Spotlight on Next Week: Durable Goods Data

Dow Jones Newswires’ Nathan Becker reports:

• Genzyme has an investor meeting slated for Monday to review long-term sales projections for controversial multiple sclerosis drug alemtuzumab. The potential of the drug is a key part of the company’s claim that an $18.5 billion takeover offer from Sanofi-Aventis SA is too low. The drug is still in the testing phase, but Genzyme expects sales to hit $3.5 billion in 2017–much higher than Sanofi’s estimate. Adobe Systems Inc. also reports earnings on Monday.
• Walgreen Co. and Nike Inc. both slated to report quarterly results Tuesday, are expected to post broad growth from last year. But ConAgra Foods Inc., which has struggled because of discounting and rising costs, is expected to release weaker year-over-year results on Tuesday.
• Meanwhile, the third estimate on third-quarter gross domestic product on Wednesday is expected to be revised upward to 2.6% from 2.5%.
• November durable goods orders to decline 0.8% from year-earlier levels when the report comes out Thursday. November durable goods orders come out Thursday. The reading measures the dollar volume of orders, shipments and unfilled orders of durable goods. The figure is considered a top indicator of manufacturing activity. Also, New-home sales for November are expected to show the seasonally adjusted annual rate climbing to 305,000 from October’s 283,000 pace, when they’re released Thursday.
• Trading is closed next Friday for the coming holiday.

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Tuesday Spotlight: Retail, Producer Price Data

• December 13, 2010, 5:54 PM ET

By Matt Phillips

Getty Images

• 8:30 a.m. — Advanced retail sales data for November are due. The top-line numbers are expected to show a 0.5% increase, with the ex-autos number arriving at 0.8%. Last time, the headline numbers showed a 1.2% increase. That was the largest monthly jump since March and the fourth-consecutive month of increased spending. Excluding auto sales, which can be volatile from month to month, retail sales rose a more moderate 0.4% last time.

• 8:30 a.m. — The producer-price index, which measures how much manufacturers and wholesalers pay for goods and materials, is expected to show a seasonally adjusted headline gain of 0.8%. The core measure — which strips out food and energy prices — is expected to be a much more muted 0.2%. Last time, the headline number rose a seasonally adjusted 0.4% in October from a month earlier. Taking out food and energy prices, which can be volatile from month to month, wholesale prices fell 0.6% in October, the sharpest one-month drop in more than four years.

• 10 a.m. — Data on U.S. business inventories is expected to show a 1% increase in October. Last time, the Commerce Department reported that U.S. business inventories rose 0.9% in September from the prior month, to a seasonally adjusted $1.4 trillion.

• 2:15 p.m. — The interest rate decision from the Fed’s key rate setting committee is due. Of course, nobody expects a rate hike but all eyes will be on the language of the statement. “We are curious to see whether the Fed will say anything about the steep rise in yields since the announcement of QE2, and if so whether it will seek to tie in the increase with the firmer tone of much of the recent economic data,” wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.

• Also, an earnings report is due from Best Buy. See you then.

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Spotlight on Next Week: Hurdle on Tax Deal, Earnings, Data

• December 10, 2010, 4:36 PM ET

By John Kell

Everett Digital

Joan Crawford, circa 1930s.

• Senate Majority Leader Harry Reid has set a procedural vote Monday on the tax-cut deal struck by President Barack Obama and congressional Republicans, and the bill could clear the Senate as early as Tuesday, according to Senate aides. The bill would then need to be approved by the House, where Democrats have urged their leaders to block action on it unless changes are made to remove tax benefits for the wealthy.

• The Department of Commerce’s retail-sales report for November is expected to show growth of 0.8%, and 0.6% excluding motor vehicles and parts, according to Briefing.com. The results come after strong October growth, as consumers become more confident about the economic climate, although high unemployment remains a concern.

• Housing starts and building permits data for November are due out Thursday, with both metrics expected to report an increase from October’s disappointing showing. Still, housing starts are at extremely low levels and the outlook is still murky amid high levels of unsold new homes.

• Meanwhile, the Consumer Price Index, a measure of the price level of a fixed market basket of goods and services purchased by consumers, is again projected to inch up in November, in what would be the fifth consecutive monthly increase.

• Best Buy, FedEx, General Mills Inc. and Research in Motion are among the companies set to report their latest quarterly results next week. All four companies are expected to report revenue and profit growth from a year ago, according to analysts polled by Thomson Reuters.

• Wall Street expects BlackBerry maker RIM, which is set to report Thursday, to post the most impressive growth. The company issued strong guidance for the fiscal third quarter in November, on top of stout second-quarter results, easing fears the company is buckling under intense competition from Apple Inc.’s iPhone and smartphones that run on Google Inc.’s Android operating system.

