A Pivotal Report this Week

An interesting week is in store, with a pivotal Retail Sales Report right at the start of the week to set the tone of trading. We will also get important guidance on the economy from the Leading Economic Indicators and several other data points. The corporate wire also offers some broader insight, with Wal-Mart on tap, along with several other major American companies. The Vanguard S&P 500 ETF (NYSE: VOO) was up 1.4% last week, but where it ends up this week will have a lot to do with how America’s retailers fared in April.

I also want to take a moment and express my deep heartfelt regret regarding the passing of my favorite financial columnist, Alan Abelson. Alan lit up my life every Saturday morning, and made my weekend business reading worthwhile, whether I got further than his lead Barron’s column and into the rest of the magazine or not. I wish his family and friends, including those we share at Barron’s, my condolences. I will miss Alan so very much every Saturday morning.

Monday

The economy will get a gut check Monday morning when the monthly Retail Sales Report for April is published at 8:30 AM ET. The trend-line for this data shows a slowing pace of growth to a level barely edging out inflation at this point year-to-year. The data was bad in March and is expected to be sad for April. Economists expect retail sales to slip 0.3% against March levels; last month, sales fell 0.4%. Excluding autos, sales should have fallen 0.1%, versus March’s decline of 0.4%. Excluding both autos and gasoline, sales are expected to have risen by 0.4%, versus the 0.1% decrease in March, illustrating the importance of gasoline prices in the period.

Business Inventories will be reported for March at 10:00 AM ET. Economists see inventories rising 0.3%, following their 0.1% increase in February. Last month, sales growth exceeded the increase in inventories, but indications are that this month’s sales will prove inadequate. Last week, wholesalers’ sales matched poorly against an inventory build at that level, so investors will need to take a closer look at this report for insight into sales activity at this level as well.

Fresh off the weekend’s G7 meeting, in which the Group of Seven ministers agreed to work together against tax evasion, euro-zone finance ministers are meeting today. President Obama is meeting with British Prime Minister David Cameron, and later in the week with the Turkish PM... I suppose read into that something about Syria and/or Iran…

In corporate news, the JMP Securities Research Conference offers presentations by Alexander & Baldwin (Nasdaq: ALEX) and American Capital (Nasdaq: ACAS). Atlas Pipeline Partners (NYSE: APL) is presenting at the Bank of America Merrill Lynch Energy & Power Leveraged Finance Conference. Companies holding investor or analyst meetings include everyone’s Russian favorite Gazprom (OTC: OGZPY.PK), and also FelCor (NYSE: FCH), SodaStream (Nasdaq: SODA), ServiceNow (NYSE: NOW) and American Water Works (NYSE: AWK). Mosaic (NYSE: MOS) is holding a conference call to review its capital management philosophy. Tallgrass Energy Partners is set to offer shares in an IPO.

The earnings schedule highlights news from AirMedia (Nasdaq: AMCN), Biglari Holdings (NYSE: BH), China Yuchai (NYSE: CYD), Dick’s Sporting Goods (NYSE: DKS), Engility (NYSE: EGL), Fortegra Financial (NYSE: FRF), Home Inns & Hotels Management (Nasdaq: HMIN), Renren (Nasdaq: RENN), Stereotaxis (Nasdaq: STXS), Take-Two Interactive (Nasdaq: TTWO) and several others.

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 produced a drop in confidence of 1.3 points, ending a three-month streak of modest gains. The economists’ consensus expectation for April is for a one point improvement to a mark of 90.5, but I’m not confident in that.

Import and Export Price data will be released for the month of April in the early going. Economists expect export prices edged lower by 0.1%, after falling by 0.4% in March. Import prices are seen falling by 0.5% this month, versus the same decrease seen last month. Large changes in export prices are usually due to agricultural exports while changes in import pricing are typically petroleum related. When both are declining, you can expect the economy is languishing.

The weekly retail same-store sales data also arrives on Tuesday, this time for the week ended May 11. Last week, the International Council of Shopping Centers (ICSC) showed a week-to-week sales decrease of 1.0%, versus the 0.4% increase the week before. On a year-to-year basis, sales were higher by 2.4%, versus the 2.6% increase in the prior week.

Philadelphia Federal Reserve Bank President Charles Plosser is scheduled to speak on the economy and monetary policy at the obscene hour of 2:00 AM ET, in Stockholm at SNS.

The Securities & Exchange Commission (SEC) is holding a roundtable discussion on the topic of securities’ credit ratings.

Israeli markets are closed on Tuesday, but this has nothing to do with Iran… or does it?

