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Following last week’s in-line U.S. payroll data print, this Global Week Ahead’s macro slate looks comparatively empty. Payroll data is a tough act to follow.
Noteworthy macro reports are the U.K.’s retail sales data out on Tuesday. The U.S. retail sales data is out on Friday. These are the last retail sales data from before the all-important holiday season. U.K. retail sales have been tracking +3% annual growth, which is modest.
Don’t expect the U.S. retail sales number (ex-autos) to be very strong either.
Modest retail sales cause this economist to opine: when the year’s major stock indexes trade flat, so do retail sales. After a number of years of double-digit index returns, the U.S. S&P 500 gave up no discretionary spending lift this year.
When the share reflation emperor has no clothes, the people don’t shop with any gusto!
We get the latest U.K. Monetary Policy Committee rate announcement on Thursday. Don’t expect any novelties before the U.S. mid-December FOMC meeting. That’s the monetary policy meeting to watch. It is still two weeks away.
A GDP number out for the Eurozone on Tuesday should be a solid +1.6% in y/y terms. A stronger GDP report could provide the catalyst cheap European large cap stocks need to get a bid.
I want to highlight three quality value stocks in Europe.
These have both a Zacks A in Value and a Zacks Rank #1 (Strong Buy) in our screens.
(1) Take a look at the U.K. retail supermarket chain Sainsbury ADRs (JSAIY). The stock has been recently lifted to a Zacks #1 Rank.
(2) Another European large cap name with a quality investor combo of a Zacks A in Value and a Zacks #1 Rank is Lufthansa ADRs (DLAKY). This is one of Europe’s strongest air carriers.
(3) A final quality value choice in Europe is Hannover RE (HVRRY). This insurance stock also has a Zacks Value Rating of A and a Zacks #1 Rank. This is the 3rd largest re-insurance company in the world. It is based in Hannover, Germany.
Broadly speaking, investors haven’t shown much interest in Europe the last few months. This is showing thru — when quality names like this trade at such low share price valuations.
Here’s the Week Ahead for Key Macro Fundamentals:
On Monday, the BoJ’s Kuroda speaks in Tokyo. Japan’s preliminary leading indicator came out at 102.9, which was better than the prior 101.6.
German industrial production looks to be up +0.6% y/y, better than the prior +0.4% y/y reading.
Chile’s proxy GDP (IMASEC, not seasonally adjusted) looks to be up +1.5% y/y, worse than the prior +2.6% y/y reading, but still showing GDP growth.
Euro Area Finance Ministers meet in Brussels for a two-day meeting. The BoE’s Carney speaks in Brussels too.
On Tuesday, the U.K.’s British Retail Consortium (BRC) retail sales monitor should show +0.5% growth in November, up from a prior -0.2% y/y. The yearly total looks to be +3.0% annually. This group is viewed as the most respected monitor of total retail sales in the U.K.
The U.K.’s Halifax House Price Index looks to be up +9.5% y/y, in line with the prior +9.7% y/y reading.
The U.K.s industrial production looks to be up +1.2% y/y, in line with a prior +1.1% y/y reading.
The Eurozone releases its latest GDP reading. Look for a +1.6% y/y reading, in line with prior expectations.
Japan releases key machinery orders. Look for a +0.1% y/y reading, better than the prior -1.7% y/y reading. Japan’s economy watchers survey should be 48.7, up from a prior 48.2.
On Wednesday, the BRC’s shop price index looks to recover from a prior -1.8% y/y reading.
China’s CPI should be up +1.4% y/y, better than a prior +1.3% y/y reading. The PPI should be down -6% y/y, worse than the prior -5.9% y/y reading.
Brazil’s IBGE inflation rate looks to be +10.42%, up from a prior +9.93%.
In comparison, Mexico’s bi-weekly CPI looks to expand +2.29%, in line with a prior +2.27% y/y reading.
On Thursday, the Bank of Korea (BoK) announces its interest rate decision.
France’s industrial production looks to be up +2.5% y/y, better than the prior +1.8% y/y reading.
Greece’s unemployment rate is 24.5% still.
The BoE Monetary Policy Committee meets. There is a rate decision. No change in the 0.5% base rate is expected. Minutes are released.
U.S. initial claims should be 268K. That’s strong.
On Friday, the Final German HICP inflation rate should be +0.3% y/y, in line with its prior reading. That’s still a very weak level of consumer price inflation.
In the U.S., retail sales ex-auto should be up +0.3% m/m, better than the prior +0.2% y/y reading.
University of Michigan sentiment should be 92.1, up from a prior 91.3.
Eurozone sovereign debt is to be rated by Fitch and S&P.
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