WHAT’S ON TAP?

One third of the S&P 500 reports earnings this week, but the vast majority of the big market moving names have already reported.  The week will be dominated by the FOMC decision on Wednesday and what is expected to be another strong GDP report on Friday.  Let’s take a look at what’s on tap (in conjunction with Econoday):

Monday - Caterpillar’s (CAT) earnings set the tone for the beginning of the week.

Tuesday  - UPS and Ford (F)  report earnings.

FOMC Meeting Begins

ICSC-Goldman Store Sales 7:45 AM ET

Redbook t8:55 AM ET

S&P Case-Shiller HPI 9:00 AM ET

Consumer Confidence 10:00 AM ET

The Conference Board’s consumer confidence index in March edged up with a reading of 52.5 from a severely depressed February figure of 46.4. The biggest positive in the report was a 7.3-point gain for the expectations component to 70.2. Importantly, the latest report showed some thawing in the labor market. The percent of survey participants finding jobs currently hard to get fell to 45.8, down 1.5 percentage points for the best reading since August.   Markets will probably react more strongly than usual with this month’s release given the unexpected drop in the mid-April consumer sentiment index.

Consumer confidence Consensus Forecast for April 10: 53.5

State Street Investor Confidence Index 10:00 AM ET

Wednesday - No market moving earnings.

FOMC Meeting Announcement 2:15 PM ET

The FOMC announcement for the April 27-28 FOMC policy meeting is expected to leave the fed funds target rate unchanged at a range of zero to 0.25 percent.  Traders, however, will be focusing on statement language for how long rates are expected to remain low.  Will the “extended period” language be modified?

FOMC Consensus Forecast for 4/28/10 policy vote on fed funds target range: unchanged at a range of zero to 0.25 percent

Thursday - Exxon (XOM) and Proctor & Gamble (PG) report before the bell.

Jobless Claims 8:30 AM ET

Initial jobless claims fell back to trend in the April 17 week, coming in at 456,000 and reversing two weeks of administrative delays that swelled claims to as high as 480,000 in the prior week. The 456,000 level compares with 445,000 in the March 20 period, offering a flat comparison at best to gauge monthly payroll change.  Analysts are hoping for a continuation of gradual improvement.

Jobless Claims Consensus Forecast for 4/24/10: 447,000

Friday - Chevron (CVX) reports before the bell.

GDP 8:30 AM ET

GDP growth for the fourth quarter in the third estimate was revised downward to an annualized 5.6 percent from the prior estimate of 5.9 percent. Both final sales and inventory investment were revised down.  Final sales grew a meager 1.7 percent, following a 1.9 percent rise in the third quarter.  Growth was largely in a slower destocking of inventories.  Inflation was barely noticeable as the GDP price index was revised up to a fourth quarter 0.5 percent gain, compared to the prior estimate of an annualized 0.4 percent.  For the advance estimate of first quarter GDP, analysts are forecasting more moderate growth but expect a stronger final sales number. Trading likely will focus on that demand measure.

Real GDP Consensus Forecast for advance estimate Q1 10: +3.4 percent annual rate

Employment Cost Index 8:30 AM ET

The employment cost index for civilian workers edged higher in the fourth quarter to a quarterly (not annualized) 0.5 percent from the third quarter’s 0.4 percent rise. But the year-on-year rate was unchanged in the fourth quarter, at a record low 1.5 percent.  The modest upward pressure in the fourth quarter was tied to government employment as total compensation for state & local government jumped 0.5 percent from no change in the third quarter.

Employment cost index Consensus Forecast for Q1 10: +0.4 percent simple quarterly rate

Chicago PMI 9:45 AM ET

The Chicago PMI for March came in at a very strong 58.8 but did slow slightly from robust 60-plus readings in February and January. But the March number remains well above the break-even level of 50 and is led by a sixth straight plus-60 reading in the leading component of new orders which came in at 61.8. Given the strong new orders figure, the April Chicago PMI likely will be quite healthy.

Chicago PMI Consensus Forecast for April 10: 60.0

Consumer Sentiment 9:55 AM ET

The Reuter’s/University of Michigan’s Consumer sentiment index for the mid-April reading unexpectedly fell to 69.5 from 73.6 in March.   Deterioration was worse in the expectations index (the leading component), which fell 5.6 points to 62.3 and a level last seen mid-year last year when payrolls were still declining severely. Current conditions also fell, down 1.7 points to 80.7. Traders are betting that the dip in the headline index was temporary, given how strong consumer spending has been lately.  A recent decline in initial jobless claims and continued good news from the equity markets may have helped to lift consumer spirits.

Consumer sentiment Consensus Forecast for final April 10: 71.0

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