• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

The Week Ahead: Data Streams Keep Flowing

When will the conversation turn to third-quarter GDP?
By CHRIS VERSACE AND LENORE HAWKINS Aug 09, 2015 | 05:00 PM EDT
Stocks quotes in this article: AMZN, PCA, NAV, PH, ETN, DF, IFF, RAX, SHAK, CREE, FOSL, JDSU, OPWR, ZBRA, CSCO, M, AMAT, JCP, JWN

It was another down week in the S&P 500, expressing a mood that reflected spotty earnings coupled with extreme valuations, continued conjecture over when the Fed may tighten and sprinkled with a GOP Republican debate that left many wide-eyed as to the dearth of in-depth conversation in favor of zingers and "vote for me." Thank God cartoonist Berkeley Breathed has brought back Bloom County to help us get through what promises to be a long election cycle.

The capper on the week, as we're sure you've heard, was the July employment report, which at 215K non-farm jobs was wanting vs. the expected 225K. Now for those convinced the Fed "has" to raise rates given "strong job growth," let's remember that both the July labor force participation rate and employment to population did not budge month over month. Those figures -- at least in our view -- take away any positives to be had in the July employment report, and given the lower-wage jobs that once again led job creation, there really wasn't all that much to get excited about, even forgetting about the continued month-over-month drop in the number of jobs being created and July headline miss.

Looking at the July jobs report and revisiting the string of missed data relative to expectations, one has to wonder how soon the conversation will shift to third-quarter 2015 GDP. Per the Federal Reserve Bank of Atlanta: "The first GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 was 1% on Aug. 6." Following the 2Q 2015 economic "snap back," the Atlanta Fed's model has lower inventory investment subtracting 1.7 percentage points from third-quarter real GDP growth.

As Grant Williams would say ... something to make you go hmm ... Are you listening, Janet?

Turning to the week ahead, all Versace will say is you know the pace of earnings is slowing big time when Monday has the greatest number of those reports -- a slot usually reserved for Thursdays. On the heels of Friday's July employment report, we have several other data streams that should offer even more clues into the jobs situation, namely the Labor Market Conditions Index (Monday), 2Q 2015 Productivity and Unit Labor Costs (Tuesday) and the June JOLTS report (Wednesday).

There are three other economic reports on tap that we see investors focusing on this week. The first is July retail sales, and given the slide in gas prices as reported by AAA over the last few weeks, let's remember to strip out gas prices when looking at this report. With Gallup finding monthly consumer spending flat in July, however, the only upside to be had outside of seasonal drivers (read that as vacation-related spending) could be the pull forward in back-to-school spending. Versace still favors Amazon (AMZN) as a non-apparel play for that. (Amazon is part of TheStreet's Growth Seeker portfolio.)

Remembering that stable prices are -- er, should be -- one of the Fed's mandates when pondering what to do with interest rates, Friday's July PPI report is one to watch. Here again, however, we have to distinguish between the headline figure, which will reflect the fall in oil prices and other line items. The WTI crude oil spot price fell from just under $57 a barrel on July 1 to $47.11 on the last day of the month. Outside of food -- but hey, who eats that -- we are not expecting an outsized print in the July PPI report.

Finally, we have one that we have been watching closely over the last few months given numerous month-over-month declines ¿ industrial production. June's figure benefited from warm weather that drove utilities, hardly something to get giddy over, especially when the same report showed manufacturing activity dipped during the month.

As we've noted, the trend in truck tonnage, weekly railcar loadings and even data points from ISM's July manufacturing report do not give us the warm fuzzies for a dramatic July surge. If anything, we expect the data to paint a picture of a manufacturing economy that continues to muddle through. Not great for the overall economy, and not one for industrial-related companies like Paccar (PCAR), Navistar (NAV), Parker Hannifin (PH), Eaton (ETN) and others.

The sister report to industrial production is capacity utilization, and we watch this to gauge slack in the economy, and if we see the degree of slack continue in July, it will raise questions over new order activity as businesses contend with excess capacity.

