Vital Signs: Soaking in Housing Woes
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 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|
|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|