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Trading Radar: S&P 500 Has First Weekly Decline This Year; Income and Manufacturing Data Ahead

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

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Equities sold off hard this week as the minutes from the FOMC's January meeting showed a more nervous and hawkish FOMC than had previously been seen, less than six weeks after adding $45 billion to its monthly LSAP. However, Treasuries remained relatively flat and traded up marginally to short-term resistance. Economic data was moderate to slightly worse, with the notable report being the Philadelphia Fed regional manufacturing report, which showed serious contraction.

Over the weekend, Italy will hold elections for its Prime Minister and upper and lower houses of Parliament. The current frontrunner is Luigi Bersani whose ideals track closely with the EU's stance. His main opponent, former PM Silvio Berlusconi, is more of a long shot, but should he win, it would mean the end of much of the progress that Italy has accomplished over the past year.

Next week features a more robust economic data calendar. On tap is the monthly durable goods orders, personal income, personal spending, quarterly GDP, and ISM manufacturing. For the durable goods orders on Wednesday, economists are expecting a 4.6% decline in January. This decline was highlighted by much worse regional Fed manufacturing surveys that have persisted throughout February. On the income front, January should see a large decline as the temporary boost from the orgy of special dividends in December wears off. For personal spending, retail sales saw a small increase in January and this should be reflected in a modest increase for personal spending. The second estimate of 4Q GDP should see a small boost as the December trade balance tightened dramatically.

On the manufacturing side, economists are expecting a slight decline to 52.5 from 53.1 in January. This is a bit more positive than the negative manufacturing reports we have seen thus far in February.

On the global front, economic data will be a bit more muted with the notable reports of the week come from China. On the schedule is the HSBC Flash Manufacturing PMI and Chinese manufacturing PMI. Both are expected to remain mostly unchanged month-to-month. Elsewhere we have German employment figures for February and eurozone consumer inflation for February.

Notable US earnings reports for the week include Kohl's (NYSE:KSS), Home Depot (NYSE:HD), Macy's (NYSE:M), JCPenney (NYSE:JCP), Groupon (NASDAQ:GRPN), Salesforce.com (NASDAQ:CRM), Barnes & Noble (NYSE:BKS), and Hertz (NYSE:HTZ).

Monday, February 25

US Economics (Time Zone: EDT)

08:30 Chicago Fed (Jan) – prior 0.02
10:30 Dallas Fed (Feb) – prior 5.5
11:00 Fed buying $2.75b-$3.5b notes in 7 to 10-year range
11:30 Treasury selling $35b 3-month bills, $30b 6-month bills
1:00 Treasury selling $35b 2-year notes

Global Economics (Time Zone: GMT)

01:45 CNY HSBC Flash Manufacturing PMI (Feb)
09:30 GBP BBA Loans for Home Purchases (Jan)

Earnings

Before:
3D Systems (DDD)
Dendreon (DNDN)
Hertz (HTZ)
Lowe's (LOW)
After:
Stifel Financial (SF)
Autodesk (ADSK)
Caesars Entertainment (CZR)

Tuesday, February 26
US Economics (Time Zone: EDT)
09:00 S&P/Case-Shiller 20 City MoM (Dec) – consensus 0.55%, prior 0.63%
09:00 S&P/Case-Shiller 20 Composite YoY (Dec) – consensus 6.60%, prior 5.52%
09:00 S&P/Case-Shiller Home Price Index – prior 145.82
09:00 House Price Index MoM (Dec) – consensus 0.6%, prior 0.6%
10:00 Richmond Fed (Feb) – consensus -2, prior -12
10:00 Consumer Confidence (Feb) – consensus 61.2, prior 58.6
10:00 New Home Sales SAAR (Jan) – consensus 380K, prior 369K
11:00 Fed to buy $1.25b-$1.75b notes in 23 to 30-year range
11:30 Treasury selling 4-week bills
1:00 Treasury selling $35b 5-year notes
10:00 Bernanke testifying to Senate Banking Committee on economy/mon policy

Global Economics (Time Zone: GMT)

02:00 NZD Reserve Bank of NZ 2-year Inflation Expectations (1Q)
05:00 JPY Small Business Confidence (Feb)
21:45 NZD Trade Balance (Jan)
23:50 JPY Retail Trade (Jan)

Earnings

Before:
Macy's (M)
AutoZone (AZO)
Home Depot (HD)
RadioShack (RSH)
HollyFrontier (HFC)
After:
Priceline (PCLN)
Gulfport Energy (GPOR)

Wednesday, February 27

US Economics (Time Zone: EDT)

