Data related to housing, consumer confidence and economic growth will all be eyed next week by investors looking for signs that the U.S. economy is strengthening.
The housing sector has been especially slow to rebound after the worst financial downturn in the U.S. since the Great Depression. Analysts believe a full-fledged recovery won’t occur until the housing market hits a bottom. All signs seem to indicate that that hasn’t happened yet.
Sales of new single-family homes in April will be released on Tuesday. These homes are competing with a surplus of existing homes put on the market due to record foreclosures. Housing experts say buyers are sitting on the sidelines waiting for prices to fall further, which is good for individual buyers but bad for the nation’s housing market.
The March S&P/Case-Shiller Home Price Index will be released on Tuesday and HFA House Price Index on Wednesday. Both indexes are expected to show that home values are still falling.
The National Association of Realtor's Pending Home Sales Index for April is due Friday. Economists are expecting slight improvements at best. In the Northeast, rainy and unseasonably cold weather has cut into sales.
On Wednesday home builder Toll Brothers (NYSE:TOL) is expected to report its quarterly earnings and those figures will certainly have an impact on the broader markets.
Meanwhile, on Tuesday two Congressional committees will hold hearings important to U.S. consumers. A Senate committee will discuss the future of the housing finance system, and a House committee will hold a hearing on domestic oil and gas production.
The second estimate of first-quarter GDP is due Thursday. The preliminary report placed growth at 1.8%, but that number is expected to be revised higher as a result of an increase in consumer spending. Consumer spending comprises 70% of the U.S. economy.
April personal income and spending reports are due Friday and are expected to show that incomes rose modestly, while spending was slightly higher. Consumer spending rose in no small part due to increased costs tied to soaring food and energy prices.
Final readings for consumer confidence in May are due Tuesday from the Conference Board's Consumer Confidence Index, and on Friday for the Reuters/University of Michigan Consumer Sentiment Index. Earlier readings showed improved confidence as labor markets seemed to be gaining traction earlier this spring. But revisions my inch downward as higher gas and food prices eat into consumers’ pocketbooks.
Among the bellwether companies reporting earnings next week are:
Monday: Campbell Soup (NYSE:CPB), Krispy Kreme Doughnuts (NYSE:KKD), Perry Ellis International (NASDAQ:PERY). Tuesday: Autozone (NYSE:AZO), Medtronic (NYSE:MDT), TiVo (NASDAQ:TIVO). Wednesday: 99 Cents Only Stores (NYSE:NDN), American Eagle Outfitters (NYSE:AEO), Costco Wholesale (NASDAQ:COST), Guess (NYSE:GES), Hormel Foods (NYSE:HRL), Toll Brothers (NYSE:TOL). Thursday: Big Lots (NYSE:BIG), HJ Heinz (NYSE:HNZ).