19 January 2012 at 9:01 GMT
Microsoft, Intel and Google are but three of a whole host of major companies reporting today. All three are likely to show growth in earnings per share year-on-year. CPI, Housing Starts, and as always jobless claims are also on the calendar for today.
US inflation set to ease at the consumer level: Yesterday's PPI report,
see here for a review, confirmed our view that inflation is easing across the board in the US even if Core PPI rose more than expected in December. Today we move from the producers to the consumers where headline CPI was down in the first two months of 4Q'11 (-0.1 and 0 pct., respectively). Consensus expects a slightly better print today at +0.1 percent, but consumer price growth is nevertheless expected to ease on an annual basis to 3 percent in December from 3.4 earlier.
Housing market in the US continues to improve: Yesterday's massive boost in the NAHB Housing Market Index, which recorded 25 in January against expectations for 22 and a 21 reading in December, is the highest level since June 2007 and confirms that housing is slowly improving - though we need to point out that it will continue to be a drawn out recovery, in our view, and not a speedy one. After November's solid gains in Housing Starts (+9.3 pct.) and Building Permits (+5.6 pct.) consensus looks for slight declines in today's December report, but the overall trend should remain upward.
Jobless Claims and Philadelphia Fed: Was last week's deterioration in Initial Jobless Claims to 399,000 just a single event or have seasonal factors made December look better than it really was? Consensus seems to think it is the former with a projected decline to 384,000 in today's report.
Fifteen minutes later we get one of the more interesting regional Fed business reports, the Philadelphia Fed Business Outlook. Empire Manufacturing beat expectations on Tuesday (13.5 vs. 11 exp.) and consensus looks for more of the same today, expecting an increase to 10.3 from 6.8 a month ago. The December report was rather solid with New Orders climbing to 9.7 from 1.3 and Inventories declining to -14.9 from 6.6, meaning the improvements are not driven by bloated inventories.
