The Daily Difference: Expect more stale numbers next week

We all know the consumer typically contributes over two-thirds to GDP, so next week’s numbers are going to be significant because they center around the consumer and the average household’s largest asset: housing. Nevertheless, many of the numbers are stale and will not provide much forward-looking information:

• Housing starts: The most significant release next week will be housing starts, to be released on Tuesday. This indicator is typically used to determine momentum in the economy, although the number (based on September starts) was originally supposed to be released October 17. Still feeling the effects of the government shutdown, this delayed number will not have as large of an impact on the markets due to the one-month delay.
• More housing numbers: Monday we will see the pending home sales index, which will be closely watched to determine the effects of “taper talk” on credit conditions. Market bulls are hoping pending home sales will increase as those who have sat on the fence jump at what may be their last chance to purchase a home with roughly 4% financing. Market bears are hoping the number will indicate the jump in rates has choked off demand for housing. The S&P Case-Shiller Home Price Index will be released Tuesday. This number is significant because it should indicate the effect on many households’ net worth (keeping in mind housing is the largest asset of most households).
• Christmas is coming: We are rapidly approaching the most important six weeks of the year for consumer sales; as a result, many will be keeping a close eye on the consumer confidence number to be released Tuesday to help adjust forecasts for the holiday shopping season. Expect the market to be very sensitive to this number!