Week in Preview

This week will be about Earnings
and Payrolls.  Following that fugly GDP number, Friday’s NFP is taking
on greater importance — especially the wage inflation aspect. Consensus
is for 120k new jobs (it takes 150k to keep up with population
growth).  The biggest drag on job growth has been construction and

Other economic data this week:

Monday: personal income and spending
Tuesday: vehicle sales (consensus is down 3%) and Institute for Supply Management
Wednesday: March factory orders 
Thursday: Q1 productivity, and ISM service-sector activity
Friday: NFP

There are still a slew of earnings coming in, and while the profits
have been coming below last quarter’s numbers, they are still way above
the lowered 3-4% analysts consensus: Year-over-year, we’re running
about 7% so far.

Monday, Verizon reports
Tuesday is P&G and
Archer Daniels Midland;
Time Warner
GM, Starbucks
and CBS

Eastman Kodak (there’s speculation EK is a private-equity target).

We get ALOT of speeches this week also: Chairman Ben Bernanke, Treaury
Secretary Hank Paulson, St Louis
Fed President William Poole, New York Fed President Timothy Geithner,
Kansas City Fed President Thomas Hoenig — anyone of these gentleman
can move the markets, so keep an ear out.

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What's been said:

Discussions found on the web:
  1. joh commented on Apr 30


    what are your thoughts on stock markets reaction to this data?

    is weakening a positive or negative factor, should it happen?

    because the reaction to last week’s gdp data was surprising to me.

  2. spencer commented on Apr 30

    The PCE data was just released.

    Real PCE in March fell and is now below the quarterly average. So the jump in 1st Q real pce is not generating any momentum. It was a one month event in January. We are ending the quarter with essentially zero real pce growth
    base for the 2nd Q.

  3. Philippe commented on Apr 30

    It seems that earnings when earmarked for the 650 Billion shares buy back representing an earnings enhancement of 300 BP points (As calculated by MSDW for the first quarter) are in the bracket of total earnings of 3-4 PCT (which is still an astonishing and respectable result within the macro economic context).
    Further on I will stress the dubious quality of earnings for the major banks worldwide as they cannot have been spared by a down cycle in the real estate, they are just procrastinating on their results adjustments. There is stress in the banking sector and it is not only 50 subprime lenders and HSBC.
    The ratings agencies will be again scrutinised.

  4. John commented on Apr 30

    Scrutinized by whom? The SEC? I seriously doubt it. This rally is the will of the powers that be…

  5. michael schumacher commented on Apr 30

    I’ve always wondered why there are several “speeches” planeed each and every time we get economic numbers out. Are they helping us understand the archaic methodology that they use in gathering this data? or explaining, yet again, another “change” in how they arrived at say the housing numbers with a +- of 12.34567890%

    How thoughtful of them………LOL


  6. Winston Munn commented on Apr 30

    If the bond markets keep reacting in this fashion, the Fed is going to have to suck up a lot of liquidity to protect their 5.25% target rate.

  7. Winston Munn commented on Apr 30

    If the 3-month T-bill falls to 4.75%, the Fed may be forced into chasing it with the target rate – the benign inflation numbers give them excuse, but so long dollar if they do. I simply can’t believe they would suck up that much liquidity, though, to protect the target rate. A rate cut would give the market an excuse for a big bounce, but I can’t see a cut being enough to rescue to ecomony going forward.

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