Week Ahead: Retailers Report This Week

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The Week Ahead

The week ahead highlights April's Retail Sales results and the important earnings reports of several major retailers. Wal-Mart, namely, reports earnings this week along with J.C. Penney, Macy's, Kohl's, Abercrombie & Fitch, Fossil and more.

Monday

Monday's economic slate is clear, but there are a slew of intriguing events worth noting nonetheless. The Senate, for one, will take up the Credit Card Bill of Rights legislation. President Obama is expected to talk about how he plans to reform health care, and open up coverage to the uninsured. Health care industry players reportedly submitted a plan to the President, outlining a strategy to cut $2 trillion over the next ten years. The industry plans to slow rate increases over the next few years. It seems to us, however, that the President has a bigger and more immediate change in mind.

Federal Reserve Chairman Bernanke speaks this evening at the Atlanta Fed's conference on financial markets. In an interesting side note, the event will be held at Jekyll Island, Georgia. Given the personality change that has occurred in the stock market over the past few years, it seems a highly appropriate locale.

Pope Benedict XVI is traversing the Middle East this week, and is expected to meet Israeli Prime Minister Benjamin Netanyahu on Monday. The Pope will publicly offer his support for an independent Palestinian state. After the meeting, Netanyahu is scheduled to leave for Egypt, where he will meet with President Hosni Mubarak.

Remember the guy with the big short bet on MBIA and Ambac? Well he's back in the news. Pershing Square Capital Management, the firm founded by William Ackman, is waging a proxy war with Target (NYSE: TGT). Pershing owns 7.8% of the mega-store retailer, and will be discussing its intentions at a meeting in New York on Monday. Meanwhile, the aforementioned Ambac Financial (NYSE: ABK) will report earnings.

Other noteworthy EPS reports for Monday include 4Kids Entertainment (NYSE: KDE), 51Job Inc. (Nasdaq: JOBS), AgFeed Industries (Nasdaq: FEED), Allied Capital (NYSE: ALD), American States Water (NYSE: AWR), Ametch Systems (Nasdaq: ASYS), Banco Macro SA (NYSE: BMA), Broadridge Fin'l (NYSE: BR), Century Casinos (Nasdaq: CNTY), China Precision Steel (Nasdaq: CPSL), Coeur d'Alene Mines (NYSE: CDE), Conseco (NYSE: CNO), Contango Oil & Gas (AMEX: MCF), Cox Radio (NYSE: CXR), Dish Network (Nasdaq: DISH), Echostar (Nasdaq: SATS), Emcore (Nasdaq: EMKR), Energy Conversion Devices (Nasdaq: ENER), Fluor (NYSE: FLR), Gilat Satellite (Nasdaq: GILT), Great Plains Energy (NYSE: GXP), Healthcare Realty Trust (NYSE: HR), Hillenbrand (NYSE: HI), Hospitality Properties Trust (NYSE: HPT), HSBC (NYSE: HTB), Inter Parfums (Nasdaq: IPAR), Kaman Corp. (Nasdaq: KAMN), King Pharmaceuticals (NYSE: KG), Magic Software (Nasdaq: MGIC), Maine & Maritimes (AMEX: MAM), McDermott Int'l (NYSE: MDR), Mesa Air (Nasdaq: MESA), Nam Tai Electronics (NYSE: NTE), Nautilus (NYSE: NLS), Nelnet (NYSE: NNI), PetMed Express (Nasdaq: PETS), Petrobras (NYSE: PBR), Playboy (NYSE: PLA), Priceline.com (Nasdaq: PCLN), Quest Software (Nasdaq: QSFT), Rosetta Stone (NYSE: RST), South Jersey Industries (NYSE: SJI), Southern Union (NYSE: SUG), StatoilHydro (NYSE: STO), Sterling Bancorp. (NYSE: STL), Stifel Fin'l (NYSE: SF), Superior Well Services (Nasdaq: SWSI), PMI Group (NYSE: PMI), WellCare Health (NYSE: WCG), Winn-Dixie (Nasdaq: WINN) and more.

Tuesday

First things first... in the pre-market, the International Council of Shopping Centers reports on Weekly Same-Store Sales. As comparable results get easier to surpass, we must eventually approach a point where sales begin rising regularly again. However, countering natural forces, rising unemployment continues to reel in spending for a growing portion of the nation. Last week's results showed sales rose 0.7% week-to-week and fell 0.8% against the prior year period.

The International Trade Report is due at 8:30 EDT. Oil prices rose in March, and so the trade deficit is expected to have widened on the relative import price increase. In February, the trade deficit narrowed to $26.0 billion, and economists surveyed by Bloomberg expect March will show a $27.5 billion deficit.

Atlanta's Fed Conference on Financial Markets continues through Wednesday. On Tuesday, Atlanta Fed President Dennis Lockhart will deliver the opening remarks.

