2012 Wake Up Call this Week

Welcome 2012, as the first week of trading and economic data contends with important domestic political developments. We’ll finally get our first state decision on a GOP candidate, when Iowa determines who it favors Tuesday. Meanwhile, December Chain Store Sales will be reported this week by retailers, giving us a read on holiday winners and losers. Friday offers the latest monthly check of the unemployment rate, and perhaps a dose of reality for the post party atmosphere.

2012 Wake Up Call

Monday

The Monday of New Year’s weekend is a national holiday, so U.S. securities markets stayed shuttered.

Tuesday

It’s back to business Tuesday on Wall Street. Usually after a three-day holiday, trading volume tends to be mild. However, all sorts of special nuances can come to play on the turn of the calendar, possibly making the day more interesting than you might expect.

The news wire will be dedicated to politics Tuesday, as Iowans Caucus to select their Republican choice for president of the United States.

The business wire will key on the release of the Federal Reserve’s FOMC meeting minutes for its December 13 meeting at 2:00 PM. However, the most important business news of the day will come in two economic releases at 10:00 AM.

The Institute for Supply Management (ISM) will report its Manufacturing Index for the month of December. Economists surveyed by Bloomberg expect the index will have improved ever so slightly, to a mark of 53.2, up from 52.7 in November. Things look to get worse here in 2012, as Europe closes somewhat to U.S. exports.

Getting less attention due to its latest span of insignificance, Construction Spending will be reported for the month of November. Economists surveyed by Bloomberg show an expectation for a 0.5% increase, following a 0.8% increase the month before. There has been an increase in multi-family home construction, which could be the main driver in my view.

The international wire has an American diplomatic tour running across the Asia Pacific region, gauging policy changes across China, Japan and South Korea.

The post holiday corporate earnings wire has confirmed reports coming from Landec (Nasdaq: LNDC), Progress Software (Nasdaq: PRGS) and Team Inc. (Nasdaq: TISI). There are several other earnings releases proposed but not confirmed for the date, including from Commonwealth Bankshares (OTC: CWBS.PK), Defentect Group (OTC: DFTC.PK), Ener1 (OTC: HEVV.PK), General Steel Holdings (NYSE: GSI), Golden Enterprises (Nasdaq: GLDC), Harry and David Holdings (OTC: HARR.PK), MACC Private Equities (OTC: MACC.PK), Orchard Enterprises (Nasdaq: ORCD), PAB Bankshares (OTC: PABK.PK), Realty Finance (OTC: RTYFZ.PK), Rosetta Genomics (Nasdaq: ROSG), Skyline (NYSE: SKY) and Zanett (OTC: ZANE.PK).

Wednesday

This week keys on the regular monthly employment reports, the first of which is due on Wednesday. Challenger Gray & Christmas reports on Announced Job Cuts before the market opens Wednesday. I’m not expecting to see a big number in the holiday heartened period, but I would view a modest result presenting a different state of affairs than I see playing out over a longer term. November’s report showed announced layoffs were down 13% from the same month a year ago.

Monthly Motor Vehicle Sales will be reported for the month of December throughout the day Wednesday. Bloomberg’s survey of economists places the consensus view for a modest increase in the annual rate of domestic sales to 10.5 million vehicles, up from 10.3 million in November. Total motor vehicle sales are seen holding on at an annual rate of 13.6 million in December. According to Barron’s query of analysts, General Motors (NYSE: GM) might post the best monthly growth.

The U.S. government will report on Factory Orders for the month of November at 10:00 AM. A day after the ISM Manufacturing data, it will be interesting to see what this measure of real activity has to say. Already reported, durable goods orders rose 3.8% in November on civilian aircraft demand, and so forecasts for this aggregate measure are for a solid 2.0% increase on average. Factory orders decreased by 0.4% in October.

The latest Weekly Same-Store Sales data from the International Council of Shopping Center (ICSC) will cover the week ending December 31. It should mark a decrease from the pre-Christmas period, but it still includes the very busy post Christmas activity. The pre-Christmas period marked a week-over-week sales increase of 0.9%, and year-to-year increase of 4.5%. Redbook reported that sales rose 4.3% on a year-to-year basis.

On the corporate wire, look for earnings news from Mosaic (NYSE: MOS), National American University Holdings (Nasdaq: NAUH), Resources Connection (Nasdaq: RECN), Sonic (Nasdaq: SONC), UniFirst (NYSE: UNF) and WSI Industries (Nasdaq: WSCI). We may also hear from any of the companies listed as possible reporters for Tuesday (see above).

