The Coming Week

This week we get some really important reports.

CPI (Thursday) and PPI (Wednesday) top of the list. Over the last few weeks, several Fed governors have come out and essentially said inflation is still too high above their comfort zone. This at a time when the official BLS numbers were pretty good on the inflation front for the last several months. Keep an eye on the alternate Fed inflation measures from the Cleveland and Dallas Fed. I'm suspecting these numbers are more important for the Fed than they are letting one.

We get two regional manufacturing reports; the New York (Tuesday) and Philly Fed (Thursday). Let's see how these jibe with the recent uptick from the ISM national survey. We also get industrial production.

Finally, we have housing starts on Thursday. Housing is still in a slump. As I have written before, I don't see a bottom yet because inventories are still very high and sales are still decreasing.

Coming Up This Week

Housing Starts and Producer Prices come out on Tuesday. The housing starts number is important. Builders have been slowing their building pace in response to a large inventory build-up.

We get the final 3Q GDP, Leading Economic Indicators and and the Philly Fed on Thursday. The ISM manufacturing numbers dropped below 50 last time, so the Philly Fed number will let is get some confirmation or not of that particular number. Personally, I've never been a big fan of the LEI numbers.

Durable Goods, personal income and consumer sentiment come out on Friday.

I would expect the market to really slow down come Thursday about noon, as traders look to get an early start on the Christmas break.

We'll also have to see if the markets decide to continue their rally, or if traders start to book and lock-in year-end profits.