Before we jump into this week's calendar, I wanted to take a moment to recap some of what happened last week.
Retail sales posted a surprising increase of one percent, almost doubling the 0.60% increase the market expected. As I had speculated, the report revealed that most of this came from the economic stimulus checks that started hitting mailboxes last month.
One of the reports from last week that could provide clues as to how this week will play out is the Pending Home Sales report. Pending home sales posted a huge increase last week. The expectations were for a one percent decline; instead we saw an increase of just over six percent. This leads me to believe that the Building Permits and the Housing Starts reports will both beat expectations this week.
In addition to those two reports, Tuesday is stocked with five additional reports. The Core PPI and PPI reports are released at 8:30 am, and expectations are for a 0.20 percent increase in Core PPI, and a full one-percent increase in the PPI Index. Since the Core numbers exclude food and energy, it is pretty clear that the bulk of the increase in the PPI is due to those two factors.
The final report of note this week is the Philadelphia Fed report. This survey covers manufacturing purchasing managers in the Pennsylvania, Delaware, and New Jersey area. In a possible glimmer of hope, the report is expected to not be as bad as last month, posting a decline of twelve points versus May's fifteen-point decline While still a decline, at least it is shrinking.