This Week: Leading Indicators, Spain, Housing Data, CPI

This Week

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

This Week: Leading Indicators, Spain, Housing Data and CPI

A slew of important information is set for release in this critical pivot period between government crutch and the first steps of a new economic effort. Overseas, keep an eye on Spain this week, as the Spanish government takes on its labor unions. Despite Spain's #1 ranking in World Cup competition, Spaniards will be equally interested in this event. In the States, we will get a look at Leading Indicators, however, what they might indicate is trouble.

Monday

With a dearth of economic reports in the US Monday, the day's data looks to be weighted more heavily from overseas markets. That said, Australian and Russian markets will be closed Monday. Britain's office for budget responsibility will publish its economic forecast. Moody's (NYSE: MCO) downgraded Greece's sovereign debt rating four steps to junk during the day Monday. Greece debt, now rated Ba1, from A3, was reduced due to risks tied to the EU rescue plan.

In the States, look for SEC Chairperson Mary Schapiro's address before the Financial Women's Association. As for the Fed, St. Louis Federal Reserve Bank President James Bullard addresses the Institute of Regulation and Risk of North Asia, in Tokyo.

Activision Blizzard (Nasdaq: ATVI) executives will be presenting before analysts at the Electronics Entertainment Expo (E3). Earnings reports include news from Alliance One International (NYSE: AOI), Capstone Turbine (Nasdaq: CPST), China Mass Media (NYSE: CMM), Chindex International (Nasdaq: CHDX), Clinical Data (Nasdaq: CLDA), Comarco (Nasdaq: CMRO), Excel Trust (NYSE: EXL), Korn Ferry Int'l (NYSE: KFY), Lakeland Industries (Nasdaq: LAKE), La-Z-Boy (NYSE: LZB), Majesco Entertainment (Nasdaq: COOL), MDS, Inc. (NYSE: MDZ), Motorcar Parts of America (Nasdaq: MPAA), National Technical Systems (Nasdaq: NTSC), Optical Cable (Nasdaq: OCCF), PerfectEnergy Int'l (Nasdaq: PFGY), Rentrak (Nasdaq: RENT), Superclick (Nasdaq: SPCK), Synergetics USA (Nasdaq: SURG), Valence Technology (Nasdaq: VLNC) and Wind Hellas (WINDH).

Tuesday

Overseas, the Bank of Japan is expected to provide liquidity to its system by making two to three trillion yen worth of loans available to banks to lend.

Last week's ICSC same-store sales data offered some improvement. On the weekly check up, sales gained 0.8%, versus the prior week's gain of 0.6% (-0.8% drop the week before that). On a year-to-year basis, the sales growth pace picked up to 3.0% against the prior year period; that compared against last week's growth rate of 2.5%, and 1.3% the week before that. Better weather surely played a role between the last two weeks. That said, this latest data was appeasing to our concerns that consumer activity might be normalizing to a stall. Still, the absolute level of activity remains nothing to write home about, and economic activity still appears to The Greek at risk of stalling. Look for the latest data in the pre-market Tuesday

At 8:30, expect the New York Fed's Empire State Manufacturing Survey. Might this latest report for June portend double-dip recession? There seems a decent chance of it, as May's report offered a General Business Conditions Index measure of 19.11, down from April's 31.86. Now, May's figure still represents significant economic expansion in the New York area manufacturing sector, but the pace change offers reason for concern. Also, the New Orders Index came in at 14.3, versus April's 29.49. Thus, the economists' consensus forecast for 21.0 might be a bit hopeful. A significant slippage here should give the market some confirmation of its fears, and start stocks lower on Tuesday (should it occur).

Import and Export Prices are due for report at 8:30 as well. U.S. import prices advanced 0.9 percent in April, following a 0.5 percent increase the previous month. Higher prices for fuel (2.3%) and nonfuel (0.5%) imports contributed to the overall advance. Prices for U.S. exports also increased in April, rising 1.2 percent after a 0.7 percent advance in March. Economists expect May's import prices to decline 1.3%, based largely on the month's fuel price action.

The Treasury International Capital (TIC) Report for April is up at 9:00 AM. March's data showed net foreign purchases of long-term securities were $140.5 billion. European issues have capital flowing into the States, and we would expect more of the same in April.

The Housing Market Index is due for report at 10:00 AM. According to the National Association of Home Builders (NAHB), builder confidence in the market for newly built, single-family homes rose for a second consecutive month in May to its highest level in more than two years. The HMI gained three points to 22 in May, its highest point since August of 2007. Unfortunately, that's still a relatively low result historically speaking, and it takes a reading of 50 to signify more home builders have a positive view than negative. Womp... womp...

The NAHB Chief Economist, David Crowe, said, "Obviously we still have a long way to go, and it's worth repeating that continued challenges such as the critical lack of project financing, inappropriate appraisal procedures, competition from short sales and foreclosures, and the soaring costs of some building materials are major obstacles on the path to a healthier housing market and economy."

At the nation's capital, General Petraeus will testify to a Senate panel on the topic of Afghanistan. Earlier this week, the US government revealed the discovery of mineral reserves in Afghanistan that hold the potential to cause a fundamental shift in the nation's economic situation.

A US bankruptcy court judge is still making important decisions regarding Lehman Brothers. This latest ruling will decide the fate of Lehman's vast art collection; Sotheby's (NYSE: BID) awaits.

