The Week Ahead: Nov. 12-18, 2012

November 11, 2012 09:52 PM
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Lawmakers return | Obama press conference | Obama to meet with congressional leaders

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

Congress returns Tuesday, Obama will hold a Wednesday press conference and will meet at the White House Friday regarding efforts to avoid the “fiscal cliff”. Those are the key items on tap in Washington this week, along with two congressional hearings on the attack in Benghazi and a key trade policy vote in the House on trade with Russia.

Also of note this week will be follow-up developments on the late-Friday news that David Petraeus, the director of the Central Intelligence Agency and a former four-star general, resigned after an FBI investigation uncovered evidence that he had been involved in an extramarital affair. Senior members of Congress were alerted to Petraeus’s impending resignation by intelligence officials about six hours before the CIA announced it. White House officials said they did not know about the affair until this week, when Petraeus informed them. It was the second national-security revelation to come to light in the two days after President Barack Obama won re-election. Last Wednesday, the Pentagon acknowledged that Iranian fighter planes had fired on an unmanned reconnaissance drone five days before the election. Petraeus was scheduled to testify before the Senate intelligence committee this week. Michael Morell, who was named acting director of the CIA after Petraeus's resignation, will appear instead.

Lame-duck lawmakers return to Washington Nov. 13, for a session that will break for a Thanksgiving recess and return again for sessions up until around Dec. 21. A host of lingering issues confront Congress and the White House, chief among them the impending fiscal cliff. Many observers expect a two-step process: somehow avoid the across-the-board (sequestration) budgets cuts schedule to take effect Jan. 2, 2013, and return in 2013 to work on a more comprehensive agreement that would include tax reform including revenue most likely coming from reduced tax deductions.

Obama has invited leaders to the White House Friday, Nov. 16, to begin negotiations on how to deal with the expiring Bush-era tax cuts, $1.2 billion in automatic spending cuts and another hike in the debt ceiling. The invitation to the meeting went to House Speaker John Boehner (R-Ohio), House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.), and Senate Minority Leader Mitch McConnell (R-Ky.). On Wednesday, Obama will hold a news conference in the East Room, and will also meet with business leaders at the White House to discuss the action needed to keep the US economy growing and reduce the deficit. On Thursday, Obama will travel to the New York City area, to view the storm damage, talk with citizens who are recovering from the storm and thank first responders.

The fate of the farm bill will be determined soon. Some farm bill proponents have already positioned themselves to fight any extension of the 2008 Farm Bill until the new farm bill is voted on by the House. The savings resulting from the new farm bill could help provide budget offsets for some of the issues handled in the lame-duck session.

The House will vote this week on Russia trade legislation, to establish permanent normal trade relations (PNTR) with Russia, setting up likely enactment by the end of the year. A floor vote is expected by the end of the week. After the House clears the bill as most sources expect, the Senate will likely quickly clear the legislation and send it to the White House. The topic is a major priority for agribusiness, because it would allow exporters to require Russia to comply with international trade rules. Russia formally joined the WTO in August, but US businesses cannot take advantage of the lowered trade barriers that results from Russia’s WTO entry until Congress repeals what is known as Jackson-Vanik, a Cold War-era measure targeting communist countries that restricted Jewish emigration.

It is a short week, with the government closed today for Veteran’s Day. For economic data, things pick up steam following the Tuesday release of the Treasury Budget statement on Tuesday. Wednesday brings the Producer Price Index, Retail Sales, Business Inventories and then the minutes of the October Federal Open Market Committee meeting, with the Consumer Price Index on Thursday. Also out Thursday will be two regional Federal Reserve Bank readings on manufacturing. The week closes out with Industrial Production on Friday. There are several Fed members on tap to speak next week, so their views on the economy could impact markets. Plus, Europe still remains in flux and any new developments in Spain or Greece could also garner market attention.

For agriculture, the Monday holiday means usually released reports will be out a day later – Crop Progress and grain export inspections on Tuesday and the Weekly Export Sales report will not arrive until Friday morning.

