The Week Ahead: Dec. 31, 2012 - Jan. 6, 2013

December 31, 2012 02:27 AM

via a special arrangement with Informa Economics, Inc.

Fiscal cliff focus

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

The fiscal cliff will remain the focus in a holiday-shortened week of activity.

Traders are clearly concerned about the potential an agreement won’t be worked out as evidenced by the market action post-Christmas. That continues to have the ability to override economic data, even positive information.

On the economic report front, markets will get more manufacturing data in the form of the Dallas Fed index on Monday, with the PMI Manufacturing and ISM manufacturing data both out on Tuesday. Construction spending comes out that day along with the minutes of the most-recent FOMC meeting. That will give markets more insight into the debate that saw the Fed opt to make more bond purchases in 2013 and set targets for inflation and employment relative to when they will adjust their interest rate policy. But the key will be nuances as the post-meeting news conference by Fed Chairman Bernanke fleshed out most of the details already. Private sector jobs figures come from ADP on Thursday along with the weekly jobless claims data. But all eyes will be on the Employment report Friday and what it signals for the US economy. Also out Friday are updates on Factory Orders and the ISM non-manufacturing index. Markets and the government will be closed Tuesday for New Year's Day.

For agriculture, it is another shortened trading week that will see traders watch for Monday’s update on Ag Prices. But the real focus will come from some key states that are to report on winter wheat conditions for the month of December. Beyond that, the attention will be on outside markets with the Weekly Export Sales report delayed until Friday due to Tuesday’s holiday. Ag interests will also see what happens if there is no new farm bill or an extension of the 2008 Farm Bill relative to the potential to revert to so-called permanent law.

For Washington, the week started on the weekend with the US House returning on Sunday, joining the Senate. What happens in Washington on the fiscal cliff front will be dictated by how negotiations turn out between the top leaders of the House and Senate and President Obama. That will keep lawmakers busy waiting if nothing else. January 3 will bring the start of a new Congress, bringing to Washington the lawmakers elected in the November election.

Monday, Dec. 31
Fiscal cliff: The top two senators were charged with coming up with a bipartisan package to deal with some but not all of the lingering fiscal cliff issues. Weekend developments show some progress, but also some continuing snags. If successful, the Senate would vote on the plan first, with a key House test following.
WTO: The World Trade Organization (WTO) issues a list of candidates to succeed Frenchman Pascal Lamy as director-general. Among the candidates, Dubai-based businessman and former Jordanian government minister Ahmad Hindawi would be the first leader of the 157-member trade body to come from the Arab world if elected.
Economic reports: Dallas Fed Mfg Survey | Selected Interest Rates (Federal Reserve).
USDA reports: Export inspections (AMS) | Agricultural Prices (NASS) | Egg Products (NASS)

Tuesday, Jan. 1
New Year's Day:
Markets around the globe are closed.
Fiscal cliff impacts: Automatic spending cuts and tax increases totaling $600 billion take effect, should no deal be reached by lawmakers in Washington.
United Kingdom takes over the Group of Eight presidency. Russia assumes the G-20 presidency, and Ireland ascends to the European Union presidency.
UN Security Council: Argentina, Australia, Luxembourg, South Korea, and Rwanda take up seats as non-permanent members of the United Nations Security Council.
Economic reports:

Wednesday, Jan. 2
Markets closed in China and Switzerland.
Economic reports: Motor Vehicle Sales | ICSC-Goldman Store Sales | MBA Purchase Applications | PMI Manufacturing Index | ISM Mfg Index | Construction Spending | Weekly Mortgage Rates (Freddie Mac) | ICI weekly money market mutual fund data Weekly mortgage applications (Labor Dept.) | FOMC Minutes

Thursday, Jan. 3
Holiday sales: Data for the key holiday shopping season will be out when major chains report December same-store sales.
Federal Reserve: Fed Presidents from San Francisco, St. Louis, and Minneapolis discuss the outlook for the U.S. economy and monetary policy in various venues.
Transportation: Weekly Traffic of Major Railroads (Assn. Of American Railroads) | Grain Transportation Report (AMS).
Energy reports: Weekly Petroleum Status Report (EIA) | Weekly ethanol plant production (EIA).
Economic reports: Jobless Claims (Labor Dept.) | Chain Store Sales | ADP Employment Report
USDA reports: National Dairy Products Sales Report (AMS) | Announcement of Class and Component Prices (AMS) | Dairy Products (NASS) | Broiler Hatchery (NASS)

Friday, Jan. 4

Federal Reserve: Fed Vice Chairman Janet Yellen and Presidents James Bullard of St. Louis and Charles Plosser of Philadelphia take part in a forum titled "Financial System Interconnectedness and Systemic Risk: Lessons from the Crisis and Policy Implications," at an American Economic Association/American Finance Association luncheon in San Diego, Calif.
Energy reports: Weekly US underground natural gas stocks (EIA)
Economic reports: Employment | Factory Orders | ISM Non-Mfg Index
USDA reports: Export Sales (FAS) | Peanut Prices (NASS)


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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