More Fun Ahead this Week
By: Tim McPartland,
As interest rates continue a modest creep higher there remains plenty of excitement yet to come this week.
Starting on Wednesday we have the ADP Employment report. We realize this is mostly a balony report–but if markets pay attention then I guess we have to also. The consensus is 220,000 new jobs for February. Sounds pretty much like a Goldilocks number–not too hot and not too cold. Then at 10:30 EST we have the Petroleum Status Report. Last week inventories built by 7.7 million barrels and if the number tomorrow is anywhere near that amount we are likely to get a downward shove in the crude market. With storage capacity in the U.S. estimated to be full to the brim in 4-6 weeks we will finally experience a reduction in production because they will be filling swimming pools with crude oil soon if the build continues. Tomorrow we also have the Mortgage Bankers Purchase Applications release. We would expect plenty more softness in housing–there simply is no juice left in the housing market. We also have 3 Fed governors (or presidents) shooting their mouths off tomorrow–why anyone wants to hear the crap they say is beyond me–guess it is like cable tv–you have to fill the air time so you reach for any speaker you can get.
On Thursday we get first time jobless claims and chain store sales right away in the morning. Jobless claims is a number than is unguessable–up and down and only God knows the real numbers. Chain store sales likely will likely show nothing to get excited about–and with the never ending winter on the east coast could even be very soft. Nevermind–it doesn’t matter–there is always an excuse if numbers are soft. Factory orders will come mid morning and have been down for 5 months in a row–consensus is they will tick up a bit, but if they fall again they may halt the interest rate creep we have seen in the last week.
On Friday we get the monthly employment report. Consensus is 230,000. Likely that anything between 200,000 and 240,000 will be ignored. Anything above 250,000 could help send interest rates higher–forget that a large chunk of these would likely be low paying jobs.
So all in all there is potential for plenty of fireworks in the markets in all directions.
We are planning no action this week in portfolios–no use selling if there is nothing to buy. We resolve to be patient.