On the earnings front, there are still some high fliers and other noteworthy companies reporting in the next five days. Dean Foods (DF) and a Versace favorite, International Flavors & Fragrances (IFF), as well as Rack Space (RAX) and Shake Shack (SHAK) share their quarterly results on Monday. Tuesday brings Cree (CREE), Fossil Group (FOSL), JDS Uniphase (JDSU), Opower (OPWR) and Zebra Technologies (ZBRA).

Wednesday brings out some of the bigger guns for the week -- Cisco Systems (CSCO) and Macy's (M) -- and their comments will shine a light on technology and back-to-school spending. A different technology view will be had with Applied Materials' (AMAT) results on Thursday -- Versace watches the company's backlog and book-to-bill ratio as a harbinger for the entire semiconductor capital equipment industry. Also on deck Thursday is Nordstrom (JWN) with its results and that will be followed by J.C. Penney (JCP) on Friday -- expect more back-to-school commentary. (Cisco Systems is part of TheStreet's Action Alerts PLUS portfolio.)

Below is a more detailed look at the economic data in the week ahead. For a fuller list of corporate earnings that will be reported over the next five days, click here to view The Street's weekly earnings calendar. Enjoy the weekend and be sure to catch Lenore Hawkins Monday on America's Morning News. Check back for our midweek column, in which we will dish on the first half of the trading week and other key matters and thoughts. Then finish off next week as Versace has his turn on America's Morning News each Friday.

Economic Calendar: Aug. 10-14



Date ET Release
10-Aug 10:00 Labor Market Conditions Index
11-Aug 6:00 NFIB Small Business Optimism Index
11-Aug 8:30 Productivity and Costs
11-Aug 8:30 Unit Labor Costs
11-Aug 10:00 Wholesale Inventories
12-Aug 7:00 MBA Mortgage Index
12-Aug 10:00 Atlanta Fed Business Inflation Expectations
12-Aug 10:00 JOLTS - Job Openings
12-Aug 10:30 Crude Inventories
12-Aug 14:00 Treasury Budget
13-Aug 8:30 Initial Claims
13-Aug 8:30 Continuing Claims
13-Aug 8:30 Retail Sales
13-Aug 8:30 Retail Sales ex-auto
13-Aug 8:30 Export Prices ex-ag.
13-Aug 8:30 Import Prices ex-oil
13-Aug 10:00 Business Inventories
13-Aug 10:30 Natural Gas Inventories
14-Aug 8:30 PPI
14-Aug 8:30 Core PPI
14-Aug 9:15 Industrial Production
14-Aug 9:15 Capacity Utilization
14-Aug 10:00 Mich Sentiment
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Versace and Hawkins had no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity | Consumer Discretionary | Technology | Stocks

More from Technology

SoFi Technologies Is Primed for a Rebound

Bruce Kamich
May 16, 2022 8:50 AM EDT

Here's where the shares may be headed next.

A 'Mag'nificent Way to Play an AdTech Rebound

Bret Jensen
May 15, 2022 9:15 PM EDT

Similar to biotech, the small adtech space has been hammered in recent quarters and has likely hit oversold territory.

SOS! General Apple, General Microsoft Are Under Fire!

Ed Ponsi
May 13, 2022 10:30 AM EDT

In a blow to the bulls, AAPL and MSFT surrender to the inevitable, as Chief Powell aims a bazooka at inflation.

Micron Technology Could Sink Even Further in the Weeks Ahead

Bruce Kamich
May 13, 2022 10:00 AM EDT

Here's what has us worried -- and how low the stock could go.

It's OK to Track ARKK for Bottom Clues, but Don't Go Down With the Ship

Bob Byrne
May 13, 2022 8:30 AM EDT

Cathie Wood's ARK Innovation ETF and its constituent stocks bounced on Thursday, though they collectively remain deep in bear market territory.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:14 PM EDT PAUL PRICE

    A New, Very Scary Movie

  • 08:51 AM EDT PAUL PRICE

    Advice From the Future...

  • 12:20 PM EDT PAUL PRICE

    A Blast From the Past Regarding Bitcoin

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login