Jobs, Autos, Manufacturing on Wednesday's Calendar

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 |  Includes: DIS, F, HMC, ITB, IYR, QQQ, SPY, TM, USO, XHB, XLE
by: optionMONSTER

By Bryan McCormick

Today is the busiest day of the week for economic releases, with important news about the auto sector, energy, employment, construction and manufacturing.

FordClick to enlarge

Motor Vehicle Sales will be reported separately by each manufacturer, with the news typically beginning at noon eastern time. That hour is not fixed, and some companies can report much earlier. Ford Motor (NYSE:F), Toyota Motor (NYSE:TM), and Honda Motor (NYSE:HMC) could move on the news.

The Mortgage Banker Association will report Purchase Applications at 7 am. I only cover the purchases component of the report as it is indicative of new activity. Purchases last week came in at 170.5. A reading higher or lower by 5 percent or more would be bullish or bearish, respectively.The SPDR S&P Homebuilders (NYSEARCA:XHB), Financial Select Sector SPDR (NYSEARCA:XLF), iShares Dow Jones U.S. Homebuilders (NYSEARCA:ITB), and iShares Dow Jones U.S. Real Estate (NYSEARCA:IYR), along with their member stocks, could be active on this report. Given the big drop in interest rates recently, we can expect refinancing to be strong.

Challenger Job Cut Report will be released at 7:30am. It will be the first report of the week concerning employment, and is considered a leading indicator of future employment trends. There are no consensus estimates available for this release, but August’s report came in at 41,676 jobs cut. If the number comes in higher than the prior month by 20 percent or more, it would be bearish. A reading lower by 20 percent or more would be bullish.

The ADP Employment Report at 8:15am will be the main job-related news for the day, with payrolls expected to growing by just 19,000. The range is extremely wide, from a very bearish loss of 80,000 jobs at the low end to a very bullish gain of 65,000 jobs at the high end. If the report comes in close to or further than the extremes of the range, the reaction is likely to be equally dramatic.

The Institute for Supply Management’s Manufacturing Index will be reported at 10am. Forecasts call for a small drop to 53 from the previous 55.5. The range is narrow, from a bearish 49.9 to a bullish 56 is. The Industrial SPDR (NYSEARCA:XLI), along with its member stocks, may be active on this release.

Construction Spending will also be released at 10am, although it is likely that the ISM manufacturing index will take precedence. Consensus calls for a 0.5 percent contraction. The estimates range from a bearish -1.6 percent to a bullish gain of 0.8 percent. The SPDR S&P Homebuilders, along with its constituents, could be active.

The last report of the day is the EIA Petroleum Status Report at 10:30am. On Tuesday night after market close, the American Petroleum Institute released its crude inventory data. The API is a private industry group, versus the government-run EIA. The API data and the EIA data do not always correlate.

API forecast a build of 1.1 million barrels. This is the same estimate the EIA used. API reported a much larger build of 4.765 million barrels. Large builds are usually bearish for crude pricing. If the EIA inventory data shows an equally large build, it would likely be bearish. A smaller build or a negative number indicating a draw would likely be bullish for crude pricing. The United States Oil Fund (NYSEARCA:USO) and the Energy Select Sector SPDR (NYSEARCA:XLE), along with its underlying, may be active on this release.

(Chart courtesy of tradeMONSTER)