In this series, we'll explore the data announcements and events that may affect the performance of bank stocks during the upcoming week.
With a big win under their belts, the banks are heading into next week with some momentum. As the economy enjoys some renewed consumer sentiment, the data releases are very housing-centric -- potentially swaying the market in a big way depending on whether the numbers favor more growth. Let's look at what's coming up this week.
- Ben Bernanke speaks and FOMC minutes released: Like clockwork, the Federal Open Market Committee's minutes will be released a few weeks after the most recent meeting. Since we already know that the committee isn't slowing down the current quantitative-easing policy yet, the minutes won't have a huge impact other than to see which members are in favor of scaling back. Federal Reserve Chairman Ben Bernanke will testify before the Joint Economic Committee earlier in the day on the outlook of the economy.
- Existing-home sales: As we saw last week, there's a slowdown in new-housing starts, leaving existing homes to bear the brunt of the housing demand. As Bank of America (NYSE: BAC ) tries to grab more market share in mortgage originations, this could be an important segment of the housing market to follow.
- MBA purchase applications: Application activity rose 7% last week, with refinancing activity maintaining control of 76% of the new applications. The purchase index did climb 2% during the week, leading it to a 12% improvement from a year ago. As we see a shift from refinancing to increased mortgage lending, the banks will begin seeing growth that continues to lag as the market tries to recover. Both Wells Fargo (NYSE: WFC ) and JPMorgan Chase (NYSE: JPM ) noted a decrease in mortgage revenue during their first-quarter earnings reports. JPMorgan CEO Jamie Dimon said he expected the current lag to continue till later in the year.
- FHFA Home Price Index: Much like the new importance of the existing-home sales figures, increasing home prices will give banks a better chance of growing mortgage revenue. This will also be important for any banks that provide mortgage insurance, since the higher prices will lead to higher down payment requirements, with mortgage insurance picking up some of the slack.
- New-home sales: With a slower rate of new housing construction, the current inventory of new houses will be in high demand. This stat will be important to follow, since fast sales of the available houses may prompt homebuilders to start up production again.
- Jobless claims: This week's big jump in jobless claims was another jolt to the markets that had been waiting for a declining trend to start. As we continue to move through this economic recovery, the importance of labor statistics to bank investors will remain high.
- Bloomberg Consumer Comfort Index: Consumer sentiment is up this week, giving more hope that consumer spending will also see a positive trend going forward. If the Bloomberg index shows a continued positive trend, investors should take note that lending may become more popular as outlooks on the economy improve.
Each week there's new information to assess and analyze, but keep in mind that no headline will make or break your bank stock. Keep an eye on the data and statistics that may help bolster your bank's fundamentals, and don't worry about the rest. As a long-term investor, know your investment thesis and stick with it. And as always, you can learn more by logging on to Fool.com.
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