Wall Street this week will get data it has craved to help get a better handle on the economy and whether it has pulled back further than policy-makers wanted.
Over the next five days, some two dozen economic reports will be released — including consumer confidence, job growth and manufacturing figures. Investors might even get a better clue about what Federal Reserve Chairman Ben Bernanke thinks of interest rates when minutes from the last Fed meeting are released.
These readings might help give Wall Street the guidance it has been clamoring for, especially after last week’s lackluster performance. But the real question is, how many people will be around to trade on the news? This is, after all, the last week of August.
“I looked up the word doldrums in the dictionary, and there’s no coincidence it comes from the word dull,” David Darst, chief investment strategist of Morgan Stanley’s global wealth management group, said Friday. “You might see some kind of fluctuation next week with these reports, but people will come back to work after Labor Day and sort through everything that’s gone on. That’s when you’ll see volume go up.”
Last week’s volume was lethargic, and traders say expect to see more of the same in coming days. Looking back to last August, the New York Stock Exchange reported volume of 43 billion shares — while it popped up to 46 billion in September and 51 billion in October.
Last week, the Dow ended down 0.86 percent, Nasdaq fell 1.09 percent, and the S&P 500 dropped 0.55 percent.
Stocks fell on concerns that the Fed might have gone too far by raising rates 17 straight times before pausing at its August meeting. While this means Bernanke is unlikely to initiate another hike, it also troubles Wall Street that the economy might have slowed too much.
The biggest fear is that consumer spending is eroding, and that could translate into lower corporate profits. Oil prices, which rose steadily last week, also are a major contributor to how much people spend.
On Tuesday, investors hope to get some clues as the direction of consumer spending from the Conference Board’s August consumer confidence index, and analysts are calling for a modest decline. The Fed minutes also come out that day.
On Wednesday, Wall Street will be reading the preliminary second-quarter gross domestic product numbers with interest to see if personal spending has slowed, and how business investment and government spending fared.
Consumers will also be in focus Thursday, when the Commerce Department releases its personal income and personal spending reports for July. Also that day, the department will release its factory orders report for last month.
Perhaps the most important report this week comes out Friday, when the Labor Department releases payroll data for August. In July, the report showed slowing momentum and volatility in payroll growth, which is expected to continue.
The pace of business spending will also be measured on Friday when the Institute for Supply Management releases its survey of activity in the manufacturing sector, covering new orders, production, employment and inventories.
Few corporate earnings reports are scheduled. Among the most significant companies scheduled to report are TiVo Inc., H&R Block Inc. and H.J. Heinz Co.