During this holiday-shortened week, investors will receive a cornucopia of data now that the government is open again. Some of the data will be a bit stale. But they should indicate how Q3 ended for the economy.
September's retail sales report (Tue) should show a solid increase, with strength in spending by higher-income shoppers more than offsetting the weakness in spending by lower-income workers. This dichotomy is supported by healthy corporate earnings from Walmart and Gap, which have prioritized higher-income shoppers. Home Depot, meanwhile, is finding that many higher-value purchases and remodeling projects are being scaled back.
Also out this week are September's PPI (Tue), the Fed’s Beige Book (Wed), and weekly jobless claims (Wed).
Here are the reports that might move the markets and influence the Fed’s thinking as the December 9-10 Federal Open Market Committee meeting approaches:
(1) Business surveys. The remaining two of the business surveys conducted by five of the Fed regional banks will come out for the Dallas (Mon) and Richmond (Tue) districts. They might confirm that business improved in November, as shown by the surveys for NY, Philly, and Kansas City. If so, then November's national M-PMI might rise above 50.0 (chart).
