Under normal weather conditions it would be a safe bet that the economic climate would clear up a bit after the Federal Reserve last week ratcheted up rates an 11th straight time, but the unruly storms sweeping the Gulf Coast continue to put investors on a slippery slope.
“Our first look will be at the damage to refineries and offshore rigs” in Texas in the wake of Hurricane Rita, said Carl Tannenbaum, chief economist at LaSalle Bank.
“The outcome of the weekend’s events will dominate the news,” agreed Lynn Reaser, chief economist at Bank of America’s Investment Strategies Group.
“We’ll be watching energy prices in light of all this storm activity,” Tannenbaum said.
The November crude oil contract Friday hovered around $64 a barrel in futures trading on the New York Mercantile Exchange.
Tannenbaum said the week’s economic releases may take a back seat to the hurricanes, adding that analysts now are most interested in data that reflects post-Hurricane Katrina activity.
August existing-home sales, set for release Monday, are expected to remain strong, with the consensus estimate at 7.15 million units, nearly unchanged from July’s robust 7.16 million units, according to Briefing.com. New-home sales will be released Tuesday.
As for anxieties about the end of the housing boom, builder David Dubin, president of Chicago-based Dubin Residential, is unperturbed. “As long as home rates are low, we’re OK,” he said.
The average rate for fixed 30-year mortgages remains under 6 percent, standing at 5.81 percent in the week ended Sept. 16, according to the Mortgage Bankers Association.
September consumer confidence data, set for release Tuesday, may offer analysts a better reflection of the storm-battered economy. A decline is expected.
Also worth watching are initial weekly unemployment claims, set for release Thursday. Overall jobless claims climbed to 432,000 in the week ended Sept. 17, their loftiest point since 2003, as Hurricane Katrina gave them a boost.
And the National Association of Purchasing Management Chicago Inc. offers a snapshot of September manufacturing activity on Friday. In August its business barometer fell to 49.2. A reading above 50 generally indicates growth, while a drop below 50 suggests contraction.
“We may see a slight improvement” in the purchasers’ data and in durable goods orders, released Wednesday, said Reaser. “But the manufacturing sector also has seen the biggest constraints in turns of higher energy prices.”
Also set for release Friday are personal income and spending data for August.
Looking at stocks, earnings continue to pour in. Walgreen Co. takes a turn on Monday, Research in Motion Ltd. is expected Wednesday and PepsiCo. Inc. on Thursday.
—
(c) 2005, Chicago Tribune.
Visit the Chicago Tribune on the Internet at http://www.chicagotribune.com/
Distributed by Knight Ridder/Tribune Information Services.
AP-NY-09-23-05 1728EDT
Comments are no longer available on this story