Photo: Wikimedia Commons
It probably wouldn’t be a horrible idea to go to sleep now, and rest up for the week ahead, which will be huge.Let’s break it up into categories.
The Debt Ceiling
If you believe that the August 2 deadline is a real thing, then this week is huge, because there really isn’t that much time left to hash out an agreement, have it “scored” by the Congressional Budget Office, and then go through the requisite first failure in Congress/market dive (Joke! We hope!). There has to be progress this week, as Geithner himself said today on the Sunday shows.
The official start of earnings season is traditionally when aluminium company Alcoa reports earnings, and that’s tomorrow. The week starting July 18 is the huge week, but this week should still be pretty busy, with a lot of banks reporting, as well as Google on the July 14.
Up until last Friday, it looked like the US economy was starting to put together a run of good data. Then the jobs report happened. The relative lack of selling on Friday might have indicated a sense that the report was an aberration. But if it was an aberration, then the data this would should continue to be pleasing. So what are some notables? The May trade deficit (key to Q2 GDP) is out on Tuesday (analysts expect -$44 billion). Then on Wednesday the latest FOMC minutes come out. Thursday brings retail sales (huge!) and PPI, and then on Friday we get CPI, Empire Manufacturing for July, capacity utilization for June, and Michigan Consumer Sentiment. That should be a monster day.
Also econ related: On Wednesday July 13 Bernanke gives his Humphrey-Hawkins testimony to Congress. Should be fun given all the crosswinds.
There are fresh meetings of top European leaders, and obviously they have a ton on their plate from Greece (the French rollover plan is dead, and the latest word is that leaders might tolerate some kind of “selective default”). Then of course, there’s Italy. It will be a good week if it doesn’t become a major new headache for EU leaders.
For background: See this guide to how Italy became such a wreck >