The Week Ahead: Confirming Apathy Or Discovering Organic Motivation

Before the Fed announced QE3 in mid-September, markets were more active, ostensibly trading varying degrees of anticipation for the size, shape, and timing of potential QE3.  Now that QE3 has arrived, things feel very different.  If the major averages and lines on charts of bond market securities could talk, they seem to be saying something to the tune of "now what?"

With this in mind, the week ahead is guaranteed to be informative, for one of two reasons.  It's not that we can be sure ahead of time that it will rise to the challenge of inspiring market trends to shift or accelerate, but we can be sure that this week provides the best shot at that for any week that doesn't contain an FOMC Announcement or Jobs Report.  In this way, it will either provide confirmation that markets really are tuned out for the most part, or it could finally be enough to motivate some movement.  In short: "apathy confirmation" vs "organic trading motivation."

The confirmation of apathy would be more of a broad assessment of the entire week whereas the organic trading motivations can be discussed now.  First up this week--and one of the biggest potential movers--will be Retail Sales at 8:30am on Monday.  It's joined by the NY Fed's Empire State Manufacturing Index, which can have an impact on markets, but isn't typically as potent as Retail Sales.  Just think "lead role" and "supporting role" here.

The following day brings Consumer Prices, which are a mere shell of their formers selves regarding their ability to move markets.  Treasury International Capital (TIC) data adds to the parade of relatively less consequential market reports, while Industrial Production tries to pick up a bit of the slack.  Tuesday morning ends with NAHB's Housing Market Index, which has recently been quite strong.

The remainder of the week will offer additional housing data including Housing Starts, Building Permits, and Existing Home Sales.  With us as always is the Wednesday morning MBA application data and Thursday morning's Jobless Claims (interesting one here, to see if there's a bounce back from last week's surprise numbers which evidently failed to include the Jobless Claims from one "large state").  Underpinning the week's domestic data will be an EU Summit on Thursday which could produce plenty of market moving headlines.