This Week The Truth Hurts

This week’s data might pound some sense into the market, because the GDP truth could hurt. When GDP is reported at the close of the week, it could significantly disappoint against economists’ expectations built upon and mislead by the Fed’s failed math (see below). In corporate news, Apple (Nasdaq: AAPL) reports results this week, along with a slew of other major names. The entire economic and corporate event schedule follows here brought to you by Wall Street Greek.

Monday

It’s Earth Day, so expect a great deal of media focus on climate change and alternative energy issues. Also, we are told by our deal-frenzied friends to go to Target (NYSE: TGT) today to get a free bag of goodies as part of the celebration of the planet.

The first bit of data to reach the economic wire Monday will be the Chicago Fed’s National Activity Index at 8:30 AM ET. The CFNAI obviously measures national economic activity. This will be the reading for March, after February produced an index level of 0.44, up from negative 0.49 in January. The three-month moving average for the CFNAI is 0.09. Readings below zero do not necessarily signify economic contraction, but rather a slower rate of economic growth than long-term trend. There is no economists’ consensus estimate available for this data point.

When Existing Home Sales data is reported for the month of March at 10:00 AM Monday, economists expect it will show the annual pace of sales broke an important psychological threshold, reaching 5.03 million. It would mark just a small increase from February’s pace of 4.98 million, but probably still offer some support to a confused real estate community after last week’s data. You’ll recall, homebuilder sentiment collapsed last week and permits for new home construction slipped as well.

Looking overseas, central bankers from France and England will sit on a panel in New York, conversing about over-the-counter derivatives at the Paris Europlace Forum. Also, Spanish bank Bankia S.A. (OTC: BNKXF.PK) will reverse split its shares 1-for-100.

In corporate news, the earnings schedule highlights news from Caterpillar (NYSE: CAT), Halliburton (NYSE: HAL), Netflix (Nasdaq: NFLX), Texas Instruments (NYSE: TXN), Hasbro (NYSE: HAS), ACE Ltd. (NYSE: ACE), Ameriprise Financial (NYSE: AMP), B/E Aerospace (Nasdaq: BEAV), Check Point Software (Nasdaq: CHKP), Sanmina (Nasdaq: SANM), Six Flags Entertainment (NYSE: SIX), Zions Bancorporation (Nasdaq: ZION) and many more.

Tuesday

Apple (Nasdaq: AAPL) reports earnings today!

The weekly retail same-store sales data comes first Tuesday for the week ended April 20. Last week, the International Council of Shopping Centers (ICSC) showed a week-to-week sales decrease of 1.1%, versus the 0.7% increase the week before. On a year-to-year basis, sales were higher by 2.0%, versus the 2.1% increase in the prior week. The data may be affected by the impact of Boston being essentially shut down in the period.

Just before 9:00 AM ET, catch the Markit Economics PMI Manufacturing Index (Flash). We just noted recent weakness in manufacturing data seems to be spreading (see the bottom of this report). Thus, this report could confirm issue or offer a point of contention. Economists are forecasting just a slight moderation in this data point, with the index seen falling to 54.2 in April, from 54.6 at the end of March. The trend for this data point is reflecting deterioration, falling from 54.9 at mid-month in March.

A second manufacturing data point arrives at 10:00 AM when the Richmond Fed provides its latest Manufacturing Index. This report for the month of April is expected to show the index held steady at a mark of 3.0.

Two important housing data points find the wire on Tuesday, with the New Home Sales Report and the FHFA House Price Index due. Investors can look for the New Home Sales data for March at 10:00 AM. Economists expect the annual pace of sales to have edged up a bit to a pace of 419K in March, from 411K in February. The FHFA House Price Index is expected to show prices rose by 0.7% in February, which would be better than January’s increase of 0.6%. The trend here has been one of accelerating price rise, with December showing an increase of 0.5%.

The Senate Banking Committee is hearing from the Consumer Financial Protection Bureau, as it provides its Semi-Annual Report to Congress.

