Brace yourself for another volatile week on Wall Street. Right now, investors want to know two things: How fast is the economy cooling? And how hot is inflation running? Well, several key government reports are due out this week that will go a long way toward answering both questions. The biggest news could actually come at the end of the week, when the Federal Reserve releases the minutes of its June monetary policy meeting, at which it raised interest rates.
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Monday, July 17:
CAPACITY UTILIZATION: The Federal Reserve is due to release a new report on factory utilization. This is a statistical measure of how much slack there is in the manufacturing economy. The less slack there is, the greater the likelihood for inflation. So a big number—for instance, anything over 82 percent utilization—could spook the markets.
EARNINGS TO WATCH: Citigroup, Harley-Davidson, Mattel, and Novartis
Tuesday, July 18:
PRODUCER PRICE INDEX: The Labor Department will release its June producer price index report, which tracks inflation at the wholesale level. In May, wholesale inflation was running at an annual pace of 4.5 percent, up from 3.5 percent earlier in the year. If it climbed even higher in June, it could lead to fears that the Fed will have to keep raising interest rates to try to fight inflation.
EARNINGS TO WATCH: Ameritrade Holding, Coca-Cola, Merrill Lynch, New York Times Co., U.S. Bancorp, Wells Fargo, and Yahoo!
Wednesday, July 19:
CONSUMER PRICE INDEX: The Labor Department will report on retail-level inflation when it releases the June results of the consumer price index. Pay close attention to the core CPI figure, which strips out volatile food and energy costs. If core CPI rose last month at an annual rate of more than 2.5 percent, look for a sell-off in the stock market.
HOUSING STARTS: How cold is the housing market growing? Wall Street finds out this morning when the Commerce Department releases the latest trends in new housing starts and building permit applications.
EARNINGS TO WATCH: Abbott Laboratories, Allstate, AMR Corp., Apple Computer, Bank of America, CIT Group, E*TRADE, eBay, General Dynamics, Host Marriott, Intel, JPMorgan Chase, Motorola, Southwest Airlines, and Yum Brands
Thursday, July 20:
LEADING ECONOMIC INDICATORS: The Conference Board will release the latest results of its index of leading economic indicators, which gauges how well the economy might perform in the coming months.
EARNINGS TO WATCH: Advanced Micro Devices, Continental Airlines, Dow Jones, Ford, Honeywell, Microsoft, Nasdaq Stock Market, Safeway, and Wachovia
Friday, July 21:
FED MINUTES: The Fed is due to release the minutes from its June monetary-policy meeting. This is a must-read on Wall Street, since the minutes might shed some additional light on how fearful the Fed really is about inflation.
EARNINGS TO WATCH: Caterpillar, Eli Lilly, Halliburton, Nucor, and Schlumberger
