Markets have shown little concrete direction in recent weeks, and while there will be no shortage of data in the third week of June, no single release is a dominant market mover.
For those in Real Estate, three releases will of direct interest: Monday’s NAHB builder confidence survey and Tuesday’s Housing Starts index will each the latest supply-side data on how housing construction is shaping up. Then on Wednesday, the weekly Mortgage Applications survey should give a sense of how demand is holding up as mortgage rates have been soaring.
Analysts at IHS Global Insight said housing conditions “remain disturbingly fragile” right now, but they expect this week to bring “a mild bounce” in housing starts and permits.
On the Inflation front, the Producer and Consumer Price Indexes are released on Tuesday and Wednesday, respectively, yet inflation remains on the backburner so the reports will garner little attention unless surprises are in store.
Two regional Manufacturing reports will give markets the latest assessment for May. Deterioration in that sector improved in May, not only in the U.S. but in China and India as well. The New York and Philadelphia reports are known to be volatile, but together they will be noticed if they are optimistic.
Key Releases this Week:
Monday:
8:00 ― Charles Evans, President of the Chicago Fed, speaks on the current crisis in Chicago.
8:30 ― The New York Fed’s Empire State Manufacturing Survey made a dramatic improvement from -14.7 to -4.6 in in May. A similar improvement this month would put the regional report into growth mode for the first time since April 2008. The consensus looks for a -2.0 reading; forecasts range from -8.1 to +5.0.
9:00 ― TIC Flows measure foreign interest in U.S. debt and assets. The report is typically of more interest to bond and currency traders, but if appetite from China or Japan appeared to be waning in April, markets could see a sell-off in equities.
1:00 ― The Housing Market Index, compiled by the National Association of Home Builders, is a monthly measure of builder confidence. In May the survey moved up two points to 16, and while any improvement is welcome, that score is still below the pre-crisis record low.
Tuesday:
8:30 ― Housing Starts, a measure of new home construction, are expected to improve marginally in May to an annual pace of 500k. Since early 2006 housing starts have been on a pretty steady decline, including April’s 12.8% decline to its lowest level in five decades of data.
8:30 ― Rising oil prices will likely push up the Producer Price Index for May. Economists expect PPI to rise 0.7% in the month, with expectations ranging from 0.1% to 0.8%. Core prices, which exclude volatile food and energy components, are widely expected to see a 0.1% gain.
9:15 ― One of the most important releases this week is the Industrial Production release for May. The index, which has been on a clear decline since early 2008, fell 0.5% in April and is set to drop another 1.0% in May, which would be consistent with the 42.8 score in the ISM survey.
Wednesday:
7:00 ― The weekly Mortgage Applications Survey showed 30-year interest rates soar to 5.57% in last week’s survey, as demand for loans fell 7.2%. How average rates fare in this week’s report will be closely watched.
?:?? ― Fed Chairman Ben Bernanke and FDIC chairwoman Sheila Bair speak sometime in the morning. It’s unlikely either speech will break any headlines as the topic is promoting financial literacy.
8:30 ― Inflation reports are never ignored but price fluctuations are still taking a back seat to growth data. The Consumer Price Index is expected to gain 0.3% in May after sitting still in April, while core prices are set to increase 0.1%, following a 0.3% increase in April.
8:30 ― The quarterly Current Account report has little impact on equities but surprises in the trade balance can have some impact on the dollar.
Thursday:
830 ― Initial Jobless Claims have exceeded 600k for 19 straight weeks. Last week’s figure dropped to 601k and some analysts look for figure fewer losses in the week ending June 13, though the consensus is 610k. Any figure above 400k is considered recessionary, so the labor market is still months away from reaching recovery.
10:00 ― The Leading Indicators Index moved up 1% in April, its first rise in 7 months, and analysts look for another 1% gain in May.
10:00 ― Manufacturing conditions in the Philly Fed Survey have improved for two months but remain in deep contraction at -22.6. Economists look for improvement to -15.0 in June. If the index moves in the same direction as Monday’s Empire State survey, optimism for broad recovery could push up markets.
Friday:
No data