Fedspeak is on hold ahead of the following week's
FOMC meeting which puts the focus on Friday's GDP report. A 4.2 percent
growth rate is Econoday's call with consumer spending seen picking up
sharply to a 2.9 percent rate. Narrowing in the net export deficit is
seen as another major plus in data that will offer new talking points
for the trade dispute. The national activity index opens the week on
Monday, where housing may be a negative, followed later in the morning
by existing home sales which are not expected to show much momentum.
More housing data follow on Tuesday with the FHFA house price index,
which has turned flat, followed by new home sales on Wednesday which
have been the sector's key area of strength. Durable goods orders are
Thursday's highlight and a big rebound in aircraft orders is expected
to lift the headline sharply for a factory sector that, despite price
and supply dislocations, is approaching double-digit growth.
Monday
National Activity Index for June
Consensus Forecast: 0.23
Consensus Range: 0.10 to 0.40
A big jump in industrial production together with
strength in employment should offset trouble in the housing sector,
making for a plus 0.23 consensus in the national activity index for June, which would be up from minus 0.15 in May.
Existing Home Sales for June
Consensus Forecast, Annualized Rate: 5.450 million
Consensus Range: 5.350 to 5.520 million
Existing home sales have been soft
this Spring selling season, coming in below Econoday's consensus range
in April and May. But the number of homes on the market has been on the
rise which should help sales in June. But forecasters aren't calling
for much strength, at a consensus 5.450 million annualized rate in June
vs 5.430 million in May.
Tuesday
FHFA House Price Index for May
Consensus Forecast, Month-to-Month Change: 0.4%
Consensus Range: 0.1% to 0.5%
Home prices have been cooling along with sales and are part of the cracks appearing in the housing sector. The FHFA house price index has managed only very small gains the past two reports though a better gain, at 0.4 percent, is the consensus for May.
PMI Composite for July, Flash
Consensus Forecast: 56.3
Consensus Range: 54.3 to 56.5
PMI Manufacturing
Consensus Forecast: 54.9
Consensus Range: 54.7 to 55.0
PMI Services
Consensus Forecast: 56.4
Consensus Range: 54.2 to 56.8
Moderate-to-strong growth has been the signal from the PMIs with manufacturing reaccelerating a bit in late June. The flash July consensus for the PMI composite is 56.3 with PMI manufacturing seen at 54.9 and PMI services at 56.4.
Wednesday
New Home Sales for June
Consensus Forecast, Annualized Rate: 669,000
Consensus Range: 590,000 to 685,000
New home sales have been the backbone for what is otherwise a mixed housing sector. Econoday's consensus for June new home sales is 669,000 vs 689,000 in May, a month when sales got a boost from lower prices.
Thursday
Durable Goods Orders for June
Consensus Forecast, Month-to-Month Change: 3.2%
Consensus Range: 0.5% to 5.0%
Durable Goods Orders, Ex-Transportation
Consensus Forecast: 0.5%
Consensus Range: 0.0% to 0.8%
A pent-up surge in aircraft orders is expected to make for a big bounce higher in durable goods orders
where the consensus for June is a 3.2 percent gain vs May's 0.6
percent decline. But strength elsewhere is expected to be more limited
with the ex-transportation consensus at a 0.5 percent
gain. May's data included slowing in orders for steel and aluminum
which spiked in March and April following the imposition of import
tariffs.
International Trade In Goods for June
Consensus Forecast, Month-to-Month Change: -$67.2 billion
Consensus Range: -$69.2 to -$65.0 billion
The goods deficit is expected to
widen to a consensus $67.2 in June vs an unexpected low $64.8 billion
in May. June's report will update progress on second-quarter net
exports and offer the latest on the bilateral deficit with China.
Advance Wholesale Inventories for June
Consensus Forecast, Month-to-Month Change: 0.3%
Consensus Range: 0.3% to 0.4%
Wholesale inventories are expected to rise 0.3 percent in June vs 0.6 percent in May. Inventories have been low relative to sales.
Initial Jobless Claims for July 21 week
Consensus Forecast: 217,000
Consensus Range: 215,000 to 220,000
Initial claims are expected to
come in at 217,000 in the July 21 week vs 207,000 in the prior week
which was the lowest since December 1969. Other readings in this report
are also at or near historic lows and consistent with strong demand for
labor.
Friday
Real GDP: 2nd Quarter, 1st Estimate, Annualized Rate
Consensus Forecast: 4.2%
Consensus Range: 3.0% to 4.8%
Real Consumer Spending, Annualized Rate
Consensus Forecast: 2.9%
Consensus Range: 2.3% to 3.2%
GDP Price Index
Consensus Forecast: 2.2%
Consensus Range: 1.5% to 2.5%
The first estimate for second-quarter GDP is expected to come in at a very strong 4.2 percent annualized rate vs the first quarter's mediocre 2.0 percent. Consumer spending
is seen rising at a 2.9 percent rate vs the prior quarter's very soft
0.9 percent. A significant narrowing in the net export deficit and
another rise for business investment are also expected to be positives.
The GDP price index is seen at 2.2 percent, unchanged from the first quarter.
Consumer Sentiment Index, Preliminary July
Consensus Forecast: 97.2
Consensus Range: 97.1 to 98.5
The consumer sentiment index has
been easing back and not much of a rebound is expected for the
preliminary July reading, at a consensus 97.2 vs 97.1 in June.
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