Last week proved to be another volatile one for the markets as the dual “threats” of the pending rate hike from the Federal Reserve and issues with Chinese growth continued to weigh on the markets. This week could be prove to be another bumpy ride as U.S. exchanges are closed during the early portion of the week. Investors will have a shorter time frame to digest any news coming out of Europe and Asia. And already that news doesn’t look too rosy.
As for economic news here in the U.S., consumer confidence, unemployment claims, and inflationary data will all weigh on Janet Yellen & Crew’s minds when the Federal Reserve prepares to look into interest rates next week.
At least investors will have a break on the earnings front. With earnings season winding down, the number of dividend-related reports has begun to slow to a trickle as the quarter begins to officially end.
Traders and investors will get a much deserved break this Monday, especially after the past few weeks’ volatility, as the U.S. markets will be closed for the Labor Day holiday. They will resume trading activity on Tuesday. As such, there is no economic information or reports released. Likewise, there are no dividend-based earnings that will be announced.
However, markets in Asia and Europe will be open, which could lead to some interesting trading. China, which has been one major source of the past few weeks’ volatility, will open after being shut for several days as China commemorates the 70th anniversary of the end of World War II.
Tuesday will see the release of several—although not vital—pieces of economic data. First is the National Federation of Independent Business’ (NFIB) Small Business report. The measure of economic conditions across labor, inventories and sales, spending, and other small business activities is expected to show a positive increase to 96. The Federal Reserve will also release two reports; both the Labor Market Conditions Index and Consumer Credit reports will be released before the opening bell. The Labor Market Conditions Index is made up of already released data, while the Consumer Credit report is expected to show a slight decrease in the amount of revolving debt outstanding consumers in the U.S. have.
- Kentucky First Federal Bancorp (KFFB ), a small mid-tier regional bank holding company located in Kentucky, is set to report EPS on Tuesday. With zero analysts covering the small bank, there are no estimates provided. But KFFB does yield a healthy 4.75%.
- Suiting and men’s fashion retailer Men’s Wearhouse Inc. (MW ) will report their results after market close, with the company expected to announce an earnings loss of $1.05 per share. MW has a dividend of 1.33%
The only piece of economic data coming out on Wednesday is the Bureau of Labor Statistics’ Job Openings and Labor Turnover Summary (JOLTS). The measure looks at the number of new jobs created during the previous month. Analysts are expecting 5.3 million new jobs, an increase over last month’s metric.
- Before market open on Wednesday, bookseller Barnes & Noble (BKS ) is expected to announce earnings per share of 13 cents. This is the first earnings report for the company since freeing off its education division as a separate company. BKS yields 3.79%
- Value Line, Inc. (VALU ), which provides investment services and ratings, will report earnings as well on Tuesday. No estimates have been given. VALU pays a dividend of 13 cents and yields 4.72%.
- RF Industries, Ltd. (RFIL ) is scheduled to report profits of 7 cents per share. The maker of various cable, connector and electronic components yields 6.67%.
Thursday kicks off with a bang as unemployment claims will be reported at 8:30 a.m., before the opening bell. While it’s considered a lagging indicator, the number of unemployed individuals is an important signal of overall economic health, and analysts were surprised last week by a slight increase. This week they are forecasting another decline to reach 279,000 individuals. Investors will also receive inflation-related data. The Bureau of Labor Statistics Import Price Index is expected to fall to hit -1.7%. Also released will be crude oil and natural gas storage data.
- Peak Resorts Inc. (SKIS) is scheduled to report a loss of 50 cents per share before market open on Thursday. The stock is a holding company for various ski resorts, parks and hotels located across the Midwest and Northeast United States. SKIS yields 7.59%.
Aside from being a day of remembrance on Wall Street, Friday brings two huge pieces of economic data that have major bearing on the upcoming Federal Reserve interest rate decision. First up is the Producer Price Index (PPI); the leading indicator of consumer inflation and measure of the change in prices of finished goods is expected to show a decline of 0.1%. The second is the University of Michigan (UoM) Preliminary Consumer Confidence report. Analysts estimate that consumers will feel a tab bit timid when it comes to spending and the measure should show a slight decline and come in at 91.8.
- Before market open on Friday, Kroger Co. (KR ) is expected to report earnings per share of 39 cents. The Ohio-based firm is the country’s largest grocery and supermarket retailer, operating under several brand names. KR yields 1.23%.
The Bottom Line
Even with trading suspended on Monday due to the Labor Day holiday, this week will be an important one. Several pieces of key economic data will help guide the Federal Reserve on its pending rate hike decision.