Monday
Three and six month treasury bonds will be auctioned at 11:30 am Monday and will kick off the monthly test of the demand for short term investment security. The dollar is becoming stronger and rumors, spawned from the announcement of Bond King Bill Gross's "Lehman high" cash levels, are beginning to spur renewed debate over the steepness of the yield curve. The yield on the 10-year has been following the dollar higher, and traders can look to capitalize on further dollar gains by shorting the debt with an ETF or ETN like (TYO).
Tuesday
Redbook (8:55 am) and Goldman's ICSC (7:45 am) store sales comps will be scoured for details as the market looks to zero in estimates of the amount of spending going into holiday shopping when compared to the previous year and may show signs of hope to rally stocks through the Thursday close if numbers surprise to the upside. The GDP number will get revised slightly, expected to drop 0.1% to 2.7% for the 2009 Q3, but will not have any effect on prices unless a larger revision pops out. We'll get existing Home Sales at 10:00 am and FHFA House Price index at the same time, both of which are expected to show further strength in housing. Any disappointment in housing will be a hard pill to swallow as bulls are basing more of their equity rally extension theory on the industry.
Wednesday
Housing news from the MBA Mortgage numbers will cross tickers at 7:00 am and will set a negative tone for the remaining data, should the results further the anemic results of the past week. Personal Consumption Expenditures (PCE) data, out of the Income and Outlays report at 8:30 am, is expected to show a 0.6% jump in consumption along side price increases of only 0.1%. At 9:55 am the second and final leg of forward looking Consumer Sentiment will prove or disprove the solid improvement to 73.4 earlier in the December. Traders will take this report and run with it into the Christmas weekend and positions should be closely watched if sentiment surges or dives from the 73 mark. The July peak at 430k annual U.S. homes sold has been hard to breach after a sharp drop in September, but Bloomberg economists think the November report will be the one to show builder's confidence ahead of the 2010 Spring buying season. The consensus for the new homes report is 10k higher than October at 440k, and is expected to show confidence in the disgraced industry moving towards the new year. CME traders keeping a sharp eye on the EIA Report at 10:30 will be trigger happy with January delivery futures contracts nearing expiration and crude supply leveling off at the absurdly high 330 million barrel mark.
Thursday
Durable Goods orders out of the gate early at 8:30 am are expected to make up for a -0.6% drop in November by increasing the amount of machinery on order by 0.5%. Last month the metric disregarding automotive orders fell a larger -1.3% as manufacturing seems to have seen most of the benefit from inventory rebuilding and big ticket purchases are pared back. Jobless claims jumped 7,000 to 480k last week, but are expected to fall 10,000 as layoffs subside. However, many employers save job slashing until after the holidays, begging that January's numbers will tell the full employment story. Money Supply and the Fed Balance sheet will be closely watched for changes this week as the story of the strengthening U.S. Dollar is criticized and supported by traders on both sides.
Disclosure: Long DTO, Long TYO, Long SDS, Long SCC
