After a sobering week to start the second quarter that saw the Dow Jones Industrial Average finish the week down 13.29 points, the S&P 500 fade by 15.91 points and the Nasdaq carve away 63.66 point, investors will be looking to the unofficial launch of earnings season this week and limited economic data to provide the markets some direction. Economic data with market moving potential will include:
Federal Open Market Committee Minutes – The minutes from the FOMC meeting three weeks earlier will be delivered at 2 PM ET. These meetings have grown in importance as investors and economists look to glean any information regarding quantitative easing policy of the Federal Reserve. The open-ended program that entails the fed buying $85 billion per month in treasuries and mortgage-backed securities has helped buoy the markets to historic highs. The feeble jobs data presented last week by the Labor Department showing that hiring grinding to a halt in March as more people left the work force has reinforced the idea that the Fed will maintain its monetary easing practices far into the foreseeable future without additional information supporting the nation’s economy is growing much stronger.
Initial Jobless Claims for the Week Ended April 6 – Last week, the Labor Department surprised by saying that first time filings for jobless benefits for the week ended March 30 spiked more than expected. Claims rose by 28,000 to 385,000 for the week, topping economist predictions of a decline to 345,000 from the week prior’s unrevised 357,000 level. The four-week moving average, a less volatile gauge of the labor market, increased by 11,250 to 354,250. In this week’s report, economists are calling for a decrease in claims to 364,000. With the Labor Department reporting that the U.S. only created a paltry 88,000 new jobs in March, investors will be paying close attention to the weekly reports on new claims as a barometer of what may happen with the unemployment rate in April.
Retail Sales for March – Last month, the Commerce Department reported that retail sales jumped 1.1 percent in February, marking the biggest climb in five months and signaling that higher taxes didn’t keep consumers from spending. The figure more than doubled economist predictions of a 0.5 percent rise. So-called "core" retail sales - a measure that excludes autos, gas and building materials - climbed 0.4 percent. Economists are expecting much for March, predicting a flat month or even a mild decline for total sales and an increase of 0.3 percent in core sales.
Producer Price Index for March – A surge in gasoline prices in February drove the PPI up by 0.7 percent, following a 0.2 percent decline in January. Across 12 months, the PPI was up 1.7 percent. "Core" PPI, which excludes the volatile food and energy sectors, rose 0.2 percent, in line with expectations. For March, economists are expecting a 0.3 percent contraction in the PPI. The Core PPI is expected to increase by 0.2 percent.
To a lesser extent on Friday, investors will be looking for the first estimate of the Reuters/University of Michigan Consumer Sentiment Index for April. In March, the index was volatile, swinging upward about 7 points in the last two weeks of the month for a final reading of 78.6. Economists are expecting only a modest change upward to about 79.1 to start April.
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