The Week Ahead: July 8-14, 2013

July 7, 2013 08:32 PM

via a special arrangement with Informa Economics, Inc.

Hearing on Smithfield Foods purchase | Obama's one-year delay for implementing part of health care law | House GOP meeting on immigration reform

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

Congress returns from the July Fourth recess as the House considers at least one Fiscal Year 2014 appropriations measure, while the Senate's focus will be on judicial nominations. Of note will be a Senate Agriculture Committee hearing on a Chinese company's proposed purchase of Smithfield Foods, a House hearing on the Obama administration's delay of part of the health care law, and a GOP House member closed-door meeting on immigration reform. What is not on this week's list is the House farm bill -- although House Majority Leader Eric Cantor (R-Va.) last Friday put it on the July calendar.

The House on Monday will consider three financial reform measures approved in June by the House Financial Services Committee. One of the bills (HR 1341) would require the Financial Stability Oversight Board to conduct a study and report to Congress on the likely effects that differences between the United States and other jurisdictions in implementing the derivatives credit valuation would have on certain transactions. The other measure (HR 1564) — Audit Integrity and Job Protection Act — would amend the Sarbanes-Oxley Act of 2002 to prohibit the Public Company Accounting Oversight Board from requiring public companies to use specific auditors or require the use of different auditors on a rotating basis. A third bill (HR 1171) would allow veterans's group greater access to federal surplus properties.

The House on Tuesday will begin debate of the FY 2014 energy and water appropriations spending bill (HR 2609), the third of the 12 regular spending bills to be passed in the House for the upcoming fiscal year. The Senate has yet to schedule floor debate for any of the appropriations measures. The House Appropriations Committee marked up the bill June 26, making major cuts to research and development programs for renewable energy and advanced energy technologies. The bill was approved on a largely party-line vote of 28-21.

The House also wants to consider a bill (HR 761), known as the National Strategic and Critical Minerals Production Act, that would require the secretaries of Agriculture and the Interior to more efficiently develop domestic sources of the minerals and mineral materials of strategic and critical importance to US economic and national security and manufacturing competitiveness.

House Republicans on Wednesday will hold a closed-door meeting on immigration, after the Senate passed its immigration reform bill last month. House Speaker John Boehner (R-Ohio) and other top House Republicans say they will not take up the Senate bill. Rather, Boehner said his conference would be listening to constituents over the July Fourth recess, and Wednesday's meeting is designed to take what they heard and "have a conversation on the way forward."

Reining in EPA. Reacting to President Obama's decision last month to unleash the Environmental Protection Agency to clamp down on greenhouse-gas emissions from power plants, the House Energy and Commerce Committee will mark up legislation this week that reins in EPA's regulatory reach. The bill, sponsored by Rep. Bill Cassidy (R-La.), would ban the agency from finalizing energy-related regulations — expected to cost more than $1 billion — if the Energy Department determines that the rule would cause "significant adverse effects to the economy." The EPA rules Obama announced last month would likely fall under that category, Cassidy said last week. Cassidy's bill will likely pass the GOP-controlled House, but won't likely advance in the Democrat-controlled Senate.

As for the Senate, leaders from both parties reached agreement to bring up at least three judicial nominations during the week.

The Senate will vote on legislation to retroactively freeze the rate on new subsidized Stafford loans at 3.4 percent for another year; the rates doubled to 6.8 percent July 1. But Republicans oppose that, and a bill passed by the House requires a recalculation every year based on the market rates, capped at 8.5 percent.

During the week, the Senate could begin consideration of any items cleared for floor debate, including two FY 2014 appropriations bills which were approved by the Senate Appropriations Committee prior to the recess – measures for Transportation and Housing and Urban Development and the energy and water spending bill, both approved by the full Senate Appropriations Committee.

Obama's one-year health care reform reprieve. On Wednesday morning, the Subcommittee on Health of the House Ways and Means Committee will hold a hearing to examine the Obama administration's recent decision to delay until 2015 the information reporting requirements and penalties associated with the employer mandate in the Affordable Care Act. Subcommittee Chairman Kevin Brady (R-Texas) said the focus specifically would be on the administration's ability to make regulatory enforcement decisions on statutory provisions in law.

The pending purchase of Smithfield Foods by Shuanghui International, a Chinese food company, will be the topic of a Wednesday afternoon hearing of the Senate Agriculture Committee. The panel also will discuss how the government's review process of foreign acquisitions of US companies impact food safety, protection of US technologies and intellectual property, and the effect of increased foreign ownership on the US food supply. Larry Pope of Smithfield Foods and Daniel Slane, a commissioner on the US-China Economic and Security Review Commission, will be among the witnesses.

Too big to fail. The Senate Committee on Banking, Housing, and Urban Affairs will hold a Thursday morning hearing on mitigating systemic risk through Wall Street reforms. The panel will hear from US financial regulators, including Treasury Undersecretary for Domestic Finance Mary Miller, Federal Reserve Governor Daniel Tarullo, Federal Deposit Insurance Corporation Chairman Martin Gruenberg, and Tom Curry, comptroller in the Office of the Comptroller of the Currency. The committee will examine the progress regulators are making on reform provisions that improve financial stability, mitigate risk, and address concerns that any of the nation's largest financial institutions remain "too big to fail."

Vice President Joseph Biden is expected on Wednesday to swear in Sen.-elect Edward Markey, after last week's special election results are certified in Massachusetts. House Democrats will then pick a successor to Markey as the ranking member on the Committee on Natural Resources. Reps. Peter DeFazio of Oregon and Raul Grijalva of Arizona are vying for that post.

