This Week Earnings Season Builds and the World’s Second Largest Economy Reports GDP
There are multiple real estate-related reports this week that are expected to conflict with one another. Otherwise, it is a slow week for economic numbers, but earnings season, with banks still in the spotlight, will begin to build. With few U.S. economic reports, an elevated amount of attention may be paid to a Tuesday release of Chinese GDP. Expectations are for 3.9% growth. The Beige Book on Wednesday sets the table for the May FOMC meeting; surprises will be magnified in a slow economic data week.
Monday 4/17
- 10:00 AM ET, The Housing Market Index has been trending upward following a severe downward spiral throughout 2022. The April consensus is 45 which would add 1 point to March’s 7 point increase to 44. This reflects home builder assessments of housing across the U.S. It is used as not just a gauge of current demand for housing, but also economic momentum which spins off of home purchases. This seemingly unrelated data has an unmistakable multiplier effect on the economy, which impacts markets.
- 12:00 PM ET, Richmond Fed President Thomas Barkin will be speaking. This has the potential for a market mood change as Barkin has been among the more hawkish of Fed district Presidents. After the last FOMC meeting in March, Barkin said he had no second thoughts on the Fed’s decision to raise rates at the meeting.
Tuesday 4/18
- 6:00 AM ET, Housing Starts, in March is expected to decline a bit to a 1.40 million annualized rate. As reported for February Starts increased sharply to a 1.450 million annualized rate from January’s 1.321 million. Permits, at 1.524 million in February, also jumped sharply and are expected to fall back to 1.431 million in March.
Wednesday 4/19
- 2:00 AM ET, The Beige Book is produced a couple of weeks before each FOMC meeting. The next meeting is May 2-3. Despite the name referring to it as a “book,” it is actually 12 individual reports of what each Federal Reserve district sees occurring economically in their region. It serves as the starting place of discussion at each of the ten annual FOMC meetings. For this reason, economists, investors, and Fed watchers pour over the details.
Thursday 4/20
- 8:30 AM ET, Jobless Claims Jobless for the April 15 week are expected to come in at 245,000 versus 239,000 in the prior week. With a very light economic calendar, this may turn out to be the focus for the week. Better than expected could cause rate fears to grow in stock market participant’s psyche, a surprise on the low side will cause news reports and market pundits to declare the Fed is done tightening.
- 10:00 AM ET, Existing Home Sales represents yet another real estate economic report this week. After February’s sharp jump to a 4.58 million annualized rate, existing home sales in March are expected to fall back to a 4.485 million rate.
- 10:00 AM ET, the Index of Leading Economic Indicators is expected to drop again to 0.4 percent for March. The index has been in steady decline, signaling a pending recession. For investors, this index seldom surprises since it is comprised of ten preciously released components, the results of which are already known. The trend is important to investors, the number has low potential to move markets when released.
- 4:30 AM ET, The Fed Balance Sheet is released at this time each Thursday. Investors are paying more attention so they can discern whether what the Fed says and what the Fed does are one in the same. Quantitative tightening is the Fed reducing the securities it owns on its balance sheet. It paid U.S. dollars for the securities. If it let’s them mature and does not repurchase securities, that money is taken out of the economy. Money is stimulative, reduced money in the system is a drag on growth.
Friday 4/21
- 9:45 PM ET, Purchasing Managers Index composite (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of 1,000 manufacturing and service sector companies. A number above 50 indicates shows rising output relative to the previous month. Services moved back to the 50 demarcation in February for the first time in eight months and improved further in March to 52.6; the consensus for April is 51.5.
What Else
Taxes are due April 18 this year. This typically creates a wave of new IRA deposits and the investments that follow.
The U.S. Supreme Court will hear arguments on Monday in Slack vs. Pirani, a complex securities law case that could set a precedent for how easy it will be for investors to sue companies over alleged misstatements or omissions in their registration statements during direct listings. The case may have major implications for direct listings—either making them a more attractive option or removing them as a viable option.
Managing Editor, Channelchek
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