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Trading Radar: With Jackson Hole In the Books, Investors Look to Next Week's Econ Data

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

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The market had been waiting for more than a month for the speeches from Fed Chair Janet Yellen and ECB President Mario Draghi at the Jackson Hole symposium. Yellen's speech was much more academic than her predecessors and did not give much for financial market participants much to go off, leaving them to navigate the markets based upon their own opinions. Overall, Yellen's speech was moderately dovish, which mimiced the minutes from the latest Fed meeting that had been released on this past Wednesday. Draghi addressed that the ECB was ready to adjust its monetary policy stance for more accommodation, but lamented that in the current times with higher debt levels and already low interest rates that there is a real risk monetary policy is losing its effectiveness. The next major central bank communication is the September 17 FOMC meeting where Yellen will hold a Q&A session.

The calendar is chock full of economic data in the US next week. The two most important reports will be July durable goods orders, and the personal income and spending reports. Inflation and spending are expected to tail off in July as slack retail sales and supply shortages in food and energy will reduce the upward pressure on prices. Spending is only expected to grow by 0.1% in July, or unchanged from the prior month after adjusting for inflation. Capital goods shipments - a gauge of capital expenditures by corporations in the US - are expected to continue to be on the slow side.

Across the rest of the world, the focus will be on the German and eurozone price data scheduled to be released next Thursday and Friday. The reactions to incoming inflation data have been very acute across global sovereign interest rates. Should price pressures continued to be muted, it will continue to keep the ECB on hold for the rest of the decade and keep German yields low. For the moment, investors view all data to be positive for equity markets - either the economy will accelerate or the ECB will provide the necessary monetary backstop, similar to how it was in the US. That begs the question: at what point will the ECB figure out a way to pay businesses to borrow money and invest in themselves?

There are not very man earnings reports next week. The one to take note of is Dollar General (DG) on Thursday. The company has been an acquisition target for the past month and its report should almost certainly generate above-average volatility.

Monday, August 25

US Economics (Time Zone: EST)
 
10:00 New Home Sales (July) - expected 428K, prior 406K
10:30 Dallas Fed - exp 13.0, prior 12.7
11:30 Treasury to sell $29b 3-month bills and $25b 6-month bills

Global Economics (Time Zone: GMT)

08:00 EUR German IFO Current Assessment, Expectations
 
Earnings
 
After:
Prospect Capital (PSEC)

Tuesday, August 26

US Economics (Time Zone: EST)
 
08:30 Durable Goods Orders (July) - expected 7.6%, prior 0.7%
08:30 Durable Goods ex Transporation - exp 0.5%, prior 0.8%
08:30 Cap Goods Shipments Nondef Ex Air - exp 0.5%, prior -1.0%
08:30 Cap Goods Orders Nondef Ex Air - exp 0.2%, prior 1.4%
09:00 FHFA Home Price Index (June) - exp 0.3%, prior 0.4%
09:00 S&P/Case Shiller 20 City MoM (June) - exp -0.1%, prior -0.31%
09:00 S&P/CS YoY - exp 8.22%, prior 9.34%
10:00 Consumer Confidence Index (August) - exp 88.5, prior 90.9
10:00 Richmond Fed - exp 6, prior 7
11:00 Fed to purchase $2b-$2.5b notes in 11-19 year range
11:30 Treasury to sell 4-week bills
1:00 Treasuty to sell $29b 2-year notes

Global Economics (Time Zone: GMT)

NZD Trade Balance
02:00 CNY July Leading Economic Indexeda

Earnings

Before:
Best Buy (BBY)

After:
Bob Evans Farms (BOBE)
Sanderson Farms (SAFM)

Wednesday, August 27

US Economics (Time Zone: EST)

07:00 MBA Mortgage Apps
11:00 Fed to purchase $950m-$1.15b bonds in 22 to 30-year range
11:30 Treasury to sell $13b 2-year FRN (reopening)
1:00 Treasury selling $35b 5-year notes

Global Economics (Time Zone: GMT)

06:00 EUR German GfK Consumer Confidence

Earnings

Before:
Express (EXPR)
Michaels Co (MIK)
 
After:
Lannett (LCI)
Workday (WDAY)

Tiffany's (TIF)

Thursday, August 28

US Economics (Time Zone: EST)

08:30 Initial Jobless Claims - exp. 300k, prior 298k
08:30 Continuing Claims - exp 2500k, prior 2500k
08:30 GDP Annualized QoQ (2Q second estimate) - exp 3.9%, prior 4.0%
08;30 Personal Consumption - exp 2.4%, prior 2.5%
08:30 GDP Price Index - exp 2.0%, prior 2.0%
08:30 Core PCE QoQ - exp 2.0%, prior 2.0%
10:00 Pending Home Sales MoM (July) - exp 0.5%, prior -1.1%
11:00 Kansas City Fed - exp 9, prior 9
1:00 Treasury selling $29b 7-year notes
 
Global Economics (Time Zone: GMT)

Japan Investors Purchases of Foreign Stocks/Bonds
01:00 AUD New Home Sales
01:30 CNY Industrial Profits
07:55 EUR German Unemployment Change
12:00 EUR German Consumer Price Index (Aug prelim)
12:30 CAD Current Account Balance

Earnings
 
Before:
Abercrombie & Fitch (ANF)

After:
Omnvision (OVTI)
Splunk (SPLK)

Dollar General (DG)

Friday, August 29

US Economics (Time Zone: EST)

08:30 Personal Income (July) - expected 0.3%, prior 0.4%
08:30 Personal Spending - exp 0.1%, prior 0.4%
08:30 PCE Deflator MoM - exp 0.1%, prior 0.2%
08:30 PCE Deflator YoY - exp 1.6%, prior 1.6%
08:30 PCE Core MoM - exp 0.1%, prior 0.1%
08:30 PCE Core YoY - exp 1.5%, prior 1.5%
09:00 ISM Milwaukee (Aug) - exp 60.00, prior 63.87
09:45 Chicago PMI (Aug) - exp 56.5, prior 52.6
09:55 University of Michigan Confidence (August final) - exp 80.2, prior  79.2

Global Economics (Time Zone: GMT)

JPY Employment Data
JPY National CPI (July)
JPY Tokyo CPI (Aug)
JPY Retail Sales
JPY Industrial Production (Jul prelim)
05:00 JPY Housing Starts
08:00 CHF Unemployment Rate (Jul prelim)
09:00 EUR CPI (Aug advance)
12:30 CAD 2Q GDP

Earnings

No major earnings scheduled

Twitter: @MichaelSedacca

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