In corporate news, look for analyst and investor meetings at Brightcove (Nasdaq: BCOV), EPL Oil & Gas (NYSE: EPL) and Safeway (NYSE: SWY). The J.P. Morgan Global Technology, Media & Telecom Conference highlights a presentation by Juniper Networks (Nasdaq: JNPR). The Goldman Sachs Consumer Products Symposium presents the latest from Procter & Gamble (NYSE: PG) and Coca-Cola (NYSE: KO). The Bank of America Merrill Lynch Health Care Conference offers presentation by Baxter International (NYSE: BAX). Look for earnings news from Agilent Technologies (NYSE: A), Country Style Cooking Restaurant (Nasdaq: CCSC), Global Sources (Nasdaq: GSOL), Phoenix New Media (Nasdaq: FENG), Qualstar (Nasdaq: QBAK), Response Genetics (Nasdaq: RGDX) and more.

Wednesday

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 an April decrease of 0.7%, after the March decline of 0.6%. The Core PPI, less food and energy influence, is expected to show a 0.2% increase, matching the prior month increase.

The Empire State Manufacturing Survey will be reported at 8:30 AM ET. Within the report, the General Business Conditions Index has shown modest regional manufacturing expansion over recent months’ reporting. This month, economists see the index improving slightly to 3.75, from 3.05.

Industrial Production will be reported at 9:15 AM ET. The economists’ consensus sees industrial production lower by 0.2% in April, versus the 0.4% increase in March. Capacity Utilization is seen moderating to 78.3% in March, versus the 78.5% usage rate in March. Data has been softening in manufacturing generally speaking, and this report could offer more evidence of the same. Manufacturing production is seen increasing by just 0.1%, versus the 0.1% decrease the month before.

The Treasury International Capital (TIC) Report for March reaches the wire at 9:00 AM ET. This report sheds light on foreign demand for long-term U.S. securities. It was not until April that stocks began to express concern in the U.S., so this data could reflect the same.

The National Association of Homebuiders’ (NAHB) Housing Market Index (HMI) is due at 10:00 AM ET. This measure of the mood of homebuilders can be skewed by its inclusion of great numbers of smaller independent builders. In today’s market, where the large well-capitalized publicly traded builders have gobbled up market share from bankrupt and troubled smaller players, two very separate sets of opinions exist about the market. Economists are looking for a slight improvement in the HMI in May, to 44, from 42 in April. Readings above 50 indicate a mostly positive perspective of the housing market, and so you can see the issue for smaller builders has a voice here.

The latest mortgage activity data arrives from the Mortgage Bankers Association Wednesday before the market open. Last week’s report covering the period ending May 3 showed mortgage applications increased by 7.0%. Applications tied to the purchases of homes increased by 2.0% on a seasonally adjusted basis to its highest level since May of 2010. The Refinance Index increased by 8.0%. Effective interest rate changes were mixed, but rates on conforming loan balances and on FHA sponsored loans increased. That led us to question whether activity got a lift from potential buyers coming off the fence out of fear of rising rates, and if this would finally be the spring for real estate.

Look for the EIA’s regular Petroleum Status Report at 10:30 AM ET. Last week’s report covering the week ending May 3 showed crude oil inventory increased by 0.2 million barrels, and remained well above the upper limit of the average range for this time of year. Total motor gasoline inventory decreased by 0.9 million barrels and was in the middle of the average range.

The National Association of Business Economics (NABE) is hosting a forum entitled, “Will the Oil and Gas Boom Reignite the Economy?”

Quarterly E-Commerce Retail Sales will be reported for Q1 2013 at 10:00 AM ET. The last report for Q4 2012 showed quarter-over-quarter growth of 4.4%, which was even better than the Q3 growth of 3.8% (revised from 3.7%).

In corporate news, the J.P. Morgan Global Technology, Media & Telecom Conference offers presentations by Symantec (Nasdaq: SYMC) and Advanced Micro Devices (NYSE: AMD). The Bank of America Merrill Lynch Health Care Conference brings news from Intuitive Surgical (Nasdaq: ISRG), Quest Diagnostics (NYSE: DGX) and McKesson (NYSE: MCK). Look for investor and analyst meetings at Northrop Grumman (NYSE: NOC), Sunpower (Nasdaq: SPWR) and Questar (NYSE: STR). William Lyon Homes will price its IPO, offering 8.7 million shares to the public.

The EPS schedule highlights reports from Macy’s (NYSE: M), Deere (NYSE: DE), Cisco Systems (Nasdaq: CSCO), Computer Sciences (NYSE: CSC), Aegean Marine Petroleum Network (NYSE: ANW), Sapient (Nasdaq: SAPE) and Consolidated Graphics (NYSE: CGX).

