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The Week of November 16-20

11/17/2009

President Obama continues his visit to the Asian region. Investors can expect benign dialogue supportive of fair currency valuations, proper trade balances, and continued economic coordination. The reality of the trip is that the President is going to see his bankers in China. Those bankers want a commitment to an orderly dollar decline so that the value of their currency does not appreciate too significantly and slow the Chinese export economy. I would caution investors against any reflex changes to portfolios based on the dialogue surrounding this trip.

Monday - Retail Sales for the month of October

The affluent consumer continues to contribute the lion's share in consumer spending. Sales figures have improved from the 4th quarter of 2008 abyss; however a reversal of last month's negative report is needed. Retail Sales for September declined 1.5%. According to Reuters, analysts surveyed are expecting a 0.9 increase for the month of October.   

Tuesday / Wednesday - PPI and CPI

Both reports should prove to be relatively benign, with little market impact. Wholesale prices reported in the PPI were lower in September. Rising fuel costs in October should propel the PPI to a modest increase of 0.5%. Consumer prices continue to suggest that the Fed has plenty of room to maintain its low interest rate policy for an extended period of time.

Wednesday - DOE Oil Inventory Report

Energy prices pulled back last week on rising inventories - Heating Oil (Distillates) in particular. For this week, relatively mild weather may cause inventories of Heating Oil to build again. It appears that Oil is gravitating more toward $75 than $80 in the near term. However, I see nothing to suggest that investors reduce exposure to the Energy theme in portfolios.

Thursday - Housing starts   

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Source: Bloomberg
 

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