Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Election Year Cycles – What to Expect? - 4th Jun 20
Why Solar Stocks Are Rallying Against All Odds - 4th Jun 20
East Asia Will Be a Post-Pandemic Success - 4th Jun 20
Comparing Bitcoin to Other Market Sectors – Risk vs. Value - 4th Jun 20
Covid, Debt and Precious Metals - 3rd Jun 20
Gold-Silver Ratio And Correlation - 3rd Jun 20
The Corona Riots Begin, US Covid-19 Catastrophe Trend Analysis - 3rd Jun 20 -
Stock Market Short-term Top? - 3rd Jun 20
Deflation: Why the "Japanification" of the U.S. Looms Large - 3rd Jun 20
US Stock Market Sets Up Technical Patterns – Pay Attention - 3rd Jun 20
UK Corona Catastrophe Trend Analysis - 2nd Jun 20
US Real Estate Stats Show Big Wave Of Refinancing Is Coming - 2nd Jun 20
Let’s Make Sure This Crisis Doesn’t Go to Waste - 2nd Jun 20
Silver and Gold: Balancing More Than 100 Years Of Debt Abuse - 2nd Jun 20
The importance of effective website design in a business marketing strategy - 2nd Jun 20
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20

Market Oracle FREE Newsletter


Economic Forecasts and Analysis For US Financial Markets (July 14-18)

Economics / US Economy Jul 14, 2008 - 02:51 AM GMT

By: Joseph_Brusuelas

Economics Best Financial Markets Analysis ArticleThe week of July 14-18 will see a major five days macro data, earnings and Fed Talk in the context of a very shaky market. Just a few potential market moving events upcoming on the schedule are: the two-day testimony on monetary policy and the economy by Fed Chair Ben Bernanke scheduled for Tuesday and Wednesday. Earnings statements that may shape the entire trading week will be published will be JP Morgan on Wednesday and Merrill Lynch, Citi and Thornburg Mortgage on Thursday.

Consumer bellwether Coca-Cola and tech icon Intel will see releases earlier in the week. The major macro data will kick off with the Tuesday release of the June PPI and advance retail sales. Wednesday will see the publication of the consumer price index for June and the following day will see the release of the housing starts and building permits data for the same month. Throughout the week the Empire Fed, Philadelphia Fed, TICS flows, industrial production, jobless claims and leading economic indicators will all be published.

Fed Talk

The week in Fed talk will be dominated by the two-day testimony by Fed Chair Ben Bernanke on monetary policy and the economy on Tuesday and Wednesday. Monday will see a vote by the Fed Governors on mortgage rules in an open meeting. San Francisco Fed Yellen will speak on the negative effects of foreclosures on Monday and Kansas City Fed President Hoenig will speak on the US economy on Tuesday.-

Producer Price Index (June) Tuesday 08:30 AM

The producer price index for June should provide a very clear illustration of the strains that increasing costs are placing on the already thin profit margins of producers. Our forecast implies that headline costs should increase 1.5%m/m and 8.7%y/y. Core pricing should increase 0.4% and 3.3% over that same interval. The major question at this juncture that the market and the Fed are both awaiting clarification is whether the advancing headline costs will bleed through to the core. The latest market data inside the PPI indicates an answer in the affirmative. Total intermediates on a three month annualized basis jumped 27.7% and the core ex-food and energy measure is up 18.5% using that same metric. Should this trend continue it will become increasingly difficult to ignore the underlying pricing pressures faced by firms. At one point, businesses will have to ignore competitiveness issues, seek to preserve profit margins and begin passing through price increases downstream.

Advance Retail Sales (June) Tuesday 08:30 AM

The well-timed stimulus package provided a much-needed shot of adrenaline to the economy in May and we expect to see another boost to spending ex-auto in June. Our forecast implies a 0.7% increase in overall spending and a 1.0% increase ex-autos. We anticipate that the focus of consumer spending will be in the food, health/ personal items and the electronics sectors. We do urge our clients to recall that the mid year surge in personal consumption will be transitory and that save a second stimulus package, that their will be a massive payback to the downside in Q4'08.

Empire Manufacturing (July) Tuesday 08:30 AM

The middle of 2008 is proving to be a test by fire for manufactures. The continued culling of workers and cutback of production schedules in the domestic auto industry should continue to weigh heavily on industrials. The near robust level of demand from the external sector can be expected to begin to level off a bit on the back of higher headline costs globally. Looking forward through the end of the year, we expect to see a series of very difficult reports out of the manufacturing sector. Our forecast implies that the NY Fed survey of manufacturing firms for the month of June will fall to -9.3.

