These 3 Economic Reports Will Move The Dow This Week

Investors following the Dow Jones Industrials (DJINDICES: ^DJI  ) are looking forward to the beginning of earnings season, with the chance to get the latest read on how the Dow's 30 components are faring in what appears to be a solid economic environment. Even as Nike (NYSE: NKE  ) reports on Thursday, though, economic data will continue to move the Dow and the stock market generally. Let's take a look at three key areas in which we'll see economic reports this week and their potential impact not just on Nike but also on Home Depot (NYSE: HD  ) , Boeing (NYSE: BA  ) , and the rest of the Dow Jones Industrials.

Housing remains in focus
Investors will see substantial amounts of housing data this week. Existing-home sales will come out Monday, but the biggest set of data will be available Tuesday, with new-home sales figures as well as the latest S&P Case-Shiller readings on home prices. In general, economists expect reasonably good figures on both fronts, with both existing and new home sales climbing in roughly the 2% range and the Case-Shiller numbers showing a 0.8% monthly gain in prices for its key 20-city index.

Home Depot stands to gain the most from continued strength in housing. Last week's reading on the Leading Economic Index led to some questions about the home-improvement retailer's future prospects, with a large drop in building permits having been the only blemish on what was otherwise a strong report. In order to be as profitable as possible, Home Depot needs to see solid levels of activity not just from building contractors but also from homeowners and their do-it-yourself projects. If housing data is good, it could help send housing-related stocks throughout the market higher.

Staying durable
On Wednesday, investors will get readings on durable goods orders in conjunction with broader GDP figures. The GDP reading is unlikely to move markets because it's the second revision of the first-quarter number, but durable goods orders are seen as being likely to slow from the previous month's pace, with projections for a 0.4% gain.

Source: Boeing.

One wild card for durable goods is aircraft sales, in which Boeing has huge influence. The impact of order sales for aircraft can be so large that many economists focus on removing transportation-related orders from the durable goods numbers, looking instead at "core" durable goods that exclude volatile auto and aircraft sales. Nevertheless, customer willingness to spend on long-lived goods has helped vault Boeing higher and should continue to do so in the future.

Are consumers strong?
On Thursday, investors will see how the consumer is doing, with releases of personal income and consumer spending figures. Economists see both figures matching each other with 0.4% gains, and many will look at the change in an important measure of consumer prices for signs of inflation.

Nike and other premium consumer-goods companies need healthy levels of personal income to push spending higher. If interest rates start to rise, then it'll be even more important for Nike to see ordinary consumers to start getting the benefit of an improving economy in the form of greater disposable income. Otherwise, sales might not meet the expectations Nike's shareholders have of the athletic giant.

Watch for surprises
Economic data will start to move to the back burner as earnings reports come fast and furious beginning next month. Nevertheless, be sure to watch these releases to keep earnings in perspective and to identify longer-term trends.

You can't afford to miss this
"Made in China" -- an all too familiar phrase. But not for much longer: There's a radical new technology out there, one that's already being employed by the U.S. Air Force, BMW, and even Nike. Respected publications like The Economist have compared this disruptive invention to the steam engine and the printing press; Business Insider calls it "the next trillion-dollar industry." Watch The Motley Fool's shocking video presentation to learn about the next great wave of technological innovation, one that will bring an end to "Made in China" for good. Click here!


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3003508, ~/Articles/ArticleHandler.aspx, 9/1/2014 11:05:30 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 17,098.45 18.88 0.00%
S&P 500 2,003.37 6.63 0.00%
NASD 4,580.27 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/29/2014 4:30 PM
^DJI $17098.45 Up +18.88 +0.00%
DOW JONES INDUSTRI… CAPS Rating: No stars
BA $126.80 Down -0.31 +0.00%
The Boeing Company CAPS Rating: ***
HD $93.50 Up +0.99 +0.00%
Home Depot CAPS Rating: ***
NKE $78.55 Down -0.27 +0.00%
Nike CAPS Rating: *****

Advertisement