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Trading Radar: Will the Fed Decide to Taper Next Week?

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

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The heavens aligned in the past week and the S&P 500 (INDEXSP:.INX) experienced a negative week for the first time since September.

Next week the main event will be Wednesday's FOMC meeting. Expectations that the Fed will cut back its asset purchase plan have changed -- many believe the taper will be announced at next week's meeting instead of in March, as had been anticipated. Additionally, it is expected that the Fed will strengthen its forward-guidance-policy tool by lowering the unemployment-rate threshold or adding other quantiative metrics to it.

The consumer price index will be released on Tuesday morning. Economists are expecting prices to accelerate to an annual rate of 1.3% in November from 1.0% in the prior month. Other notable economic reports scheduled for the coming week are September through November housing starts, existing home sales, and the final estimate of third-quarter US GDP.

In the coming week, the Bank of Japan will update its target for expanding the monetary base in 2014. Additionally, the Reserve Bank of India will issue its monthly monetary policy statement. Lastly, China and Europe will release preliminary estimates of December manufacturing activity.

FedEx (NYSE:FDX) will be the first company to report fourth-quarter earnings along with Oracle (NASDAQ:ORCL) and Nike (NYSE:NKE).

Monday, December 16

US Economics (Time Zone: EST)

08:30 Empire Manufacturing (Dec) – expected 5.00, prior -2.21
08:30 Nonfarm Productivity – exp 2.7%, prior 1.9%
08:30 Unit Labor Costs – exp -1.4%, prior -0.6%
08:58 Markit US PMI (preliminary) – expected 55.0, prior 54.3
09:00 Total Net TIC Flows (Oct) – prior -$106.8b
09:00 Net Long-term TIC Flows – exp $40.0b, prior $25.5b
09:15 Industrial Production – exp 0.6%, prior -0.1%
09:15 Capacity Utilization – exp 78.4%, prior 78.1%
11:00 Fed buying $2.75b-$3.5b bonds in 7.5 to 10-year range
11:30 Treasury selling $32b 3-month, $27b 6-month bills

Global Economics (Time Zone: GMT)

JPY 4Q Tankan Manufacturer and Service Outlook
01:45 CNY HSBC/Markit Flash Manufacturing PMI
09:00 EUR Eurozone Manufacturing PMI
09:00 EUR Eurozone Services PMI
2:00pm Draghi speaks in Brussels

Earnings

After:
FuelCell Energy (FCEL)

Tuesday, December 17

US Economics (Time Zone: EST)

08:30 Consumer Price Index YoY – expected 1.3%, prior 1.0%
08:30 CPI Ex Food & Energy YoY – exp 1.7%, prior 1.7%
10:00 NAHB Housing Market Index – exp 55, prior 54
11:00 Fed to purchase $1.25b-$1.75b notes in 23 to 30-year range
11:30 Treasury selling 4-week bills
1:00 Treasury selling $32b 2-year notes

Global Economics (Time Zone: GMT)

00:30 AUD RBA Minutes
07:00 EUR EU New Car Registrations
09:30 GBP CPI & RPI
10:00 EUR Eurozone ZEW Economic Sentiment Survey
10:00 EUR Eurozone CPI


Earnings

After:
Jabil Circuit (JBL)
VeriFone Systems (PAY)

Wednesday, December 18

US Economics (Time Zone: EST)

07:00 MBA Mortgage Applications
08:30 Housing Starts (Sep-Nov) – Nov expected 952K
08:30 Building Permits (Nov) – exp 990K, prior 1039K
2:00 FOMC Rate Decision
11:30 Treasury selling $35b 5-year notes

Global Economics (Time Zone: GMT)

JPY Trade Balance
INR Reserve Bank of India Policy Statement
00:00 NZD NBNZ Business Confidence
09:00 EUR German IFO – Expectations, Current Situation
09:30 GBP BoE Minutes
09:30 GBP ILO Unemployment Rate
21:45 NZD GDP

Earnings

Before:
Lennar (LEN)
Fedex (FDX)

After:
Oracle (ORCL)
Paychex (PAYX)
General Mills (GIS)

Thursday, December 19

US Economics (Time Zone: EST)

08:30 Initial Jobless Claims – expected 318K, prior 298K
08:30 Continuing Claims – exp 2764K, prior 2744K
10:00 Philly Fed – exp 10.0, prior 6.5
10:00 Existing Home Sales – exp 5.02M, prior 5.12m
10:00 Leading Index – exp 0.7%, prior 0.2%
11:00 Fed buying $1.25b-$1.75b notes in 23 to 30-year range
11:30 Treasury selling $16b 5-year TIPS (2nd reopening)
1:00 Treasury selling $29b 7-year notes
2:00 Fed buying $4.75b-$5.75b notes in 5 to 6-year range

Global Economics (Time Zone: GMT)

Japan Investors Purchases of Foreign Bonds/Stocks
05:00 JPY Leading Index
07:00 CHF Trade Balance
09:30 GBP Retail Sales

Earnings

Before:
KB Home (KBH)
ConAgra Foods (CAG)

After:
Nike (NKE)
Red Hat (RHT)
TIBCO Software (TIBX)

Carnival (CCL)
Rite Aid (RAD)
Darden Restaurants (DRI)

Friday, December 20

US Economics (Time Zone: EST)

08:30 3Q GDP Annualized QoQ (final estimate) – exp 3.6%, prior 3.6%
08:30 Personal Consumption 3Q – exp 1.4%, prior 1.4%
08:30 GDP Price Index – exp 2.0%, prior 2.0%
08:30 Core Price QoQ – exp 1.5%, prior 1.5%
11:00 Kansas City Fed – prior 7
11:00 Fed buying $2.75b-$3.5b bonds in 7.5 to 10-year range

Global Economics (Time Zone: GMT)

JPY BoJ Meeting
02:00 NZD Credit Card Spending
07:00 EUR German GfK Consumer Confidence
09:30 GBP Public Sector Finances
09:30 GBP 3Q GDP (final estimate)
13:30 CAD CPI
13:30 CAD Retail Sales
15:00 EUR Eurozone Consumer Confidence

Earnings

Before:
Carmax (CMX)
Walgreen (WAG)


Twitter: @MichaelSedacca

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