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Monday, April 08, 2013

This Week – Earnings May Weigh and Retail Sales May Wane

This week, the start of earnings season will be well-noted, but after Alcoa and J.P. Morgan Chase, very few widely followed names will report. Earnings will start in earnest next week. This week, though, important news about consumers and retailers might hit the fan. The first quarter performance of the major indexes, evidenced by the SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones Industrial Average (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ) gains of 10.5%, 11.9% and 6.1%, respectively, come into question as companies begin to report results and economic data softens.

SPY Chart 2013 Q1

Monday

It’s the unofficial start to the corporate earnings season with the report of Alcoa (NYSE: AA) at the close. Also reporting today, A. Schulman (Nasdaq: SHLM), VisionChina Media (Nasdaq: VISN), Healthcare Services Group (Nasdaq: HCSG) and AZZ Incorporated (NYSE: AZZ). Dot Hill Systems (Nasdaq: HILL) is holding a meeting for analysts. Bristol-Myers Squibb (NYSE: BMY) is announcing the appointment of Francis Cuss as its new Executive Vice President and Chief Scientific Officer.

Federal Reserve Chairman Bernanke is giving the keynote speech at the Atlanta Federal Reserve Bank’s financial markets conference, this year entitled, “Maintaining Financial Stability: Holding a Tiger by the Tail.”

The Investor Movement Index (IMX) is released around noontime. The IMX is a behavior based index created by TD Ameritrade (Nasdaq: AMTD) to provide insight into investor sentiment on Main Street. It varies in this regard from the State Street (NYSE: STT) Investor Sentiment Index, which measures institutional investors.

The Masters Golf Tournament tees off in Augusta, Georgia.

Tuesday

In the early going, the National Federation of Small Business (NFIB) will report its Small Business Optimism Index. Last month’s report for March showed very little improvement in confidence to a still deeply inadequate level. The economists’ consensus expectation for April is for a slight deterioration to a mark of 90.6, from 90.8 previously.

Look for the regular retail same-store sales data in the premarket as well. Last week, the International Council of Shopping Centers (ICSC) showed a week-to-week sales increase of 4.7%, versus the 1.7% decline the week before. On a year-to-year basis, sales were higher by 1.9%, versus the 1.0% increase in the prior week. This data was impacted by Easter and should be discounted as such.

At 10:00 AM ET, look for the monthly Wholesale Trade Report. In this report for the month of February, economists are expecting just a 0.5% increase in wholesale inventories, against the 1.2% gain the month before. You’ll want to compare the month’s inventory growth to the change in sales for a more complete perspective.

China reports on March price change at the consumer and producer levels Tuesday.

Investors bothered by this month’s Employment Report will want to catch the latest JOLTS Survey Tuesday for news on job openings and labor turnover.

Richmond Federal Reserve Bank President Jeffrey Lacker speaks Tuesday, giving an address he’s entitled, “Ending Too Big to Fail is Going to be Hard Work,” at the Global Society of Fellows meeting at the University of Richmond.

In corporate news, look for investor and analyst days at First Solar (Nasdaq: FSLR), Agrium (NYSE: AGU) and Coronado Biosciences (Nasdaq: CNDO). The Telsey Advisory Group Spring Conference brings presentations by Alliance Data (NYSE: ADS), Guess (NYSE: GES) and Pandora Media (NYSE: P). Infoblox (Nasdaq: BLOX) is having a customer conference call. Look for earnings news from SeaChange International (Nasdaq: SEAC), Zep (NYSE: ZEP) and American DG Energy (Nasdaq: ADGE). The IPO wire has Taylor Morrison Home and Knot Offshore Partners.

Wednesday

The Federal Reserve publishes the minutes of its March meeting, shedding more light on the intimacies of the discussion in-bank. This could be a market moving event, because what it sheds light on is of utmost importance to equity investors. Also, look for Minneapolis Fed Bank President Narayana Kocherlakota as he moderates a panel at the Atlanta Fed conference at 8:30 AM. Dallas Fed Bank President Richard Fisher speaks on the economy and monetary policy in Texas at 1:00 PM ET.

We will also get the latest mortgage activity data from the Mortgage Bankers Association in the premarket Wednesday. Last week’s report covering the period ending March 29 showed mortgage applications decreased by 4.0%. Applications tied to the purchases of homes increased slightly, while the Refinance Index declined by 6.0%. Interest rates decreased slightly in the period, but it was just ahead of Passover and Easter, when this business slows down.

