This week is a reverse of last week: Not a lot of international data, but an increase in domestic reports, although most of the releases are “second-tier” and are unlikely to have an effect on Fed policy going forward.
The highlight of the week is probably the Empire State Manufacturing and Philly Fed surveys Thursday. They are the first look at August economic data, and both surveys were leading indicators to the uptick in manufacturing activity nationally that we’ve seen over the past month. If they can keep positive momentum going, it’ll speak well for August economic data.
Retail sales are released Tuesday, and June’s sales numbers were one of the few disappointing economic reports we’ve had recently. That was furthered last week by some soft same-store sales reports and reduced earnings guidance from retailers. So, it’ll be important to see if the consumer bounced back in July. The consumer remains one of the areas of concern in the domestic economy, so the market will watch closely for any signs of a further pullback.
The latest round of housing data also kicks off Friday with housing starts, and as I said when recapping mortgage applications, it’ll be important for the market to see the housing data at least stay level from June or even tick a bit higher in July. Don’t underestimate how important housing is to the economy. If the housing data is disappointing over the next few weeks and shows the recovery may be slowing, that’s a reason to re-think levels of risk.
Internationally, China is quiet, and Europe is pretty slow too. EU industrial production (Tuesday) and flash GDP (Wednesday) are the highlights. But, barring some horrid number, neither should alter current sentiment toward the EU economy (which is that it’s stabilizing).