In a week containing a number of top-tier releases, the main message is likely to be that both economic growth and job creation remain subdued.
Dovish Federal Open Market Committee minutes on Thursday and weak payroll data on Friday are likely to usher in the last quarter of the year.
The minutes of the September FOMC meeting should provide greater clarity on the range of opinion among committee members on the decision to embark on a third round of unsterilized asset purchases, or QE3, and extend the rate guidance from 2014 to 2015.
In addition, investors should look for more color on the commitment to maintain an accommodative policy stance even as the recovery progresses and to what extent any members raised concerns over the implication that policymakers would appear less sensitive to inflation as a result.
Friday’s jobs report will likely show that employers added 113,000 jobs in September, up only a bit from August’s 96,000 addition. The unemployment rate is likely to head higher in September, offsetting some of the decline in August.
Also in the U.S., investors will get September auto sales figures on Tuesday. Ford Motor Company (NYSE: F) will release its results at 9:30 a.m. on Oct. 2, followed by a 10:00 a.m. conference call.
On Thursday, retailers are scheduled to report same-store sales results for September. Large U.S. retailers set to release results include Macy's, Inc. (NYSE: M), Target Corp. (NYSE: TGT), the TJX Companies Inc. (NYSE: TJX), the Gap Inc. (NYSE: GPS), Limited Brands Inc. (NYSE: LTD), Saks Inc. (NYSE: SKS), Costco Wholesale Corp. (Nasdaq: COST), Kohl's Corp. (NYSE: KSS), Ross Stores Inc. (Nasdaq: ROST), Walgreen Co. (NYSE: WAG), Nordstrom Inc. (NYSE: JWN) and the Buckle Inc. (NYSE: BKE).
In Europe, aside from digesting the Spanish bank stress test results, the markets will be focused on the European Central Bank meeting on Thursday. There will no doubt be hopes of a bit more clarity on the likely timing and size of outright monetary transactions, or OMTs.
Economists expect both the ECB and the Bank of England to leave interest rates unchanged.
In emerging markets, investors will be watching Brazil’s industrial production and inflation data, Turkey’s consumer price index, and Poland’s central bank meeting.
Below are entries on the economic calendar between Oct. 2 and Oct. 5. All listed times are EDT.
All Day – September 2012 U.S. auto sales results. Analysts expect vehicle sales to reach a seasonally adjusted annualized selling rate of 14.5 million units in September.
9:45 a.m. -- U.S. ISM New York regional business activity index for September.
France -- Parliament debates on fiscal compact.
Australia – October RBA cash rate.
U.K. -- September nationwide house price index.
U.K. – September construction PMI.
E17 – August PPI.
7:00 a.m. -- MBA Mortgage Index for the week ending Sept. 29.
8:15 a.m. -- Despite its admittedly spotty performance as a forecasting tool, the ADP National Employment Report is once again likely to color expectations heading into the BLS official release. Economists expect ADP’s private payroll series expanded by 143,000 in September, after rising 201,000 in August. Since its first release in April 2006, the absolute difference between the preliminary ADP and BLS estimates of the change in private payrolls has averaged a hefty 74,000 jobs.
10:00 a.m. -- Although the services sector is less exposed to the global downturn than manufactures, the limited progress made in resolving the domestic fiscal cliff is making business a bit more cautious. It is likely that the ISM non-manufacturing index nudged lower to 53.2 in September, from 53.7 in August.
Poland -- October base rate announcement.
Russia -- September CPI.
China -- Official non-manufacturing PMI for September.
Australia -- August trade balance.
E17 – August retail sales.
E17 – September composite PMI, final reading.
E17 – September services PMI, final reading.
Sweden – September services PMI.
Spain – September services PMI.
Italy – September services PMI.
France – September services PMI, final reading.
Germany – September services PMI, final reading.
U.K. – September services PMI.
Turkey – September CPI.
Ireland – September unemployment rate.
TBA – ICSC monthly chain store sales for September.
7:30 a.m. - September Challenger job cuts.
8:30 a.m. - Economists look for initial jobless claims to rise to 370,000 for the week ending Sept. 29. That is up from the 359,000 print in the prior week.
10:00 a.m. – Factory orders likely declined 5.8 percent in August, after rising 2.8 percent in July.
2:00 p.m. – The minutes of the September FOMC meeting should provide greater clarity on the range of opinion among committee members on the decision to embark on a third round of unsterilized asset purchases and extend the rate guidance from 2014 to 2015. Economists look for a very dovish assessment of the outlook for the economy, especially the labor market, and heightened concern about downside risks. The committee’s new stance suggests that the burden of proof now lies heavily on the data beating expectations sufficiently to persuade members that easing measures can be scaled back. The minutes should provide further confirmation of this. In addition, investors should look for more color on the commitment to maintain an accommodative policy stance even as the recovery progresses and to what extent any members raised concerns over the implication that policymakers would appear less sensitive to inflation as a result.
U.K. – Bank of England asset purchase decision and bank rate decision for October.
E17 – European Central Bank interest rate announcement for October.
E17 – ECB press conference.
E17 -- Publication of the MFI interest rate statistics.
7:00 a.m. -- St. Louis Fed President James Bullard (FOMC non-voter) speaks in Tennessee.
8:30 a.m. – Economists forecast nonfarm payrolls to increase 113,000, up only a bit from August’s 96,000 addition. Private payrolls should rise by 130,000 in September’s jobs report, while manufacturing payrolls remain unchanged. The unemployment rate is likely to head higher in September, offsetting some of the decline in August. Economists forecast the unemployment rate to head back to 8.2 percent from 8.1 percent. Average hourly earnings will likely gain 0.2 percent, and hours worked should hold steady at 34.4.
1:00 p.m. -- Fed Board of Governor Elizabeth Duke (FOMC voter) speaks in New York.
3:00 p.m. – Consumer credit probably expanded by $6.5 billion in August.
Japan – Bank of Japan target rate for October.
Russia -- Overnight deposit rate and overnight repo rate for October.
Italy -- Prime Minister Mario Monti meets leaders of France, Spain, Malta, Portugal in Malta (to Oct. 6)
Ukraine – September CPI.
Philippines – September CPI.
Malaysia – August exports.
Spain – August industrial production.
Sweden -- August service production.
Norway – August manufacturing production.
Germany -- August factory orders.
Sources: Central banks, European Commission, Reuters, Market News, Capital Economics, Barclays, Bank of America Merrill Lynch.