Financial markets will get still more pieces to the US economic puzzle ahead, with Monday bringing the monthly update on how much credit consumers are taking on. Wednesday brings Wholesale Trade data, but the major focus will be on the minutes from the most-recent FOMC meeting and Fed Chairman Bernanke is also scheduled to speak that day. Thursday will see release of the Weekly Jobless Claims data along with the monthly Treasury Budget Statement. The week wraps up with a check on inflation at the wholesale level via the Producer Price Index (PPI) and a reading on consumer attitudes via the Consumer Sentiment index. The Mideast and Egypt will continue as a watch point and that could affect financial, energy and other markets, depending on what develops.

For agriculture, the attention will mostly be on Thursday with USDA’s monthly Crop Production and Supply/Demand reports along with the Weekly Export Sales report. Monday’s Crop Progress data also will be watched, but it probably won’t make news unless corn and soybean ratings decline. Otherwise, outside market influences again could affect markets and demand from China or other global buyers also holds the potential to get traders’ attention.

Monday, July 8
Congress returns: Both House and Senate lawmakers return from their July Fourth recess.
US-EU trade talks: EU officials arrive in Washington to begin what is expected to be lengthy trade negotiations.
ECB President Mario Draghi attends the quarterly hearing of the committee of economic and monetary affairs at the European Union Parliament.
Euro group finance ministers meet.
Energy: A three-judge panel in New Orleans hears a challenge by BP over billions of dollars in claims it paid related to the Deepwater Horizon oil spill.
Economic reports: Selected Interest Rates (Federal Reserve) | Consumer Credit
USDA reports: Export inspections (AMS) | Crop Progress (NASS) | Mink (NASS)

Tuesday, July 9
close in Argentina and Brazil.
Banking regs: The FDIC introduces draft of leverage limits for banks, including JPMorgan Chase, Morgan Stanley, Bank of America, and Citigroup. The proposals are expected to require banks to hold 3% to 6% of total assets in capital.
FBI director nomination: Committee confirmation hearing. Senate Judiciary Committee confirmation hearing on the nomination of James Comey to be director of the Federal Bureau of Investigation.
Final report from the Special Inspector General for Iraq Reconstruction: Subcommittee hearing. House Foreign Affairs — Subcommittee on Middle East and North Africa.
Regulatory Accountability Act: Subcommittee hearing. House Judiciary — Subcommittee on Regulatory Reform, Commercial and Antitrust Law.
Weather Forecasting Improvement Act: Subcommittee markup. House Science, Space and Technology — Subcommittee on Environment mark up of HR 2413, the Weather Forecasting Improvement Act of 2013.
Natural Gas Pipeline Permitting Reform Act: Subcommittee hearing. House Energy and Commerce — Subcommittee on Energy and Power.
US competitiveness: Subcommittee hearing. House Small Business — Subcommittee on Economic Growth, Tax and Capital Access hearing titled "American Competitiveness Worldwide: Impacts on Small Businesses and Entrepreneurs."
'Too big to fail' institutions and Dodd-Frank Act: Subcommittee hearing. House Financial Services — Subcommittee on Oversight and Investigations hearing on the constitutionality of sections of the Dodd-Frank Act concerning "Too Big to Fail" financial institutions.
Economic reports: ICSC-Goldman Store Sales | NFIB Small Business Optimism Index
USDA reports: Weekly Weather and Crop Bulletin (WAOB) | Aquaculture Trade Data (ERS)

Wednesday, July 10
Federal Reserve: Fed Chairman Ben Bernanke speaks about the history of US central banking, after the market closes.
FOMC: Minutes of the Federal Open Market Committee's (FOMC) June meeting will be focused on for any hints of "tapering" of the bond-buying program.
OPEC updates: Opec’s release of its monthly oil market report will be closely watched following the political upheaval in Egypt.
Chinese purchase of Smithfield Foods: Committee hearing. Senate Ag Committee. Witnesses: Larry Pope, CEO, Smithfield Foods; Matthew Slaughter, associate dean for faculty, professor of management, faculty director, Center for Global Business and Government, Tuck School of Business, Dartmouth College; Usha Haley, professor, and director, Robbins Center for Global Business and Strategy, West Virginia University; Daniel Slane, commissioner, US-China Economic and Security Review Commission.
Impact of government bureaucracy on economy: Subcommittee hearing. House Financial Services — Subcommittee on Capital Markets and Government Sponsored Enterprises.
Small business growth strategies: Committee hearing. House Small Business Committee.
US manufacturing competitiveness: Subcommittee hearing. House Science, Space and Technology — Subcommittee on Research and Technology.
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 | MBA Purchase Applications | | Wholesale Trade
USDA reports: Broiler Hatchery (NASS) | National Dairy Products Sales Report (AMS)


Thursday, July 11
Japan: The Bank of Japan is expected to hold interest rates steady.
Regulation of new chemicals: Subcommittee hearing. House Energy and Commerce — Subcommittee on Environment and the Economy.
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.) | Import & Export Prices
USDA reports: Export Sales (FAS) | WASDE (World Board) | Crop Production (NASS) | Oilseeds: World Markets and Trade (FAS) | World Agricultural Production (FAS) | Grains: World Markets and Trade (FAS) | Cotton, Grains, Oilseeds and World Agricultural Production Data (FAS) | Cotton: World Markets and Trade (FAS) | Season Average Price Forecast (ERS)


Friday, July 12
Federal Reserve: St. Louis Fed's James Bullard and Philadelphia Fed's Charles Plosser speak about monetary policy and the economic outlook at the Rocky Mountain Economic Summit in Wyoming, hosted by the Global Interdependence Center.
Mercosur summit: A summit of the presidents of the South American trading bloc Mercosur taking place in Montevideo, Uruguay, is expected to confirm the return of suspended Paraguay.
Economic reports: Producer Price Index | Consumer Sentiment
USDA reports: Peanut Prices (NASS)


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






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