Economic Indicators: Consumer Confidence, Unemployment

What to Watch

For the week of August 29th, Arthur Cashin, Managing Director of Floor Operations at UBS Financial Services will be reviewing  Personal Income and Outlays, Pending Home Sales Index, S&P Case-Shiller Index, Consumer Confidence, FOMC Munities, Chicago PMI, Factory Orders, Jobless Claims, Productivity and Costs, ISM Mfg Index, Construction Spending, and Nonfarm Payrolls/Unemployment Rate.

Cashin believes the Federal Reserve and Chairman, Ben Bernanke, have done all they can from a monetary stand point. It’s now up to the government, Congress and the White House, to adopt the necessary fiscal policy to stimulate the lagging economy. Hurricane Irene will negatively impact insurers most, says Cashin, with home suppliers like Lowes, Home Depot, and Costco benefiting from the storm as people stocked supplies. The events in Europe will also stay in the forefront of investors’ minds; banks will be closely watched because of their exposure to the sovereign debt crisis.

Various other economic indicators are also due out next week covering manufacturing, real estate, the cost of living, consumer sentiment and the broader market. The announcement schedule for the week of August 29th includes the following:

  • Monday:  Personal Income and Outlays and Pending Home Sales Index
  • Tuesday:  Consumer Confidence and FOMC Munities
  • Wednesday:  Chicago PMI and Factory Orders 
  • Thursday:  Initial Jobless Claims, Productivity and Costs, ISM Mfg Index, and Construction Spending
  • Friday:  Non-farm Private Payrolls

Highlights from the week of August 22 thru 26:

On Monday, the equity markets inched up amid speculation the Fed may step in and provide additional stimulus to jump start the lagging economy. With the absence of any macro reports, the equity markets closed up modestly with light volume. Reports indicated the Gaddafi regime was about to collapse and rebel forces had taken most of Tripoli. Crude oil settled around $84 a barrel.

On Tuesday, the Richmond Fed survey came in lower than anticipated, the worst since 2009. New home sales also disappointed as home builders continued to compete with distress sales. However, the equity markets soared as the Dow climbed about 3% and the S&P 500 rose 3.43% on hopes the Fed will announce some form of stimulus and investors ignored a 5.8 magnitude earthquake that hit Mineral, Virginia causing major disruptions in traffic and businesses.

On Wednesday, Durable goods came in better than forecasted led by a surge in demand for aircraft and autos that overshadowed a decrease in business equipment. The news erased pre-market losses and the Dow and S&P increased sharply, up about 1.30% each. Gold fell sharply and crude oil stabilized.

On Thursday, the jobless claims report unexpectedly rose over the previous week, inflated by the Verizon labor dispute (subsequently resolved). However, Apple and Bank of America overshadowed the jobs data after Steve Jobs announced he is stepping down as CEO of Apple and Warren Buffet bought $5 billion worth of BofA’s preferred stock.

On Friday, Federal Reserve Chairman, Ben Bernanke, said the agency still has tools to stimulate the economy. The Chairman did not provide any details or signal when or whether the central bank might deploy them. Second quarter GDP was revised lower than expected with several economists calling the reading mediocre. The markets were unaffected, however, and the Chairman’s speech did not provide any surprise. The Dow finished up 1.21% and S&P 500 finished up 1.51%.

 


Enhanced by Zemanta