The Business Week Ahead

Week of November 20 to November 24

Wednesday will be the focus of Thanksgiving week, led off by durable goods and including FOMC minutes. Durable goods have been pivoting higher and another gain is expected for the October report while inflation, or rather its absence, will be a key topic in the minutes. The week opens on Monday with the index of leading economic indicators where outsized strength is the call and includes existing home sales on Tuesday where strength is also the call. Fedspeak will not be a feature of the week as no speakers are scheduled.

Monday

Index of Leading Economic Indicators for October

Consensus Forecast, Month-to-Month Change: 0.6%

Consensus Range: 0.3% to 1.0%

Hurricane factors including higher jobless claims and a shorter workweek pulled down the index of leading economic indicators by 0.2 percent in September. But claims have since fallen back while the workweek has climbed, these together with a jump in building permits point to strength for October's LEI. Forecasters see the LEI rising 0.6 percent.

Tuesday

National Activity Index for October

Consensus Forecast: 0.20

Consensus Range: 0.05 to 0.25

The big jump in both industrial production and payroll growth along with the rise for building permits will be key positives for the national activity index where Econoday's consensus is plus 0.20 vs September's 0.17 rise. This index has been soft, underperforming what has been a solid year for economic growth.

Existing Home Sales for October

Consensus Forecast, Annualized Rate: 5.425 million

Consensus Range: 5.320 to 5.550 million

Existing home sales have been modestly positive and rose 0.7 percent in September to a 5.390 million annualized rate. Hurricane effects have been hard to assess with Florida a negative for September but the Houston area turning around quickly and proving to be a positive. Forecasters see October's results showing another month of solid growth to 5.425 million.

Wednesday

Durable Goods Orders for October

Consensus Forecast, Month-to-Month Change: 0.5%

Consensus Range: -0.5% to 1.6%

Durable Goods Orders, Ex-Transportation

Consensus Forecast: 0.5%

Consensus Range: 0.2% to 0.7%

Durable Goods Orders, Core Capital Goods (Nondefense Ex-Aircraft)

Consensus Forecast: 0.6%

Consensus Range: 0.5% to 0.7%

Durable goods orders had been mixed this year but broke through to the upside in August and September with respective monthly jumps of 2.2 and 2.0 percent. Aircraft orders have been on the rise as have capital goods orders, the latter pointing to extending gains for business investment. Econoday's consensus for durable goods orders is a 0.5 percent gain with ex-transportation also seen up 0.5 percent. Core capital goods orders are expected to rise 0.6 percent. These are all very healthy rates of growth.

Initial Jobless Claims for November 18 week

Consensus Forecast: 240,000

Consensus Range: 238,000 to 240,000

Initial claims are expected to come in at 240,000 in the November 18 week vs 249,000 in the November 11 week. Claims have been elevated in hurricane-hit Puerto Rico but did ease in the prior week.

Consumer Sentiment Index, Preliminary November

Consensus Forecast: 97.9

Consensus Range: 96.2 to 100.0

The consumer sentiment index edged back in the preliminary November report to a 97.8 level that remains historically very high. Inflation expectations improved in the report as expectations for wage growth hit an expansion high. Econoday's consensus for preliminary November is for little change, at 97.9.

FOMC Minutes

Covering the October 31, November 1 Meeting

The FOMC left rates unchanged at their last meeting though members did upgrade economic activity from moderate to solid. Strength was the description for both the labor market and business investment with household spending described as moderate. Inflation, outside of a post-hurricane spike in gasoline, was still described as soft. Any comments on wage growth would be closely watched as would an early assessment of balance-sheet sheet unwinding.

Friday

PMI Composite for November, Flash

Consensus Forecast: 55.4

Consensus Range: 55.1 to 55.5

PMI Manufacturing for November, Flash

Consensus Forecast: 54.6

Consensus Range: 54.1 to 55.0

PMI Services for November, Flash

Consensus Forecast: 55.4

Consensus Range: 55.2 to 55.6

Markit's set of U.S. indicators showed strength in October to easily top Econoday's forecasts. Manufacturing jumped to an 8-year high while services held steady and strong. The consensus for November is calling for another solid showing, at 55.4 for the composite, 54.6 for manufacturing, and 55.4 for services.