With lots of earnings reports, a couple of data points scheduled for release, and several speeches from government officials, Thursday should be the most interesting day of the week. Two hours before the opening bell, stocks are looking up following a mostly flat close yesterday.
Key Releases:
8:30 ― Most analysts are warning that Jobless Claims are pretty unreliable due to seasonal adjustment factors, but it has still been welcoming that initial filings have been well below 600k for the past two weeks. Analysts look for filings to edge up from 522k to 560k in the week ending July 18.
HFE’s Ian Shepherdson notes: “After two very steep drops we expect claims to rebound substantially to about 575k from 522k. The seasonal adjustment has ‘expected’ much bigger auto layoffs during the annual retooling shutdowns, partly because GM and Chrysler laid off thousands of people earlier in the spring as they slid into bankruptcy.”
Analysts at BMO Capital Markets say seasonal factors should be less of an issue this week, but that means filings could spike. “And of course, it just so happens to be the survey week, so a spike may cause a tizzy of a reaction,” they said.
Eyes will also focus on the Continuing Claims figure, which saw its biggest one-week nosedive ever in the week ending July 4. That too was probably a result of seasonal factors, but markets will want to see if the trend continues.
9:30 ― Daniel Tarullo, Governor of the Fed, Sheila Bair, chairwoman of the FDIC, and Mary Schapiro, chairwoman of the SEC, testify on regulatory restructuring before the Senate Banking Committee in DC.
10:00 ― The major real estate release this week is Existing Home Sales, which are expected to inch up to an annual rate of 4.850 million sales in June. In May the index gained 2.4% to 4.770 million, with the level of excess inventory dropping 5 months to a pace of 9.6 months.
Foreclosure-related sales continue to play a major role in sales, which puts a mixed spin on the increase in sales, but any drop in inventories in an asset to the economy.
Going against the median forecast, analysts at IHS Global Insight said sales will fall further in June, and into the summer. “Distressed sales and improved affordability won the tug of war in April and May. But over the past seven months, the battle has been a stalemate, as sales have hardly changed. For June, we project a small decline in sales. Going forward, we expect sales to slide further as the unemployment rate rises.”
Earnings:
Throughout the day we’ll also hear earnings reports from McDonald's, 3M, AT&T, Ford, Bristol Myers, Philip Morris, Wyeth, Hershey, Kimberly-Clark, EMC, UPS, and more. After markets close, Amex and Microsoft will follow suit.