At 2:00 p.m., economists expect the US monthly Treasury Budget to show a deficit of $28 billion for April, compared to the $192.3 billion posted in March. Thanks to tax season, April typically provides a surplus, but this year, government spending intended to support the economy will not even allow for that. Halfway through the fiscal year, the Treasury deficit is twice as large as it was last year, standing at $956.8 billion.

Integrated Asset Services releases its March housing price index Monday. February's report showed prices were down 17.9% from their 2006 national peak.

The day's earnings schedule includes American Italian Pasta (Nasdaq: AIPC), Applied Materials (Nasdaq: AMAT), BluePhoenix (Nasdaq: BPHX), BMC Software (NYSE: BMC), China Digital (NYSE: STV), Compugen (Nasdaq: CGEN), Consolidated Water (Nasdaq: CWCO), Electro Scientific (Nasdaq: ESIO), Federal Agricultural Mortgage (NYSE: AGM), Fossil (Nasdaq: FOSL), Great Atlantic & Pacific (NYSE: GAP), Kratos Defense & Security (Nasdaq: KTOS), Learning Tree (Nasdaq: LTRE), MBIA (NYSE: MBI), Nissan Motor (Nasdaq: NSANY), Russ Berie (NYSE: RUS), Ticketmaster (Nasdaq: TKTM) and more.

Wednesday

April's Retail Sales headline on Wednesday. Due at 8:30 a.m., Bloomberg's group of economists surveyed forecasts a 0.1% increase month-to-month and a 0.3% rise when excluding autos. The disarray in the auto sector should impact this reading even more significantly in the months that follow. March sales fell 1.1%, and declined 0.9% when excluding automobiles. April motor vehicle sales dropped, and last week's Chain Store Sales data showed solid results led by Wal-Mart (NYSE: WMT). Also, higher gasoline prices will offer some support to April's results.

Import and Export Prices are due at 8:30 Wednesday. Again, April import prices will be impacted by oil price increase through the month. The recently weakening dollar value likely played a role in driving all import prices higher as well. Import prices rose 0.5% month-to-month in March, but were down 14.9% on a yearly basis on demand weakness and inventory shedding. Export prices dropped 0.6% in March, and were down by 6.7% from the prior year period on the economic downturn. Deflation concerns should be quelled by recent signs of life out of China, and when considering the degree of global central bank action undertaken to spur economic activity.

Business Inventories are due at 10:00 a.m. EDT. Inventory-to-sales ratios, both on the wholesale and business level, seem to have steadied in recent reporting; but as unemployment grows, there could be a new wave of spending redux ahead. My view is that rising confidence among the still employed will support the purchase of lower ticket needs and drive higher ticket purchases to a more normalized low-point (from the panic driven low). However, other factors are in play as well, like the potential bankruptcy of General Motors (NYSE: GM). Economists are looking for a 0.8% decrease in inventory levels in March; that compares against the 1.3% drop in February.

Wednesday offers the regular Mortgage Activity Report from the Mortgage Bankers Association. Last week's report showed a 2.0% increase despite a 17 basis point increase in contracted 30-year fixed rate mortgages. The EIA Reports on Petroleum Status at 10:30. Last week's data showed a crude oil inventory build of 0.6 million barrels, a lesser rate than in weeks past. Finally, the Silver Institute releases its world silver survey for 2009 on Wednesday.

NYSE Euronext (NYSE: NYX) presents at the UBS Global Financial Services conference in New York. The day's earnings schedule includes news from Macy's (NYSE: M), Whole Foods Market (Nasdaq: WFMI), Acxiom (Nasdaq: ACXM), Aegean Marine (NYSE: ANW), Allianz SE (NYSE: AZ), American Science & Engineering (Nasdaq: ASEI), Clearwire (Nasdaq: CLWR), Comstock Homebuilding (Nasdaq: CHCI), CPI Int'l (Nasdaq: CPII), Dr. Pepper Snapple (NYSE: DPS), eDiets.com (Nasdaq: DIET), Gammon Gold (NYSE: GRS), Great Basin Gold (AMEX: GBG), Helen of Troy (Nasdaq: HELE), ING Groep (NYSE: ING), Jack in the Box (Nasdaq: JACK), Liz Claiborne (NYSE: LIZ), Maidenform Brands (NYSE: MFB), Pioneer Behavioral Health (NYSE: PHC), Spartan Stores (Nasdaq: SPTN), Stanley Inc. (NYSE: SXE), Telefonica (NYSE: TEF), Tidewater (NYSE: TDW), Youbet.com (Nasdaq: UBET) and more.

Thursday

April's Producer Price Index release keys the morning news schedule on Thursday. Increases of 0.1% are expected for both the Headline and the Core PPI. Again, energy price rise should affect the Headline figure. Related price effects from derivatives and energy costs play to keep Core prices stubbornly inflated at the producer level. In March, Headline PPI fell 1.2%, driven largely by food price decline and also energy costs. Core PPI was flat in March.

