Economic Focus in Holiday-Shortened Week

Announcements out of the Euro-zone summit have significantly brought down concerns about that region, at least for now. (See here for a focused discussion.)

Attention now shifts to the domestic scene, where the holiday-shortened week is chock full of material economic reports, with the June non-farm payroll report giving us a good sense of developments in the labor market. Other key reports include the manufacturing and non-manufacturing ISM surveys.

We don’t have much on the earnings front next week, with only a handful of lesser-known companies reporting results. The reporting cycle gets fully underway the following week when Alcoa (AA) comes out with its quarterly results. Given the overall low expectations for the second quarter, we will likely see a replay of the first quarter results.

Monday - 7/2

• We will get the June Manufacturing ISM report after the market opens, with expectations of the index declining to 52.5 from May’s 53.5 level. The Chicago PMI report, which historically has had a strong correlation with the national manufacturing ISM reading, came roughly in-line with expectations on Friday.
• We also have the May Construction Spending report coming out at the same time as the ISM report. The expectation is for construction spending to come down from April’s 0.3% growth pace.
• The only notable earnings release this morning is from lighting solutions provider Acuity Brands (AYI) before the open.

Tuesday - 7/3

• We will get the May Factory Orders report after the market opens, with expectations of 0.1% growth following 0.6% drop in March.
• We will also be getting the June motor vehicle sales numbers throughout the day, with the annualized sales pace in June expected to increase to 14 million from May’s 13.8 million pace.
• The only notable earnings release this day is from JDA Software (JDAS), after the close.

Wednesday - 7/4

• July 4th holiday.

Thursday - 7/5

• We have a busy day of economic releases, with the June ADP (ADP) report and the weekly Jobless Claims data coming out in the morning, while the non-manufacturing ISM report coming out after the market opens.
• The ADP report is the last major release before Friday’s jobs report and will set the tone for market expectations for the Friday number.
• The Non-Manufacturing ISM report is expected to pullback modestly from May’s 53.7 level.
• International Speedway (ISCA), the motorsports promoter, will report results in the morning, while U.K.-based tech company Xyratex (XRTX) will report after the close.

Friday - 7/6

• The June non-farm payroll report is expected to bring in 100K jobs following the 69K jobs tally in May. The unemployment rate is expected to remain unchanged at 8.2%.
• Following three months of disappointing jobs reports, expectations have come down significantly. But it will be interesting to see if even these lowered expectations will be met on Friday.

Note: There are no earnings releases aside from ones mentioned here already.