Economic Calendar
U.S. markets will be closed for Memorial Day.
Durable Goods (Tues): Economists estimate orders fell 0.7% in April following March’s 2.6% jump. Nondefense capital goods orders excluding aircraft — a proxy for business investment — is estimated to have declined by 0.3%. “Boeing orders shifted lower in April following a very strong March,” noted Credit Suisse economists. “This should drive headline orders into negative territory. We expect a 0.5% gain in ex-trans, slower than March’s 2.1%, but still consistent with an improvement in 3-month momentum (see Exhibit 2). The investment components – core capital goods orders and shipments – should get plenty of focus, as equipment capex was a sour spot for the economy in Q1.”
S&P/Case-Shiller Home Price Index (Tues): Economists estimate prices climbed 0.7% month-over-month in March or 11.8% year-over-year. “Looking ahead, we expect home price appreciation to slow as valuations continued to get stretched,” said BofA Merrill Lynch economists.
Markit US Services PMI (Tues): This services index registered at 55.0 in April. “May manufacturing measures maintained momentum,” said UBS’s Kevin Cummins.
Consumer Confidence (Tues): Economists estimate the Conference Board’s index of sentiment climbed to 83.0 in May from 82.3 in April. “The preliminary reading of the University of Michigan consumer sentiment declined in early May,” noted Nomura economists. “However, higher equity prices and lower initial jobless claims this month suggest that consumers might be more optimistic in May.”
Richmond Fed Manufacturing Activity (Tues): Economists estimate this regional activity index slipped to 4 in May from 7 in April.
Dallas Fed Manufacturing Index (Tues): Economists estimate this regional activity index declined to 9.0 in May from 11.7 in April.
GDP (Thurs): Economists estimate Q1 GDP growth was revised down to -0.6% from an earlier estimate of 0.1%. Here’s Goldman Sachs’ Jan Hatzius: “The first-quarter disappointment has resonated among economists and market participants for two reasons. First, it brings to mind the 2011 precedent, and more broadly the repeated downside surprises on growth in recent years. Second, it comes in the wake of the debate around “secular stagnation” that was kicked off by the speech by Lawrence Summers at the November 2013 IMF research conference. If the US economy cannot accelerate to a clearly above-trend pace even after the end of the private and public sector retrenchment at a time when monetary policy and financial conditions still look very supportive, then it is certainly appropriate to ask whether the forces holding the economy back are deeper and more structural in nature. In that sense, it is really ‘showtime for the recovery’ ... “
Initial Jobless Claims (Thurs): Economists estimate claims fell to 320,000 from 326,000 last week. “Still, first filings over the last three months have averaged 320,000, providing little information about the direction of the labor market,” said Citi’s Peter D’Antonio. “In contrast, the story for beneficiaries has been unambiguously better. We forecast another drop in this figure, which would keep the insured rate at 2.0% for a fourth week. Since the beginning of the year, continuing claims have fallen by more than 200,000 and recent readings point to further improvement in the labor market ahead.”
Pending Home Sales (Thurs): Economists estimate pending sales climbed 1.0% in April. “We look for pending home sales, which track signed contracts on single-family homes, condos, and co-ops, to rise 2.0% m/m in April to 96.2,” said Barclays’ economists. “Factors in our forecast are MBA applications for purchase, which rose 4.7% on the month, and buyer traffic in the NAHB home index, which rose to 32 in April from 31 in March. Improvement in both inputs is likely driven by better weather, and suggests upward momentum.”
Personal Income And Spending (Fri): Economists estimate income climbed 0.3% and spending increased by 0.2% in April. “Personal spending surged 0.9% [in March], partially due to the implementation of the Affordable Care Act (ACA), which fueled health-related spending as enrollees piled into the exchanges,” noted Wells Fargo’s John Silvia. “The weather-related rebound and higher spending on healthcare likely are not sustainable.”
Chicago Purchasing Managers Index (Fri): Economists estimate this regional PMI fell to 60.0 in May from 63.0 in April. “April showed sharp increases in the employment, new orders, and production sub-components, and the Philadelphia Fed and Empire State indices also showed gains in May,” said Barclays’ economists. “Taken together, these factors suggest that the April rise was backed by solid underlying fundamentals and should favor a strong print in May.”
Univ. of Michigan Confidence (Fri): Economists estimate the final print of this sentiment index climbed to 82.8 in May from 81.8. “An improving labor market should contribute to improved financial conditions and expectations for consumers,” said BofA Merrill Lynch economists. “Businesses have pointed to increased sales and expectations for continued improvement in business conditions. Unfortunately, weak wage growth, increasing food and gas prices, and a declining saving rate may drag on consumers’ assessments of their respective financial situations. The slow-to-recover housing market is likely still weighing on consumers as well.”
