By Theresa Sheehan

PRINCETON (SMRA) – Anticipation of economic news seems to lose some
intensity going into a holiday weekend. Those indicators scheduled for
release over the May 24 week will probably be quickly absorbed by
markets as the Memorial Day holiday approaches.

The main reports will be for housing and manufacturing, followed by
consumer confidence and growth. However, to some extent attention will
be more towards the following week when the employment data is scheduled
for Friday, June 4.

SIFMA recommends an early close of 14:00 ET on this Friday, May 28.

The S&P/Case-Shiller Home Price Index for March is Tuesday morning,
followed shortly thereafter by the FHFA House Price Index for March.
Both indexes have been showing some signs of softening on a monthly
basis, but compared to a year ago prices are more stable. Home prices
have yet to recover after the correction that began in 2008.

NAR data for sales of existing homes in April is set for midmorning
Monday, and the Commerce Department’s report on new single-family home
sales in April is midmorning Wednesday. Both are likely to reflect a
burst of activity related to the then-expiring homebuyer tax credit
program. Home resales will probably have the greater impact as the
program was more beneficial to those entering the home market and who
more usually purchase an existing property.

New orders for durable goods in April on Wednesday may once more
hinge on the transportation sector. Orders for Boeing aircraft declined
in April, but demand for new motor vehicles may have been up.
Additionally, stronger overall demand for manufactured goods should have
a positive impact, and orders should be on the rise.

The final three of the Fed District Bank manufacturing surveys for
May will be released. On Tuesday, the Richmond Fed’s Survey of
Manufacturing Activity, and the Dallas Fed’s Texas Manufacturing Outlook
Survey is the same morning. The Kansas City Fed’s Manufacturing Survey
is set late morning Thursday. So far for May, the New York and
Philadelphia Fed surveys for the factory sector have suggested a
softening of activity, but still growing.

The Chicago Purchasing Managers Business Barometer for May is
Friday. This index includes both manufacturing and service business, but
because it used to be only manufacturing, it remains associated with the
other measures of the factory sector. This index has been quite strong
of late, and should remain so into May.

The Conference Board’s Consumer Confidence Index for May Tuesday
precedes the release of the final Reuters/University of Michigan
Consumer Sentiment Index on Friday. On the whole, consumer
confidence seems to have risen as May drew to a close, in part on
moderation in gasoline prices. Nonetheless, consumers are going to
remain quite wary of potential threats to the current modest economic
recovery.

The Conference Board report will also include some measures of
consumer perceptions of the labor market that will feed into
expectations for the next employment report, as well as those for buying
plans that may impact consumer spending.

Also impacting consumer confidence is the state of the labor
market. Initial jobless claims for the week ended May 22 will probably
resume the incremental downward trend, but the unexpected push higher in
the May 15 week was an unpleasant surprise. That increase adds to the
distance the level must travel before it falls under the 400,000 mark
that is more consistent with a healthier labor market.

The second estimate (first revision) of first quarter GDP is
scheduled for Thursday morning. The advance estimate of 3.2% will
certainly see some revision as the Commerce Department assumptions are
replaced with reported data. However, changes are mostly expected to
offset each other, and the general tone of moderate growth in the report
to be little changed.

Data on personal income and spending for April is to be released
Friday morning. Most measures of earnings remain quite sluggish, and
the wave of income tax refunds that increased incomes have largely
dissipated. Consumer spending should have a modest rise. The PCE
deflator will look much like the CPI and show a very benign reading
consistent with no acceleration in inflation and some mild disinflation.

The current round of speeches from Fed officials has a decidedly
international emphasis as many Fed officials travel abroad. Even when
remaining nearer home, the implications of the changing global
regulatory environment and the impacts of the global financial crisis
just past are common topics. Then there is the current disruption
associated with sovereign debt to take into account.

The Bank of Japan is hosting a two-day conference on the “Future of
Central Banking Under Globalization.” A number of international central
bankers will be in attendance, including Fed Chairman Bernanke, and
District Bank Presidents Plosser of Philadelphia and Evans of Chicago.

St. Louis Fed President Bullard will be in London, England on
Tuesday to give a presentation, and in Stockholm, Sweden on Thursday.

Although remaining in the U.S., Richmond Fed President Lacker will
speak at the Institute for International Economic Policy in Washington
on Wednesday.

There are no major central bank announcements scheduled for the week.

A flurry of hearings are scheduled for the week as Congress moves
towards a week’s recess following Memorial Day. However, few will have
direct market implications.

On Wednesday the House Financial Services Committee’s Subcommittee
on Capital Markets, Insurance, and Government Sponsored Enterprises will
hold a Hearing on: “FHFA Oversight: Current State of the Housing
Government Sponsored Enterprises.”

** Stone & McCarthy Research Associates **

[TOPICS: M$$FI$,M$U$$$,MAUDS$]