If you were standing in shock minutes after the stock market opened last Monday, you, like many others, probably did not expect to see such a cataclysmic plunge in equities across the globe. The sea of red was as awe-inspiring as it was scary.
Much was written on Real Money and Real Money Pro as well as many other places about the why, how and what-does-it-mean of the Monday-Tuesday drop and subsequent rebound on Wednesday and Thursday, so we won't yammer on about that here.
We will, however, share two observations. First, amid all the would-be euphoria over the stronger-than-forecast upward revision to second-quarter GDP, it means there is that much further to fall should the Atlanta Fed's GDPNow forecast of 1.3% for the current quarter prove to be correct. Second, just because we had a few very good days in the market, Friday's open should serve as a reminder that rarely do the causes behind such sharp lower moves dissipate so quickly. That means you should expect forecasts for global growth and earnings to be revised as we exit the summer.
Turning to the week ahead, we're shaking up our view to look at what is on tap each day of the upcoming trading days. A tad different, but Versace wanted to get prepped as he sits in for Doug Kass on Monday's Daily Diary. Here goes....
Monday offers a relatively quiet start to the week, with two regional manufacturing reports -- Dallas and Chicago. We keep tabs on all the regional Fed manufacturing indices each month to square up against other national data. With oil prices slumping, the Dallas Fed survey is likely to show some declines, but to us the one to watch will be the Chicago survey to see if production and order strength in July continued, putting backlogs into expansion territory for the first time in several months.
Tuesday will be the day of the week. You may be thinking it's because the week gets progressively slower as we approach the Labor Day weekend, or perhaps it's because of video chip company Ambarella's (AMBA) earnings report ... but that's not what we're thinking. Tuesday brings a "drinking from the firehose" amount of global PMI data. Even though we tend to focus on the big four of the global economy -- the U.S., China, eurozone and Japan -- the same falling oil prices mentioned above have us looking at the impact on the Russian economy. In our view, the Fed will be weighing such data as it contemplates if and when to act, which means we should be looking at all of it as well.
Wednesday starts the march toward the August employment report with ADP's view on job creation for the month as well as Gallup's take. Helping fill in that picture, later that day, is the Fed's roundup of anecdotal regional economic findings that is the Beige Book. Of the handful of earnings reports out while Bob Evans (BOBE), Five Below (FIVE) and Vera Bradley (VRA) are to be had, our thematic view will be focused on Navistar's (NAV) take on truck demand and engine emission mandates.
The jobs fun continues on Thursday with Challenger's job cuts report, one of our favorites if you can call it that, and Gallup's own payroll-to-population report. The latter hovered at 45.5% in June and July, which, when you flip it around, tells us that almost 55% of the population is not working. Paired with the "scariest page on the Internet" that is USDebtClock.org, it's a picture as scary as 1970s-1980s slasher films. We'll also get the August ISM Services report as well as hear from Cooper Industries (COO), Campbell Soup (CPB) and mining equipment company Joy Global (JOY). Joy's view on the drop in commodities is one thing, but its outlook is what will have our ears burning. (Campbell Soup is part of TheStreet's Dividend Stock Advisor portfolio.)
After the jobs data buildup over the prior two days, the employment data junkie in Hawkins will be putting Friday's August employment report through its paces. The bombastic blonde of business will cut through the headline unemployment rate to focus on the quality of jobs created, wages and other metrics that speak to the true state of the jobs environment (payroll to population, labor force participation). Following this report, we expect investor activity to taper rather quickly as many depart for the Labor Day weekend, which also brings to an end the bulk of back-to-school shopping.
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 rest of your weekend and be sure to catch a double dose of us on Monday -- Hawkins on America's Morning News, Versace filling in on the Daily Diary. 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. 31-Sept. 4|
|31-Aug||Dallas Fed Manufacturing Survey|
|1-Sep||Nikkei Japan Manufacturing PMI|
|1-Sep||Caixin China General Manufacturing PMI|
|1-Sep||Caixin China General Services PMI|
|1-Sep||Markit Russia Manufacturing PMI|
|1-Sep||Markit Spain Manufacturing PMI|
|1-Sep||Markit / ADACI Italy Manufacturing PMI|
|1-Sep||Markit France Manufacturing PMI|
|1-Sep||Markit / BME Germany Manufacturing PMI|
|1-Sep||Markit Eurozone Manufacturing PMI|
|1-Sep||Markit Brazil Manufacturing PMI|
|1-Sep||Markit US Manufacturing PMI|
|1-Sep||JPMorgan Global Manufacturing PMI|
|1-Sep||Gallup US ECI|
|2-Sep||MBA Mortgage Index|
|2-Sep||ADP Employment Change|
|2-Sep||Gallup US Job Creation Index|
|2-Sep||Unit Labor Costs -Rev.|
|2-Sep||Fed's Beige Book|
|3-Sep||Challenger Job Cuts|
|3-Sep||Gallup US Payroll to Population|
|3-Sep||Natural Gas Inventories|
|4-Sep||Nonfarm Private Payrolls|