Nothing Else Matters This Week

By The Greek - Economy & Markets:

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This week is all about the Employment Situation Report release on Friday. Nothing else matters! The market will anticipate it from the week's start to finish, and the report itself does not seem likely to surprise positively considering all the anecdotal evidence and weekly jobless data. No, instead it seems we are headed for unemployment catastrophe! Prepare for 8+% unemployment, and mid-teen real unemployment when considering part-time workers who wish they had a full-time job and bloggers hanging on to a dream.

The Week Ahead

Monday

Due to extraordinary circumstances, we covered Monday in a separate article this week. Please see Monday's schedule of events via THIS LINK.

Tuesday

Tuesday will offer a few more indicators of consumer spending. Motor Vehicle Sales will be reported on Tuesday. The annual pace of February's sales is expected to dwindle away to 6.2 million. The anemic rate seen this time around is even less than January's pace of 6.8 million.

The International Council of Shopping Centers will report sales for the most recent week in the AM as usual. Last week's data highlighted year-over-year sales decline of 0.8%. Dare we say there's some good news to be found in the softening rate of decline in year-to-year sales? Still, we can't see sales decline stopping completely, at least not while the economy is still shedding jobs. However, at some point, natural economic growth should overcome this special cyclical weakness that is powered by extraordinary credit unwind. Plenty more retailers could go bankrupt before that happens just the same.

We expect Pending Home Sales will show deterioration when January's data is released on Tuesday. The then pending status of fiscal stimulus, including home purchase stimulant, should have kept signed contracts quelled in January while would-be buyers waited (all five of them!). Bloomberg's consensus of economists sees the index dropping to 85.1, from a level of 87.7 in December.

Christina Romer, the Chairperson for the Council of Economic Advisors, will address the National Association for Business Economics in the early AM. Also that morning, Atlanta Fed President Dennis Lockhart will speak on the topic of the economy. Down in DC town, the Senate Banking Committee will hold a hearing on how to improve consumer protection from financial abuses. Some of you might smartly remark, just keep people from themselves... However, for those of you on the front line of poverty and struggle, you are well aware of the pitfalls that litter the path of the unfortunate.

Secretary of State Clinton will visit Dodge on Tuesday, as she takes a trip to Jerusalem before heading off to the West Bank Wednesday. This trip takes her from Egypt, to Palestine, to Brussels and Geneva, to speak with the Russians. This is clearly a "brush the surface" kind of first visit, as was her Asian tour. The new Administration seems to want to clearly articulate the message, "there's a new sheriff in town."

As I think about her marathon efforts though, I wonder if she is not compiling too many miles all at once. Wouldn't less broad reaching trips surrounded by more inspection and analysis of meetings, followed by counteraction, prove more productive? Perhaps this is the plan for forthcoming journeys, and I will not attempt to analyze this sophisticated office from my couch. Still, how much is being digested, and how much value is added by this whirlwind touring? Is the President receiving daily updates. Otherwise, if Clinton and Obama are sitting down to talk about all these issues at once... how much value add can be garnered on individual international issues when attempting to down a feast of information stretching from Indonesia to Jerusalem all at once? I think the Administration is full of adrenaline and energy, and perhaps biting off more than it can chew in one sitting with these trip, but I admire their intense interest in restoring the image of the USA.

Look for the Bank of Canada to cut rates further on Tuesday, while the recently active Australian central bank considers a breather.

