Financial Options

With no major economic indicators due out Monday, the way is clear for the markets to react strongly to a decision by Supreme Court Justice Ruth Bader Ginsberg on the Chrysler creditor appeal to the Bankruptcy Court's approval of the Fiat sale. Markets have been reacting positively to an apparently quick and painless Chrysler bankruptcy and the potential for a similar process for General Motors. A stay preventing the sale could negatively impact US stocks, though financial stocks may breathe a sigh of relief if the major creditors that got shafted in favor of unions and the government get that reprieve. The Conference Board will release its Employment Trends Index on Monday, likely confirming the bulk of last week's labor market data that showed unemployment continuing to rise but at a slower pace.

Tuesday the Commerce Department will report on Wholesale Trade. With the weekly Redbook retail index and the International Council of Shopping Centers report on major chain store sales, retail is well covered Tuesday as well.

Wednesday's biggest news will be the Federal Reserve Beige Book, which will give savvy investors a chance to see the bright spots, geographically and by industry, that will lead the economic recovery. Other big news Wednesday will be the Foreign Trade statistics from the Commerce Department, where an increase in non-petroleum imports would be further sign of a rebound starting. And in the field of petroleum, Wednesday's oil inventory report will be very important as consumers are beginning to chafe at a subdued repeat of last summer's gasoline price spike that did at least as much to damage the economy as Wall Street's paper problems.

Thursday brings a triple whammy with stats on retail sales, jobless claims and business inventories. Retail sales are widely expected to improve after April's disappointing report while jobless claims continue at a high level. The less commented news on business inventories may be more important, as business inventories have contracted considerably but generally not as much as sales. Too high inventories are negative for economic growth, as businesses scale back production to deplete excess inventories. The inventory-to-sales ratio hit a 9-year high in January, but has started to fall. Also Thursday, the RBC Financial Group will release its CASH Index report on consumer confidence and finances, the Conference Board will release the Leading Indexes for Japan and the UK, and the Fed balance sheet and money supply reports will deserve a look.

Friday's big news is in international trade and inflation, with the release of Import/Export Price Indexes from the Bureau of Labor Statistics. With lending and spending still slow in the US, the first sign that the Fed's money creation is leading to inflation is likely to come from the import sector.

There is extra action this week from Treasury on several fronts. The usual weekly 4-week, 3-month and 6-month T-bill auctions will be supplemented by a 3-Year Treasury Note auction Tuesday, a 10-Year aote Auction Wednesday, a 30-Year Bond auction Thursday and the release of federal budget figures on Wednesday.

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