NEW YORK ( TheStreet) -- Believers in and skeptics of an economic recovery have been waiting for more data to confirm their views. In the coming week, they'll get plenty of it. From manufacturing to housing to price inflation data, there will be no shortage of government reports on the health of the U.S. economy next week, most of which have the capacity to move markets. And if that wasn't enough, the Federal Reserve will meet and hand down a decision on interest rate policy.
In other words, traders will need their rest this weekend before the data overload. Too bad they'll lose an hour of sleep due to daylight savings. > > Bull or Bear? Vote in Our Poll "This past week was lighter in data, and we had more good news than bad," says Art Hogan, chief market analyst with Jefferies, specifically noting the better-than-expected retail sales data delivered Friday. "The question is whether the data next week is more or less supportive," Hogan adds. "It's certainly a data-rich week with plenty to go by. It's a perfect combination of data, and it'll certainly keep us on our toes." On the other hand, James Paulsen, chief investment strategist with Wells Capital Management, says that despite the large volume of economic releases on tap, the next five sessions aren't filled with data important enough to sway someone's view of the economy. "We're working to debunk the major crisis fear that we're going to experience a double-dip recession. That's the bigger picture here," Paulsen argues. "Usually the most important data is the jobs number and Institute for Supply Management numbers, which come early in the month and set a tone. Those reports, especially ones about the job market, are very important." Paul Nolte, with Dearborn Partners, agrees. "The focus is really on earnings and employment, and that's it," he says. "That gives you this slow-moving market with not a lot of volume, although we are slowly grinding higher." Whether they prove to be important or not, the parade of reports kicks off early Monday with the New York Fed's Empire State manufacturing index for March at 8:30 a.m. EDT, followed at 9 a.m. EDT by the December report on net long-term TIC flows, which measures capital flows out of the U.S. Fifteen minutes later, the Fed will release more industrial data in the form of production and capacity utilization statistics for February.
"The Empire State index is among the first new data for the new month, so that's really a leading indicator," Paulsen said. "The Fed's utilization number is kind of a laggard, as it's for February." Tuesday's session will be headlined by the Federal Open Market Committee's decision on interest rates at 2:15 p.m. EDT, although few market watchers expect that officials will alter the current fed funds target rate of zero to 0.25%. In the past week, Chicago Fed President Charles Evans said accommodative interest rates are likely to be needed "for some time," and that the central bank's policy-making arm will keep its target rate low for the next "three or four meetings." With the expectations, Jefferies' Hogan says the Fed is not going to be able to surprise the stock market when it releases its decision and accompanying statement Tuesday. "If there was any chance of a surprise, they'd remove the mention of 'extended period of time' from the statement, but it's early yet," Hogan says. "That'll be an issue for the fourth quarter, not the second or third quarter." Also on Tuesday, the Census Bureau will post housing starts and building permits data for February, right as the Labor Department posts its import and export price data for February. Wells Capital's Paulsen says that housing numbers should garner the most attention, because they have consistently been the weakest of the economic releases. "We want to see whether housing is really coming back or whether weather has any involvement," he said. "The housing data is going to go a long way in helping decide whether things are starting to moderate," Nolte adds. "These numbers will still be distorted due to weather and the tax credit. But we should be seeing a lot better numbers given the amount of money due to government intervention. That's part of the nervousness of the market." Inflation data will be in focus on Wednesday and Thursday, with the producer price index and the consumer price index scheduled for release, respectively. Economists expect that inflation at both the producer and consumer levels was relatively contained in February, which Hogan says will disappoint market participants looking for evidence of economic growth.
"We actually want these numbers to come in a little hotter, because we want a modicum of inflation to represent some economic growth," Hogan says. Thursday's slate of economic reports also includes weekly initial jobless claims and the current account balance for the fourth quarter, both due at 8:30 a.m. EDT. Later, at 10 a.m. EDT, the Philadelphia Fed will release its manufacturing index for March while the Conference Board posts leading economic indicators data for February. Dearborn's Nolte says that the weekly jobless claims data will be compelling as the report will be the first in a long time without a caveat attached. "There weren't any major weather issues last week, so this may be the first number in a long time without an excuse," Nolte says. "And it will be one of the clean numbers that investors will have to rely on for the March jobs data." Despite the large numbers of reports, it won't be all economic data all the time. While the unofficial start of the first-quarter earnings reporting season is still a few weeks away, several companies are reporting on their most recent quarter. In the coming week, Discover Financial ( DFS), Nike ( NKE), FedEx ( FDX), GameStop ( GME) and Palm ( PALM) are among a small handful of companies on tap to open their books on the most recent quarter. In addition, Hogan points out that the end of the third quarter is only two weeks away, which means that some companies could preannounce for the current quarter. "Usually a preannouncement is negative if there is one at all," Hogan says. "But I don't think we've moved estimates up enough. If you look at the change in overall S&P 500 earnings since the fourth quarter, the total consensus has barely changed." Also on the corporate front, investors will be watching for a resolution on health care and financial reform, although there is little chance a solution or settlement for either will be reached. President Obama set a March 18 deadline for the House to complete work on the health care bill, pushing back a planned trip to Indonesia until March 21. Still, Democratic leaders in the House and Senate will not commit to a deadline, according to The Washington Post.
Meanwhile, Sen. Christopher Dodd (D., Conn.) will unveil a new version of his financial reform bill on Monday after bipartisan negotiations with Republicans reached an impasse. The New York Post reported Friday that Dodd's new proposal will hand more power to Fed Chairman Ben Bernanke and will press banks to contribute billions to a fund that would pay to wind down fallen institutions. Dodd had been working with Sen. Bob Corker (R., Tenn.) on a bipartisan reform package before talks fell apart. "You're getting to the point where it's going to make it or it's not," Wells Capital's Paulsen says. "There is a lot of rumbling over both health care and financial. It's likely that there will continue to be more rumbling." -- Written by Robert Holmes in Boston. Follow Robert Holmes on Twitter and become a fan of TheStreet.com on Facebook.