Federal Reserve meeting should dominate financial coverage next week, as market observers wait to see whether the Fed will step in with new interventions to jumpstart the slow U.S. recovery.
Also, a raft of consumer and trade data are expected next week, but on the equities side, there are only a few notable companies posting their latest earnings.
Apple Inc AAPL +0.62%. is expected to unveil its new iteration of the iPhone at an event on Wednesday.
Handful of Reports Surrounding the Fed
The main event next week for economy watchers will be the two-day Federal Reserve Open Market Committee meeting, kicking off Wednesday, and its accompanying press conference Thursday. Investors and economists will also get a boatload of data on consumers, trade and inflation.
The top-line inflation numbers for August are likely to show big increases, but the rises will reflect gasoline prices. Core rates that exclude food and energy are expected to be muted, leaving the Fed able to focus on growth, not price pressures. That is the general view of economists surveyed by Dow Jones Newswires.
The producer-price index due Thursday is expected to jump by 1.0% in August, but the core index is forecast to be up just 0.2%.
Consumer prices will be reported Friday, after the Fed has met and gone home. The median forecast calls for the CPI to be up 0.6% last month, but the core index is projected to have increased only 0.2%.
Data on consumer spending and attitudes also will be on display next Friday.
Dollar’s Fate Tied to Fed Meeting
The dollar’s fate will be closely linked to the outcome of the Federal Reserve’s policy meeting next week.
Friday’s weaker-than-expected jobs numbers have ramped up expectations the central bank could announce a third round of bond buying at the close of its two-day meeting. This so-called quantitative easing would involve printing money and would lower U.S. bond yields, two factors likely to weaken the dollar.
Increasingly, many investors are betting the central bank will pull the trigger on another bond-purchase program. The question they face is when and in what form.
But some market participants say while this Friday’s weak jobs numbers open the door for more Fed interventions, other recent indicators–including auto sales–point to an improving U.S. economy. So the Fed may not be in such a rush to announce more bond buying. Instead, it may simply extend the window where it expects to keep interest rates near zero.
Quarterly Results Due From Pier One United Natural Foods UNFI -0.05%
A handful of retailers–Pier 1 Imports Inc. (PIR) Five Below Inc FIVE -1.39%. (FIVE) Orchard Supply Hardware Corp OSH +2.07%. (OSH) and privately held Neiman Marcus Group Inc.–are scheduled to report earnings next week.
Pier 1 late last month forecast fiscal second-quarter earnings slightly ahead of consensus estimates, citing customers’ favorable response to its new merchandise assortments. The home-furnishings retailer has enjoyed a turnaround since the recession, when it was on the brink of bankruptcy.
Discount retailer Five Below, which went public in mid-July, will report its first earnings as a public company and is expected to post a small profit.
Also, casino-games company Shuffle Master Inc SHFL -0.33%. (SHFL) and organic-foods distributor United Natural Foods Inc. (UNFI) should report their latest quarterly results. Chipmaker Texas Instruments Inc. TXN -1.29% (TXN) should also provide a mid-quarter financial update.
Euro Movement Driven by German Court Decision, ECB
The outlook for the euro zone looks a lot less ominous now that the European Central Bank has waded into the crisis with its plan to snap up unlimited amounts of debt issued by the bloc’s more fiscally strained member states.
But a German constitutional court decision next Wednesday on the legality of two euro-zone bailout vehicles poses a major risk for the euro. If the court were to rule the temporary European Financial Stability Facility and the permanent European Stability Mechanism are unconstitutional, it would call into question the central infrastructure the monetary union’s 17 member nations have used to calm the debt crisis.
It would also hamper the latest bond-buying plan announced by the European Central Bank this week, which pumped the euro higher and brought down the cost of borrowing for Italy and Spain.
Since the German parliament has already approved the bailout mechanism, chances of the German court rendering it illegal are very low, said Marc Chandler, currency strategist at Brown Brothers Harriman, adding “it does pose some risk.”
Also Wednesday, the Netherlands holds parliamentary elections.
Conferences and events
Among the significant conferences next week are Denver Gold Group’s Denver Gold Forum from Sunday to Wednesday in Denver; Barclays Capital Global Financial Services Conference from Monday to Friday in New York City; Morgan Stanley Healthcare Conference MS +5.11% from Monday to Wednesday in New York City; Rodman & Renshaw Annual Global Investment Conference from Sunday to Tuesday in New York City; RBC Capital Market Global Industrials Conference from Tuesday to Wednesday in Las Vegas; Deutsche Bank dbAccess Technology Conference from Tuesday to Thursday in Las Vegas; ThinkEquity Growth Conference from Wednesday to Thursday in New York City; CL King & Associates Best Ideas Conference from Wednesday to Thursday in New York City; and Morgan Stanley Industrials & Autos Conference from Thursday to Friday in New York City.
Apple Inc. also invited media to a Sept. 12 product announcement Tuesday at which the company is widely expected to announce a new iPhone.
Monday
Economics
July Consumer Credit (3:00 p.m. Eastern Time): Seen expanding to $7 billion from $6.5 billion a month earlier.
Earnings
Casey’s General Stores, Del Monte, Five Below, John Wiley & Sons, Majestic Entertainment, Orchard Supply Hardware
Palo Alto Networks, Shuffle Master, Titan Machinery
Tuesday
Economics
August NFIB Small Business Index (7:30 a.m.)
July U.S. trade deficit (8:30 a.m.): Seen at $44.8 billion from $42.9 billion a month earlier.
July Job Openings and Labor Turnover (10:00 a.m.)
Earnings
Hanwha Solar, McDonald’s (monthly), Texas Instruments and United Natural Foods
Wednesday
Economics
August Import Prices (8:30 a.m.): Seen rising 1.5% after falling 0.6% a month earlier.
July Wholesale Inventories (10:00 a.m.): Seen expanding 0.5% after declining 0.2% a month ago.
Earnings
Pall Spartech SEH -0.18%
Thursday
Economics
Weekly Jobless Claims (8:30 a.m.): Seen rising to 370,000 from 365,000 a week earlier.
August Producer Price Index (8:30 a.m.): Seen rising 1.0% after expanding 0.3% a month earlier.
August Federal Budget (2:00 p.m.)
Earnings
Analogic, K12, Neiman Marcus, Pier 1 Imports WW Grainger GWW +0.04% (monthly)
Friday
Economics
August Retail Sales (8:30 a.m.): Seen rising 0.9% after jumping 0.8% a month ago.
August Consumer Price Index (8:30): Seen rising 0.6% after coming in unchanged a month earlier.
August Industrial Production (9:15): Consensus sees it falling 0.1% after a 0.6% rise a month earlier.
August Capacity Utilization (9:15): Seen at 79.2% from 79.3% a month ago.
September Reuters/UMich Consumer Sentiment (preliminary) (9:55 a.m.): Seen at 73.5 from 74.3 a month earlier
July Business Inventories (10:00): Seen up 0.4% after rising 0.1% a month earlier.
Earnings
Nothing of note.
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