The Week Ahead - 27 September 2010

Themes for me this week will be the longer tern notes being auctioned by the US Treasury on Monday, Tuesday and Wednesday where I'll be looking for any weakness. Then on Thursday there is the US Initial jobless and continuing claims for September plus on Friday I'll be paying close attention to US ISM manufacturing for September.

I'm keen to see if there is any real improvement in US jobless numbers and manufacturing or if the can is just continuing to be kicked down the road in the hope of better days materialising all by themselves.

Australasia, Japan and China
All times are AEST

Mon 27 September
09.50 Japan Merchandise trade balance total August
09.50 Japan Adjusted merchandise trade balance August
09.50 Japan Merchandise trade exports August
09.50 Japan Merchandise trade imports August
12.00 China Industrial profits August

Tue 28 September
15.00 Japan Small business confidence September

Wed 29 September
07.45 New Zealand Trade balance August
07.45 New Zealand Trade balance 12 month August
09.50 Japan Tankan large manufacturers index Quarter 3
09.50 Japan Tankan large manufacturing outlook Quarter 3
09.50 Japan Tankan non-manufacturing Quarter 3
09.50 Japan Tankan non- manufacturing outlook Quarter 3
09.50 Japan Tankan large all industrial Capex Quarter 3
10.00 Australia Conference board leading index August
12.30 China HSBC manufacturing PMI September

Thu 30 September
07.45 New Zealand Building permits August
09.15 Japan Nomura/JMMA manufacturing PMI September
09.50 Japan Retail trade August
09.50 Japan Large retailers sales August
09.50 Japan Industrial production August
11.00 Australia HIA new home sales August
11.30 Australia Building approvals August
11.30 Australia Private sector credit August
11.30 Australia RP data-rismark med val August
12.00 New Zealand NBNZ activity outlook September
12.00 New Zealand NBNZ business confidence September
14.00 Japan Vehicle production August
15.00 Japan Housing starts August
15.00 Japan Annualized housing starts August
15.00 Japan Construction orders August

Fri 1 Oct 09.30
Japan Job-to-applicant ratio August
09.30 Japan Overall household spending August
09.30 Japan Tokyo CPI September
09.30 Japan Jobless rate August
09.30 Japan Tokyo CPI ex-fresh food September
09.30 Japan Tokyo CPI ex food, energy September
09.30 Japan National CPI August
09.30 Japan National CPI Ex Food, Energy August
11.00 China PMI Manufacturing September
15.00 Japan Vehicle Sales September


North America & Europe
Times are London, UK time

Mon 27 September
UK Hometrack housing survey September
13.30 US Chicago Fed national activity index August
15.30 US Dallas Fed manufacturing activity September

Tue 28 September
Germany CPI September
Germany CPI - EU harmonised September
07.00 Germany GFK consumer confidence survey October
09.30 UK GDP Quarter 2
09.30 UK Current account Quarter 2
09.30 UK Total business investment Quarter 2
11.00 UK CBI reported sales September
14.00 US S&P/CaseShiller home price index July
15.00 US Consumer confidence September
15.00 US Richmond Fed manufacturing index September

Wed 29 September
09.30 UK Index of services (3mth/3mth)
09.30 UK Net consumer credit August
09.30 UK Net lending sec. on dwellings August
10.00 Euro Zone Business climate indicator September
10.00 Euro Zone Economic confidence September
10.00 Euro Zone Industrial confidence September
10.00 Euro Zone Services confidence September
13.30 Canada Industrial product price August
13.30 Canada Raw materials price index August

Thu 30 September
00.01 UK GFK consumer confidence survey September
08.55 Euro Zone Unemployment change September
08.55 Euro Zone Unemployment rate September
13.30 Canada GDP July
13.30 US GDP (annualized) Quarter 2
13.30 US Personal consumption Quarter 2
13.30 US GDP price index Quarter 2
13.30 US Core PCE Quarter 2
13.30 US Initial jobless and continuing claims September
14.45 US Chicago purchasing manager September
15.00 US NAPM-Milwaukee September

Fri 1 October
09.30 UK Bank of England housing equity withdrawal Quarter 2
09.30 UK PMI manufacturing September
10.00 Euro Zone Unemployment rate August
13.30 US Personal income August
13.30 US Personal spending August
13.30 US PCE deflator August
13.30 US PCE core August
14.55 US University of Michigan confidence September
15.00 US ISM manufacturing September
15.00 US ISM prices paid September
15.00 US Construction spending August
22.00 US Domestic vehicle sales September
22.00 US Total vehicle sales September

Upcoming Treasury Auctions
As found at http://www.treasurydirect.gov/RI/OFAnnce

Long term notes are highlighted.

As always, do your own research and have a great week.

Buffett contradicts himself on recession

Last week Billionaire investor and Berkshire Hathaway Chairman, Warren Buffett appeared via video link at the Montana Economic Development Summit and made some very bullish statements about the economy, the state of Berkshire Hathaway's businesses and the recovery.

In an article by MATT GOURAS published online by The Washington Post on Monday, September 13, 2010 Buffett is quoted as saying;

"I am a huge bull on this country. We are not going to have a double-dip recession at all, I see our businesses coming back across the board."

Yet just 10 short days later Buffett is interviewed by CNBC's Becky Quick.

Becky - The NBER said this week that the recession officially ended back in June of last year.

Buffett - Well, they define it differently. But I mean, I define it, I think we're in a recession until real per capita GDP gets back to where it was before. That is not the way the National Bureau of Economic Research measures it. But I will tell you that to any, on any common sense definition, the average American is below where he was before, or his family, in terms of real income, GDP. We're still in a recession, and we're not gonna be out of it for awhile, but we will get out of it.

Check the video out for yourself.

US Housing Market Still Stalled

The NAHB builder confidence survey released today in the US points to a continued lack of confidence from home builders.

Unchanged from previous month

Builder confidence remained unchanged from the previous month at 13, the lowest since March 2009. According to the news release on the National Association of Home Builders web site

"Neither the component gauging current sales conditions nor the component gauging sales expectations in the next six months budged in September from their low readings in the previous month, holding at 13 and 18, respectively. The index gauging traffic of prospective buyers edged down a single point, to 9."

A reading above 50 indicates that more builders see the market as good than see it as poor, the reading has not been above 50 in over 4 years, the last time being in April 2006.

Departing from reality

In the minutes following the release of the NAHB builder confidence survey stock indexes surged up 0.5%, with the S&P 500 presently sitting at 1137 after shooting up from from 1128 just minutes before the announcement. On the surface of it you would have expected this news to be at best neutral to stocks and at worst perhaps create a slight fall, however in a complete departing from reality stocks have surged in what looks on the surface to be clearly some sort of market manipulation. It's little wonder Small Investors have been exiting the market in their droves as covered in depth in this article by Graham Bowley published by The New York Times August 21, 2010.

Uncertainty increases

"In general, builders haven't seen any reason for improved optimism in market conditions over the past month," noted NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "If anything, consumer uncertainty has increased, and builders feel their hands are tied until potential home buyers feel more secure about the job market and economy."

FOMC tomorrow

With a statement from the Federal Open Market Committee due tomorrow and major stock indexes globally sitting on or just below resistance it will be interesting to see what news that brings and whether indexes will break resistance and run upward or has today's news and subsequent manipulation of the market just been to suck in the long positions prior to an announcement from the FOMC that will see the market reverse and head lower again, only time will tell.