Week Ahead: Debt Negotiations and Job Report
The week ahead for financial markets will almost certainly be dominated by the Tuesday deadline imposed for reaching an agreement on the debt ceiling and thereby staving off a possible government default.
July labor numbers are due late in the week, as second-quarter earnings continue to pour in. Meanwhile, investors will be keeping a sharp eye out for a downgrade of U.S. debt by one of the big three credit rating firms.
The Treasury Department set the Aug. 2 deadline for raising the U.S. debt limit and has warned for months that the government wont have enough cash to pay its bills if the limit isnt raised by then. Congress has refused to raise the debt limit without a long-term plan in place to cut the deficit.
Meanwhile, seemingly forgotten in the endless bickering and breathless negotiations is the need to create jobs. But that issue will come to the forefront again on Friday when the July labor numbers are released.
Payroll processor ADP will give a preview to those numbers on Wednesday when the company releases its own labor figures. Sometimes ADP is right, like in May, and sometimes its wrong, like in June. The June employment numbers were abysmal, with just 18,000 jobs created in the U.S. The unemployment rate jumped up to 9.2%.
Fridays revised GDP number, which showed the U.S. economy is virtually stagnant, offers no reason for optimism.
The auto industry will release July new vehicle sales on Tuesday, while same-store sales figures for big U.S. retailers is due Thursday. The Institute for Supply Management indexes for manufacturing and non-manufacturing for July are due Monday and Wednesday, respectively.
Among the high-profile earnings due next week are reports from Allstate (NYSE:ALL) on Monday; CBS Corp. (NYSE:CBS), NYSE Euronext (NYSE:NYX), Becton Dickinson (NYSE:BDX) and Pfizer (NYSE:PFE) due Tuesday; Prudential (NYSE:PRU) Mastercard (NYSE:MA) and Time Warner (NYSE:TWX) due Wednesday; Sunoco (NYSE:SUN), Priceline.com (NASDAQ:PCLN), Kraft Foods (NYSE:KFT) on Thursday; and Proctor & Gamble (NYSE:PG) on Friday.