Fed meeting and retail sales on tap
This week, you can push aside European debt worries and instead focus on the Federal Reserve's last policy meeting of the year. The pace of recovery will be the main topic, though Fed-watchers will parse the accompanying statement to see if Bernanke & Co. drop any hints about QE3 as a means to nudge the moribund housing market and goose the economy.
After the Federal Open Market Committee reports on retail sales, manufacturing and inflation should provide a better picture of U.S. growth. Don't tell too many people, but recent economic data has been better than expected. While growth is not brisk, it sure is better than the alternative: Contraction.
It should be a relatively light week in Europe, until European Central Bank President Mario Draghi delivers a speech on Friday. After the announcement of the European fiscal pact among 23 of the 27 EU nations, Draghi said it was a "very good outcome." (For more on the agreement, see "EU RIP? Europe deal fractures union, raises stocks"). Economists are eager to learn whether the ECB will step up its support of indebted Eurozone countries and, if so, under what form the assistance will come.
For their part, investors were temporarily pleased with the outcome of the summit and pushed up stocks for the second consecutive week.
-- DJIA: 12,184, up 1.4% on week, up 5.2% YTD (up 8.5% in two weeks, for best two-week percent performance since July 24, 2009)
-- S&P 500: 1255, up 0.9% on week, down 0.2% YTD (up 8.3% in two weeks)
-- NASDAQ: 2646, up 0.8% on week, down 0.2% YTD (8.4% over past two weeks)
-- January Crude Oil: $99.41, down 1.5% on week
-- February Gold: $1,716.80, down 2% on the week
-- AAA National Average Price for Gallon of Regular Gas: $3.29
-- Total bank failures for 2011 = 90 (0 new bank failures over weekend)
FACTOIDS OF THE WEEK:
Retail sales: The retail landscape is changing as fast you can hit the send button. In 2011, total purchases made via smartphones in the U.S. are expected to reach $6 billion, twice the pace of 2010, according to Forrester Research. Sales could top $30 billion by 2015.
-- 2011 NRF holiday shopping estimate: +3-4%, but previous NRF estimates have been all over the map, according to Barry Ritholtz
-- 2011 NRF Thanksgiving Weekend retail sales: +16.6%
-- 2011 MasterCard Advisors SpendingPulse Thanksgiving Weekend retail sales: +8.7%
-- 2008 NRF estimate: +2.2% (2008 Actual: -6%)
-- 2009 NRF estimate: -43% (2009 Actual: +3%)
-- 2010 NRF estimate: +9.2% (2009 Actual: +5.5%)
THE WEEK AHEAD:
Mon 12/12:
2:00 Treasury budget
FedEx's busiest shipping day
Tues 12/13:
7:30 NFIB small business optimism index
8:30 Retail sales
2:15 FOMC announcement
Weds 12/14:
8:30 Import and export prices
Thurs 12/15:
8:30 Weekly jobless claims
8:30 PPI
8:30 Empire State manufacturing
9:15 Industrial production
10:00 Philadelphia Fed Survey
Fri 12/16
8:30 CPI
Quadruple witching
ECB President Mario Draghi speaks
