The July 25 week finishes up with the release of the preliminary US estimate for second quarter GDP on Friday. So far markets expectations are for sluggish growth in line with the first quarter performance. While the data is likely to be disappointing overall, it does put the first half of 2011 in the rear view, and markets will be ready to move on to see how the second half of the year is shaping up. Before Friday arrives, however, there are a number of other reports that will round out the outlook for the housing market, manufacturing, and consumer confidence. The second quarter earnings season continues with a large number of releases on the calendar. These will include a number of companies in the oil industry, aircraft manufacturers, and some drug and chemical companies. The preliminary estimate of second quarter GDP will be released on Friday. The number will include some assumptions for changes in inventories, net exports, and consumer spending since the available data for the quarter is not complete. Expectations are for growth similar to the anaemic 1.9% pace of the first quarter, albeit with a somewhat different composition for growth. This is a disappointing pace, but markets are prepared for a soft number.
The last monthly reports on consumer confidence in July will be released next week. The Conference Board's Consumer Confidence Index is due on Tuesday, and the final Reuters/University of Michigan Consumer Sentiment Index is at 9:55 ET on Friday (preliminary reading 63.8). Data available so far for July indicates that consumers' outlook took a turn downward at the start of the month. It may have regained some ground as July progressed, but overall should be down compared to June. Initial jobless claims for the week ended July 23 on Thursday should be past any distortions that might have been apparent in the seasonal adjustment factors early in July and the influx of government workers in Minnesota due to a government shutdown. The Employment Cost Index (ECI) for the second quarter on Friday will get lost behind the release of the GDP numbers at the same time. It should be consistent with slow growth in most wages and salaries, and show some moderation in rises in benefits. Data for the manufacturing sector will include the next round of surveys from the Fed District Banks. The Richmond Fed's Manufacturing Survey for July is set for 10:00 ET on Tuesday, and is the most closely watched after the New York and Philadelphia indexes. It tends to lead the other surveys by a month or two. In June, the Richmond general activity index moved back into positive territory after briefly turning negative in May. It will likely confirm...Read more