdaq: ASML), Astoria Financial (NYSE: AF), Cavium Networks (Nasdaq: CAVM), Crown Holdings (NYSE: CCK), Datalink (Nasdaq: DTLK), Exponent (Nasdaq: EXPO), First Midwest Bancorp (Nasdaq: FMBI), Gannett (NYSE: GCI), Hoku Scientific (Nasdaq: HOKU), Host Hotels and Resorts (NYSE: HST), Kinder Morgan Energy Partners (NYSE: KMP), Kinder Morgan Management (NYSE: KMR), Landstar System (Nasdaq: LSTR), Lufkin Industries (Nasdaq: LUFK), Marshall & Ilsley (NYSE: MI), MEDTOX Scientific (Nasdaq: MTOX), Mercantile Bank (Nasdaq: MBWM), National Penn Bancshares (Nasdaq: NPBC), Northern Trust (Nasdaq: NTRS), Piper Jafray (NYSE: PJC), Polycom (Nasdaq: PLCM), Resources Global Professionals (Nasdaq: RECN), Rurban Financial (Nasdaq: RBNF), S.Y. Bancorp (Nasdaq: SYBT), Saba Software (Nasdaq: SABA), St. Jude Medical (NYSE: STJ), Texas Capital Bancshares (Nasdaq: TCBI), TrueBlue (NYSE: TBI), United Community Financial (Nasdaq: UCFC), United Security Bancshares (Nasdaq: UBFO), Universal Forest Products (Nasdaq: UFPI), Valley National Bancorp (NYSE: VLY) and Xilinx (Nasdaq: XLNX).

Thursday

Two important economic reports are scheduled for the pre-market on Thursday. Look for the regular Weekly Initial Jobless Claims data from the Labor Department. Economists are generally looking for an up-tick to a level in between last week's 346K and the prior week's 404K, with consensus at 378K this time around.

Also at 8:30, June Housing Starts are expected to fall to an annual rate of 960K, from 975K in May. Barron's cover story this past weekend was entitled "Home Prices are about to Bottom." We'll let you know what we think about the story after we read it on the train Tuesday.

At 10:00, look for the Philadelphia Federal Reserve to issue its survey, with economists expecting the General Business Conditions Index to show a negative 17.0, compared to -17.1 last time out.

We'll be back to CSPAN to catch a Senate investigative panel, as it examines the very interesting topic of offshore tax havens on Thursday. We have more than a few friends who will be attuned to that particular meeting. Speaking of offshore issues, China is scheduled to issue several economic statistics for the month of June, not to mention its Q2 GDP data. The world's central bankers and oil traders will be a spot interested in that news. Regarding energy, the EIA posts its regular Natural Gas Report at 10:30. Last week, the group noted a build in inventory.

Thursday's earnings schedule includes Google (Nasdaq: GOOG), JP Morgan Chase (NYSE: JPM), Merrill Lynch (NYSE: MER), Microsoft (Nasdaq: MSFT), The Coca-Cola Co. (NYSE: KO), A.O. Smith (NYSE: AOS), Advanced Micro Devices (NYSE: AMD), AMCORE Financial (Nasdaq: AMFI), American River Bankshares (Nasdaq: AMRB), Amphenol (NYSE: APH), AptarGroup (NYSE: ATR), Avocent (Nasdaq: AVCT), BancFirst (Nasdaq: BANF), BancorpSouth (NYSE: BXS), Bank of New York Mellon (NYSE: BK), Baxter Int'l (NYSE: BAX), BB&T (NYSE: BBT), Berkshire Hills (Nasdaq: BHLB), BlackRock (NYSE: BLK), Brookline Bancorp (Nasdaq: BRKL), Brown & Brown (NYSE: BRO), Calamos Asset Management (Nasdaq: CLMS), Capital One Financial (NYSE: COF), Champion Enterprises (NYSE: CHB), CIT Group (NYSE: CIT), Citizens Banking (Nasdaq: CRBC), Coca-Cola Enterprises (NYSE: CCE), Comerica (NYSE: CMA), Continental Airlines (NYSE: CAL), Courier Corp (Nasdaq: CRRC), Cubist Pharmaceuticals (Nasdaq: CBST), Cypress Semiconductor (NYSE: CY), Cytec Industries (NYSE: CYT), Danaher (NYSE: DHR), Enterprise Financial Services (Nasdaq: EFSC), Evergreen Solar (Nasdaq: ESLR), Fairchild Semiconductor (NYSE: FCS), Fidelity Sourthern (Nasdaq: LION), First Commonwealth Financial (NYSE: FCF), First Financial Bankshares (Nasdaq: FFIN), First Financial Holdings (Nasdaq: FFCH), First Horizon National (NYSE: FHN), Flagstar Bancorp (NYSE: FBC), Genuine Parts (NYSE: GPC), Gilead Sciences (Nasdaq: GILD), Great Southern Bancorp (Nasdaq: GSBC), Harley-Davidson (NYSE: HOG), HNI Corp. (NYSE: HNI), Home Bancshares (Nasdaq: HOMB), Huntington Bancshares (Nasdaq: HBAN), ICU Medical (Nasdaq: ICUI), Illinois Toolworks (NYSE: ITW), Independent Bank (Nasdaq: INDB), Informatica (Nasdaq: INFA), Insteel Industries (Nasdaq: IIIN), International Business Machines (NYSE: IBM)...

...International Game Technology (NYSE: IGT), Johnson Controls (NYSE: JCI), Knoll Inc. (NYSE: KNL), Leggett & Platt (NYSE: LEG), MBT Financial (Nasdaq: MBTF), McMoRan Exploration (NYSE: MMR), Media General (NYSE: MEG), Meridian Biosciences (Nasdaq: VIVO), Methode Electronics (NYSE: MEI), MGIC Investment (NYSE: MTG), Mission West Properties (NYSE: MSW), Nash Finch (Nasdaq: NAFC), National Beverage (Nasdaq: FIZZ), New Oriental Education & Technology (NYSE: EDU), Nexen (NYSE: NXY), Nokia (NYSE: NOK), NovaGold Resources (AMEX: NG), Novartis (NYSE: NVS), Nucor (NYSE: NUE), Orbital Sciences (NYSE: ORB), Pacific Continental (Nasdaq: PCBK), People's United Financial (Nasdaq: PBCT), PMC-Sierra (Nasdaq: PMCS), PNC Financial (NYSE: PNC), PPG Industries (NYSE: PPG), Provident Bankshares (Nasdaq: PBKS), Reliance Steel (NYSE: RS), Safeway (NYSE: SWY), Sherwin-Williams (NYSE: SHW), Simmons First National (Nasdaq: SFNC), Skyworks (Nasdaq: SWKS), Soapstone Networks (Nasdaq: SOAP), Sonoco Products (NYSE: SON), Stryker (NYSE: SYK), SunPower (Nasdaq: SPWR), TD Ameritrade (Nasdaq: AMTD), Tempur Pedic (NYSE: TPX), Textron (NYSE: TXT), Umpqua Holdings (Nasdaq: UMPQ), United Technologies (NYSE: UTX), USA Truck (Nasdaq: USAK), Valmont (NYSE: VMI), Virginia Commerce (Nasdaq: VCBI), Votorantim Celulose (NYSE: VCP), Winmark Corp. (Nasdaq: WINA) and Zions Bancorp (Nasdaq: ZION).

Friday

Economic data empty, Friday still offers investors little chance to catch their breath. Besides the very important earnings reports you see listed below, the world's media will be following Barack Obama as he sets forth on his foreign policy fine-tuning tour of Europe and the Middle East.

Friday's earnings close out with big-leaguers Citigroup (NYSE: C), Honeywell (NYSE: HON), Schlumberger (NYSE: SLB), Acme Unlimited (AMEX: ACU), Amcol Int'l (NYSE: ACO), Bridge Capital Holdings (Nasdaq: BBNK), Donegal Group (Nasdaq: DGICA), Gateway Financial (Nasdaq: GBTS), Great Atlantic and Pacific Tea (NYSE: GAP), Green Bankshares (Nasdaq: GRNB), iGate Corp. (Nasdaq: IGTE), LaBranche & Co. (NYSE: LAB), Manpower (NYSE: MAN), Mattel (NYSE: MAT), Old Second Bancorp (Nasdaq: OSBC), Overstock.com Inc. (Nasdaq: OSTK), Popular (Nasdaq: BPOP), Sensient Technologies (NYSE: SXT), Student Loan Corp. (NYSE: STU), Wilmington Trust (NYSE: WL) and Wipro Limited (NYSE: WIT).

Baseball fans should take note that the first round of bidding for the Chicago Cubs is due on Friday. The team is currently owned by the Tribune.

Please see our disclosure at the Wall Street Greek website. Article also interests AMEX: DIA, AMEX: SDS, AMEX: DOG, AMEX: SPY, AMEX: QLD, Nasdaq: QQQQ, NYSE: NYX.