This Week: Turkey Nearly Cooked
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This Week: Turkey Nearly Cooked
This holiday is one of conflict for some folks, because as you may know, Greeks do not normally like Turkey. However, for one day a year we forgive past grievances for the sake of poultry-kind. The holiday week should bring light trading volume as folks travel to be with family. Believe it or not though, the stock market is open on Black Friday, but only until 1 PM ET.
We covered Monday's schedule in our article, "Business News," found via the link provided here.
As we approach Black Friday, retail industry data and news will be in focus. Thus, there exists the potential for market reaction to the Weekly Same-Store Sales Report, published by the International Council of Shopping Centers every Tuesday in the pre-market. Last week's data produced the same old boring trend. Year-over-year results continue to trump increasingly easy comparisons. As you'll recall, Americans buried their cash in the backyard last holiday shopping season, and for good reason. All hell was breaking loose on Wall Street and Main Street both, and nowhere proved safe for capital.
Same-store sales improved 2.4% year-to-year at last check, which was a little less than the prior week's gain of 2.9%. On a week-to-week basis, sales slipped by 0.1%, matching the prior week's decline. Keep an eye on the week-to-week data, because despite seasonal influences, the market is watching that metric carefully in light of still rising unemployment.
Third quarter GDP is up for its first revision at 8:30 AM. Its initial read produced a market lifting +3.5% GDP gain, but economists are mostly looking for downward revision Tuesday to +2.8%, based on Bloomberg's survey. Driving the unfavorable change, lower consumer spending, greater inventory draw-down and international trade (import gains outpaced the export change). Since it's expected, the reining in of nascent economic growth may not weigh on the market, but economists' expert commentary on the matter could. NYU Professor Nouriel Roubini, for one, seems to garner a lot of airtime with controversial statements on days like these.
S&P Case Shiller weighs in on Home Prices a little later than we would prefer. Street whispers and the monthly data trend indicate that the Home Price Index will likely post another upward move for September. However, it's October we need to know about now! The FHFA House Price Index is also scheduled to be published Tuesday - at 10:00. FHFA's data is limited by the ceiling amount for conforming loans purchased by GSEs: Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).
After a steep decline in October (5.5 points to 47.7), the Conference Board is scheduled to post November's Consumer Confidence Index at 10:00 AM Tuesday. We do not see the situation much improved, and neither do economists, as their average forecast for the current month sits at 47.0. Last month's drop in the Expectations Index was alarming, as investors were hopeful that consumers who were down on current conditions might bank on better times ahead, which seemed the case not too long ago.
State Street (NYSE: STT) will report on Investor Confidence for November at 10:00 AM. October's reading showed a decline of 10 points, to 108.4. October marked the second month of decrease in a row since August's recent peak at 122.8. The 100 point mark represents neutrality on the part of institutional investor fund flows toward/away from risky assets.
At 2:00 PM, the Federal Open Market Committee (FOMC) will release the minutes of its most recent meeting. We do not expect much variance in the information from Chairman Bernanke's statements. Recall, the Chairman said inflation was tame and that rates would be kept low to help economic growth gain traction.
Tuesday's EPS reports include Allied Healthcare (Nasdaq: AHCI), American Eagle Outfitters (NYSE: AEO), American Italian Pasta (Nasdaq: AIPC), American Woodmark (Nasdaq: AMWD), Amtech Systems (Nasdaq: ASYS), Avanir Pharmaceuticals (Nasdaq: AVNR), Bank of Montreal (NYSE: BMO), Barnes & Noble (NYSE: BKS), Blue Coat Systems (Nasdaq: BCSI), Borders Group (NYSE: BGP), Brown Shoe (NYSE: BWS), ChinaEdu (Nasdaq: CEDU), Coldwater Creek (Nasdaq: CWTR), Cracker Barrel Old Country Store (Nasdaq: CBRL), Daktronics (Nasdaq: DAKT), dELiA*s (Nasdaq: DLIA), Dollar Tree Stores (Nasdaq: DLTR), DSW (NYSE: DSW), Eaton Vance (NYSE: EV), Fred's (Nasdaq: FRED), Genesco (NYSE: GCO), GeoPharma (Nasdaq: GORX), Giant Interactive Group (NYSE: GA), H.J. Heinz (NYSE: HNZ), Hillenbrand (NYSE: HI), Hormel Foods (NYSE: HRL), Industrie Natuzzi (NYSE: NTZ), J. Crew Group (NYSE: JCG), Medtronic (NYSE: MDT), Netezza (NYSE: NZ), QAD (Nasdaq: QADI), Signet Jewelers (NYSE: SIG), TIVO Inc. (Nasdaq: TIVO), Warner Music Group (NYSE: WMG), Wimm-Bill-Dann Foods (NYSE: WBD) and WSP Holdings (NYSE: WH).
