Weekly Economic Indicators: Low Key Thanksgiving Week

The First Thanksgiving, painted by Jean Leon G...

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The full announcement schedule for the week of November 21st  is as follows:

  • Monday:  Exiting Home Sales
  • Tuesday:  GDP and FOMC Minutes
  • Wednesday:  Durable Goods Orders, Personal Income and Outlays, Initial Jobless Claims, and Consumer Sentiment    
  • Thursday:  All Markets are Closed for Thanks Giving 
  • Friday:  Fed Balance Sheet

Click this link for the full economic calendar for the week.

This week, I spoke with Doreen Mogavero of Mogavero, Lee & Co before she headed out to meet with clients in Dallas. Mogavero is a frequent commentator on Bloomberg Television and Fox Business News.  We spoke about a few topics tied to the economic calendar for the short Thanksgiving week (only 3 ½ trading days), including the overall market, Retail Sales, GDP, and the FOMC Minutes. 

Overall Market View and Berkshire’s acquisition of approximately 5% of IBM: Mogavero says traditionally the day before Thanksgiving is a very good trading day, and she expects it to be the same this year even with the recent market volatility and low volumes. She believes traders will be looking to place their bets early in the week and get out of their positions before Wednesday. Overall, Mogavero expects a rally, with the Dow and S&P 500 ending higher for the year. She continues to caution that Europe is still  the “fly in the ointment”, however, and investor confidence remains low. The way Europe addresses its debt crisis through a long-term solution is key. Mogavero believes the lack of vision and leadership from Washington is making markets shaky; retail investors coming into the market until confidence is restored. Mogavero commented that Warren Buffett’s Berkshire Hathaway purchase of a 5% stake in IBM is good for the market, as investors will follow Buffett’s long-term investment lead. She thinks Buffett is trying a new investment approach where he expands his horizons by adding tech companies to his portfolio.

Retail Sales, the FOMC Minutes, and Jobless Claims: Mogavero does not expect this retail season to be a good one for the “brick and mortar” retailers, apart from last minute impulse buying for children because of the strength of online retailers. “Black Friday” (Nov. 25th) will likely be flat for retailers in physical locations with “Cyber Monday” (Nov. 28th) benefiting as a result of taxes not being charged by some online retailers. Mogavero was surprised by the jobless claims data last week and thinks jobless claims will tick up above the 400,000 mark again. On the FOMC Minutes, she thinks the message will be the same from the Federal Reserve Bank (“Fed”) as for the last few meetings. In general, they will continue to indicate their willingness to take whatever action is necessary to aid the economy.  She said it wouldn’t be a surprise to see continued dissention among members.  

GDP and the 60 Minutes Piece on Congressional Members/Staffers and Insider Trading: Mogavero does not see GDP finishing the year strong, as big companies continue to lay off workers and curtail expansion. Housing prices are “bumping along the bottom”, as people fear rates will go up. Mogavero pointed out banks are still not lending freely, so small businesses can’t expand and create jobs. She expects GDP to be flat with the previous quarter, as the price of oil inches up and food prices continue to rise. Regarding the recent 60 Minutes segment on Congressional insider trading, Mogavero was shocked that members of Congress and their Staffers are allowed to trade on confidential information. She said a full investigation should be conducted as Congress/Staffers should not be allowed to trade on confidential information while everyone else’s records are under constant scrutiny by regulators.

Happy Thanksgiving.

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