The corporate news schedule has Agrium (NYSE: AGU), SRA International (NYSE: SRX), Signet (NYSE: SIG) and Societe Generale (AMEX: GLE) meeting with investors. The Chicago Board of Options Exchange plans to price its IPO. Lincare (Nasdaq: LNCR) will split its shares 3-for-2. The earnings schedule includes news from Best Buy (NYSE: BBY), Bakers Footwear (Nasdaq: BKRS), Casey's General Stores (Nasdaq: CASY), CLARCOR (NYSE: CLC), Dot Hill Systems (Nasdaq: HILL), FactSet Research Systems (NYSE: FDS) and Roadrunner Transportation (Nasdaq: RRTS).

Wednesday

Prepare yourself for a busy morning on Wednesday. We have four economic reports on tap for before the opening bell rings. Housing Starts should prove critical when reported for May on Wednesday morning at 8:30. May should expose the impact of the expiration of tax credits in April. Starts are measured at the start of construction, and so should start to tail off post tax credit. Economists forecast an annual pace of 650,000, versus the 672K pace seen in April.

The Producer Price Index for the month of May will be reported at 8:30. Gasoline price decline is seen pulling producer prices down on the Headline measure, where economists see a decrease of 0.5% for May. Excluding food and energy, Core PPI is seen gaining by 0.1%.

Industrial Production and Capacity Utilization will be reported at 9:15 AM. May's data is expected to show continuation of improving trend. Production is expected to gain by 1.0% in May, after rising 0.8% in April. Capacity Utilization is forecast to improve to 74.5% for May, up from 73.7% in April.

Wednesday's pre-market data includes the regular mortgage activity report. Old trends continued in this post-homebuyer tax incentive period. For the week ended June 4, the Market Composite Index of mortgage volume collapsed 12.4%. Without the tax incentive helping to sustain sales activity, and having pulled some forward, Purchase Activity fell off a cliff 16.3% (though only down 5.7% when seasonally adjusted). Refinance activity declined as well, and that is the most telling point in this data.

The Mortgage Bankers Association adjusted the data to account for the Memorial Day holiday, but it appears the adjustment was simply inadequate. Otherwise, we would not have expected the big move lower in the Refinance Index (down 14.3%), since rates were hardly changed from the prior week. Average contracted rates for fixed rate mortgages of 30-year and 15-years in duration stuck low at 4.81% (prior 4.83%) and 4.26% (4.24%), respectively. Look for a more valuable report this week, excluding the holiday skew.

In DC happenings, at 5:45 PM, Fed Chairman Bernanke addresses the Conference on the Squam Lake Report, discussing "Fixing the Financial System". Philadelphia Federal Reserve Bank President Charles Plosser participates in a panel discussion at an academic forum in New York on fixing the financial system. A Senate panel examines the financial impact of the Gulf oil spill. BP's (NYSE: BP) Chairman has been invited to the White House. The SEC is voting on proposed changes to disclosure rules for target-date funds.

The EIA's Petroleum Status Report is due for release at its usual 10:30 reporting time. Overseas, markets will be closed in China, Hong Kong and Taiwan Wednesday. Spain has an important day ahead of it, with its new labor market reforms being presented.

In corporate news, look for Oasis Petroleum to price 42 million shares at between $13 to $15 each. Electronic Arts (Nasdaq: ERTS) hosts an analysts meeting, while Sunoco (NYSE: SUN), Toronto Dominion (NYSE: TD) and ArcelorMittal address investors. Norfolk Southern (NYSE: NSC) is presenting at a Bank of America/Merrill Lynch conference.

Look for earnings releases from Culp Inc. (NYSE: CFI), Dave & Buster's (NYSE: DAB), FedEx (NYSE: FDX), IHS Inc. (NYSE: IHS) and Rand Logistics (Nasdaq: RLOG).

Thursday

The Consumer Price Index for May is due at 8:30 Thursday morning. Economists forecast an increase of 0.2% for the Headline figure and a 0.1% increase in the Core CPI. Also in the premarket, look for Weekly Jobless Claims. Last week's data for the period ended June 5 showed 456K new benefits filers. The Current Account is due for morning reporting as well. The current account measures the United States' international trade balance in goods, services, and unilateral transfers each quarter.

Leading Economic Indicators will be reported for May at 10:00 AM. Economists forecast indicators will gain by 0.6% this time, versus the 0.1% decline in April (+1.3% in March). The big swings reflect the effects of expiring stimulus and the Easter holiday, but real economic dullness might present itself in the months ahead, if not in May.

The Philadelphia Fed Survey follows the earlier reporting of the New York data. At 10:00 AM, economists expect the report to show the Philly index at 20.0, versus 21.4 last period. The EIA Natural Gas Report is due at 10:30 AM. Natural gas stocks remain full when comparing against historical levels for this time of year.

Must see TV: BP's Tony Hayward testifies before an angry House subcommittee Thursday. STMicroelectronics (NYSE: STM) and McKesson (NYSE: MCK) address analysts Thursday. The day's earnings schedule includes Actuant (NYSE: ATU), J.M. Smucker (NYSE: SJM), Pier 1 Imports (NYSE: PIR), Smithfield Foods (NYSE: SFD), The Kroger Co. (NYSE: KR) and Winnebago (NYSE: WGO).

Friday

It's Quadruple Witching, the day on which contracts for stock index futures, stock index options, stock options and single stock futures (SSF) all expire. Days like these can be volatile for markets.

Friday marks the deadline for the Swiss parliament to vote on the UBS (NYSE: UBS) tax deal. Share offering lockup restrictions expire for Kinder Morgan Energy Partners (NYSE: KMP). The earnings list includes Alloy (Nasdaq: ALOY).



Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.