The Week Ahead : March 18th to March 22nd

Hi fellow monkeys,

According to a Reuters article, the S&P/DJIA growth we've seen since the beginning of 2013 is not coming to an end, even though it will probably remain slow. With a forward PE 9% below the October 2007 value at the S&P 500's all time high, analysts judge US equities to be fairly cheap. When compared to other assets such as bonds, equities are not expensive at all. When factoring in the low interest rates and increasing dividend payouts, stocks are still the best asset under the sun.

The week ahead is also rich in releases and economic data. (More after the break.)

On Monday, the National Association of Home Builders releases its February survey. A 47 is expected by the consensus, which would be a one point increase from the January survey. Nevertheless, anything below 50 means that builders perceive housing sales as poor instead of good. The Bureau of Labor Statistics is also releasing its Regional and State Employment and Unemployment data for January 2013. Both releases are scheduled at 10:00 AM.

On Tuesday, the Census Bureau releases the February Housing Starts. The consensus expects an increase to 919 thousand (Seasonally Adjusted, Annualized) in February, up from 890 thousand in January. This would still be 5.5% below the December 2012 Housing Starts of 973 thousand. This release is scheduled at 8:30 AM.

Wednesday is going to be a bigger day. We kick it off at 7:30 AM with the Mortgage Bankers Association's release of the mortgage purchase applications index. At 2:00 PM, the Federal Open Market Committee does its meeting announcement and forecasts. No modification of the low interest rate policy or additional QE purchases are expected at this meeting. The FOMC will also release its target federal funds rate and its quarterly economic projections. This release will be followed by a press briefing from Ben Bernanke at 2:30 PM. During the day, the American Institute of Architects will release its February Architecture Billings Index, a leading indicator for commercial real estate.

On Thursday, the Department of Labor releases its weekly unemployment claims report at 8:30 AM. The consensus is for claims to increase to 340 thousand from 332 thousand last week. The "sequester" budget cuts might start impacting weekly claims this week. At 9:00 AM, the Markit US PMI Manufacturing Index Flash is released with an expected decrease to 55.0 from 55.2 in February. This is followed by the Federal Housing Finance Agency's January House Price Index at 10:00 AM where a 0.7% increase in house prices is expected. At the same time, the National Association of Realtors releases its February Existing Home Sales data. Here, the consensus is for seasonally adjusted sales of 5.01 million annually. This would represent a 1.8% monthly increase. Again at 10:00 AM, the Philly Fed releases its March manufacturing survey. A reading of minus 1.5, up from minus 12.5 last month is expected (below zero indicating contraction). Finally, during the day, UK Chancellor George Osborne will unveil hits budget amid low confidence as the UK economy experiences its slowest recovery since the 19th century.

Finally, no releases are scheduled for this Friday.

Have a good week !