January Retail Sales Report Due Friday

After a hectic week, the financial markets is likely to remain bogged down with rumors as well as more clues on where the economy is headed and, by extension, continue to figure out the Federal Reserve’s policy outlook. The main events this week will be two key economic reports--fourth-quarter productivity figures due out Tuesday and January retail sales on Friday. They will probably show that the U.S. economy continues to move along at a torrid pace. The retail sales figures, expected to increase 0.6%, are particularly critical. The Fed has made it clear that it wants demand to slow to a less-frenetic pace, and strength in these figures will only reinforce the Fed’s concern. The productivity figures are likely to show ongoing strength, with fourth-quarter estimates of 4% or higher.

Fed Chairman Alan Greenspan and Treasury Secretary Lawrence Summers are due to testify before a Senate committee Thursday. Their comments will be confined to the subject of derivatives. Meanwhile, the Treasury is due to hold a five-year note auction Tuesday, a 10-year note auction Wednesday and a 30-year bond auction Thursday. (Bridge News)

Other reports this week:

* The Fed is scheduled to release statistics today on consumer use of credit cards, auto loans and personal loans during the Christmas shopping season. Consumer credit rose $8.1 billion in December after increasing $15.6 billion during November, analysts said.

* Inventories at U.S. wholesalers probably increased 0.7% in December after rising 1.1% during November, analysts said. Wholesale sales, meanwhile, probably rose 0.7% in December after rising 1.6%. The Commerce Department is scheduled to release the report Wednesday.