Look for the EIA’s regular Petroleum Status Report at 10:30 AM ET. Last week’s report covering the week ending March 29 showed crude oil inventory increased by 2.7 million barrels, and remained well above the upper limit of the average range for this time of year. Total motor gasoline decreased by 0.6 million barrels but remained in the middle of the average range.

The Monthly Treasury Budget will be reported for the month of March at 2:00 PM ET. Economists expect the month to offer a budget deficit of $172.4 billion, versus $203.5 billion reported in February. Over the past 10 years, the average deficit for March has been $107.6 billion. It’s obvious why the President is picking this particular day to send his budget plan for fiscal 2014 to Congress. It will be interesting to see what it offers.

G-8 foreign ministers start a two-day meeting in London Wednesday.

In corporate news, there are analyst or investor days scheduled at Advance Auto Parts (NYSE: AAP) and Calpine (NYSE: CPN). The Telsey Advisory Group Spring Conference offers a presentation by Elizabeth Arden (Nasdaq: RDEN). The EPS schedule highlights reports from Bed Bath & Beyond (Nasdaq: BBBY), Carmax (NYSE: KMX), Constellation Brands (NYSE: STZ), Fastenal (Nasdaq: FAST), Family Dollar (NYSE: FDO) and Titan Machinery (Nasdaq: TITN).

Thursday

Weekly Initial Jobless Claims is due for report at 8:30. Last week’s report covering the period ending March 30 showed weekly claims spiked higher by 28K, rising to 385K. The four-week moving average for jobless claims rose 11,250 to 354,250. Last week I said another higher figure would raise investor concern, and it did. Economists see claims dropping to 365K this week.

Import and Export Price data will be released Thursday for the month of March. Economists expect export prices edged higher by 0.1%, after rising by 0.8% in February. Import prices are seen falling by 0.5% this month, versus the 1.1% increase seen last month. Large changes in export prices are usually due to agricultural exports while changes in import pricing are typically petroleum related.

Bloomberg’s Consumer Comfort Index stabilized last week after declining over the two prior weeks. The weekly measure of the consumer mood edged up 0.3 points last week, reaching a mark of -34.1.

The EIA’s Natural Gas Report is due Thursday at 10:30 AM. Last week’s report covering the period ending March 29 showed working gas in storage declined by 94 Bcf. Stocks were 779 Bcf less than last year at this time and 37 Bcf below the five-year average for this time of year.

The SEC’s Investor Advisory Committee reviews target date funds. Also, look for Fed-speak from representatives Plosser and Bullard Thursday.

The corporate wire has the chain store sales of individual retailers for the month of March. An increasing number of them are not reporting this data. Look for shareholder and analyst meetings at NVIDIA (Nasdaq: NVDA), The Hartford Financial Services Group (NYSE: HIG) and Siemens (NYSE: SI). Look for an IPO from transaction processing firm Evertec. Residential Capital and Reader’s Digest are in bankruptcy court. The EPS slate highlights presentations by China Finance Online (Nasdaq: JRJC), Pier 1 Imports (NYSE: PIR), J.B. Hunt (Nasdaq: JBHT), Rite Aid (NYSE: RAD) and more.

Friday

The monthly Retail Sales Report for March is due at 8:30 AM ET. Economists expect retail sales to stay flat against February levels. In February, sales rose 1.1%. Excluding autos and gasoline, sales are expected to have increased by 0.3%, versus the 0.4% increase in February.

The Thomson Reuters/ University of Michigan Consumer Sentiment Index is expected to have improved to 79.0, from 78.6. This 10:00 AM report comes a week after the Conference Board report showing a significant drop-off in the consumer mood.

Just a day after the import and export price release, we’ll receive insight into producer level pricing. The Producer Price Index (PPI), due at 8:30 AM, is expected to show a March decrease of 0.2%. The Core PPI, less food and energy influence, is expected to show a 0.2% increase, matching the prior month increase.

Business Inventories will be reported for February at 10:00 AM ET. Economists see inventories rising 0.4%, following their 1.0% increase in January. Investors will need to take a closer look at the report for insight into sales activity as well.

Fed Chairman Bernanke gives a noontime speech in Washington D.C.

E.U. finance ministers are meeting in Dublin.

The corporate wire has the earnings of J.P. Morgan Chase (NYSE: JPM). Also find news from CAMAC Energy (NYSE: CAK), China Sunergy (Nasdaq: CSUN) and a few more.

You might also enjoy some of our recent work including, Ignore the Economic Message at Your Own Risk and Gold: A Fresh Rally Begins Today.

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.

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