The Week Ahead: Jan. 7-13, 2013

January 6, 2013 09:17 PM

via a special arrangement with Informa Economics, Inc.

Congress on recess | GOP leaders say no more tax revenue | USDA reports

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

The new Congress is already on recess. The Senate is in recess until 11:30 a.m. ET on Monday, Jan. 21 for a joint session of Congress for the inauguration. Legislative business will resume at 10 a.m. ET on Tuesday, Jan. 22. The House also is in recess and will reconvene at 2 p.m. ET on Jan. 14.

The first full week of the new year arrives without the drama of the fiscal cliff staring the markets in the face. But there is not a lot of economic data due out that will give traders a lot to zero in on for market direction. Tuesday will bring the Consumer Credit update with Thursday providing the weekly jobless claims data. The week wraps up with International Trade data on Friday and the Treasury Budget statement due out on Friday afternoon. What will likely capture much of the financial markets’ attention, however, are several appearances by Fed members. The minutes released from the December meeting indicated some splits on the Fed over the asset purchases and traders will tune in on comments to see if they get a feeling of the prevailing view on the panel as to when the asset purchases could come to an end or be scaled back.

But GOP leaders over the weekend made clear they want no more talk of additional tax revenue, despite the push by President Obama and other Democratic leaders. House Speaker John Boehner (R-Ohio), in an interview with The Wall Street Journal editorial page to be published Monday (link), said the GOP wouldn't agree to any more tax increases in the next two years. "The tax issue is resolved," he said.

Senate Majority Leader Mitch McConnell (R-Ky.), told ABC News that, "The tax issue is finished, over, completed. That's behind us." He said new tax revenue is "absolutely" off the table as part of any coming negotiations with Democratic lawmakers and President Obama.

Democratic leaders say more revenue is needed, mainly by scaling back tax breaks. "There are still deductions, credits, special treatments under the tax code that ought to be looked at very carefully," Sen. Dick Durbin (D-Ill.), the Democrats' No. 2 leader in the Senate, said on CNN Sunday. Durbin suggested revisiting, among other things, the ability of taxpayers to "park their money" offshore to avoid US taxes. House Minority Leader Nancy Pelosi (D-Calif.) said Sunday on CBS that the fiscal cliff did not do enough to raise government revenues and that lawmakers should end certain tax breaks, citing in particular "special subsidies for big oil."

For agriculture, the week doesn’t get real interesting until we arrive at Friday with a host of USDA updates. Before that, we’ll get Export Inspections data Monday and the Weekly Export Sales report will finally be back to its normal Thursday morning release. But traders all week will be looking ahead to the barrage of Friday releases – the Annual Production Summary, Winter Wheat and Rye Seedings, December Grain Stocks and the Supply/Demand Reports. The production update and S/D data have the potential to produce some market reaction and will also likely mean more of the volatility that has been linked to high-speed trading in the seconds leading up to the reports being released. Of course the data no longer arrives at 7:30 am CT but rather 11 am CT for the first time. That will create an interesting dynamic of how the day’s trading will unfold in the final three hours of market action. Weather in Plains HRW wheat country and South America will be important and traders will be watching for signs that US wheat has indeed become competitive on the world market.

For Washington, the new Congress will be settling into their roles. Key lawmakers over the weekend and early today made clear the big issues ahead is a battle between spending cuts, entitlement reform and the push by key Democrats, including President Obama, for still more tax-related revenue tied to the need to hike the debt limit.

Both House Ag Committee Democrats and Republicans have set their membership rolls for the new Congress, although Democrats said they still had a couple openings to fill.

Monday, Jan. 7
Congress on recess: The Senate is in recess until 11:30 a.m. ET on Monday, Jan. 21 for a joint session of Congress for the inauguration. Legislative business will resume at 10 a.m. ET on Tuesday, Jan. 22. The House also is in recess and will reconvene at 2 p.m. ET on Jan. 14.
Economic reports: Selected Interest Rates (Federal Reserve)
USDA reports: Export inspections (AMS)

Tuesday, Jan. 8
Risks report:
The World Economic Forum will release its Global Risk Report for 2013. Published annually ahead of the WEF’s annual meeting in Davos, the report offers a snapshot of how 1,000 experts perceive the risks facing the global economy, the environment, technology, and society
President Barack Obama and Afghan President Hamid Karzai meet for talks on the role of the US in Afghanistan after 2014.
Economic reports: ICSC-Goldman Store Sales

Wednesday, Jan. 9
The National Governors Association leadership delivers its inaugural state-of-the-states address reviewing challenges and outlining priorities for 2013.
Energy reports: Weekly Petroleum Status Report (EIA) | Weekly ethanol plant production (EIA).
Economic reports: Weekly Mortgage Rates (Freddie Mac) | ICI weekly money market mutual fund data Weekly mortgage applications (Labor Dept.) | MBA Purchase Applications
USDA reports: Broiler Hatchery (NASS) | National Dairy Products Sales Report (AMS)

Thursday, Jan. 10
European Central Bank (ECB) meets: Some analysts believe the ECB will cut the repo rate by 25 basis points to boost demand for credit. Most see the Bank of England standing pat.
Ireland takes president of EU Council: The official launch event of the Irish presidency of the Council of the EU takes place in Dublin. Ireland has pledged to use its six-month presidency to focus on stability, jobs and growth in Europe.
Federal Reserve: Regional Fed presidents Esther George, Kansas City; James Bullard, St. Louis; and Narayana Kocherlakota talk about the economic outlook for 2013 in different venues.
Spain auctions two-year debt, refocusing attention on Europe's debt issues.
Transportation: Weekly Traffic of Major Railroads (Assn. Of American Railroads) | Grain Transportation Report (AMS).
Energy reports: Weekly US underground natural gas stocks (EIA)
Economic reports: Jobless Claims (Labor Dept.) | Wholesale Trade
USDA reports: Export Sales (FAS)

Friday, Jan. 11
China reports on December inflation numbers with the consumer- and producer-price indexes.
Czechs vote for president: The Czech Republic will hold its first presidential election by popular vote – takes place over two days. Up to now, the country’s parliament has had responsibility for choosing the president.
Economic reports: International Trade | Import and Export Prices | Treasury Budget
USDA reports: World Agricultural Supply and Demand Estimates (WAOB) | World Agricultural Productions (FAS) | Oilseeds: World Markets and Trade (FAS) | Grains: World Markets and Trade (FAS) | Cotton: World Markets and Trade (FAS) | Cotton, Grains, and Oilseeds Database (FAS) Cotton Ginnings (NASS) | Winter Wheat Seedings (NASS) | Crop Production (NASS) | Crop Production - Ann. (NASS) | Grain Stocks (NASS) | Rice Stocks (NASS) | Peanut Prices (NASS) | Latest US Agricultural Trade Data (ERS) | Season Average Price Forecast (ERS)


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






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