Vital Signs: Soaking in Housing Woes

Lots of data is coming on new and existing home sales and house prices, durable good orders, personal income, and consumer spending

The financial markets are still trying to absorb it all: The collapse of Bear Stearns (BSC), an expanded role for the Federal Reserve in brokering Bear’s purchase by JPMorgan Chase (JPM), the Fed’s new lending facilities, another big cut in interest rates, and continued signs that point to rough going in the economy. Fallout from these events will spill over into the coming week, as investors continue to soak it all in, even as they sort through the next batch of reports.

The upcoming week offers more to chew on, especially some fresh data from the epicenter of the economic and market woes: the housing sector. Analysts will be scouring February numbers on existing home sales on Monday and new home sales on Wednesday for any sign that home demand is stabilizing. The rate of decline does appear to be slowing, but some further weakness is expected.

The same will be true for measures of home prices on Tuesday. The Standard & Poor’s/Case-Shiller price index has shown no hint of stabilization. In fact, it has been falling at faster pace through December, and the January index will offer more evidence on the trend. Also, the Office of Federal Housing Enterprise Oversight (OFHEO) will begin publishing its price index on a monthly basis, starting with this week’s report for January. Up to now, the OFHEO index was only published quarterly.

Consumers will also be in the spotlight this week. Both the Conference Board and the University of Michigan report their indexes of consumer confidence, both of which have plummeted recently. Consumers continue to get hit from all sides, as jobs markets weaken, gasoline prices soar, and market turmoil persists. Upcoming readings seem sure to remain in the doldrums.

In addition, look for new numbers on personal income and consumer spending for February. Household outlays, after adjusting for inflation, are on their way to the weakest quarterly showing since the last recession, and February numbers will indicate just how weak. There's some danger that quarterly spending could actually fall, something that hasn’t happened in 16 years. With consumer demand waning, analysts will also be checking the February report on durable goods orders to see how business demand for capital goods is holding up.

Finally, look for a multitude of Fedspeak by a half-dozen Fed officials, including a Wednesday talk by Dallas Fed President Richard Fisher, who cast one of the two dissenting votes against the size of the Fed’s three-quarter-point rate cut on Mar. 18.

Here’s the weekly economic calendar, from Action Economics.

Top Economic Reports
Top Reports Date Time For Median Estimate Last Period
Existing Home Sales (Mln) Monday, March 24 10:00 a.m. February 4.85 4.89
Consumer Confidence Index Tuesday, March 25 10:00 a.m. March 75.0 75.0
Durable Goods Orders Wednesday, March 26 8:30 a.m. February 1.4% -5.1%
New Home Sales (Mln) Wednesday, March 26 10:00 a.m. February 0.580 0.588
Gross Domestic Product (Final) Thursday, March 27 8:30 a.m. Q4 0.6% 0.6%
GDP Chain Price Index (Final) Thursday, March 27 8:30 a.m. Q4 2.7% 2.7%
Personal Income Friday, March 28 8:30 a.m. February 0.3% 0.3%
Personal Consumption Expenditures Friday, March 28 8:30 a.m. February 0.2% 0.4%
Consumer Sentiment Index (Final) Friday, March 28 10:00 a.m. February 70.8 70.5
Other reports and events...
Reports Date Time For
EARNINGS: Tiffany & Co. Monday, March 24  
Walgreen Monday, March 24  
S&P Case Shiller Home Price Index Tuesday, March 25 10:00 a.m. January
OFHEO Home Price Index Tuesday, March 25 10:00 a.m. January
Richmond Fed Survey Tuesday, March 25 10:00 a.m. February
Johnson Redbook Weekly Store Sales Tuesday, March 25 8:55 a.m. Mar. 16-22
ICSC-UBS Store Sales Tuesday, March 25 7:45 a.m. Mar. 16-22
EARNINGS: Jabil Circuit Tuesday, March 25  
SPEECH: Chicago Fed President Evans Wednesday, March 26 12:00 p.m.
SPEECH: Dallas Fed President Fisher Wednesday, March 26 1:00 p.m.
Mortgage Applications Wednesday, March 26 7:00 a.m. Mar. 3-11
EARNINGS: Oracle Wednesday, March 26  
Paychex Wednesday, March 26  
Weekly Jobless Claims Thursday, March 27 8:30 a.m. Mar. 16-22
SPEECH: Minneapolis Fed President Stern Thursday, March 27 12:00 a.m.
SPEECH: Cleveland Fed President Pianalto Thursday, March 27 12:00 p.m.
SPEECH: Atlanta Fed President Lockhart Thursday, March 27 12:20 p.m.
EARNINGS: Apollo Group Thursday, March 27  
ConAgra Foods Thursday, March 27  
Lennar Corp. Thursday, March 27  
McCormick & Co. Thursday, March 27
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