Consumer Price Index (June) Wednesday 08:30 AM

The painful increase in the cost of oil and commodities observed by the market in June should be on display. Our forecast implies a month over month increase of 0.9% and 5.0% y/y. The core should see a increase of 0.2% m/m and 2.3% y/y. Headline costs should capture the stunning move in the oil markets during the month and that should be expected to be the major narrative in June inflation data across the board. Our headline forecast is not in agreement with the current consensus and should the headline arrive near our estimate, the June CPI could be one of the major market moving events of the week.

Industrial Production/Capacity Utilization (June) Wednesday 09:15 AM

The manufacturing sector can be expected to see further problems throughout the remainder of the year. The market did not observe the expected pick up in production after the settlement of the American Axel strike and deterioration in the labor sector associated with industrial production above market consensus in June does not bode well for the industrial production series. Our forecast implies that production will deteriorate by -0.1% and capacity utilization will remain steady at 79.4%.

FOMC Minutes (June Meeting) Wednesday 2:00 PM

The release of the FOMC minutes from the June meeting of the Federal Open Market Committee will take a back seat to the Semi-Annual testimony on monetary policy and the economy by Fed Chair Ben Bernanke. The market over the past few days has swung wildly from a concern over pricing back to problems with the financial sector, so the release is not the potential market-moving document that it might have been just a few days ago. But, the market will nevertheless pay close attention to the discussion on inflation inside the minutes and concern over another bout of systemic issues in the financial sector.

Jobless Claims (Week Ending July 5) Thursday 08:30 AM

The weekly claims series took an unexpected decline to 346K due to seasonal adjustments having to do with temporary plant closings and the irregular reporting that typically occurs around holiday-shortened weeks. We expect them to move back towards the four week moving average of 380K. However, the major narrative that continues to demonstrate a deteriorating labor sector is the continuing claims portion of the series that has reached 3.2mln. This suggests another move higher in the overall rate of unemployment and a move back towards 400k in the headline within the next few weeks.

Housing Starts/Building Permits (June) Thursday 10:00 AM

We expect to see a mixed bag in the starts and permits data in June. Starts should see a modest decline to 961K in the data and the market should observe a minimal increase in the demand for permits. Of late, the data across the housing sector has continued to deteriorate, but at a decreasing rate. This has buoyed market sentiment that the housing sector is grasping for a bottom. Whatever the merits of such an argument, we think that the credit crisis has yet to really enter its insolvency phase that will provide another gut wrenching period of downturns that will provide the true bottom for the market.

Philadelphia Fed (July) Thursday 10:00 AM

We are quite bearish on the manufacturing sector, given the now clear reduction in auto assembly schedules among domestic producers and the announcement of further culling of the labor force. Our forecast for the Philadelphia Fed's survey of manufacturing firms in the region implies that the headline will fall to -18.4. We do urge our clients to recall that the headline in the survey is a single stand-alone question that often is disconnected from underlying production schedules. However, with the curtailing of current and future production and the very clear problems ahead in the auto industry, we do think that our bearish forecast may be a bit on the optimistic side.

By Joseph Brusuelas
Chief Economist, VP Global Strategy of the Merk Hard Currency Fund

Bridging academic rigor and communications, Joe Brusuelas provides the Merk team with significant experience in advanced research and analysis of macro-economic factors, as well as in identifying how economic trends impact investors.  As Chief Economist and Global Strategist, he is responsible for heading Merk research and analysis and communicating the Merk Perspective to the markets.

Mr. Brusuelas holds an M.A and a B.A. in Political Science from San Diego State and is a PhD candidate at the University of Southern California, Los Angeles.

Before joining Merk, Mr. Brusuelas was the chief US Economist at IDEAglobal in New York.  Before that he spent 8 years in academia as a researcher and lecturer covering themes spanning macro- and microeconomics, money, banking and financial markets.  In addition, he has worked at Citibank/Salomon Smith Barney, First Fidelity Bank and Great Western Investment Management.

© 2008 Merk Investments® LLC
The Merk Hard Currency Fund is managed by Merk Investments, an investment advisory firm that invests with discipline and long-term focus while adapting to changing environments.
Axel Merk, president of Merk Investments, makes all investment decisions for the Merk Hard Currency Fund. Mr. Merk founded Merk Investments AG in Switzerland in 1994; in 2001, he relocated the business to the US where all investment advisory activities are conducted by Merk Investments LLC, a SEC-registered investment adviser.

Merk Investments has since pursued a macro-economic approach to investing, with substantial gold and hard currency exposure.

Merk Investments is making the Merk Hard Currency Fund available to retail investors to allow them to diversify their portfolios and, through the fund, invest in a basket of hard currencies.

Joseph Brusuelas Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules