There is no way to sugar coat it or paint a rosy picture. This week could be disastrous for the market. Coming off eight straight down trading days, and the largest weekly percentage drop in the history of the Dow, the economic calendar provides no relief.

This week is full of important reports, and unfortunately for us, few are expected to improve over last month. The calendar starts on Wednesday when the Core PPI and PPI figures for September are announced at 8:30 AM. Core PPI (which excludes food and energy costs) is expected to rise by 0.20 percent. PPI is expected to drop by 0.30 percent, most likely due to the recent plunge in energy costs.

Also on Tuesday, the Retail Sales report for September comes out, and is also expected to post a decline. Expectations are for a drop of 0.40 percent, which is even larger than the 0.30 percent drop in August. Even back-to-school sales couldn’t rescue this segment.

The Core CPI and CPI reports come out on Thursday, and I find the CPI report to be an oddity. The market anticipates that both reports will show an increase. While this can be expected for Core CPI since it excludes food and energy costs, I would have thought the CPI would have dropped for the same reason PPI is expected to drop. Energy costs have dropped significantly as of late, and I would have expected to see this reflected in the CPI.

Capacity Utilization and Industrial Production are both expected to post declines for last month, showing that the weakness in the manufacturing sector continues. The same can be said for the housing sector. The September reports for Building Permits and Housing Starts look like they will show contraction. As loans continue to get harder and harder for potential buyers to find, the housing sector will continue the slide.

As if this isn’t enough, this week also has the release of the Beige Book on Wednesday, the Philly Fed report on Thursday, the Preliminary Michigan Sentiment report on Friday, and a week full of earnings reports. If a majority of these reports come in worse than expected, and earnings consistently miss expectations, it could be a very grim week on Wall Street.

Earnings:
Tues: DNA, JNJ, PEP
Wed: EBAY, JPM, KO, WFC
Thurs: BAX, COF, C, GOOG, MER
Fri: HON

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