There's a lot of data to consider this week. Though the Federal Reserve didn't think the economic impact of Hurricane Katrina was great enough to pause in raising interest rates last week, it did say that spending, production, and employment will be set back in the near term. That means that investors should expect a run of soft economic data. Some of it will show up this week.
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Monday, September 26
EXISTING-HOME SALES: Is the housing bubble leaking air? The number of existing-home sales issued monthly by the National Association of Realtors is a good measure of the housing sector's health, and it was down 2.6 percent in July from June. August data will help determine if that was an anomaly or the beginning of a downward trend for housing. Most of the period reflected in this number is pre-Katrina.
EARNINGS TO WATCH: Walgreen, Analogic Corp., Jabil Circuit
Tuesday, September 27
CONSUMER CONFIDENCE: Taking the consumer's temperature through surveys has a spotty record for predicting future spending and investing. But at a turning point in the economy, which some economists say may be approaching, this indicator can be telling, especially on the heels of the University of Michigan sentiment survey in mid-September, which came in far below expectations. The Conference Board's confidence index for September will be very closely watched indeed. Both numbers reflect consumer attitudes in the wake of Katrina.
NEW-HOME SALES: New-home sales account for only 15 percent of the residential real-estate market, but they generate lots of investment, jobs, spending, and production. July new-home sales rose 6.5 percent over June, which many analysts took as a very good sign. Yet the price of new homes fell 7 percent. Watch both pieces of data this month.
DURABLE-GOODS ORDERS: Orders for big-ticket factory goods fell steeply in July, the biggest decline in 18 months, with some economists speculating that high energy prices are sapping the economy's momentum. That's very worrying, as factory orders are one of the best indicators of future economic activity. A bad number this month could send the financial markets reeling.
EARNINGS TO WATCH: Red Hat, Research in Motion, McCormick & Co.
Thursday, September 29
HELP WANTED: The Conference Board will release the latest results of its Help Wanted Advertising Index, which tracks the health of the job market by measuring employment listings in 51 major newspapers across the country.
NEW UNEMPLOYMENT CLAIMS: Jobless claims seem to have peaked after Hurricane Katrina, though further upward revisions to previous weeks' reports are possible.
GROSS DOMESTIC PRODUCT UPDATE: The Bureau of Economic Analysis will provide an updated estimate on second-quarter economic growth. The previous second-quarter estimate was 3.3 percent growth; the consensus among economists is that this will not change.
EARNINGS TO WATCH: American Greetings, Arrow International, PepsiCo, Family Dollar, Actuant Corp.
Friday, September 30
INCOME AND SPENDING: The Commerce Department issues its monthly report on Americans' income, spending, and saving. Personal income was up 0.3 percent in July, and consumers spent more than they earned, pushing the personal-savings rate into negative territory. Economists expect personal income to rise a similar amount in August.
MICHIGAN SENTIMENT SURVEY: The preliminary number for this consumer survey came out on September 16, and it was surprisingly low. This week the University of Michigan updates this number for September, and it may be lower still because of Katrina.
CHICAGO PMI: The Chicago Purchasing Managers Index measures business activity in the Midwest and, more broadly, offers a good hint about the health of the nation's factory sector. Katrina's impact could lower the September number.
Biz Buzz wraps up the day's market news and offers an agenda of upcoming economic news.
