INSIGHTS
AUG
27
WEEK AHEAD
Looking forward to this week? All the excitement surrounding Jackson Hole is understandable. In a month where little has happened, this qualifies as a huge deal. You have all the key players in town for the Kansas City Federal Reserve Bank’s Symposium.
The Chairman of the Fed will be a highlighted speaker as everyone expects him to give a better indication of what the Fed is going to do at their September meeting.
You also have ECB President Mario Draghi there and his speech will also stir the pot a little. However…I will say it now, if you are waiting for any further enlightenment from the Fed Chairman or from Mr. Draghi, don’t hold your breath.
While we all anticipate something substantial coming out of the September Fed meetings, don’t expect anything from this particular get together. The past meetings in Jackson Hole were more a social event than any thing else. Chairman Bernanke is a master of keeping people guessing. There are economists who have spent their whole careers deciphering the words of Fed Chairman and they will all agree that, Ben Bernanke is a master at speaking for hours and giving away nothing.
Expect President Draghi to give some hope to all those that believe that there is still going to be an ECB in 2013. He is guilty of being the most pessimistic optimist (or is it the most optimistic pessimist) in the World. His speeches have at times been supportive of the European Union’s efforts to get its financial house in order and also painted a very dark picture of the difficulties several members face going forward.
The truth probably lies somewhere in between.
The rest of the week has some very interesting data points and also we have the Republican National Convention.
Conventions used to be fun affairs with drunk delegates voting for Snoopy, Doonesbury, Homer T Simpson and so on. They used to be carried gavel to gavel and Chet Huntley used to give you a run down of all the inner workings of maneuvers and coups that were happening behind closed doors. Like everything else, it has given way to reality TV and NCIS reruns. Although we have gone to a system that anoints the Presidential candidate way before the Convention even starts, I long for the day when it was all decided on that Convention floor.
Some highlights of the Convention will be Governor Chris Christie’s keynote address. This is always an interesting speech. Having Governor Christie give it, just makes it that much more interesting.
Getting back to the business calendar, this week has a couple of key numbers coming out. I will have to say that the GDP numbers that are coming out on Wednesday are the most important considering the events that we will be watching all week.
A strong GDP number (highly unlikely) and the Republicans will have to scramble and adjust every speech they are going to make Wednesday and Thursday night. It potentially could be a disaster for them. Don’t count on it. I think the numbers will come in right in line with consensus estimates of 1.7% growth. Although it is a lagging indicator, its still widely followed and very influential.
There also some pretty good indicators coming out. Case Shiller Home Price Index and Consumer Confidence index early on could help continue positive momentum in the market.
Weekly jobless claims on Thursday are always an important gauge of economic health. I still feel it is the truest and most accurate number we see each week. It has the shortest lag time of any major piece of data we get. High unemployment has been with us since the Bush administration and these numbers represent the biggest roadblock to a sustained recovery.
The last week of the summer tends to be the slowest week as far as trading goes but with all the items I have mentioned on the table it should be one of the most interesting of the year.
The Chairman of the Fed will be a highlighted speaker as everyone expects him to give a better indication of what the Fed is going to do at their September meeting.
You also have ECB President Mario Draghi there and his speech will also stir the pot a little. However…I will say it now, if you are waiting for any further enlightenment from the Fed Chairman or from Mr. Draghi, don’t hold your breath.
While we all anticipate something substantial coming out of the September Fed meetings, don’t expect anything from this particular get together. The past meetings in Jackson Hole were more a social event than any thing else. Chairman Bernanke is a master of keeping people guessing. There are economists who have spent their whole careers deciphering the words of Fed Chairman and they will all agree that, Ben Bernanke is a master at speaking for hours and giving away nothing.
Expect President Draghi to give some hope to all those that believe that there is still going to be an ECB in 2013. He is guilty of being the most pessimistic optimist (or is it the most optimistic pessimist) in the World. His speeches have at times been supportive of the European Union’s efforts to get its financial house in order and also painted a very dark picture of the difficulties several members face going forward.
The truth probably lies somewhere in between.
The rest of the week has some very interesting data points and also we have the Republican National Convention.
Conventions used to be fun affairs with drunk delegates voting for Snoopy, Doonesbury, Homer T Simpson and so on. They used to be carried gavel to gavel and Chet Huntley used to give you a run down of all the inner workings of maneuvers and coups that were happening behind closed doors. Like everything else, it has given way to reality TV and NCIS reruns. Although we have gone to a system that anoints the Presidential candidate way before the Convention even starts, I long for the day when it was all decided on that Convention floor.
Some highlights of the Convention will be Governor Chris Christie’s keynote address. This is always an interesting speech. Having Governor Christie give it, just makes it that much more interesting.
Getting back to the business calendar, this week has a couple of key numbers coming out. I will have to say that the GDP numbers that are coming out on Wednesday are the most important considering the events that we will be watching all week.
A strong GDP number (highly unlikely) and the Republicans will have to scramble and adjust every speech they are going to make Wednesday and Thursday night. It potentially could be a disaster for them. Don’t count on it. I think the numbers will come in right in line with consensus estimates of 1.7% growth. Although it is a lagging indicator, its still widely followed and very influential.
There also some pretty good indicators coming out. Case Shiller Home Price Index and Consumer Confidence index early on could help continue positive momentum in the market.
Weekly jobless claims on Thursday are always an important gauge of economic health. I still feel it is the truest and most accurate number we see each week. It has the shortest lag time of any major piece of data we get. High unemployment has been with us since the Bush administration and these numbers represent the biggest roadblock to a sustained recovery.
The last week of the summer tends to be the slowest week as far as trading goes but with all the items I have mentioned on the table it should be one of the most interesting of the year.