| |
Key Data Releases for Week of 24 April
21 Apr 06
Tuesday, 25 April – EXISTING HOME SALES (March) | Global Insight: 6.63M | | Consensus: 6.70M | | Last Actual: 6.91M (February) |
What To Look For After an early year weather-related rebound in the month of February we are expecting sales decline in March to 6.63 million (annualized).
Implications Global Insight continues to project a cooling off in the home sales market as mortgage rates have climbed substantially higher in the first three and a half months of 2006. Ultimately, this will contribute to a slowdown in consumer spending in the second quarter, and second half of 2006.
Wednesday, 26 April – DURABLE GOODS ORDERS (March) | Global Insight: 2.1% | | Consensus: 1.6% | | Last Actual: 2.7% (February) |
What To Look For - Orders should advance 2.1% in March.
- Aircraft orders are expected to rebound.
- Capital goods excluding aircraft should also report a solid month.
- Defense orders are expected to pull back in March after a huge surge in February.
- Motor vehicles should also see a positive month in March.
Implications The manufacturing sector continues to steam-roll ahead, driven by lean inventories and strong business investment trends. After a strong first quarter, the stage is set for solid growth in the second quarter.
Wednesday, 26 April – NEW HOME SALES (March) | Global Insight: 1.123M | | Consensus: 1.106M | | Last Actual: 1.080M (February) |
What To Look For - New home sales are expected to rebound -- sales plunged 10.5% in February, the largest percentage drop since February 1995.
- The anomalous February drop was mostly a story about the West, where sales plunged 29.4%. We suspect that sampling error accounts for part of February's drop in the West, and that sales will partly rebound strongly enough in that region to push national sales up to 1.123 million.
Implications Notwithstanding the expected rebound in March, new home sales are on a downward trend for 2006 overall.
Friday, 28 April – REAL GDP (Q1, Advance)
| Global Insight: 4.9% | | Consensus: 4.9% | | Last Actual: 1.7% (Q4, Final) |
What To Look For - Real GDP growth should bounce back to 4.9% in the first quarter, confirming that the weak 1.7% rate in the fourth quarter of 2005 was an aberration.
- The key swing factor is consumer spending, which should advance at a rate above 5% after increasing less than 1% in the fourth quarter.
Implications The economy starts the second quarter on very good footings in terms of consumer and investment demand, and corporate earnings momentum. Looking forward, however, consumer spending will face increasing headwinds from a sharp spike in gasoline prices, higher borrowing costs and substantial cooling in the housing market.
Friday, 28 April – U. MICHIGAN CONSUMER SENTIMENT (April - Final) | Global Insight: 88.6 | | Consensus: 89.0 | | Last Actual: 89.2 (April - Preliminary) |
What To Look For - Both the Conference Board and University of Michigan indexes of consumer confidence/sentiment are expected to edge downward in April in response to the surge in gasoline prices.
- Although the job market remains healthy, the recent spike in crude oil prices is raising concerns that inflation will erode income gains.
Implications Consumer sentiment is expected to get knocked down by the recent spike in gasoline prices, even though employment prospects still remain positive. The persistence of crude oil prices in excess of $70/barrel suggests that the drag from upward pressure on gasoline prices is going to get worse before it gets better. As a result, second quarter consumption growth is susceptible to downside risk.
|
|
|
