Hoping for Clues in a Slew of Economic Data
Wall Street will finally get the data it has craved to help it get a better handle on the economy and on whether it has pulled back further than policymakers wanted.
In the next five days, about two dozen economic reports will be released -- including consumer confidence, job growth and manufacturing figures.
Investors might get an even better clue about what Federal Reserve Chairman Ben Bernanke thinks of interest rates when minutes from the last Fed meeting are released.
These readings might help give Wall Street the guidance it has been clamoring for, especially after last week’s lackluster performance. But the real question is, how many people will be around to trade on the news? This is, after all, the last week of August.
“I looked up the word doldrums in the dictionary, and there’s no coincidence it comes from the word dull,” David Darst, chief investment strategist of Morgan Stanley’s global wealth management group, said Friday.
“You might see some kind of fluctuation next week with these reports, but people will come back to work after Labor Day and sort through everything that’s gone on. That’s when you’ll see volume go up.”
Traders say they expect to see more of the lethargy of last week in the coming days. Last August, the New York Stock Exchange reported consolidated volume for the month of 43.33 billion. It jumped to 46.37 billion in September and 51.37 billion in October.
Last week the Dow ended down 0.9%, Nasdaq fell 1.1% and the S&P; 500 dropped 0.6%.
Stocks fell on concerns that the Fed might have gone too far by raising rates 17 straight times before pausing at its August meeting. Though this means Bernanke is unlikely to initiate another hike, it also troubles Wall Street that the economy might have moderated too quickly.
The biggest fear is that consumer spending is eroding, and that could translate into lower corporate profits. Oil prices, which rose steadily last week, also are a major factor in how much people spend.
On Tuesday, investors hope to get some clues on the direction of consumer spending from the Conference Board’s consumer confidence index, and analysts are calling for a modest decline.
The Federal Reserve minutes also will be released Tuesday.
On Wednesday, Wall Street will be reading the preliminary second-quarter gross domestic product numbers with interest to see whether personal spending has slowed and how business investment and government spending fared.
Consumers will also be in focus Thursday, when the Commerce Department releases its personal income and personal spending reports for July. Also that day, the department will release its factory orders report for last month.
Perhaps the most important report this week comes out Friday, when the Labor Department releases its nonfarm payroll data for August. In July, the report showed slowing momentum and volatility in payroll growth, which is expected to continue.
From the Associated Press
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The Week Ahead
Today
* Treasury bill auction.
Tuesday
* Census Bureau releases reports on income and poverty in the U.S.
* Conference Board reports its monthly consumer confidence index.
Wednesday
* Commerce Department reports on gross domestic product for the second quarter.
* Quarterly earnings report due from TiVo Inc.
Thursday
* The nation’s largest retailers announce their sales figures for August.
* Commerce Department reports on personal income and spending for July and factory orders for July.
* Labor Department reports on weekly jobless claims.
* Freddie Mac reports on mortgage rates.
* Federal Reserve Chairman Ben Bernanke speaks on productivity at an economic conference at Clemson University.
* Quarterly earnings reports expected from H&R; Block Inc., H.J. Heinz Co., Tiffany & Co. and Zale Corp.
Friday
* Automakers release sales figures for August.
* Labor Department reports on employment for August.
* Commerce Department reports on construction spending in July.
