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Trading Radar: Growth and Consumption Data Ahead in the US

Michael Sedacca

This was the first week of the year that we've had three consecutive down days on the S&P 500 (^INX). The sell-off was sparked by Ben Bernanke's testimony to Congress on Wednesday regarding the possibility that the Fed could slow the pace of asset purchases by the end of the summer. Similarly, New York Fed President William Dudley said that, given the recent growth in employment, it was possible that the Fed could slow purchases over the next three to four months. Given the recent trends in inflation and growth, a slowing of purchases seems like a lowered possibility as long-term inflation expectations have come down sharply over the last month.

Next Monday, US markets will be closed for Memorial Day, and activity is expected to be light in Europe. The rest of the week offers a mix of growth and housing data. Personal spending and income data for April will be released on Friday with a 0.1% monthly gain in income and spending from the month prior expected. Throughout this year, real incomes have decreased as consumers have saved less (consciously or not) to keep up a steady pace of spending. This now appears to be reaching a point where it will become a drag on growth.

Home price data from March is forecast to continue to accelerate. The S&P/Case-Shiller index of home prices is forecast to rise 10.20% from last year, which shows that home prices continue to accelerate. Also on tap next week are three regional manufacturing surveys and two regional purchasing managers' indexes, which are expected to continue to show deceleration in the manufacturing sector. Lastly, the second estimate of 1Q GDP will be released on Thursday with no change expected from last month's estimate.

The global economic calendar will be light next week. Consumer inflation data will be released across Europe, and Germany will release employment figures. This past week showed that German growth nearly slowed to a crawl, which is perilous for the eurozone's largest country and guarantor of much of its public programs. Other employment data is also due out for Japan.

Earnings seasons has drawn to a close, and only a few retailers have yet to report their results. Notable reports for next week include Tiffany (TIF), Fresh Market (TFM), Costco (COST), Joy Global (JOY), and Lions Gate (LGF).

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Monday, May 27

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US Economics (Time Zone: EDT)

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US markets closed for Memorial Day.

Global Economics (Time Zone: GMT)

01:30 CNY Industrial Profits


No major earnings

Tuesday, May 28

US Economics (Time Zone: EDT)

09:00 S&P/Case-Shiller 20 City MoM - consensus 1.00%, prior 1.24%
09;00 S&P/Case-Shiller Composite of 20 YoY - consensus 10.20%, prior 9.32%
10:00 Richmond Fed - consensus -4, prior -6
10:00 Consumer Confidence - consensus 71.0, prior 68.1
10:30 Dallas Fed - consensus -10.0, prior -15.6
11:00 Fed buying $1.25b-$1.75b notes in 23 to 30-year range
11:30 Treasury selling $30b 3-month bills, $25b 6-month bills
1:00 Treasury selling $35b 2-year notes

Global Economics (Time Zone: GMT)

05:00 JPY Small Business Confidence
06:00 CHF Trade Balance
23:50 JPY Large Retailer Sales


Tiffany (TIF)

Wednesday, May 29

US Economics (Time Zone: EDT)

07:00 MBA Mortgage Index
11:00 Fed buying $2.75b - $3.5b bonds in 7 to 10-year range
11:30 Treasury selling 4-week bills, $25b 52-week bills
1:00 Treasury selling $35b 5-year notes

Global Economics (Time Zone: GMT)

07:55 EUR German Employment Change
12:00 EUR German CPI
14:00 CAD Bank of Canada Rate Decision


Chico's (CHS)
The Fresh Market (TFM)

Thursday, May 30

US Economics (Time Zone: EDT)

08:30 Initial Claims – consensus 346K, prior 360K
08:30 Continuing Claims – consensus 3060K, prior 3005K
1Q GDP will be second estimates
08:30 GDP Price Index - consensus 1.2%, prior 1.2%
08:30 GDP QoQ (Annualized) - consensus 2.5%, prior 2.5%
08:30 Personal Consumption - consensus 3.2%, prior 3.2%
08:30 Core PCE QoQ - consensus 1.2%, prior 1.2%
10:00 Pending Home Sales MoM - consensus 1.5%, prior 1.5%
10:00 Pending Home Sales YoY - consensus 9.4%, prior 5.8%
11:00 Fed purchasing $1.25b-$1.75b bonds in 23 to 30-year range
1:00 Treasury selling $29 7-year notes

8:45 Pianalto speaks in Washington

Global Economics (Time Zone: GMT)

05:45 CHF GDP
09:00 EUR Eurozone Consumer Confidence
23:50 JPY Industrial Production


Joy Global (JOY)
Costco (COST)

Lions Gate (LGF)
Palo Alto Networks (PANW)
Splunk (SPLK)

Friday, May 31

US Economics (Time Zone: EDT)

08:30 Personal Income - consensus 0.1%, prior 0.2%
08:30 Personal Spending - consensus 0.1%, prior 0.2%
08:30 PCE Deflator YoY - consensus 0.8%, prior 1.0%
08:30 PCE Core YoY - consensus 1.0%, prior 1.1%
09:00 NAPM Milwaukee - consensus 49.00, prior 48.43
09:45 Chicago PMI - consensus 50.0, prior 49.0
09:55 University of Michigan 2nd estimate - consensus 83.7, prior 83.7
11:00 Fed buying $4.25b-$5.25b notes in 5 to 6-year sector

Global Economics (Time Zone: GMT)

01:00 CNY Manufacturing PMI
05:00 JPY Housing Starts
08:30 GBP Mortgage Lending
09:00 EUR Eurozone CPI
12:30 CAD GDP


No major reports

Twitter: @MichaelSedacca

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