In this series, we'll explore the data announcements and events that may affect the performance of bank stocks during the upcoming week.
Banks had a big week, with a new and improved rating from Moody's lifting them higher. But mixed economic data this week sent the overall market into a tizzy, with investors not quite sure which way is up. Next week, there are a lot of data releases that could sway your investments one way or another, so let's take a look at what's coming up.
- Bank of America (NYSE: BAC ) settlement hearing: A much anticipated court date was rescheduled for Monday, when a court will hear arguments for or against a $8.5 billion settlement between B of A and investors. The settlement was viewed as highly favorable to the bank, and its rejection could cost B of A dearly.
- Construction spending: Last week's housing data showed that home prices and pending home sales were up, leaving the housing market with a dwindling inventory. Since construction starts had slowed in the past month, this data point will be an important sign of whether or not home builders have gotten the incentives they need to start building new homes. Higher construction spending would be a boon for banks, as it would signal the beginning of a new wave of available houses for new mortgages.
- Motor vehicle sales: though generally not as heavily followed as mortgages, auto loans provide a stream of revenue for the banks when other loan activity is slow. Last month we saw auto sales increase, and with an increase in demand for durable goods (which automobiles are considered), there may be more opportunities for banks to issue new loans.
- MBA purchase applications: Though this past week's data showed a 8.8% decline in application activity, there was some positive news for banks. With refinancing applications accounting for 71% of the total activity, it was that segment's decline that brought the overall tally down. Applications for new mortgages actually increased 3% during the week -- a great sign for Wells Fargo (NYSE: WFC ) and JPMorgan Chase (NYSE: JPM ) , both leaders in the mortgage origination market who predicted that new mortgage business would continue to lag through the remainder of the year.
- ADP Employment Report: Giving a fuller view of the current employment market, the ADP report gives details on who is working, for how much, and other important factors in the recovery of the labor market. Though we've seen firing decrease over the past few months, hiring has yet to pick up -- leaving the recovery stagnant.
- Challenger Job-Cut Report: Much like the ADP report, the Challenger data gives us a deeper look at who is getting cut and other details that the general jobless claims report cannot give.
- Jobless claims: Though there has been a bigger occurrence of dropping jobless claims, this week saw a 10,000 claim increase. Investors will be keeping a close eye on the labor market statistics since the Fed has noted that it will also be keeping a watchful eye. 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.
- Employment Situation: This highly anticipated report will give more details on the recovery of the labor market, a key factor in the overall economic recovery.
- Consumer Credit survey: Since we know from this week's consumer spending and personal income data that both are down, next week might see a tightening of consumer credit. The survey will give information on how available credit is being used, what is available to the average household, and plans for credit in the coming months.
Throughout the week
Prominent members of the Federal Reserve will be speaking throughout the week:
- San Francisco Federal Reserve Bank President John Williams will discuss inflation targeting at the Sveriges Riksbank conference in Stockholm, Sweden on Monday.
- Federal Reserve Gov. Sarah Bloom Raskin will participate on a panel discussing job creation trends in Washington on Tuesday and give a speech on revised capital rules to banking conference in Columbus, Ohio on Thursday.
- Kansas City Federal Reserve Bank President Esther George will give a speech on the economy in Santa Fe, New Mexico on Tuesday.
- Dallas Federal Reserve Bank President Richard Fisher will give a speech on monetary policy to the C.D. Howe Institute in Toronto, Canada on Tuesday.
- Philadelphia Federal Reserve Bank President Charles Plosser will lecture on too-big-to-fail at Boston College on Thursday.
Knowing that there are a number of data releases and events that can influence how your investment performs in a given week is helpful as we stay diligent. But as a long-term investor, you know that no news headline or data point on a given day will make or break your stock. Keep an eye out for the items that you think will effect your portfolio and leave the rest. And as always, you can learn more by logging on to Fool.com.
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