Foreign Ministers of NATO nations are meeting on this day.

In corporate news, it’s put up or shut up time for Apple (AAPL) as it reports earnings after not having had anything helpful to say for several months now. Publicis Group (OTC: PUBGY.PK) is meeting with investors, and Salesforce.com (NYSE: CRM) is giving a company tour. Patriot Coal is in bankruptcy court.

Look for earnings news from Apple, Amgen (Nasdaq: AMGN), Juniper Networks (Nasdaq: JNPR), E.I. du Pont (NYSE: DD), Forest Laboratories (NYSE: FRX), Lockheed Martin (NYSE: LMT), Gannett (NYSE: GCI), Arch Coal (NYSE: ACI), ARM Holdings (Nasdaq: ARMH), AT&T (NYSE: T), Broadcom (Nasdaq: BRCM), Cree (Nasdaq: CREE), Delta Air Lines (NYSE: DAL), Discover Financial (NYSE: DFS), Edwards Lifesciences (NYSE: EW), Encana (NYSE: ECA), Johnson Controls (NYSE: JCI), Nabors Industries (NYSE: NBR), Norfolk Southern (NYSE: NSC), Regions Financial (NYSE: RF), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), VMware (NYSE: VMW), Waters (NYSE: WAT), Xerox (NYSE: XRX) and Yum! Brands (NYSE: YUM).

Wednesday

Durable Goods Orders will be reported for the month of March on Wednesday at 10:00 AM ET. This is a volatile measure and a difficult one for economists to peg, because of the high ticket price of durable goods. For this reason, the data comes with and without the especially high-priced transportation segment data. Economists expect durable goods orders to show 2.8% lower for March, after February’s climb of 5.7%. Excluding transportation, though, durables are expected to just inch up by 0.5%, after falling 0.5% last month.

The latest mortgage activity data arrives from the Mortgage Bankers Association Wednesday before the market open. Last week’s report covering the period ending April 12 showed mortgage applications increased by 4.8%, after rising 4.5% the week before. Applications tied to the purchases of homes increased by 4.0% on a seasonally adjusted basis to its highest level since May of 2012. The Refinance Index increased by 5.0%, after rising 6.0% the week before. Effective interest rates mostly fell or stayed low in the period and the weather is improving and supporting the spring season as well.

Washington D.C. will play a role in trade today, with three significant events. The Joint Economic Committee is holding a hearing on the issue of long-term unemployment. Meanwhile, the House Financial Services Committee is having a hearing on housing finance and the regulatory impediments to private investment capital. Also, the Independent Community Bankers of America has their annual Washington Policy Summit today and tomorrow.

Look for the EIA’s regular Petroleum Status Report at 10:30 AM ET. Last week’s report covering the week ending April 12 showed crude oil inventory decreased by 1.2 million barrels, and remained well above the upper limit of the average range for this time of year. Total motor gasoline inventory decreased by 0.6 million barrels and are now above the upper limit of the average range.

Australian and Indian markets are closed Wednesday.

In corporate news, the Bakken Investor Conference kicks off in Minot, North Dakota. General Electric (NYSE: GE), which reported last Friday and sank 4.0% on that day, has its annual shareholder meeting. Commerzbank (OTC: CRZBY.PK) is executing a 1-for-10 reverse split. The EPS schedule highlights reports from Boeing (NYSE: BA), EMC (NYSE: EMC), Procter & Gamble (NYSE: PG), Qualcomm (Nasdaq: QCOM), Sprint Nextel (NYSE: S), Xilinx (Nasdaq: XLNX), EMC (NYSE: EMC), Aflac (NYSE: AFL), Akamai Technologies (Nasdaq: AKAM), Allegheny Technologies (NYSE: ATI), Assurant (NYSE: AIZ), Avery Dennison (NYSE: AVY), Cabot Oil & Gas (NYSE: COG), Citrix Systems (Nasdaq: CTXS), Cliff’s Natural Resources (NYSE: CLF), Corning (NYSE: GLW), Crown Castle Int’l (NYSE: CCI), Daimler (OTC: DDAIF.PK), Dr. Pepper Snapple (NYSE: DPS), Eli Lilly (NYSE: LLY), Equifax (NYSE: EFX), F5 Networks (Nasdaq: FFIV), Flowserve (NYSE: FLS), Ford (NYSE: F), General Dynamics (NYSE: GD), GlaxoSmithKline (NYSE: GSK), Hess (NYSE: HES), Lam Research (Nasdaq: LRCX), Lorillard (NYSE: LO), LSI Corp. (NYSE: LSI), Motorola Solutions (NYSE: MSI), NASDAQ OMX (Nasdaq: NDAQ), Northrop Grumman (NYSE: NOC), O’Reilly Automotive (Nasdaq: ORLY), Praxair (NYSE: PX), Rockwell Automation (NYSE: ROK), Southern (NYSE: SO), Stericycle (Nasdaq: SRCL), Stryker (NYSE: SYK), T. Rowe Price (Nasdaq: TROW), TE Connectivity (NYSE: TEL), Teradyne (NYSE: TER), Thermo Fisher Scientific (NYSE: TMO), Varian Medical (NYSE: VAR), Waste Management (NYSE: WM), WellPoint (NYSE: WLP), Western Digital (NYSE: WDC), Whirlpool (NYSE: WHR), Windham Worldwide (NYSE: WYN) and Zynga (Nasdaq: ZNGA).

Thursday

Weekly Initial Jobless Claims is due for report at 8:30. Last week’s report covering the period ending April 13 showed weekly claims rose by 4K, to 352K. The four-week moving average for jobless claims rose 2,750 to 361,250. Economists see claims at about the same level this week, as is usually the case. It’s tough to predict much change in such a regularly reported economic data point.

After stabilizing recently, Bloomberg’s Consumer Comfort Index, a weekly measure of the consumer mood, shot higher by 4.8 points last week, reaching a mark of -29.2. It’s not very often that this indicator moves so much, and so I expect the change was due to an anomaly and could correct this week. Consumers are not generally in a good mood today, as was evidenced by the recent drops seen in the Conference Board and University of Michigan monthly measures.

The Kansas City Fed’s Manufacturing Survey is up for report at 11:00 AM Thursday morning. The KC Fed’s Index is expected by economists to continue to show regional contraction, though less of it in April, with the consensus forecast set for a reading of -1.0, better than March’s -5.0.

The EIA’s Natural Gas Report is due Thursday at 10:30 AM. Last week’s report covering the period ending April 12 showed working gas in storage increased by 31 Bcf. Stocks were 794 Bcf less than last year at this time and 74 Bcf below the five-year average for this time of year.

Eurogroup President Jeroen Dijsselbloem, the foolish figurehead who said Cyprus would be a template for all future bailouts, addresses the European Parliament’s economic and monetary affairs committee.

The corporate wire has Charles Schwab’s (Nasdaq: SCHW) interim business update for institutional investors. Reader’s Digest is in bankruptcy court. The EPS slate highlights presentations by Bristol-Myers Squibb (NYSE: BMY), Exxon Mobil (NYSE: XOM), Amazon.com (Nasdaq: AMZN), Altera (Nasdaq: ALTR), Cerner (Nasdaq: CERN), Safeway (NYSE: SWY), 3M (NYSE: MMM), Alexion Pharmaceuticals (Nasdaq: ALXN), Altria Group (NYSE: MO), AmerisourceBergen (NYSE: ABC), Baidu (Nasdaq: BIDU), Ball Corp. (NYSE: BLL), Bemis (NYSE: BMS), Biogen Idec (Nasdaq: BIIB), BorgWarner (NYSE: BWA), Boston Scientific (NYSE: BSX), Cameron Int’l (NYSE: CAM), CBRE Group (NYSE: CBG), Celgene (Nasdaq: CELG), Chubb (NYSE: CB), Cincinnati Financial (Nasdaq: CINF), CMS Energy (NYSE: CMS), Coca-Cola Enterprises (NYSE: CCE), Colgate-Palmolive (NYSE: CL), ConocoPhillips (NYSE: COP), CONSOL Energy (NYSE: CNX), Diamond Offshore Drilling (NYSE: DO), Dominion Resources (NYSE: D), Dow Chemical (NYSE: DOW), Eastman Chemical (NYSE: EMN), Entergy (NYSE: ETR), EQT (NYSE: EQT), Expedia (Nasdaq: EXPE), Federated Investors (NYSE: FII), Harley-Davidson (NYSE: HOG), Helmerich & Payne (NYSE: HP), Hershey (NYSE: HSY), International Game Technology (NYSE: IGT), KLA-Tencor (Nasdaq: KLAC), L-3 Communications (NYSE: LLL), Leggett & Platt (NYSE: LEG), Mead Johnson (NYSE: MJN), MetroPCS (NYSE: PCS), Noble Energy (NYSE: NBL), Occidental Petroleum (NYSE: OXY), Parker Hannifin (NYSE: PH), PerkinElmer (NYSE: PKI), Principal Financial Group (NYSE: PFG), Range Resources (NYSE: RRC), Raytheon (NYSE: RTN), Republic Services (NYSE: RSG), SCANA (NYSE: SCG), Sigma-Aldrich (Nasdaq: SIAL), Southwest Airlines (NYSE: LUV), Starbucks (Nasdaq: SBUX), Time Warner Cable (NYSE: TWC), United Parcel Service (NYSE: UPS), Verisign (Nasdaq: VRSN), Zimmer Holdings (NYSE: ZMH) and more.

Friday

First Quarter GDP will be reported for the first time at 8:30 AM ET. Economists’ expectations may be overstated and mislead there by the Federal Reserve and its recent economic forecasts. After reviewing the March update of the Fed forecasts, we noted that the Fed’s Math Just Doesn’t Add Up. You might also enjoy our more cynical blog discussion on the topic here – The Fed’s Funny Math. Economists are still looking for about the same growth that the Fed is, with the Q1 consensus forecast set for growth of 3.1%. That would compare against the fourth quarter of 2012 growth of just 0.4%. While economic activity did pick up at the start of the year, it was mostly on hope and prayers and not substantial support from the U.S. government, American consumers, or from international demand. The reality is that the payroll tax break expiration and the Sequester spending cuts have had a meaningful impact upon our economy, along with the heavy weight of Europe. I’m looking for a gross failure this year with regard to economists’ expectations and what reality will unfold. The range of economist expectations extends from 2.3% growth to 3.3% for Q1.

At 9:55 AM, catch the Reuters / University of Michigan Consumer Sentiment Index. When last reported, this index marked a precipitous decline in the consumer mood. I believe the mood changed for the worse after high expectations were built following the U.S. government stumble through the debt ceiling and fiscal cliff issues; those expectations were met by the reality of higher taxes in a still vulnerable economy. This latest reading is expected to show the index at 73.0, up slightly from the recent reading of 72.3. See the bottom of this article for an important economic discussion on this consumer topic.

The Bank of Japan (BOJ) is expected to release its semi-annual forecast on economic growth and consumer price trends on Friday.

The corporate wire has the earnings of Tyco International (NYSE: TYC), Covidien (NYSE: COV), Weyerhaeuser (NYSE: WY), Chevron (NYSE: CVX), Aon (NYSE: AON), Goodyear (NYSE: GT), AbbVie (Nasdaq: ABBV), American Electric Power (NYSE: AEP), DTE Energy (NYSE: DTE), FLIR Systems (Nasdaq: FLIR), LyondellBasell (NYSE: LYB), National Oilwell Varco (NYSE: NOV), VF Corp. (NYSE: VFC) and more.

See also our daily market previews and our regular economic and stock analysis from our expert founder.

You might also enjoy some of our recent work including:

10 Economic Warning Signs in 1 Week
Why I Would Sell GE
Recession Signal – This Consumer Data is Alarming

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