Sunday, December 14, 2014

Monday: Industrial Production, NY Fed Mfg Survey, Homebuilder Survey

by Bill McBride on 12/14/2014 07:27:00 PM

From the WSJ: Fed Likely to Stare Down Oil-Price Drop

Falling oil prices are a boost to the U.S. consumer. But lower prices also are putting downward pressure on already low inflation, potentially moving the nation further away from the Fed’s objective of 2% annual increases in consumer prices.

If Ms. Yellen and her colleagues put more weight on the looming inflation drop, they will hold off on interest-rate increases, which are expected by mid-2015. If they put more weight on underlying economic strength, they will proceed as planned, or even accelerate their move.

The signs so far are that the Fed will proceed as planned.
For inflation, the Fed will watch core measures of inflation and inflation expectations - and ignore the decline in headline inflation.  As far as the economic strength, the Fed will remain patient.

• At 8:30 AM ET, the NY Fed Empire Manufacturing Survey for December. The consensus is for a reading of 12.0, up from 10.2 in November (above zero is expansion).

• At 9:15 AM, the Fed will release Industrial Production and Capacity Utilization for November. The consensus is for a 0.7% increase in Industrial Production, and for Capacity Utilization to increase to 79.4%.

• At 10:00 AM, the December NAHB homebuilder survey. The consensus is for a reading of 59, up from 58 in November. Any number above 50 indicates that more builders view sales conditions as good than poor.

Schedule for Week of December 14th

From CNBC: Pre-Market Data and Bloomberg futures: currently the S&P futures are down 3 and DOW futures are down 13 (fair value).

Oil prices were down sharply over the last week with WTI futures at $56.90 per barrel and Brent at $60.69 per barrel.  A year ago, WTI was at $97, and Brent was at $112 - so prices are down 41% and 46% year-over-year respectively.

Below is a graph from for nationwide gasoline prices. Nationally prices are around $2.56 per gallon (down almost 70 cents from a year ago).  If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by