By Theresa Sheehan
PRINCETON (SMRA) – For the week ahead the July data for industrial
production and capacity utilization Tuesday will cover a period of
extremely hot weather for much of the U.S., and consequently demand for
utilities to cool homes and business will climb.
The earliest of the housing sector data will be released midmorning
Monday with the NAHB/Wells Fargo Housing Market Index for August. The
index remains consistent with a more pessimistic outlook, and is
unlikely to turn substantially higher with the current slow patch in the
economy and persistent high unemployment.
Data on housing starts and permits issued in July Tuesday morning
should be of a piece with the prior readings of the NAHB index. Stocks
of new homes remain quite limited, but without some sign of an upturn in
demand, builders will remain reluctant to begin new projects. There also
appears to be a downshift to smaller homes and multi-units as consumers
are more cautious about the price of homes, and opt for smaller
properties.
The Producer Price Index for July Tuesday morning will read as a
bit of an afterthought since it is being released two business days
after the CPI. It should also show some modest gains that will be a
relief from the concerns about deflation.
The Conference Board’s Leading Economic Index for July midmorning
Thursday should be up once again after falling slightly in June.
Positive contributions are expected from interest rates, plant and
equipment, vendor performance, the workweek, and building permits.
Falling consumer confidence and stock prices should make a negative
contribution.
The Treasury International Capital System (TICS) for June on
Monday will refine what is already known about foreign demand for US
debt and equities abroad.
Initial jobless claims for the week ended August 14 Thursday
morning comes after a spike in claims in the prior week. To some extent
that may have been due to workers returning to the rolls with the
renewal of extended benefits, which may have been miscounted as new
claims. This is the survey comparison week for August from July.
Two of the most forward looking of the indicators for the factory
sector are scheduled this coming week. The New York Fed’s Empire State
Survey is Monday morning, and the Philadelphia Fed’s Business Outlook
Survey is midmorning Thursday. The trend in the general activity index
of the various Fed District Bank surveys of manufacturing has been down,
but with the exception of the Dallas survey, all have been maintaining
growth.
The BLS reports on mass layoffs and state unemployment for July are
both scheduled for midmorning Friday. Layoff activity should remain
quite low for the month with the exception of higher than usual cuts in
government. State and regional data on unemployment may show drops in
those localities where unemployment is most persistent, and where the
loss of extended benefits at least temporarily moved some workers out of
the count for the unemployed.
Overall, although the August 16 economic data calendar is
not particularly busy, it does have some first-tier reports that will
help further solidify the outlook for the U.S. economy in the third
quarter. There will also be a continued lull in the presence of Fed
officials on public engagement calendars, with only one Fed District
Bank President scheduled to speak.
Technically it is not economic data, and officially it is not on
the calendar. However, we expect the Fed to release the Senior Loan
Officer Opinion Survey Monday afternoon. It will update the view of
credit conditions in the U.S. for both commercial and industrial
businesses and households. We would anticipate an emphasis on small
business lending in the special questions.
Another event that is not data but which will be watched carefully
is the Treasury and HUD conference Tuesday on the future of Fannie and
Freddie. The 12 panelists, mortgage, credit and academic experts, are
varied enough to guarantee there will be no particular consensus reached
on the future of housing finance at this initial session.
The weekly measures of retail activity could get a boost from the
concentration of sales tax holidays in the second weekend of August. The
ICSC/Goldman-Sachs Index at 7:45 ET on Tuesday could show stronger
sales, especially since many retailers are offering back-to-school
bargains in conjunction with the short period of tax relief.
U.S. Treasury Auctions
The first leg of the quarterly refunding auction is done and will
settle on Monday. There are no coupon auctions during the week, but
there is an announcement on Thursday of a reopening of the 30-year TIPS
bond, and new 2-, 5-, and 7-year notes. The auctions will take place in
the subsequent week on Monday through Thursday, respectively.
Central Bank Meetings
There are no major central bank announcements on the calendar until
early September.
On Thursday, St. Louis Fed President James Bullard will be in
Rogers, Arkansas to speak on the U.S. economy.
** Stone & McCarthy Research Associates **
[TOPICS: M$$FI$,M$U$$$,MAUDS$]