The Week Ahead: Uneven Data of Late

 | Mar 02, 2014 | 8:00 PM EST  | Comments
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Stock quotes in this article:

acw

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rba

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azo

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bobe

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irg

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kr

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fl

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trk

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rsh

Aside from the happenings in Ukraine last week, the two biggest pieces of information to hit the stock market were better-than-expected January new-home sales and the sharp downward revision in the fourth-quarter gross domestic product estimate. I think it's pretty fair to say that few people expected those two data points to turn out the way they did.

The new-home-sales figures caught many by surprise, as the harsh winter weather had led to weak housing starts for the month. While new home sales can be volatile from month to month, you have to remember that housing inventories remain at low levels.

As for the GDP number, fourth-quarter annualized growth is now expected at 2.4%, down from the prior 3.2%. This was a sharper downward revision than anticipated: Most of the revision estimates I saw called for a dip to 3% or so. But let's remember that revision is in the rear view mirror, and many are now focused on the current quarter. Measures of consumer spending, job creation, factory output and the housing market have come in well below expectations, and it's all prompting some folks to speculate as to whether the Federal Reserve will continue to taper quantitative easing.

Last week, Federal Reserve Chair Janet Yellen commented that recent economic data have pointed to weaker-than-expected gains in consumer spending and jobs growth. She said the Fed will be watching to see whether the slowdown proves to be a mere temporary blip caused by severe winter weather.

Are we seeing yet another slowdown in the domestic economy, much like we have witnessed during the last several years? Or is it simply the weather? The above-consensus January core capital-goods orders suggests there is life in the economy.  My own take on this is that we are seeing a number of industries hit by the harsh winter weather, and that it will result in pent-up demand for housing, autos and consumer goods in the coming months. That expected demand pick-up should bolster the case made by Atlanta Fed President Dennis Lockhart yesterday -- that the central bank will continue cutting its bond-buying campaign despite recent uneven economic data.

Turning to what's ahead this week, you are in for a ton of data, both domestic and international, and it all culminates with Friday's February employment report.

We'll have a better look at the purchasing managers indices for China and the eurozone, and that means getting under the hood to see order and backlog figures. On the domestic front, personal income and personal spending hit on Monday, and that means seeing how the consumer is really holding up as we get both savings-rate data and disposable-income numbers. Monday will also see February auto-and-truck sales, and it seems pretty safe to assume Wall Street is looking for a subdued report given the weather impact.

Leading up to Friday's jobs data, we'll get some advance views from ADP and the Challenger job-cut report, as well as Wednesday's Fed Beige Book for March. Exiting the week is that jobs number, which many are awaiting in order to find out if the pace of job creation accelerated in February. Per Briefing.com, the current consensus expectation for nonfarm payroll growth in February was 163,000 -- a big step up from 113,000 in January and only 75,000 in December.

Just in case you thought the coming week was only about economic data, a number of key companies are reporting as well. Accuride (ACW), Ritchie Brothers (RBA) and AutoZone (AZO) are due to offer insight into the auto, truck and construction markets, while commentary and outlooks from Bob Evans (BOBE), Ignite Restaurant (IRG) and Kroger (KR) will weigh in on food inflation. Other indicators on the consumer include Foot Locker (FL) and Speedway Motorsports (TRK).

In the watching-it-like-a-traffic-accident category, RadioShack (RSH) will issue its quarterly results, and it will be interesting to see if the company is on track to reinventing itself or simply continuing on the long, slow painful decline.

_________________

Economic Calendar

Monday, March 3

  • HSBC China Manufacturing Purchasing Managers Index (PMI)
  • Markit U.S. Manufacturing PMI
  • HSBC Mexico Manufacturing
  • J.P. Morgan Global Manufacturing PMI
  • Personal Income & Spending (January)
  • Personal Consumption Expenditures (PCE) (January)
  • Institute for Supply Management (ISM) Manufacturing Index (February)
  • Construction Spending (January)
  • Auto and Truck Sales (February)

____

Tuesday, March 4

  • Markit Japan Services PMI

____

Wednesday, March 5

  • J.P. Morgan Global Composite PMI
  • Markit Eurozone Composite PMI
  • HSBC China Services PMI
  • Mortgage Bankers Association (MBA) Mortgage Index (Weekly)
  • ADP Employment Report (February)
  • ISM Services Index (February)
  • Crude Inventories (Weekly)
  • Fed's Beige Book (March)

____

Thursday, March 6

  • HSBC Emerging Markets Index
  • Challenger Job Cuts (February)
  • Initial & Continuing Jobless Claims (Weekly)
  • Productivity & Unit Labor Costs (4Q 2014)
  • Natural Gas Inventories (Weekly)

____

Friday, March 7

  • Employment Report (January)
  • Trade Balance (January)
  • Consumer Credit (January)

________________

Earnings Calendar

Monday, March 3

  • Accuride Corp. (ACW)
  • Dendreon Corp. (DNDN)
  • Guidewire Software (GWRE)
  • Icahn Enterprises (IEP)
  • Bank of Ireland (IRE)
  • Magna International (MGA)
  • Nu Skin Enterprises (NUS)
  • Ritchie Bros. Auctioneers (RBA)
  • Stratasys Inc. (SSYS)
  • zipRealty Inc. (ZIPR)

____

Tuesday, March 4

  • AeroVironment Inc. (AVAV)
  • AutoZone (AZO)
  • Carmike Cinemas  (CKEC)
  • GTx Inc. (GTXI)
  • Ignite Restaurant Group (IRG)
  • Molycorp, Inc. (MCP)
  • PCTEL Inc. (PCTI)
  • RadioShack Corp. (RSH)
  • The E.W. Scripps Co. (SSP)
  • Smith & Wesson Holdings (SWHC)

____

Wednesday, March 5

  • Brown Forman (BF.A)
  • Bob Evans Farms (BOBE)
  • Boyd Gaming (BYD)
  • Federal Signal Corp. (FSS)
  • Hovnanian Enterprises (HOV)
  • Navistar International (NAV)
  • NACCO Industries (NC)
  • PetSmart, Inc. (PETM)
  • Pozen (POZN)
  • Revlon, Inc. (REV)
  • Tecumseh Products (TECUA)
  • Speedway Motorsports (TRK)

____

Thursday, March 6

  • Analogic Corp. (ALOG)
  • Ciena Corp. (CIEN)
  • Check Point Systems (CKP)
  • The Cooper Companies (COO)
  • Costco Wholesale Corp. (COST)
  • Casella Waste Systems (CWST)
  • Finisar Corp. (FNSR)
  • H&R Block (HRB)
  • ID Systems (IDSY)
  • IDT Corp. (IDT)
  • Joy Global (JOY)
  • Kroger Co. (KR)
  • Novatel Wireless (NVTL)
  • Pinnacle Foods (PF)
  • The Children's Place (PLCE)
  • Skullcandy, Inc. (SKUL)
  • Staples (SPLS)
  • The Fresh Market (TFM)
  • Quiksilver (ZQK)

____

Friday, March 7

  • Big Lots (BIG)
  • Foot Locker (FL)
  • Piedmont Natural Gas (PNY)

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