The day ahead offers several fresh data points and a range of speakers from the Federal Reserve. Traders are being cautious as equity prices are slightly down after earlier gains in the week.
90 minutes before the opening bell, Dow futures are up 9 points to 10,663 and S&P 500 futures are flat at 1,161.
Key Events Today:
7:30 ― Elizabeth Duke, a governor of the Federal Reserve, and Sheila Bair, chairman of the FDIC, speak to the American Bankers Association government relations summit in Washington.
8:30 ― Unlike the PPI from Wednesday, the Consumer Price Index should be less impacted by falling energy prices. Economists expect to see 0.1% price gains on the headline and the core index, following a 0.2% gain in the headline and a drop of 0.1% in the core.
“Declining rent prices could continue to weigh down on the shelter component, which constitutes approximately 30% of the index,” wrote economists at BBVA. “Furthermore, substantial economic slack, as exhibited by the high unemployment rate and low rate of capacity utilization, will offset prices pressures and inflation expectations remain well anchored. As a result, we continue to expect core inflation to remain low but positive in 2010.”
8:30 ― Initial Jobless Claims fell to 462k in the first week of March, raising hopes that another decline this week ― the survey period for the payrolls data ― could signal job growth for the month. But in order to point to sustained growth most economists say the weekly survey needs to show a consistent number closer to the 400k mark.
Economist Ellen Zentner from BTMU called this week’s data “especially important because it will bolster, or dash hopes of March showing the first gain for private sector jobs since adding +75K in November 2009 ― barring November’s job gain it’s been more than two years since the private sector has added jobs.”
Economists from Nomura added that new claims remain too high to indicate growth.
“We expect a further decline in claims over the next two weeks,” they wrote. “If this does not materialize, we expect that forecasts for exceptionally strong payroll growth in March will be reduced.”
8:30 ―Thomas Hoenig, president of the Kansas City Fed, along with Richmond Fed president Jeffrey Lacker and Cleveland Fed president Sandra Pianalto, speak about the role of banking in local economic growth at the American Bankers Association conference.
10:00 ― Leading Economic Indicators, a composite index tracking turning points in the economy, is expected to climb for the tenth straight month in February. In January the index eased from 1.2% to +0.3%, and in February the slowdown should continue to +0.2%.
“Although a wide interest rate spread and steady growth in inflation-adjusted money supply are likely to make positive contributions to the headline number, the softness of labor-related components will probably drive down the LEI to some extent,” wrote economists from Nomura.
10:00 ― A strong new orders component in February’s Philadelphia Fed Manufacturing Survey points to strong growth in March. The headline index improved from 15.2 to 17.6 last month, and this month economists look for a score of 18.0. Combined with the Empire Fed index these two surveys should point to robust manufacturing growth across the nation.
Economists from Nomura said to expect the headline number to be pulled back slightly to 17.0, but even so they were optimistic about the general direction.
“While inclement weather constrained the expansion to some extent ― as described, for instance, in the latest Beige Book ― most manufacturers in this region remain optimistic about business conditions.”
11:00 ― Treasury announcement on monthly supply auctions for next week; Forecast: $44bln 2yr notes, $42B 5yr notes, and $32B 7yr notes-all same amount as last month
11:30 ― Elizabeth Duke, a governor of the Federal Reserve, speaks to the Women's Leadership Forum at the ABA conference in Washington.
