MARK TO MARKET: Will Markets Ignore Claims Explosion?
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07:30 ET
=DJ MARK TO MARKET: Will Markets Ignore Claims Explosion?
12 Dec 07:30
By Jim Murphy
A Dow Jones Newswires Column
NEW YORK (Dow Jones)--The important question is: What will the markets make
of the explosion in state unemployment benefit claims that so many of the
cognoscenti have forecast for the week ended Saturday, Dec. 7?
The claims report, which arrives at 8:30 a.m. EST, has always been a
minefield for forecasters. They seldom get it nearly right; often they get it
embarrassingly wrong.
The cognoscenti claim that the surge in claims for the Dec. 7 week will be a
"payback" for the sharp declines of the previous three weeks, which were
understated by distortions caused by flawed seasonal adjustment factors.
That is, claims won't really have surged in the Dec. 7 week, they will
merely be "playing catch-up" with what transpired in recent weeks but couldn't
accurately be captured until now. Will markets take that into account, or will
they be dazzled, then depressed, by this morning's "Claims-O-Rama?"
If you can't get the data you want, want the data you get.
No one is forecasting that first-time claims for state unemployment benefits
declined in the week ended Saturday. Forecasts range from up 10,000 to up
55,000. The Dow Jones Newswires forecast is for a somewhat conservative
increase of 25,000.
Modest Improvement
Also at 8:30 a.m., the Commerce Department reports on U.S. retail sales in
November.
It wouldn't take much of a gain for overall retail sales to have improved
from October. In October, they were unchanged. The Dow Jones forecast is that
they rose 0.4% in November. Take out auto sales, and the DJ forecast is up
0.2%, which is notably weaker than the 0.7% gain reported for October.
The danger with this report lies to the downside, what with everyone hung up
about the strength of sales this holiday season.
Webcasters All
As the fourth calendar quarter draws to a close, we are entering the
"Guidance Season," which precedes the 4Q Earnings Season, which begins in the
second week of January.
Three prominent companies are reporting quarterly results today, but
investors will probably more interested in what their executives have to say
about the outlook.
I understand that baked beans on toast is still a preferred breakfast in
Britain and that HJ Heinz vegetarian baked beans are the preferred beans for
building this breakfast.
After reporting fiscal second quarter results this morning, Heinz executive
will host a conference call on the Web at 8:15 a.m. You can reach it at
www.Heinz.com
Next among the conference callers is the big warehouse shopping club chain,
Costco. The company's conference call begins at 11:00 a.m. at www.costco.com
At 4:00 a.m., Costco released results for its first fiscal quarter. Net sales
grew 9% from the first quarter of fiscal 2002, Costco said, and diluted
earnings per share of 31 cents matched Wall Street's expectations.
On Dec. 5, Goldman Sachs cut its rating on Costco shares to "in line" from
"outperform." Last week, Costco reported November sales that were somewhat
disappointing.
Adobe Systems, the big software developer, doesn't report fiscal fourth
quarter results until after the 4:00 p.m. closing bell on Wall Street. You can
catch the conference call at 5:00 p.m. at www.adobe.com/aboutadobe/invrelations
Procter & Gamble, the global consumer-products biggie, meets with analysts
beginning at 9:30 a.m. You can sit in at www.pg.com.investors.
United Technologies executives are expected to discuss the company's
prospects for 2003, beginning at 5:30 p.m. at www.utc.com
Good Read
The Federal Open Market Committee met this week. It follows as the night the
day that the minutes of the FOMC's previous meeting are released on the
Thursday of the week of the latest meeting.
When the minutes of the Nov. 6 meeting are released at 2:00 p.m., they figure
to draw a greater crowd of curiosity seekers than they usually do.
That's because the FOMC rate-setters surprised most of us on Nov. 6 by
cutting the funds target rate by 50 basis points and amazed all of us by
switching to a "balanced" risk assessment on the economy from one weighted
toward the downside.
Why did they do it? How did they reason themselves into it?
Will Mr. Greenspan or any other members of the panel provide elucidation on
the "soft spot" the economy is now passing through? - "Soft spot" being the
description that appeared in the post-meeting statements for both the Nov. 6
and Dec. 10 meetings.
We'll have to read the minutes.
(Jim Murphy can be reached at (201) 938-2145 or by e-mail at
Jim.Murphy@DowJones.Com)
(END) Dow Jones Newswires
12-12-02 0730ET |