The earnings schedule highlights news from 51Job (Nasdaq: JOBS), Abraxis Biosciences (Nasdaq: ABII), ADC Telecommunications (Nasdaq: ADCT), Allos Therapeutics (Nasdaq: ALTH), America Service Group (Nasdaq: ASGR), America's Car-Mart (Nasdaq: CRMT), Arena Resources (NYSE: ARD), AutoZone (NYSE: AZO), Bank of Montreal (NYSE: BMO), Bank of Nova Scotia (NYSE: BNS), BioScrip (Nasdaq: BIOS), Blount Int'l (NYSE: BLT), Bruker Corp. (Nasdaq: BRKR), Cache (Nasdaq: CACH), Carrizo Oil & Gas (Nasdaq: CRZO), Celsion (Nasdaq: CLSN), Chico's FAS (NYSE: CHS), CRH plc (NYSE: CRH), Culp Inc. (NYSE: CFI), Delta Petroleum (Nasdaq: DPTR), Energy Recovery (Nasdaq: ERII), Ferro (NYSE: FOE), Financial Federal (NYSE: FIF), Golfsmith Int'l (Nasdaq: GOLF), Greatbatch (NYSE: GB), HickoryTech (Nasdaq: HTCO), Home Diagnostics (Nasdaq: HDIX), Inspire Pharmaceuticals (Nasdaq: ISPH), Isle of Capris (Nasdaq: ISLE), Jackson Hewitt (NYSE: JTX), JER Investors (NYSE: JRT), John Bean Tech (NYSE: JBT), Kenneth Cole (NYSE: KCP), LeMaitre Vascular (Nasdaq: LMAT), Luna Innovations (Nasdaq: LUNA), Masimo Corp. (Nasdaq: MASI), MBIA (NYSE: MBI), Monotype Imaging (Nasdaq: TYPE), Move, Inc. (Nasdaq: MOVE), Netezza (NYSE: NZ), NMT Medical (Nasdaq: NMTI), Philippine Long Distance (NYSE: PHI), PLATO Learning (Nasdaq: TUTR), PRG-Schultz (Nasdaq: PRGX), Resource Capital (NYSE: RSO), SciClone Pharmaceuticals (Nasdaq: SCLN), Seaspan (NYSE: SSW), Sun Healthcare (Nasdaq: SUNH), Superior Well Services (Nasdaq: SWSI), Systemax (NYSE: SYX), Tech Data (Nasdaq: TECD), Thomas Group (Nasdaq: TGIS), Town Sports Int'l (Nasdaq: CLUB), Trina Solar (NYSE: TSL), USA Mobility (Nasdaq: USMO), Vector Group (NYSE: VGR), VeriFone (NYSE: PAY), Virgin Mobile (NYSE: VM), Xilinx (Nasdaq: XLNX) and more.

Wednesday

The employment data parade begins on Wednesday, concluding with Friday's all important government report. Wednesday brings Challenger's Planned Job Cuts data and ADP's Private Employment Report. Challenger measures the number of announced corporate layoffs in February, and there's been no let up... Expect more nightmarish news from all directions. The tone of trading through the entire week will be obsessed with the expectation for dire employment data starting on Wednesday.

If you can't wait for the Federal report, ADP's data is considered the best predictor of all the precursors of nonfarm payrolls. However, you will be damned if you do and if you don't this month. A bit of positive employment news would not be believable, and a bout of bad news would only serve as confirmation. ADP's data is probably not going to prove significant at this point, considering the adequate information available from anecdotal sources and the weekly jobless claims data. We are sorry to say that do not have a consensus estimate for either of these two employment data points.

ISM produces the follow up to its Manufacturing Index on Wednesday, the Nonmanufacturing Index (clearly named by someone void of creativity). So, we cringe when we write the word "nonmanufacturing," as despite it's quirky comic value, it still disappoints the creative mind. Bloomberg's consensus of economists could care less, and is looking for a measure of 41.0 for February, versus the reading of 42.9 in January. For better or worse, the reading will still very likely reflect some degree of economic contraction (below 50.0). You know the market will not need to see expansion to be enthused, but progression toward it, but we do not expect that miracle this time around.

Dallas Fed President Richard Fisher is scheduled to discuss the economic outlook before a group in Texas. Meanwhile, the very active Atlanta Fed President Dennis Lochart is scheduled to discuss the economic outlook before a group in Florida. The regular Mortgage Bankers' Association Purchase Applications Report will tally the week's mortgage activity. Recently, a slight increase in interest rates had a profound effect on application activity. The Fed releases its Beige Book of regional economic indicators at 2:00 PM ET.

You will want to catch British Prime Minister Gordon Brown's address of the U.S. Congress on Wednesday. This will certainly make for interesting fodder for folks like me. The EIA Petroleum Status Report is due at 10:30. Last week's data posted an oil inventory build of 0.7 million barrels. Motor gasoline inventories decreased by 3.4 million barrels.

