Weekly Economic Indicators: Home Improvement | Exchanges

BOCA RATON, FL - SEPTEMBER 26: Construction workers, Louis Delgado (L) and Tony Rodriguez work on building a Toll Brothers Inc. home on September 26, 2012 in Boca Raton, Florida.? (Image credit: Getty Images via @daylife)

The economic release schedule for the week of October 15th? is as follows:

• Monday:? Retail Sales, Empire State Manufacturing Survey, Business Inventories, William Dudley, Jeffrey Lacker, and James Bullard speaks
• Tuesday:? Consumer Price Index, Treasury International Capital, Industrial Production, Housing Market Index, and John Williams speaks
• Wednesday:? MBA Purchase Applications and Housing Starts
• Thursday: Weekly Jobless Claims, Philadelphia Fed Survey, Leading Indicators, and Fed Balance Sheet
• Friday:? Existing Home Sales

This week I spoke with Gordon Charlop Ph.D., Managing Director, Rosenblatt Securities, and frequent CNBC commentator, about what he will be watching.

Overall Market

Charlop believes the market will retrace some of the highs, and then trend higher for the remainder of the year, especially when the uncertainty of the elections is behind us. He notes that overall individual investors are getting into the equity markets, although many are using ETP?s. We are in a performance squeeze and there is no evidence that we will break the floor of the near term trading range. Further, corporate issues have been well received, so companies will be able to use this capital to support their own stocks with buybacks.? hus, 3rd quarter earnings that are below expectations may not result in huge selloffs.? He is not expecting higher gas prices, the European sovereign debt crisis, or even the IMF lowering global growth to drag the equity markets down.

3rd Quarter Earnings Season

Charlop believes companies will be helped by lowered guidance, as expectations are currently below analysts? estimates.? He predicts financial and technology stocks will be the big winners. The data suggests that based on company outflows for taxes, it is unlikely that there will be earning surprises to the downside. Also, credit flows are improving better than forecasted. ?Better performing companies will do better, and laggards will be laggards.?

Retail Sales

With Black Friday and the Christmas holiday shopping season upon us, Charlop is expecting the retail season to shape up better than anticipated. It will not be spectacular, but people will be shopping. The only hurdle could be crude oil prices, which have the potential to put a dent in the season, both from a consumer shopping side and retail end. He is starting to see some improvements in the economy, which he predicts will translate to the retailers.? "It feels like when President, Bill Clinton, took office in his first term, the economy is beginning to pick up, although we are not out of the woods yet."

Housing Data

This week there is a slew of housing related data coming out, including housing market index, housing starts, existing home sales, and MBA purchase applications. Charlop thinks the recent string of better than expected housing data is indicative of an improving economy. However, he feels housing data is regional, and in pockets not as strong, while some areas like New York, Miami, Atlanta, and Washington are starting to heat up. Foreign buyers have entered the Miami market and absorbed the excess inventory of homes.? "The population?s habit to be in urban centers is becoming more desirable.?? He also said the over built areas will catch up eventually.

Presidential Elections

Charlop said he is proud to be an American, after watching the first Presidential debates, we have two very intelligent and articulate candidates running for President. He agrees with Jim Lehrer to let Presidential candidate Mitt Romney and President Barack Obama go at it and have a meaningful dialogue. He added we take it for granted as Americans, as this could not have been possible in some countries around the world. Charlop is looking forward to the remaining debates. He is not sure President Obama can erase the first impression created by Mitt Romney. He said the real question is whether Romney can curtail his image, and convince his party to agree with him.

Buzz on the Trading Floor

Markets will trend higher and investors continue to sit on the sidelines waiting for a dip, which might never come - all of which leaves us with lower volumes. This could be a situation of ?reverse capitulation.? We are drifting higher fairly well, driven by decent corporate news and corporate buybacks.? The trading floor seems to be reasonably calm, versus markets in the past, anticipating uncertainty of a bumpy road ahead. The main concern is that politicians are not taking the high ground, and acting in the best interest of the country.? We need revenue generation and spending cuts to avoid the fiscal cliff facing the country.? Politicians need to put their ideology aside and stop acting in their own interest.? "We can?t slash and burn without? any revenue generation, never say never.?

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Source: http://exchanges.nyx.com/parasnand-madho/weekly-economic-indicators-home-improvement

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