The October 24 week will initially focus on the summits in Europe and that may continue to be the theme, given few distractions from the US economic data.
Among the expected reports, there are only a few that are likely to register strongly as markets await the events of the October 31 week which includes the quarterly refunding announcement, the October employment report, and the update to the Fed's quarterly economic forecast and the Chairman's post-meeting press briefing.
The most interesting piece of US data in the week could well be the preliminary estimate of third quarter GDP on Thursday. Stronger than expected results for retail sales and a hint that net exports are lower suggest that activity in the third quarter may be less soft than previously thought.
Data on personal income and spending in October at on Friday may get a little boost from transfer payments as post-disaster insurance checks are issued. However, wages and salaries are going to see only modest gains, at best. Consumer spending may look a bit stronger due to decent sales of some big-ticket items like motor vehicles. The PCE price deflator should fall in line with the change in the CPI, showing some mild gains.
Data for durable goods orders in October on Wednesday will probably reflect the downturn in orders for civilian aircraft in the month. However, new orders for motor vehicles may offset some of that the decline, and there may be some modest demand from rebuilding efforts after the severe weather impacts along the East Coast back in late August and early September.
The Richmond Fed will release its manufacturing survey for October on Tuesday, and the Kansas City Fed's survey of manufacturing is on Thursday. The indexes from the New York and Philadelphia outlooks gave to divergent views, with the Empire State general activity index barely budging higher at -8.4, while the Philadelphia measure jumped over 26 points to a positive 8.7. We think that the Richmond survey is more likely to follow the lead of the Philadelphia report and could turn positive again in October, and that Kansas City's index has been steadily positive for some time and will continue so.
The final monthly measures of consumer confidence will be reported on Tuesday with the Conference Board's Consumer Confidence Index, and on Friday with the Reuters/University of Michigan Consumer Sentiment Index.
So far for October,...Read more
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