Thursday

The second of the big monthly employment reports comes due in the premarket Thursday when ADP Private Employment Services reports on Private Nonfarm Payrolls. This estimate of a portion of the government report due Friday is often off the mark, especially in dynamic times like these. Economists see this estimate of private nonfarm payrolls for December increasing 160,000. Bloomberg indicates the range of economists’ forecasts spanning 145K to 220K. In November, private nonfarm payrolls were estimated up by 206K.

Weekly Initial Jobless Claims are also due Thursday. Over recent weeks, this data has been offering enthusing information, however, we have warned investors to look past the holidays for a true trend. Economists see this week’s report covering the Christmas to New Year’s Eve period showing further improvement to 375K, down from 381K the week before.

The only other premarket report for Thursday will come from individual retailers, which report on monthly chain store sales for December Thursday. The data will be aggregated by the close of the day at organizations specializing on the sector, so the morning will only offer the media a chance to misinterpret trend. We warned recently that enthusiasm built by higher sales will likely be deflated by later warnings on earnings due to deep discounting, so buyer beware.

At 9:45 AM ET, catch the latest weekly report on the Bloomberg Consumer Comfort Index. This index got a lift along with all the other confidence data points on holiday glitter. Last week’s report actually showed deterioration to -47.5, as buyers’ remorse already started to sink in post the holidays.

ISM reports on its Non-Manufacturing Index at 10:00 AM ET. In today’s America, this report is far more important than ISM’s Manufacturing Index due to its far greater significance to the domestic economy. Bloomberg’s survey of economists shows a consensus expectation for the index to improve to 53.4, up from 52.0 in November.

Due to the holiday, several reports are pushed back. For instance, the Mortgage Bankers Association will likely report this week on Thursday, though some publishers list the report for Wednesday. We’ve been noting of late that record low mortgage rates have had no effect, partly on the continued hangover of the American economy and also on holiday distraction. Last week’s report showed a 2.6% decrease in the Market Composite Index despite the lowest rates of 2011.

The EIA reports on Petroleum Status Thursday, instead of Wednesday this week. Look for the latest oil inventory data at 11:00 AM. The Natural Gas Report will come due at its usual 10:30 report time.

Overseas, look for France’s government bond auction for a measure of confidence in the nation’s footing. The French IMF Director, Christine Lagarde, will visit South Africa Thursday.

The corporate wire has reports coming from A. Schulman (Nasdaq: SHLM), AEHR Test Systems (Nasdaq: AEHR), AngioDynamics (Nasdaq: ANGO), Apollo Group (Nasdaq: APOL), Constellation Brands (NYSE: STZ), Family Dollar Stores (NYSE: FDO), Franklin Covey (NYSE: FC), Global Payments (NYSE: GPN), Kingtone Wireless Info Solution (Nasdaq: KONE), Monsanto (NYSE: MON), MSC Industrial Direct (NYSE: MSM), RPM International (NYSE: RPM), Ruby Tuesday (NYSE: RT), Saba Software (Nasdaq: SABA), Texas Industries (NYSE: TXI), Worthington Industries (NYSE: WOR) and Xyratex (Nasdaq: XRTX).

Friday

Friday of course will be noted for its monthly Employment Situation Report. Often called the granddaddy of all economic reports, this data point, and the massaging that is done to it by a slew of critical analysts, provides a good measure of the economic situation. Bloomberg’s survey of economists shows the consensus view for slight deterioration in the unemployment rate to 8.7% in December, from the 8.6% rate measured in November. Nonfarm Payrolls are seen marking a 150K increase last month, versus the 120K increase reported in November.

Monster Worldwide (NYSE: MWW) will report its Monster Employment Index (MEI) Friday. This measures monthly online job demand, but the report is a far side note Friday, given the government data.

The American Economic Association is having its annual meeting in Chicago Friday, while Boston Fed President Eric Rosengren addresses a trade association in Hartford. Economists will have new material to discuss, given the jobs data. On Saturday, St. Louis Fed President James Bullard addresses the Korean American Economic Association in Chicago.

Autodesk (Nasdaq: ADSK) has a shareholder meeting scheduled Friday. The EPS list includes AZZ Inc. (NYSE: AZZ), Commercial Metals (NYSE: CMC), Greenbrier (NYSE: GBX), IHS Inc. (NYSE: IHS), PriceSmart (Nasdaq: PSMT) and Robbins & Myers (NYSE: RBN).

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