The regular reporting of weekly jobless claims is a guaranteed attention getter each Thursday morning. Last week's data showed an easing in weekly filings to 601K. Consensus forecasts on this data are typically very close to the prior week result. After all, in most instances changes in the economic situation should not vary much from week to week.

The SEC meets to hear testimony and discuss plans to tighten rules on investment advisers. The EIA's regular reporting of Natural Gas inventory is due at 10:30. Not to be confused with the EIA, the IEA publishes its monthly oil market report on Thursday as well.

Key economic contributor, Wal-Mart (NYSE: WMT), reports first quarter results. CVS Caremark (NYSE: CVS) will hold its annual investor conference. The day's earnings schedule also highlights news from Abercrombie & Fitch (NYSE: ANF), Agilent Technologies (NYSE: A), Blockbuster (NYSE: BBI), Brasil Telecom (NYSE: BRP), Compuware (Nasdaq: CPWR), Credit Agricole (ACA.PA), Eddie Bauer (Nasdaq: EBHI), Fortress Int'l Group (Nasdaq: FIGI), Gafisa (NYSE: GFA), Gildan Activewear (NYSE: GIL), Goldleaf Fin'l (Nasdaq: GFSI), Heely's (Nasdaq: HLYS), IamGold (NYSE: IAG), Kohl's (NYSE: KSS), Kowabunga! (NYSE: KOW), Lear (NYSE: LEA), Nordstrom (NYSE: JWN), Ready Mix (NYSE: RMX), Salary.com (Nasdaq: SLRY), SIGA Technologies (Nasdaq: SIGA), Sony (NYSE: SNE), TLC Vision (Nasdaq: TLCV), Urban Outfitters (Nasdaq: URBN), Vivendi (VIV.PA) and more.

Friday

Friday offers an atypically busy economic slate, as four reports reach the wire in the pre-market and one shortly after the bell rings. The biggest news looks to arrive from the Consumer Price Index (CPI), reported for the month of April. Economists are looking for little change this time around, with the Headline CPI seen flat (versus -0.1% in March) and the Core CPI seen rising 0.1% (vs. a 0.2% increase). The difference in the Core rate of price change would be important. Should prices stick to climbing at a rate of 0.2%, which seems unlikely based on most other data, our theory of stubborn prices lending to future inflation troubles would be further supported. Ironically, the government has lent to price strength due to tax increases on such things as tobacco and alcohol, to name a few.

The second critical report looks to be the Industrial Production data for April. Production fell 1.5% in March, and a 0.6% drop is seen for April. Some talking heads are calling your eyes to look at the numbers excluding autos, but we believe autos are actually pretty critical whether included or not. The supplier network impact, not to mention other support industries, stand to take a significant hit from the drastic downsizing underway at GM and Chrysler. If bankruptcy ensues for GM, expect the situation to get worse whether including or excluding autos in your calculation. Capacity Utilization has also been deteriorating steadily. March showed utilization fell to 69.3% in March, which marked a record low. April estimates peg utilization even lower, at 68.8%.

New York area manufacturers had reason for hope in March, driving reassessment of sentiment. The Empire State Manufacturing Index, produced by the New York Fed, shows how the area manufacturers are feeling about their operating environment. A slew of new orders and other signs of economic stabilization brought the group back toward a more normal reality last month. Economists see the index improving slightly for May as well, to -12.0, from -14.7 last month.

The Reuters/University of Michigan Consumer Sentiment Index is due at 9:55. As reflected in recent stock action, and perhaps born from the positive comments of economic leaders, consumer sentiment is rising. Economists expect it will improve again to 67.0, from 65.1 at last check.

The Treasury International Capital Report is due at 9:00 a.m. The report measures the flow of funds into and out of long-term US securities. February's report showed a $22 billion inflow. Recall, March marked the market low, and stocks spent most of the month on the rise thereafter. Thus, we would expect another inflow of some sort for this report.

Dallas Fed President Richard Fisher will speak on the economic outlook at a Texas bankers meeting. Mexico's central bank is likely to cut rates sharply, after deep economic impact wrought by the swine flu. Estimates indicate a 1% impact to the country's GDP this quarter.

Mizuho Financial Group and Sumitomo Mitsui Financial Group, two of Japan's biggest banks, post results on Friday. In the US, look for EPS news from J.C. Penney (NYSE: JCP), AngloGold Ashanti (NYSE: AU), Arrowhead Research (Nasdaq: ARWR), Astea Int'l (Nasdaq: ATEA), Craft Brewers Alliance (Nasdaq: HOOK), Mizuho Fin'l Group (NYSE: MFG), Multi-Color Corp. (Nasdaq: LABL), Ninetowns Internet (Nasdaq: NINE), Panasonic (NYSE: PC), Sinovac Biotech (NYSE: SVA), Spire (Nasdaq: SPIR), Teekay Corp. (NYSE: TK), Teekay Tankers (NYSE: TNK), Triad Guaranty (Nasdaq: TGIC) and more.

Saturday

Disease experts are scheduled to meet in Helsinki to discuss swine flu and other fun infectious diseases.


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).