• Oracle will announce its fiscal second-quarter results Thursday, in the first financial results since the business-software company won a record judgment against SAP. In November, a federal jury said Oracle’s archrival must pay Oracle $1.3 billion in damages for copyright infringement. Meanwhile, Oracle’s latest-quarter performance will likely to have been boosted by continued strength in software and an updated line of hardware products from its January acquisition of Sun Microsystems.

• The Irish opposition party Fine Gael said it will discuss its position on the country’s EUR67.5 billion aid package at a meeting of senior party figures next week. Ireland’s parliament will vote on it Wednesday, Prime Minister Brian Cowen said Thursday. He said the package negotiated by the International Monetary Fund and the European Union is in the nation’s best interest.

• Herman Van Rompuy, president of the European Council, Thursday called for European governments to agree to a limited change to the European Union treaty next week that will allow the creation of a permanent mechanism to bail out troubled EU economies. He said he believed European leaders would do “whatever it takes” to ensure the financial stability of the euro region.

• The council of cash-strapped Harrisburg, the capital of Pennsylvania, is expected to vote on the city’s $57 million 2011 budget next week. Mayor Linda Thompson last month presented a budget that kept property taxes flat and is lower than the $65 million spending plan enacted for this year. Harrisburg earlier this week disclosed officials mistakenly failed to fully budget its general obligation debt for 2011 and currently don’t have enough to make the next payments due in March.

• Following the Italian Parliament’s approval of EUR25 billion in budget cuts the next two years, the government of Prime Minister Silvio Berlusconi faces a confidence vote in Parliament Tuesday that could bring down his government and pave the way for early elections in the spring. This week’s approval of Italy’s two-year spending budget comes at a pivotal moment, placing Italy’s fiscal house in order as lawmakers brace for political turbulence in the weeks ahead.

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Next Week’s Spotlight: Not A Lot on Tap

There’s scant earnings and data on the docket for next week. With little else to occupy the minds of those in markets, we expect focus may swing back to the eurozone situation, especially with a vote due on the Irish austerity budget on Tuesday.

Retailers, Apparel, Tax Preparers To Report Results
A handful of apparel and retail companies–including Talbots Inc., Men’s Wearhouse Inc. and Oxford Industries Inc. –are expected to report their latest quarterly results next week. Analysts polled by Thomson Reuters projected a mixed performance from the trio, with top- and bottom-line growth only expected from Men’s Wearhouse, which operates stores for men in the U.S. and Canada.

Meanwhile, tax-service providers H&R Block Inc. and Jackson Hewitt Tax Service Inc. are scheduled to report results on Tuesday and Friday, respectively. Wall Street analysts expected H&R to report slightly better results, while Jackson Hewitt’s fiscal second-quarter loss is seen widening.

Other companies expected to report their latest earnings next week include auto-parts retailer AutoZone Inc. on Tuesday and gun maker Smith & Wesson Holding Corp. on Wednesday.

Verizon To Turn On 4G Mobile-Broadband
Verizon Wireless said it plans to begin offering its faster next-generation wireless service on Sunday as the carrier officially jumps into the 4G fray. The carrier–jointly owned by Verizon Communications Inc. and Vodafone Group — said its new fourth-generation service initially will be for laptop aircards only, with additional devices, including smartphones, coming by the middle of next year.

Exchanges Expected To Seek Extension Of Circuit Breakers
U.S. stock exchanges next week are expected to ask regulators to extend for four additional months a pilot program that limits price swings in some stocks put in place last summer in the wake of the market’s May 6 “flash crash,” according to people familiar with the matter. Market operators plan to seek an extension until April 11 of so-called circuit breakers for individual stocks and exchange-traded funds, the people said.

Bernanke To Appear On 60 Minutes On Sunday
Federal Reserve Chairman Ben Bernanke will appear on CBS’s “60 Minutes” show this Sunday, the television network said. Bernanke is expected to discuss the unemployment rate, the deficit and the Fed’s decision to purchase $600 billion in U.S. Treasurys in an effort to boost a weak economy.

Consumer Sentiment Seen Improving In December
The preliminary University of Michigan Consumer Sentiment Index is expected to show an increase in December to 72.2 from the final reading of 71.6 in November, according to a Briefing.com consensus. The index grew in the prior month due to the performance of the equity market and better employment numbers. U.S. stocks capped their best two-day performance since July this week as better-than-expected retail and home sales encouraged investors.

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Friday Spotlight: Jobs Friday. Buckle Up.

By Matt Phillips

Provided we don’t have yet another euro-centered debt freakout — a big if — there’s only one report that’s likely to matter to the markets tomorrow, the Labor Department’s monthly jobs report.

8:30 a.m. — The consensus expectation is for the addition of 144,000 jobs in November, with the unemployment rate staying steady at 9.6%.?Here’s some of what we’re reading in advance of the big print.