Thursday

Following the recent reporting of the PPI, the Consumer Price Index (CPI) is due today at 8:30 AM ET. Economists see this measure of inflation showing prices fell 0.3% in April, after dropping 0.2% in March. However, when excluding volatile food and energy prices, the Core CPI is expected to have grown at a 0.2% pace, up from the 0.1% pace of the prior month.

Weekly Initial Jobless Claims is due for report at 8:30. Last week’s report covering the period ending May 4 showed weekly claims decreased by 4K, to 323K. Economists see claims rising to 330K this week. The four-week moving average declined by 6,250 last week, falling to 336,750.

The Bloomberg Consumer Comfort Index, a weekly measure of the consumer mood, deteriorated by 0.6 points last week, and reached a mark of -29.5. I expect the index to revisit even lower levels before long. Consumers are not generally in a good mood today, as evidenced by the trends of monthly sentiment data.

Housing Starts will be reported at 8:30 AM ET. This report covers new residential construction starts and also offers information on new permit issuance for construction. In this report for April, economists expect the annual pace of housing starts decreased to 969K, from 1.036 million in March. The economists’ consensus for permit issuance stands at 945K, which would be up from the prior month’s pace of 902K. Such a mixed result would likely leave housing stocks relatively unchanged.

The Philadelphia Federal Reserve’s Business Outlook Survey measures the regional manufacturing mood. The report for the month of May is expected to show index improvement to a mark of 2.2, up from 1.3 in April.

Several Fed speakers are on the board for Tuesday, with Fed Governor Sarah Raskin, Philly Fed Bank President Plosser, Dallas Bank President Fisher, Richmond’s Lacker, San Francisco’s Williams and Boston’s Rosengren all scheduled to speak in the afternoon. Also, European Central Bank (ECB) President Mario Draghi is scheduled to make an address.

The EIA’s Natural Gas Report is due Thursday at 10:30 AM. Last week’s report covering the period ending May 3 showed working gas in storage increased by 88 Bcf. Stocks were 737 Bcf less than last year at this time and 99 Bcf below the five-year average for this time of year.

President Obama is meeting with the Turkish Prime Minister in Washington.

In corporate news, look for investor or analyst meetings at Advanced Micro Devices (NYSE: AMD), Marsh & McLennan (NYSE: MMC), Progressive (NYSE: PGR), CoreLogic (Nasdaq: CLGX), EPL Oil & Gas (NYSE: EPL), STMicroelectronics (NYSE: STM), Haemonetics (NYSE: HAE) and SAP AG (NYSE: SAP). Tableau Software will offer 7.2 million shares in its IPO. The J.P. Morgan Global Technology, Media & Telecom Conference highlights the presentation of SanDisk (Nasdaq: SNDK). The Bank of America Merrill Lynch Health Care Conference highlights the presentation of Express Scripts (Nasdaq: ESRX).

The EPS slate highlights presentations by Wal-Mart (NYSE: WMT), J.C. Penney (NYSE: JCP), Kohl’s (NYSE: KSS), Nordstrom (NYSE: JWN), Applied Materials (Nasdaq: AMAT), Autodesk (Nasdaq: ADSK) and more.

Friday

The Thomson Reuters/ University of Michigan Consumer Sentiment Index is expected to have improved to 78.0, from 76.4 at the end of April. This will be an interesting read, coming a few days after retail sales data was reported for the month of April. This data could put in a floor for retailers if Monday’s news was bad.

The Conference Board will publish its monthly Leading Economic Indicators (LEI) Index at 10:00 AM ET. Economists see this forward looking economic measure marking a 0.3% improvement in April, which would be reassuring after March’s decline of 0.1%.

Minneapolis Federal Reserve Bank President Narayana Kocherlakota sits on a panel at the University of Chicago Booth School, discussing monetary policy and financial regulation.

The corporate day offers the likely loud annual meetings of J.C. Penney (NYSE: JCP), Chipotle Mexican Grill (NYSE: CMG), Aetna (NYSE: AET), Aon (NYSE: AON) and Macy’s (NYSE: M). The day’s earnings slate includes iSoftStone (NYSE: ISS), Donaldson Co. (NYSE: DCI), FNB United (Nasdaq: FNBN) and Stage Stores (NYSE: SSI).

Markets are closed in Hong Kong and South Korea for Buddha’s birthday. For some reason, markets were open for my birthday just a couple weeks ago. Whatever!

Saturday

Federal Reserve Chairman Ben Bernanke is speaking about America’s long-term economic prospects.

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