Wall Street ended the first quarter with a full slate of economic data to mull over, and when the new, holiday-shortened, week arrives, there'll be plenty more to come.
No doubt, the bulls are hoping for clear signals that the U.S. economy is growing rather than slowing, but at that so-hard-to-achieve rate that's more akin to a consistent simmer than to a boil.
At the same time, they'll be trying to bounce back from a five-session span that saw the
Dow Jones Industrial Average
lose 1%, the
drop 1.1% and the
For the entire quarter, the Dow ended down 0.9%, and the Nasdaq and S&P eked out the slimmest of gains.
The bears, meanwhile, will be looking for evidence that the continuing struggles of the housing sector, and in particular the subprime arena, are reaching other parts of the economy and foreshadowing a broader slowdown.
Neither camp will have to wait long, because on Monday, the Institute for Supply Management will release its survey on the factory sector for March.
Following Friday's strong Chicago purchasing managers' index, a report on manufacturing activity in the Midwest, expectations should be ratcheted up that the national number will be considerably better than consensus estimates.
Though the Chicago PMI is a regional indicator, it's often used to provide an educated guess about the entire country's factory health.
On average, analysts are expecting a reading of 51, which would be down a bit from 52.3 in February. Still, even if predictions prove correct, any number above 50 means the sector is expanding. A reading below that mark signals a contraction.
Also on the manufacturing front, automakers, including Detroit's Big Three of
( DCX), will be out with their monthly sales results. Foreign carbuilders who are making further inroads in the U.S., namely
, will weigh in, as well.
Two days after its factory report, the ISM will offer up its nonmanufacturing index, a look at the strength of the service sector. That index probably edged ahead to 54.7 last month from 54.3, economists believe. The service index will be joined by factory orders for February, which are forecast to have risen 2%.
But the headline event will still be to come at the end of the week. A day after the Labor Department puts out its weekly initial jobless claims on Thursday, it's scheduled to disclose one of the most eagerly anticipated data points every month -- the jobs report.
Importantly, however, the market is closed that day in observance of Good Friday, which would give traders the weekend to digest the numbers before they act on them.
Monthly nonfarm payrolls have been subject to sizeable revisions of late, and there's no reason to expect that to change this time around. For March, employers probably added 120,000 workers, while the unemployment rate likely crept up to 4.6% from 4.5%. In February, the government said 97,000 jobs were created.
Also due are reports on wholesale inventories and consumer credit.
Taken together, the slew of economic information will provide substantial material for those of us trying to figure out what it all means for the
interest rate policy. The central bank hasn't altered its target fed funds rate, currently at 5.25%, for six meetings going back to last June.
That doesn't mean policymakers have necessarily been working to remove all doubt about their intentions.
When they concluded a two-day meeting March 21, they omitted language from their past remarks that the "extent and timing of any additional firming that may be needed" will depend on economic data. Stocks soared, because the absence of the phrase bolstered the hopes of investors who want to see a rate cut some time this year.
Still, the Fed found room to provide both cautious comments about the housing market and to warn that inflation has the potential to linger as a concern.
"Recent indicators have been mixed and the adjustment in the housing sector is ongoing," the Fed said at the time. "Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters."
Despite softening its tone on rates, the Fed noted that readings on core inflation "have been somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures."
With so much data in hand from last week and due during the coming week, traders can be forgiven if they find themselves deciding to keep up the guesswork.
Of course, it isn't
about the economy in the short week. Considering that the first quarter has now wrapped up, investors will have to stay on guard for the profit and sales warnings that are inevitable.
The busiest time for corporate profit reports is still a couple of weeks away, with the season unofficially beginning with Dow component
on April 10. But next week is expected to feature results from consumer-electronics sellers
, along with agricultural concern
and chip outfit
That's a lot to digest in just four days. Come ready to dig in.