This Week’s Profit Reports Could Render Final Verdict on First Quarter Earnings Season
Posted on: May 5th, 2008 | By William Patalon III | Filed under Stock Market Investing
Economically Speaking
Weekly Economic Calendar
| Date | Release | Comments |
| April 29 | Consumer Confidence (04/08) | Lowest level in 5 years |
| April 30 | GDP (1st qtr) | Slow growth, but NOT recessionary |
| Fed Policy Meeting Statement | 25 bps cut may be last for a while | |
| May 1 | Initial Jobless Claims (04/26/08) | Surprisingly high increase in benefits claims |
| Personal Spending/Income (03/08) | Lackluster showing for 4th straight month | |
| Construction Spending (03/08) | Much greater than expected decline | |
| ISM – Manu (04/08) | Continued sector contraction | |
| May 2 | Unemployment Rate (04/08) | Slight improvement from March |
| Non-farm Payroll Additions (04/08) | Fewer than anticipated job losses | |
| Factory Orders (03/08) | Rebounded after consecutive monthly losses | |
| The Week Ahead | ||
| May 5 | ISM – Services (04/08) | |
| May 7 | Consumer Credit (03/08) | |
| May 8 | Initial Jobless Claims (05/03/08) | |
| May 9 | Balance of Trade (03/08) |
After noting that the “substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity,” the Fed may now be embarking upon a much-needed summer vacation given that last Wednesday’s quarter-point interest-rate cut appears to be its last move for awhile.
After all, Team Bernanke & Co. has lowered the benchmark Federal Funds rate seven times since mid-September; it now stands at 2.0%, the lowest level since late 2004.
Additionally, the Fed had recently engaged in a few other “creative” actions at a time investors were growing quite nervous about the ever-expanding credit crisis. For now, the central bank seems content to sit back and watch, while the stimuli or “methods to its madness” begin to take effect.
Though consumer confidence fell to a five-year low in April, analysts may want to revise their recessionary forecasts for another quarter. With many anticipating negative economic growth in the 1st quarter, gross domestic product GDP rose by 0.6%.
Remember, by true definition, a recession is marked by two consecutive quarterly contractions, so barring a revision in the months ahead, the 2nd quarter now becomes key for the potential emergence of any real downturn. Suddenly, some “experts” are questioning that likelihood. While the Labor Department revealed a fourth straight month of job losses in April, the results were not nearly as bad as many had predicted (only 20,000 non-farm jobs were lost, vs. the 70,000 that had been expected). Likewise, the unemployment rate actually fell to 5.0% (from 5.1% in March), another promising sign for workers.
On the manufacturing front, factory orders rebounded after consecutive monthly declines and climbed by 1.4% in March. The ISM Index revealed slight sector contraction, though again many economists were expecting a far worse reading. While a weaker than expected construction spending report depicted that housing is not showing any real signs of rebounding, some analysts believe the Fed has laid the groundwork for recovery.
Pages: 1 2
Pages: 1 2
William (Bill) Patalon III is the Managing Editor and Senior Research Analyst for Money Morning, and is also the Managing Editor for The Money Map Report. Patalon's work has appeared in Kiplinger's personal finance magazine, USA Today, and The South China Morning Post, among other publications. 
Money Morning is the leading source of investment research on the global markets. Its free daily service provides news, research, investment opportunities and insights on international investing -- most of it well before it appears in the mainstream financial media.