In this series, we'll explore the data announcements and events that may affect the performance of bank stocks during the upcoming week.
Last week was a doozy for investors interested in the labor and housing markets -- as most bank investors are. After all the head-spinning data, this week is kind of a recap, so you can take a little bit of a breather. But don't think there isn't anything valuable to glean from the events or announcements in the coming days.
- Gallup U.S. Consumer Spending Measure: Reporting consumer spending habits as reported by consumers themselves, the Gallup report gives investors a glimpse into the daily and weekly lives of people's discretionary spending. This is particularly important for the banks and credit card companies, which will now have to charge lower transaction fees for debit card purchases. With the data in hand from consumers, you can estimate the impact of the new fee reduction.
- JOLTS: The Labor Department's Job Openings and Labor Turnover Survey is a recap of June's activity, so it's a little behind the times. But investors can get some new information from it, including the number of job openings available to the nation's workforce. This measure is helpful when trying to figure out the trend of new job creation, which we learned was slowing in July.
- MBA purchase applications: With interest rates remaining flat last week, it's likely that banks and investors will continue to see the declines in new mortgage applications. Last week's 2% decline was painful for both Wells Fargo (NYSE: WFC ) and JPMorgan Chase (NYSE: JPM ) , the nation's top two mortgage originators, since a loss of new business won't let them sustain the revenue growth they've had in the past few quarters. And for Bank of America (NYSE: BAC ) ,the lack of demand from buyers for new loans gives the beleaguered company a smaller chance of snatching up a bigger segment of the mortgage market.
- Bank reserve settlement: It's that time again. Every two weeks, the Federal Reserve requires banks to check in with their capital reserve balances. While some banks have no problem meeting their required threshold, others may have to scramble to gather up enough cash to meet the requirements -- leading to increases in interbank lending, which can influence movement in the federal funds rate.
- Gallup U.S. Job Creation Index: More data on new job creation, though this report will shed more light on why the trend was declining in July.
- Consumer Credit: Another report that's not quite timely, the consumer credit report allows investors to see the amount of used and available credit. A rise in consumer credit could be a healthy sign for the economy, as long as consumers are spending wisely and within their means.
- Jobless claims: Last week's big drop in new unemployment benefit claims was unexpected, though data in July is subject to volatility from manufacturing plant closures. This week's report will be important for investors as they try to see if a trend forms that brings the average weekly claims back down to pre-recession levels.
- Consumer Comfort Index: Giving investors a picture of how consumers are feeling about the economy and their own finances, this index from Bloomberg will allow the banks to gauge the likelihood that new business will enter their branches.
Throughout the week
A number of prominent Federal Reserve members are giving speeches or talks on the current economic environment, monetary policy, and the financial crisis. Any nuggets of information gleaned from these talks could provide good insight into future Fed policy.
- Dallas Federal Reserve Bank President Richard Fisher will deliver speech on the economy in Portland, Ore.
- Chicago Federal Reserve Bank President Charles Evans will hold a breakfast open to the press to discuss various items.
- Philadelphia Federal Reserve Bank President Charles Plosser will give a speech on the economic outlook to Women in Housing Finance, in Washington, D.C.
- Cleveland Federal Reserve Bank President Sandra Pianalto will deliver a speech in Cleveland.
As always, it's important to know what will affect your stocks as you move through the week. But as a Foolish investor who's in it for the long haul, you know that being informed means riding the waves caused by any of the announcements I've mentioned. And as always, don't feel as if you need to study every piece of information released in any given week -- pick and choose what you find most important. Fool on!
With plenty of data points and news headlines intimating trouble for banks ahead, there's no shortage of investors unsure about the future of the Big Four. In fact, many investors are still terrified about investing in big banking stocks after the financial crash. But the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.