The schedule for the week of August 19th includes:
- Monday: None
- Tuesday: ICSC-Goldman Store Sales and Chicago Fed National Activity Index
- Wednesday: MBA Purchase Applications, Existing Homes Sales, and FOMC Minutes
- Thursday: Weekly Jobless Claims, PMI Manufacturing Index Flash, FHFA House Price Index, Leading Indicators, Kansas City Fed Manufacturing Index, and Federal Reserve (“Fed”) Balance Sheet
- Friday: New Home Sales
I spoke with Benedict Willis III, Managing Director of Albert Fried & Company, LLC., and frequent commentator on Bloomberg, CNBC, and FOX Business, about the economic calendar. Willis will be focused on the overall market, Federal Reserve Bank (“Fed”) minutes, the Jackson Hole Summit, housing data, and regional Federal Reserve data.
According to Willis, with the conclusion of second earnings season and no major economic news, the equity markets are in a stalled pattern. He has been anticipating a correction, but with all the money flowing in to the equity market from bond funds, commodity funds, and money market funds, it’s hard to get a pull back. Volumes are down as traders are away on vacation and there are no major event to drive the markets. The FOMC minutes could provide some increased activity, but Willis is not expecting any surprises from the minutes.
Jackson Hole Summit And The Next Fed Chief
Fed Chairman Ben Bernanke will not be attending the central bank’s marquee conference in Jackson Hole, Wyoming, this year because of a personal scheduling conflict. However, his job and talk about the next Fed Chief will be front and center. Fed watchers will be looking for hints of who will become the next head of the central bank. The symposium of central bankers and global financial leaders will be held on August 22nd and 23rd. President Obama has indicated there are a number of candidates who are qualified for the job, including current Vice Chairwoman Janet Yellen, former Obama economic advisor, Lawrence Summers, and former Fed governor, Donald Kohn. Willis said Janet Yellen is coming from a dark spot, as there has never been a Vice Chairperson who has become the Chairman; although she has the momentum right now.
Housing Data
Although the economic calendar is light this week, there are a few housing related items such as MBA purchase applications, existing home sales, FHFA house price index, and new home sales data, which are due out this week. Willis feels the housing data indicates that the sector is recovering with the low interest rate environment. The home builder sector as well as the retailers are all trading higher. He added that a friend of his that does real estate business in the mid-west is the busiest in years. Willis said, “When banks get back to the business of banks, they will benefit from the rising interest rate environment.”
Weekly Jobless Claims
The jobless claims data has been hard to interpret lately because of seasonality and major industries not following historical patterns. He expects the data to be normalized in September and October. The claims data has been dipping lately to the low 300K range, but Willis said he does not have any conviction.
PMI Manufacturing and Kansas City Fed Manufacturing Index
The regional Fed data could move the markets, as investors might use the data to gauge when the Fed will scale back its asset purchase program. However, Wills said he looking forward to September when investors return from vacation and all will be ready play, looking for deals.