Wall Street Greek: This Week: G-8, Chain Store Sales, Congressional Hearings

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This Week

Monday was covered in our article, "Morning Business: Obamas Take Moscow."

Tuesday

Last week's check of the ICSC Weekly Same-Store Sales data showed a 0.6% year-over-year increase and a 0.6% week-to-week decline. We noted the stabilizing situation in this data that has thus far not coincided with the thoughts of most talking heads, nor other lagged economic reports. Look for Chain Store Sales on Thursday to also disagree...

The Reserve Bank of Australia will issue its latest monetary policy statement on Tuesday, with expectations for the RBA to hold rates steady. The day also marks Egypt's deadline for Palestine to form a unity government. We are not sure what kind of penalty Egypt has in mind, nor if it could possibly make things any worse for Palestinians.

Reporting earnings on Tuesday, look for news from A. Schulman (Nasdaq: SHLM), International Speedway (Nasdaq: ISCA), Kayne Anderson Energy Development (NYSE: KED), Ruby Tuesday (NYSE: RT) and The Greenbrier Companies (NYSE: GBX).

Wednesday

Wednesday brings another relatively quiet day, with Consumer Credit on tap along with the regular weekly report schedule. The G-8 summit kicks off in L'Aquila, Italy, with climate change and economic distress/cooperation at the forefront of discussion.

Look for the Mortgage Bankers Association Mortgage Activity Report bright and early. Last week's data showed sharp decline in mortgage activity despite favorable rate change. Contracted 30-year fixed rate mortgages adjusted to 5.34%, from 5.44% in the week ended June 26. Yet, the Market Composite Index dropped 18.9%, after seasonal adjustment. The Refinance Index sank 30.0%, and recently resilient Purchase Activity fell 4.5%. We speculated here that the weather had much to do with the downfall in activity. Levels of rainfall had been notable through the measured period.

At 10:30, look for the EIA's Petroleum Status Report. Last week, commercial crude oil inventories fell by 3.7 million barrels, and stocks of oil stood above average. Gasoline stocks increased, however, by 2.3 million barrels, keeping pressure on retail gasoline pricing. The summer driving season is active, and gasoline stocks can be expected to continue seeing draws in the near-term.

At 3:00 PM, the Consumer Credit Report is widely expected to post a third consecutive monthly contraction. Economists surveyed by Bloomberg see a $7.5 billion change for May, versus the $15.7 billion shrinkage in April. Credit card defaults, consumer retrenching and lending standard reassessment have all impacted the degree of available and demanded credit. This is seen as a long-lasting change in a return to a more normal environment that matches better against historical standards. Free money, assisted by the securitization of pools of loans, has been adequately exposed for its risks to economic development.

FDIC Chair Sheila Bair is scheduled to address the organization's conference today. The NYSE Euronext (NYSE: NYX) holds a virtual investment forum on the topic of banking and banks. Earnings season starts with the report of Alcoa (NYSE: AA). Also look for news from Family Dollar (NYSE: FDO), Nevado Gold & Casinos (AMEX: UWN), Nu Horizons Electronic (Nasdaq: NUHC), Pepsi Bottling Group (NYSE: PBG), Rodman & Renshaw (Nasdaq: RODM) and WD-40 (Nasdaq: WDFC).

Thursday

Weekly Initial Jobless Claims, due at 8:30, should show 610K new benefits filers, based on economists surveyed by Bloomberg. That would compare against the prior week's 614K and the four-week moving average count of 615,250. With this degree of job loss, double-digit unemployment is inevitable and soon in coming. Last week's Labor Department Report showed unemployment at 9.5% (highest in a quarter century), but the effective non-employed count, concerns more at 16.5%. Recall, this measure includes the folks who have given up on getting a job and those working part-time, but who would prefer a real job.

At 10:00 a.m., look for the Wholesale Trade data. April's count showed Wholesale Inventories fell 1.4%, against a shorter 0.4% drop in sales. Durable goods pressured the count, and understandably so, given the trouble in autos and credit. Auto inventories fell 4.5% through the month.

Must-see TV returns, as the House Financial Services Committee continues its interrogation of government messengers Bernanke and Paulson. This time, the committee will hear testimony on the Federal Reserve's role in financial overhaul. Separately, Federal Reserve Governor Elizabeth Duke is scheduled to speak at the FDIC confab.

The Bank of England will be on record with its latest decision on rates. The ECB produces its Monthly Bulletin, and our Fed produces its Balance Sheet statistics at 4:30.

Natural Gas continued to find pressure, as the weekly inventory data showed a build of 70 Bcf. This left gas in storage still well above historical average marks. This week's take comes at the usual 10:30 a.m.

Individual retailers report on monthly Chain Store Sales mostly on Thursday. Thomson Reuters reports expectations for a 4.5% aggregate June decline. We suspect the weather will be widely cited as catalyst for special weakness in June. The corporate earnings slate includes news from 3Com (Nasdaq: COMS), Chevron (NYSE: CVX), Adams Express (NYSE: ADX), CalAmp (Nasdaq: CAMP), Chattem (Nasdaq: CHTT), FCStone Group (Nasdaq: FCSX), Franklin Covey (NYSE: FC), Helen of Troy (Nasdaq: HELE), Lawson Software (Nasdaq: LWSN), Rocky Mountain Chocolate Factory (Nasdaq: RMCF), Shaw Group (NYSE: SGR), Tortoise Capital Resources (NYSE: TTO) and Value Line (Nasdaq: VALU).

Friday

Treasury Secretary Timothy Geithner testifies before the House Financial Services Committee at 10:00 a.m. The focus of the hearing is on derivatives and the President's financial reform plans. Separately, the government's deadline for GM to get bankruptcy approval for its asset sales looms; at risk, the loss of government loans. Sure, like that's going to happen...

Look for the International Trade Report at 8:30. The trade gap is expected to post expansion for May, after a significant rise in crude oil pricing. Bloomberg's tally of economists pegs consensus at a $-28.8 billion deficit though, which would represent a positive change from April's $-29.2 billion. Barron's seems to have a better read here, with its check of consensus at -$30.0 billion.

Also in the pre-market, look for Import and Export Prices. May's data showed a 0.6% increase in export prices and a 1.3% monthly rise in imports. Inflation is not a concern in the near-term though, given the 6.5% and 17.6% year-over-year price drops, respectively.

The Reuters/University of Michigan Consumer Sentiment data is due up at 9:55 a.m. Consensus sees further improvement to 71.5, from 70.8 in June. May produced 1.9 points of positive change, but the impact of "green shoots," and perhaps smoke, have stalled as investors weigh the potential drag of significant unemployment.

The International Energy Agency (IEA) produces its Monthly Oil Report Friday. The earnings slate includes Audiovoxx (Nasdaq: VOXX), Infosys Technologies (Nasdaq: INFY), PriceSmart (Nasdaq: PSMT), The Progressive Corp. (NYSE: PGR) and a few pink sheets.