Calendar of key events and reports this week:

Monday, Nov. 12
Veteran's Day is observed, and the bond market is closed.
EU finance ministers meet: Finance ministers of EU states meet in Brussels at the Economic and Financial Affairs Council.
Merkel visits Portugal: Angela Merkel, German chancellor, visits debt-ridden Portugal to hold talks with Pedro Passos Coelho, prime minister, and President Aníbal Cavaco Silva. She will be accompanied by German business representatives who will hold investment meetings.
Summit on the Global Agenda, staged by the World Economic Forum, opens in Dubai (until November 14) with participants discussing economic, industrial and regional topics.
International Energy Agency releases its global energy outlook, which gives projections of trends to 2035 and the ramifications for energy security, the environment and economic development.

Tuesday, Nov. 13
Congress returns: Lame-duck session, expected to last until around Dec. 21, with break for Thanksgiving.
Energy reports:
Weekly National Petroleum Report (API).
Economic reports: NFIB Small Business Optimism Index | ICSC-Goldman Store Sales | Treasury Budget | Selected Interest Rates (Federal Reserve)
USDA reports: Export inspections (AMS) | Crop Progress (NASS) | Aquaculture Data (ERS) | Rice Outlook (ERS) Oil Crops Outlook (ERS)

Wednesday, Nov. 14
Obama press conference: President Obama will hold his first full-fledged press conference in more than eight months. White House press secretary Jay Carney said the president will hold the conference in the East Room of the White House, probably during the day, although a time has not been set. Obama’s last full press conference was on March 6.
Greece's biggest labor unions conduct a partial walkout, joining trade unions in France, Spain, and Portugal, which have called a general strike.
Trade Adjustment Assistance (TAA): Subcommittee hearing. House Oversight and Government Reform — Subcommittee on Government Organization, Efficiency and Financial Management.
Proposed international banking rules: Committee hearing. Senate Banking, Housing and Urban Affairs Committee.
Energy: Weekly National Petroleum Report (API)
Economic reports: Weekly mortgage applications (Labor Dept.) | MBA Purchase Applications | Producer Price Index | Retail Sales | Business Inventories | FOMC Minutes
USDA reports: Wheat Outlook (ERS) | Feed Outlook (ERS) Broiler Hatchery (NASS)

Thursday, Nov. 15
Federal Reserve Chairman Ben Bernanke speaks at a confab hosted by Operation Hope.
Dallas Fed President Richard Fisher speaks at Stanford University.
Water resources development: Committee hearing. Senate Environment and Public Works Committee hearing on the Water Resources Development Act of 2012.
Investigation of Benghazi attack: Committee hearing. House Foreign Affairs Committee.
Investigation of Benghazi attack: Committee oversight hearing. Senate Select Intelligence Committee.
Transportation: Weekly Traffic of Major Railroads (Assn. Of American Railroads) | Grain Transportation Report (AMS).
Energy reports: Weekly US underground natural gas stocks (EIA) | Weekly Petroleum Status Report (EIA) | Weekly ethanol plant production (EIA).
Economic reports: Jobless Claims (Labor Dept.) | Consumer Price Index | Empire State Mfg Survey | Weekly Mortgage Rates (Freddie Mac) | ICI weekly money market mutual fund data
USDA reports: Turkey Hatchery (NASS) | Farm Labor (NASS) | Sugar and Sweeteners Outlook (ERS)

Friday, Nov. 16
Obama meets with Congressional leaders: President Obama meets with Democratic and Republican leaders to begin negotiations on averting the “fiscal cliff.”
Health care:
Deadline for states to decide if they will set up health-insurance exchanges.
Energy: Monthly Petroleum Statistical Report (API).
Economic reports: Treasury International Capital | Industrial Production
USDA reports: Export Sales (FAS) | Livestock, Dairy and Poultry Outlook (ERS) | Cattle on Feed (NASS) | Peanut Prices (NASS).

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






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