The day before the Thanksgiving Day holiday will be a busy one for Wall Street. Many of the week's economic reports that might have been reported Thursday or Friday will be pushed to Wednesday so that bankers can avoid indigestion. That means we will have to swallow eight reports the day before we digest an enormous quantity of turkey.
Wednesday brings the now highly anticipated Weekly Applications Survey produced by the Mortgage Bankers Association. Over recent weeks, this regular report has provided interesting insight into the effects of the First-Time Homebuyer Tax Credit on the real estate market. Even as mortgage rates have dropped, Purchase Application activity has declined. Not coincidentally, this decline has coincided with the informal deadline date necessary to contract for a mortgage that would qualify for the tax credit (early October).
For the week ended November 13, the Market Composite Index of mortgage activity declined 2.5%. The Purchase Index fell 4.7%, while the Refinance Index declined 1.4%; all while the rates on contracted 30-year and 15-year fixed rate mortgages eased to 4.83% and 3.82%, respectively.
Durable Goods Orders are due for report at 8:30. Economists are looking for a 0.5% increase in orders for October, compared with the revised 1.4% increase reported for September. Excluding transportation, orders improved 1.2% in October. September new order growth was driven by machinery and transportation equipment.
Also at 8:30, Personal Income and Outlays are due for October reporting. Last month's confidence measures noted concern regarding future income, and Personal Income was unchanged at last check in September. Bloomberg's consensus of economists is looking for a 0.2% increase for October. Average weekly earnings were already reported up 0.3% in October, justifying economists' expectations here.
Consumer Outlays declined 0.5% in September following "Cash for Clunkers" cut-off. Economists are looking for an increase of 0.5% for October, as the month's retail sales and motor vehicle sales both improved. The Core PCE Price Index is seen rising 0.2% in October, versus the 0.1% increase in September. Providing some reason to expect such a rise, the Core Consumer Price Index (CPI) was just reported up 0.2% for the month.
The final premarket report for Wednesday is the Weekly Initial Jobless Claims data. Economists are looking for an important dip in initial benefits filings this time around, to 495K, versus 505K last week. The four-week moving average fell for the 11th straight week at last check, but still stood above 500K, at 514K. A move to below the 500K mark in initial filings would be uplifting for stocks, as the market is watching employment for a turn in trend.
The second of the week's consumer confidence measures comes due Wednesday at 9:55 AM ET. The Reuters/University of Michigan Consumer Sentiment Index dropped a significant 4.6 points in early November on renewed economic concerns. Economists are looking for this latest reading to place the index slightly higher, at 67.0, versus 66.0 at last check.
Existing Home Sales came in strong for October, running at an annual pace of 6.1 million, up 10.1%. New Home Sales are next up Wednesday at 10:00 AM, and economists are forecasting improvement there as well. Based on Bloomberg's survey, economists see the annual pace of New Home Sales improving to 410,000 for October, up slightly from 402K.
The EIA will report on both Petroleum Status and Natural Gas Wednesday, due to the holiday. Last week's oil report showed crude stocks decreased by 0.9 million barrels in the week ended November 13. Total motor gasoline stores fell by 1.7 million barrels. Natural gas inventory increased by 20 Bcf. Look for this week's oil data at 10:30 AM ET and the natural gas report at noon.
The day's earnings schedule includes China Finance Online (Nasdaq: JRJC), Conn's (Nasdaq: CONN), Deere & Co. (NYSE: DE), London Stock Exchange (LSE: LSE.L), Golden Ocean Group (Nasdaq: GDOCF.PK), Tiffany & Co. (NYSE: TIF) and Trintech (Nasdaq: TTPA).
Happy Thanksgiving American readers! The remainder of the world has some important data to chew on. The European Central Bank is due to weigh in on its interest rates, and the Bank of Japan releases the minutes of its October meeting. Also, the International Atomic Energy Board is scheduled to meet.
Back to work for traders! Believe it or not, in one of those holiday anomalies that needs correction, the stock market is open on Friday until 1 p.m. The bond market also closes early, but at 2 p.m. It's Black Friday, so look for important first reads from retailers. This particular day holds great importance to the industry relative to the rest of the days of the year. In overseas news, look for the Bank of Mexico to make its key rate decision.
Friday's EPS reports include news from Frontline Ltd. (NYSE: FRO), Ship Finance International (NYSE: SFL) and a handful of foreign names.
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Labels: Week Ahead