07:00 MBA Mortgage Index
08:30 Durable Goods Orders (Jan) – consensus -4.0%, prior 4.6%
08:30 Durable Goods Ex Transport (Jan) – consensus 0.3%, prior 1.3%
08:30 Capital Goods Orders Nondef Ex Air (Jan) – consensus 0.5%, prior 0.2%
08:30 Capital Goods Shipments Nondef Ex Air (Jan) – consensus -0.8%, prior 0.3%
10:00 Pending Home Sales MoM (Jan) – consensus 2.0%, prior -4.3%
11:00 Fed buying $4.25b-$5.25b notes in 4.5 to 5.5-year range
1:00 Treasury selling $29b 7-year notes
10:00 Bernanke testifies to House Financial Services Committee

Global Economics (Time Zone: GMT)

07:00 CHF UBS Consumption Indicator (Jan)
08:00 CHF KOF Swiss Leading Indicators (Feb)
09:30 GBP GDP (4Q 1st est)
10:00 EUR Eurozone Consumer Confidence (Feb)
23:50 JPY Industrial Production (Jan 1st est)

Earnings

Before:
Cincinnati Bell (CBB)
Target (TGT)
Joy Global (JOY)
Stillwater Mining (SWC)
Starwood Property Trust (STWD)
Fortress Investment Group (FIG)
After:
JCPenney (JCP)
Liberty Media (LBTYA)
Sturm & Ruger (RGR)
Monster Beverage (MNST)
Universal Display (PANL)
Groupon (GRPN)

Thursday, February 28

US Economics (Time Zone: EDT)

08:30 Initial Claims – consensus 356K, prior 341K
08:30 Continuing Claims – consensus 3147K, prior 3114K
08:30 GDP QoQ (Annualized) 4Q 2nd estimate – consensus 0.5%, prior -0.1%
08:30 Personal Consumption 4Q 2nd estimate – consensus 2.3%, prior 2.2%
08:30 GDP Price Index 4Q 2nd estimate - consensus 0.6%, prior 0.6%
08:30 Core PCE QoQ 4Q 2nd estimate – consensus 0.9%, prior 0.9%
09:45 Chicago PMI (Feb) – consensus 54.1, prior 55.6
11:00 Kansas City Fed (Feb) – prior -2

Global Economics (Time Zone: GMT)

00:00 AUD HIA New Home Sales (Jan)
00:01 GBP GfK Consumer Confidence (Feb)
00:30 AUD Private Capital Investment (4Q)
05:00 JPY Housing Starts (Jan)
06:45 CHF GDP (4Q)
08:55 German Unemployment Rate (Feb)
10:00 EUR Eurozone CPI (Jan)
10:00 CHF CPI (Jan)
13:00 EUR German CPI (Feb 1st est)
13:30 CAD Current Account Balance (4Q)
23:30 JPY Unemployment Rate (Jan)

Earnings

Before:
Barnes & Noble (BKS)
Ocwen Financial (OCN)
Sears Holdings (SHLD)
Kohl's (KSS)
After:
Gap (GPS)
Kodiak O&G (KOG)
Deckers (DECK)
Medivation (MDVN)
Salesforce.com (CRM)
Palo Alto Networks (PANW)
Splunk (SPLK)
Molycorp (MCP)

Friday, March 1

US Economics (Time Zone: EDT)

08:30 Personal Income (Jan) – consensus -2.3%, prior 2.6%
08:30 Personal Spending (Jan) – consensus 0.2%, prior 0.2%
08:30 PCE Deflator YoY (Jan) – consensus 1.2%, prior 1.3%
08:30 PCE Core YoY (Jan) – consensus 1.3%, prior 1.4%
08:58 Markit US PMI Final Est (Feb) – prior 55.2
09:55 University of Michigan Confidence (Feb 2nd estimate) – consensus 76.3, prior 76.3
10:00 Construction Spending MoM (Jan) – consensus 0.4%, prior 0.9%
10:00 ISM Manufacturing (Feb) – consensus 52.5, prior 53.1
10:00 ISM Prices Paid (Feb) – consensus 57, prior 56.5
5:00 Total Vehicle Sales (Feb) – consensus 15.10M, prior 15.23M
5:00 Domestic Vehicle Sales (Feb) – consensus 11.95M, prior 12.08M

Global Economics (Time Zone: GMT)

01:00 CNY Manufacturing PMI (Feb)
01:45 CNY HSBC Manufacturing PMI (Feb)
09:00 EUR Eurozone Manufacturing PMI (Feb final est)
09:00 EUR Italian Unemployment Rate (Jan 1st est)
09:30 GBP Manufacturing PMI (Feb)
10:00 EUR Eurozone CPI (Feb)
10:00 EUR Eurozone Unemployment Rate (Jan)
13:30 CAD GDP QoQ Annualized (4Q)

Earnings

Before:
Vanguard Natural Resources (VNR)

Twitter: @MichaelSedacca

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