Joe LaVorgna, Deutsche Bank: For the big picture, it is private employment that matters most, and the solid employment readings from the various purchasing managers’ surveys, the mild decline in initial jobless claims and the firming in employee tax receipts tell us November job gains should be at least as much as what we witnessed in October, if not a bit more.

Paul Dales, Capital Economics: The 159,000 gain in private payroll employment in October provided hope that employment could start to grow by the 200,000 per month necessary to more than absorb the increase in the labour force. The last time private payroll employment rose by that much for a sustained period was between January 2005 and April 2006.

Julia Coronado, BNP Paribas: The combination of the ADP and Challenger reports could suggest an overall reading on nonfarm payrolls very much in line with the consensus forecast of 145k with more private hiring but also more government job losses. We are therefore not inclined to change our forecast for 145k on this news. On balance the message would be that the economy continues to hire at a pace that is roughly sufficient to stabilize the unemployment rate and keep consumer spending expanding at a moderate pace, although we are expecting the unemployment rate to tick up in November to 9.7% as discouraged workers begin to re-enter the labor force.

Marc Chandler, Brown Brothers Harriman: The trend is clear. In Oct the 3-month average stood at 139k, the highest since the March/April job surge (a total of almost 400k in those two months). There is some risk that the work week and hourly earnings, important elements of the report, may not show the same improvement as the job creation, but on balance a strong US jobs report is likely.

Nomura Global Economics: Available labor market data for the month have also looked encouraging. The employment components of both the Philly Fed and Empire State manufacturing surveys remained well-above their breakeven levels, and the four-week average of initial jobless claims moved to its lowest level this year. We therefore anticipate solid growth in nonfarm payroll employment of 130,000 and a decline in the unemployment rate of 9.5% (private payroll employment may be a bit higher given job cuts among state and local government workers). We think the bulk of job gains will come from service-providing sectors, including retail trade, transportation, professional and business services, and health and education.

Maury Harris, UBS: The employment report will probably show further strengthening in the labor market in November, with payrolls rising solidly (total UBS: 150k, cons: 145k; private UBS: 175k, cons: 155k) and the unemployment rate holding steady (UBS & cons: 9.6%). We also expect upward revisions to payrolls in September and October, reflecting improved underlying data as well as the seasonal adjustment methodology. We, along with consensus, project a 0.2% m/m rise in average hourly earnings and the workweek unchanged at 34.3 hours.

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Wednesday Spotlight: ADP, ISM, Beige Book, Auto Sales

7 a.m. — The weekly mortgage applications survey is expected. Last week, the Mortgage Bankers Association reported the volume of mortgage applications filed in the U.S. increased a seasonally adjusted 2.1% from the previous week on a jump in purchasing activity.

8:15 a.m. — ADP National Employment Report is due for November. The private sector count is considered something of a sneak peak of the big Friday jobs report. Consensus is for a gain of 70,000 private sector jobs. Last time, private-sector employment rose by 43,000 in October topping economists’ expectations, and presaging a strong government report later that week.

10 a.m. — ISM Manufacturing index for November. The headline index is expected to stay flat — but in positive territory — at 56.9. Any number over 50 indicates expansion. The Institute for Supply Management’s index of overall manufacturing activity, based on surveys of purchasing managers, rose to 56.9 in October from 54.4 the month before.

2 p.m. — Federal Reserve Beige Book report on regional economic activity is released. “This week’s publication of the Beige book (due Wednesday at 2.00 pm) will be the first opportunity to see the extent that the substantial improvement in macroeconomic data has had on the FRB’s internal thinking,” wrote Michael Shaoul, chief executive of brokerage Oscar Gruss, in a note Monday.

Throughout the day — Auto sales figures for November in the U.S. will be released by car makers.

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Tuesday Spotlight: Case-Shiller, Bernanke Speaks

By Matt Phillips

9 a.m. — Case-Shiller home price data for September is set to be released. The index of home prices in 20 metropolitan areas is expected to rise 1% year-over-year. In August, the 20-metropolitan area index was up 1.7% versus the prior year.

9:45 a.m. — A report from the Chicago chapter of the Institute of Supply Management offers a read on the business climate in the midwest in November. The headline business barometer number is expected to arrive at 60, that’s a bit lower than last month, but still indicates expansion. Last month the the Institute for Supply Management-Chicago reported that its business barometer increased to 60.6 in October from 60.4 in September. That was the 13th straight month of economic expansion as the U.S. rebounds from the worst slowdown since the Great Depression.

10 a.m. — Consumer confidence readings for November are expected to improve as the headline reading jumps to 52.3, according to Wall Street group think. U.S. consumer confidence improved in October, but remained at historically low levels. The Conference Board, a private research group, said its index of consumer confidence rose to 50.2 in October from September’s revised 48.6.

3 p.m. — Fed Chairman Ben Bernanke is expected to participate in a “Conversation on the Economy” with business leaders at Ohio State University.

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