The EPS schedule includes news from Alesco Financial (NYSE: AFN), Allion Healthcare (Nasdaq: ALLI), Allis-Chalmers Energy (NYSE: ALY), Altra Holdings (Nasdaq: AIMC), American Commercial Lines (Nasdaq: ACLI), American Railcar (Nasdaq: ARII), American Insurance (NYSE: ASI), Atlantic Tele-Network (Nasdaq: ATNI), Ballard Power (Nasdaq: BLDP), Big Lots (NYSE: BIG), BJ's Wholesale Club (NYSE: BJ), Brown Shoe Co. (NYSE: BWS), Casella Waste (Nasdaq: CWST), Chelsea Therapeutics (Nasdaq: CHTP), Churchill Downs (Nasdaq: CHDN), Clarient (Nasdaq: CLRT), Coldwater Creek (Nasdaq: CWTR), CombiMatrix (Nasdaq: CBMX), CombinatoRx (Nasdaq: CRXX), Copart (Nasdaq: CPRT), Cox Radio (NYSE: CXR), CRM Holdings (Nasdaq: CRMH), Cross Country Healthcare (Nasdaq: CCRN), Darling Int'l (NYSE: DAR), Diedrich Coffee, Inc. (Nasdaq: DDRX), Dynamex (Nasdaq: DDMX), Edgewater (Nasdaq: EDGW), EMS Technologies (Nasdaq: ELMG), Exelixis (Nasdaq: EXEL), Foot Locker (NYSE: FL), FPIC Insurance (Nasdaq: FPIC), France Telecom (NYSE: FTE), Frozen Food Express (Nasdaq: FFEX), Genesis Lease (NYSE: GLS), Giant Interactive (NYSE: GA), Global Ship Lease (NYSE: GSL), GP Strategies (NYSE: GPX), H&E Equipment (Nasdaq: HEES), Hutchinson Telecommunications (NYSE: HTX), InSite Vision (NYSE: ISV), Joy Global (Nasdaq: JOYG), Kadant (NYSE: KAI), Legacy Reserves (Nasdaq: LGCY), Liz Claiborne (NYSE: LIZ), LTX Corp. (Nasdaq: LTXC), Maidenform (NYSE: MFB), Martek (Nasdaq: MATK), Martin Midstream (Nasdaq: MMLP), Mindray Medical (NYSE: MR), Natural Gas Services (NYSE: NGS), Northgate Minerals (AMEX: NXG), Penwest Pharma (Nasdaq: PPCO), PetSmart (Nasdaq: PETM), Power Medical (Nasdaq: PMII), Rehabcare (NYSE: RHB), S1 Corp. (Nasdaq: SONE), Select Comfort (Nasdaq: SCSS), Semtech (Nasdaq: SMTC), Sigma Designs (Nasdaq: SIGM), Spartech (NYSE: SEH), Toll Brothers (NYSE: TOL), Trintech (Nasdaq: TTPA), URS Corp. (NYSE: URS), US Concrete (Nasdaq: RMIX), Weight Watchers (NYSE: WTW) and Yamana Gold (NYSE: AUY).

Thursday

Another day, another couple of jobs reports. Look for the Monster Employment Index and Weekly Jobless Claims on Thursday morning. New benefits filers moved to a frightening height last week, reaching 667K. Bloomberg's consensus of economists forecasts a still harrowing level of 650K this week. At that level, the four-week moving average would rise further. Monster's metric for online job demand threatens deterioration from January's level of 118.

Individual retailers report Chain Store Sales for the month of February on Thursday. While the ICSC weekly sales data have been less than catastrophic recently, we expect retailers to post ongoing sharp declines in sales as Wal-Mart (NYSE: WMT) and other discounters take market share.

The ECB and the Bank of England are both seen cutting interest rates by 50 basis points. The ECB took a breather after its February meeting, but the data since has been dreadful. Jean-Claude Trichet could face an angry mob by torchlight if he fails to act again this time. That's a near impossibility though. A fellow economists out of Cyprus went public with his criticism of Mr. Trichet this week, and the Union begins to crackle.

Fourth Quarter Productivity and Costs will be reported in the premarket. This report offers the revision of the initial data, which produced higher productivity than might have been expected. With GDP having been revised lower though, we can expect a downward revision of productivity. Unit Labor Costs should rise on the revision as a result of the same factor. Bloomberg's consensus of economists forecasts Productivity will show a +1.5% gain (revised from 3.2%). Unit Labor Costs are expected 3.4% higher, versus the 1.8% initial increase.

Factory Orders are set for 10:00 a.m. release. January's orders are expected to have declined 3.5%, versus a 3.9% decrease in December. We think you understand why well enough... The RBC Cash Index, a measure of consumer confidence by household, hit a record low of 1.6 in February (13.3 in January). It was the first time the metric entered into single digits. The EIA reports Natural Gas Inventories at 10:30, as always.

ExxonMobil (NYSE: XOM) has its analysts' meeting scheduled, while the EPS list includes 21st Century Holding (Nasdaq: TCHC), 3D Systems (Nasdaq: TDSC), Airspan Networks (Nasdaq: AIRN), Alaska Communications (Nasdaq: ALSK), Alliance Healthcare (Nasdaq: AIQ), Alon USA Energy (NYSE: ALJ), AmBev (NYSE: ABV), Analogic (Nasdaq: ALOG), Angiotech (Nasdaq: ANPI), Anika Therapeutics (Nasdaq: ANIK), ArcSight (Nasdaq: ARST), ArQule (Nasdaq: ARQL), Artesian Resources (Nasdaq: ARTNA), B&G Foods (NYSE: BGF), Babcock & Brown (NYSE: FLY), Bio-Reference Labs (Nasdaq: BRLI), Cedar Shopping Centers (NYSE: CDR), China Security (NYSE: CSR), Ciena (Nasdaq: CIEN), Clean Energy Fuels (Nasdaq: CLNE), Clearwire (Nasdaq: CLWR), Cornell (NYSE: CRN), Crown Media (Nasdaq: CRWN), Depomed (Nasdaq: DEPO), DexCom (Nasdaq: DXCM), Dialysis Corp. (Nasdaq: DCAI), Dynamic Materials (Nasdaq: BOOM), Emergent Biosolutions (NYSE: EBS), Finisar (Nasdaq: FNSR), Fuel Systems Solutions (Nasdaq: FSYS), Fuel Tech (Nasdaq: FTEK), Genesco (NYSE: GCO), Gerber Scientific (NYSE: GRB), GTSI Corp. (Nasdaq: GTSI), Gulf Island Fabrication (Nasdaq: GIFI), Gushan Environmental (NYSE: GU), Harvest Natural Resources (NYSE: HNR), Home Inns and Hotels (Nasdaq: HMIN), I.D. Systems (Nasdaq: IDSY), Icahn Enterprises (NYSE: IEP), Insulet Corp. (Nasdaq: PODD), Intrepid Potash (NYSE: IPI), K-Swiss (Nasdaq: KSWS), Kopin (Nasdaq: KOPN), Lakes Entertainment (Nasdaq: LACO), Lincoln Educational (Nasdaq: LINC), Marvell Technology (Nasdaq: MRVL), Mastech (NYSE: MHH), McCormick & Schmick's (Nasdaq: MSSR), National Cinemedia (Nasdaq: NCMI), Navisite (Nasdaq: NAVI), Noven Pharma (Nasdaq: NOVN), Orion Marine (Nasdaq: OMGI), Pinnacle Airlines (Nasdaq: PNCL), RAE Systems (NYSE: RAE), RHI Entertainment (Nasdaq: RHIE), Safeguard Scientific (NYSE: SFE), Smith Micro (Nasdaq: SMSI), Steinway Musical (NYSE: LVB), The Cooper Cos. (NYSE: COO), Trans World Entertainment (Nasdaq: TWMC), U.S. Physical Therapy (Nasdaq: USPH), Union Drilling (Nasdaq: UDRL), Urban Outfitters (Nasdaq: URBN), West Marine (Nasdaq: WMAR), Wind River Systems (Nasdaq: WIND), Youbet.com (Nasdaq: UBET) and more.

Friday

The Bureau of Labor Statistics reports the Employment Situation Report at 8:30 a.m. Unemployment is forecast to reach 7.9%, while the employment force is expected to have shed 648K jobs in February. No matter how well anticipated this news is, it seems impossible to offer relief rally. The reason why is well articulated in one word, "disheartening."

Philadelphia Fed President Charles Plosser takes part in a panel discussion at NYU on Friday. Maybe I'll stalk him and talk up the Phillies... Finally, the Consumer Credit Report for January is due at 3:00 PM. Credit is contracting sharply as lending standards have tightened. Also, many folks are just plain no longer qualified for the same credit they were while unemployed and when their homes were worth 20-40% more. It was not so long ago that credit was defying logic and still growing, and your favorite blogger was warning of what was to come... Do you remember the times?

Friday's EPS schedule includes AnnTaylor Stores (NYSE: ANN), HealthTronics (Nasdaq: HTRN), Hudson Technologies (Nasdaq: HDSN), Logility (Nasdaq: LGTY), Perficient (Nasdaq: PRFT), Petrobras (NYSE: PBR), Regent Communications (Nasdaq: RGCI), Rex Energy (Nasdaq: REXX), Tasty Baking (Nasdaq: TSTY) and Veolia Environnement (NYSE: VE).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. (Article interests: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, NYSE: NYX, AMEX: DOG, AMEX: SDS, AMEX: QLD, AMEX: XLF, AMEX: IWM, AMEX: TWM, AMEX: IWD, AMEX: SDK)