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Trading Radar: Retail Sales Growth Will Play a Driving Role in Market Direction


Economics, earnings reports, and market events for the week ahead.

The US equity markets capped off the week with another down day on Friday as traders didn't feel comfortable holding large amounts of risk over the weekend. We'll have to wait and see if the markets can find a durable bottom on Monday or even Tuesday. US markets will be closed next Friday in observance of Easter.
The two themes that market participants will be focusing on next week is Monday's March retail sales report and the plethora of first-quarter earnings reports that start on Tuesday. Now that the weather-distorted January and February figures have been released, investors need to see a strong bounce-back in economic activity as pent-up demand is released. If that doesn't happen, investors will continue to rotate out of growth and into high cash-flow stocks, as has been the case since last Friday's nonfarm payrolls report.
Next Monday's retail sales report is expected to increase by 0.8% month-over-month, which would be an acceleration in its annual rate of growth from 1.5% to 2.97%. In my opinion, that estimate is aggressive. ICSC chain-store sales only rose 2.18% year-to-year in March and Redbook same-store sales rose 2.7%. The largest component of the retail sales report, auto sales, which carries an 18.7% weighting, rose to a 16.33 million seasonally adjusted annual rate from 15.27 million in February. The rise should contribute about +0.46% to the month-over-month change in retail sales.
The March consumer price index, housing starts and building permits, and industrial production reports are also all worth watching next week. All will help give investors a better picture of economic activity last month.
Next week's most important event for global risk assets is the release of China's first-quarter GDP on Wednesday morning. Although there has been a clear slowdown in activity for China in the past five months, March's trade balance started to show some improvement. And Chinese equities have rebounded strongly in anticipation of an expected upturn.   

Earnings reports will start in earnest next Tuesday, April 14, and will continue through May 9. Large-cap finance and tech companies account for the majority of next week's earnings. Notable companies on the calendar include Goldman Sachs (NYSE:GS), Google (NASDAQ:GOOG), Morgan Stanley (NYSE:MS), Pepsi (NYSE:PEP), Coca Cola (NYSE:KO), American Express (NYSE:AXP), Intel (NASDAQ:INTC), Citigroup (NYSE:C), and Yahoo (NASDAQ:YHOO).

Monday, April 14

US Economics (Time Zone: EST)

08:30 Advance Retail Sales (Mar) - expected 0.8%, prior 0.3%
08:30 Retail Sales ex Auto - exp 0.5%, prior 0.3%
08:30 Retail Sales ex Auto & Gas - exp 0.4%, prior 0.3%
10:00 Business Inventories - exp 0.5%, prior 0.4%
11:00 Fed to purchase $900m-$1.15b notes in 22 to 30-year range
11:30 Treasury selling $25b 3-month, $23b 6-month bills
12:45pm Tarullo (moderate, board member) speaks with ECB's Noyer in NY

Global Economics (Time Zone: GMT)

09:00 EUR Eurozone Industrial Production

M&T Bank (MTB)
Citigroup (C)

Tuesday, April 15

US Economics (Time Zone: EST)
08:30 Empire Manufacturing (April) - expected 8.00, prior 5.61
08:30 Consumer Price Index YoY (Mar) - exp 1.4%, prior 1.1%
08:30 CPI Ex Food & Energy YoY - exp 1.6%, prior 1.6%
09:00 Net Long-Term TIC Flows - exp $30.0B, prior $7.3B
09:00 Total Net TIC Flows - prior $83B
10:00 NAHB Housing Market Index (Apr) - exp 50, prior 47
11:00 Fed to purchase $1.75b-$2.25b notes in 6 to 7-year range
11:30 Treasury selling 4-week bills
8:30am Lockhart (dove, nonvoter) speaks at Atlanta Fed conference in Georgia
8:45am Yellen (dove, chair) speaks via video to Atlanta Fed conference in Georgia
3:00pm Plosser (hawk, voter) moderates panel discussion in Georgia
4:00pm Rosengren (dove, nonvoter) speaks in Maine
8:00pm Kocherlakota (dove, voter) speaks in North Dakota

Global Economics (Time Zone: GMT)

06:00 JPY Machine Tool Orders (March final)
08:30 GBP CPI & PPI
09:00 EUR German ZEW (April) Current Situation, Expectations
09:00 EUR Eurozone Trade Balance
13:00 CAD Existing Home Sales


Coca-Cola (KO)
Johnson & Johnson (JNJ)
Northern Trust (NTRS)
Interactive Brokers (IBKR)
Intel (INTC)
Yahoo! (YHOO)

Wednesday, April 16

US Economics (Time Zone: EST)

07:00 MBA Mortgage Applications
08:30 Housing Starts (Mar) - expected 975K, prior 907K
08:30 Building Permits - exp 1015K, prior 1014K
09:15 Industrial Production - exp 0.5%, prior 0.6%
09:15 Capacity Utilization - exp 78.7%, prior 78.8%
2:00 Fed's Beige Book
11:00 Fed to purchase $900m-$1.15b notes in 22-30-year range
8:30am Stein (board, hawk) speaks at Atlanta Fed conference in Georgia
11:30am Lockhart (dove, nonvoter) speaks in Georgia
12:25pm Yellen (dove, chair) speaks in NY
1:25pm Fisher (hawk, voter) speaks in Texas

Global Economics (Time Zone: GMT)

02:00 CNY Fixed Asset Investment YTD (March)
02:00 CNY Retail Sales YTD
02:00 CNY Industrial Production YTD
02:00 CNY GDP (1Q)
04:30 JPY Industrial Production (Feb final)
08:30 GBP Jobless Claims Change
08:30 GBP ILO 3M Unemployment Rate
09:00 EUR Eurozone CPI (Mar final)
2:15am BoJ's Kuroda speaks in Tokyo
8:30pm Kuroda speaks at branch managers meeting


PNC Financial (PNC)
US Bancorp (USB)
Huntington Bank (HBAN)
Bank of America (BAC)
WW Grainger (GWW)
Capital One Financial (COF)
American Express (AXP)
Kansas City Southern (KSU)
Sandisk (SNDK)
Google (GOOG)
Kinder Morgan (KMI)

Thursday, April 17

US Economics (Time Zone: EST)

08:30 Initial Jobless Claims - expected 311K, prior 300K
08:30 Continuing Claims - exp 2775K, prior 2776K
10:00 Philly Fed (Apr) - exp 10.0, prior 9.0
1:00 Treasury selling $18b 5-year TIPS
Global Economics (Time Zone: GMT)

JPY Japan Investors Purchases of Foreign Bonds/Stocks
05:00 JPY Consumer Confidence Index (Mar)
12:30 CAD CPI (Mar)


Honeywell (HON)
Baker Hughes (BHI)
DuPont (DD)
General Electric (GE)
Schlumberger (SLB)
Union Pacific (UNP)
UnitedHealth (UNH)
Keycorp (KEY)
Blackstone (BX)
Alliance Data (DATA)
Blackrock (BLK)
Mattel (MAT)
Fifth Third Bancorp (FTIB)
Morgan Stanley (MS)
Goldman Sachs (GS)
Pepsi (PEP)
Chipotle (CMG)
Phillip Morris (PM)
Cypress Semi (CY)
Advanced Micro (AMD)

Friday, April 18

US Economics (Time Zone: EST)

US markets closed for Easter holiday
Global Economics (Time Zone: GMT)

01:30 CNY Property Prices


No major reports scheduled

Twitter: @MichaelSedacca

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