The Economy and Earnings in the Week Ahead
July 02, 2012

Week Ahead: Important Reports Due -- Friday's Jobs Report, Also Manufacturing and Auto Sales.

by Ian Harvey

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The Key Events in the Week Ahead

July 02, 2012

Introduction

The week ahead will have its own dramatic moments -- there is a series of events that could be the key for markets -- some traders may stay close to their desks -- even as U.S. markets take a day-long break for the July 4 holiday. They will also close early on Tuesday.

Everything will build up to the jobs-and-unemployment report on Friday, which most economists believe won't be much to get excited about. There's the Institute for Supply Management's June report on manufacturing on Monday and auto manufacturers' reports on sales for the month on Tuesday.

Earnings in the Week Ahead

While there are few earnings reports that can really move markets on the schedule, there is still Europe to worry about.

CLICK HERE…..for a list of companies reporting in the week ahead.

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Economy in the Week Ahead

One of the foremost events in the week ahead is the jobs report for June, due for release on Friday, and it is expected to again show tepid employment growth. But it is being watched closely since jobs are considered a major trigger for further Fed easing. There is also a slew of other data, such as ISM manufacturing data and auto and chain store sales, which could reveal much about the current state of the consumer.

Here is a brief list of some of the key events in the week ahead.

All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Monday

Earnings: Acuity Brands (AYI)

Economy:

• 10.00 am ISM manufacturing

• 10.00 am Construction spending

• 1.00 pm San Francisco Fed President John Williams on a panel on monetary policy

Tuesday

Earnings: There are no earnings reports of note on the day's docket.

Economy:

• Monthly auto sales

• 10.00 am Factory orders

• 1.00 pm Stock market closes early for holiday

Wednesday

Independence Day Holiday

Thursday

Earnings: International Speedway (ISCA) and Xyratex (XRTX)

Economy:

• Monthly chain store sales

• 7.30 am Challenger job cut report

• 7.45 am European Central Bank rates decision

• 8.15 am ADP employment

• 8.30 am Initial claims

• 10.00 am ISM nonmanufacturing

Friday

Earnings: There are no earnings reports of note on the day's docket.

Economy:

• 8.30 am Employment report

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Economic Reports to Watch in the Week Ahead

1. The ISM Manufacturing report -- due Monday -- look for a slide to a reading of about 50. That will reflect the cool-down that hit the economy this spring.

2. Construction spending, from the Commerce Department -- due Monday -- expect a small gain, largely because of apartment construction. Government spending will fall for the sixth straight month.

3. Auto and truck sales -- due Tuesday -- the expectation is for continued strength, although sales haven't been as strong as earlier this year. The consensus on auto sales is a seasonally adjusted annual rate of 13.9 million units, up slightly from May. Watch for a negative surprise. There have been anecdotal reports of slowing sales since Memorial Day. Truck sales may decline because of slowing in the oil patch..

4. ISM Non-Manufacturing Index -- due Thursday -- the last index reading came in at 53.7. Look for something closer to 53. Europe is the problem.

5. Jobless claims -- due Thursday -- look for 385,000 new claims for the week ended June 30, the same as the week of June 23.

6. Payrolls and unemployment, from the Labor Department -- due Friday -- The consensus estimate is for a gain of 90,000 jobs in June, but there are many people who see 75,000 or less. Private-sector growth is stalling; public sector jobs are slumping. The unemployment rate should hold at 8.2%.

Overseas Events that may Influence the Market

The European Central Bank holds a much-anticipated rates meeting Thursday and some traders expect it to cut interest rates. The ECB meeting follows a surprisingly eventful European leader’s summit which resulted in a plan to forge a central banking authority and to authorize the euro-zone rescue fund to directly aid banks. There had been very low expectations for the meeting, and the results fired up a major risk rally Friday in stocks, commodities and the euro – therefore, what may be the expectation from this meeting?

Other Important Articles Relating to the Week Ahead

1. The Week Ahead in the Stock Market – July 02, 2012

2. The Major ETFs in the Week Ahead – July 02, 2012

3. The Past Week Stock Market Results – July 02, 2012

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