Financial Options

With the week down to 4 days (no figures due out Friday ahead of the holiday weekend) and very little of substance earlier in the week, this week's drama is likely to come from news more than numbers.

The housing reports due out early in the week focus on builder sentiment (Monday) and its immediate effect in housing starts (Tuesday); these are two of the last indicators where we'd expect to see real improvement in the housing market showing up and in the field of housing starts bad news is still good news thanks to a continued inventory glut. The State Street Investor Confidence Index (Tuesday) will be interesting for the comparison between the lagging European economy and the US, where both public and private sectors are forging ahead at a quicker pace than in Europe.

With the summer driving season kicking off this weekend, the Wednesday oil report could return to the fore. If gasoline demand continues to show weakness and last week's drop in inventories was a blip rather than a trend, $60 oil is overpriced. If the inventory drops get serious and demand shows even a hint of recovery, markets seem poised to resume a more modest version of last year's insanity.

The Federal Open Market Committe minutes (Wednesday) may start to get interesting again as there ought to at least be some discussion on how to contain inflation in the face of the huge expansion of the Fed balance sheet, which will be reported on Thursday. The Conference Board reports on Leading, Coincident and Lagging Indicators, also due Thursday, aren't likely to contribute much to forecasting, but the lagging indicators may confirm the growing consensus that the recession hit bottom early in the year.

*See more information on the Financial Roadmap series here. Earnings reports are companies of interest, NOT recommendations.