The Week Ahead

To the extent there is a focus on eco data this week we’ve got little on the burner until Thurs’s Claims result (for the wk ending Mar/5) and Fri’s Feb Retail Sales, that expected to be up 1.0%. A Sales result through expectations will encourage the mkt crowd a tad but a result inside of expectations will greatly disappoint. This reflects the state of mkt tension at the moment. Results are not adjusted for price change so we’ll see how gas prices may have impacted the headline number.

We also have the Mar Michigan consumer sentiment survey on Friday. There are other popular consumer surveys but clients are well advised to ignore all of them, that is, not to fold them into the investment decision-making process.

Over the past many years it has been our experience that there is very little correlation between polling response and spending ahead. Consumers will belly ache like crazy to the pollster while on the way to shop for a new car. These surveys may be money makers for their owners but they won’t help us.


Summary, US economy:

Employment is not yet vibrant but as we all know now, it is improving, that in spite of the administration’s anti-business agenda. The pace of improvement will accelerate in the months ahead due to 1) real demand, and 2) the reversal of much of the administration’s blockage.

After flattening estimates for Q4, spending has eased a tad so far in Q1, but this is pause, not trend. We will look for spending to accelerate and in both cases - jobs and spending results will exceed forecasts.

Manuf will continue on its way to the moon; the positive trend in non-manuf activity will remain with us.

Energy prices driven by wild card events tagged to Mid East unrest fill the role of primary potential retardant at the moment (Obama already having done his part).

Robert Craven