The April 15 week starts with the national tax filing deadline on Monday for most taxpayers. The January 28 announcement from the IRS listed the exceptions. It said, “The filing deadline to submit 2018 tax returns is Monday, April 15, 2019, for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17 to file their returns.” It may well be slightly more of a last minute rush than usual. Filing season statistics available to-date put the number of tax returns received and processed 0.3% behind the comparable period last year. Changes in tax law could mean that some taxpayers are expecting to have to send in money and therefore are putting it off until the last minute. It could also be that confusion over the changes will result in more extensions being requested than usual.
The week ends with non-government holiday for Good Friday. The federal government is open, but many businesses and schools are closed. This week retailers will be ramping up promotions in advance of Passover and Easter, and the holiday on Friday may see a burst of activity helped by mild spring weather. Friday is a full holiday for the stock and bond markets. The bond market will have an early close on Thursday at 14:00 ET.
The upcoming holiday weekend also means that the communications blackout period around the FOMC meeting that will officially start at midnight on Saturday, April 20 will effectively begin sooner. The last Fed policymaker scheduled to speak in the coming week is on Wednesday, April 17.
The Fed’s Beige Book may prove to be the last word on the outlook for monetary policy when it is released at 14:00 ET on Wednesday. The prior two editions of the Beige Book reflected the softest assessment of the economy since September 2016 when there were adverse weather impacts to contend with. However, the recent slowdown appears to be more fundamental to economic conditions with the abrupt slowing in late 2018 in both manufacturing and services and with the partial federal government shutdown that lasted 35 days from late December to late January. The next edition will cover the period from late February through the first days of April. While it is unlikely to reflect more than modest-to-moderate expansion during that time, it could indicate that the slide in activity is over, or even that conditions improved slightly.
Data on retail sales in March will be reported at 8:30 ET on Thursday. The 0.2% decline in February reflected soft sales of motor vehicles and weakness in other sectors that may have been due to severe weather events. The March numbers are likely to look much better with the rise in motor vehicle sales, continued gains in gasoline prices, and the arrival of spring weather that will encourage buying of building materials and garden supplies. Also, tax refunds began to show up in late February and could be turned over into purchases of big-ticket items in March.
Indications are that recent sharp declines in mortgage interest rates are benefiting the housing market. The NAHB/Wells Fargo Housing Market Index for April at 10:00 ET on Tuesday could add a point or two to the 62 reading of February and March as consumers are motivated to commit while rates are at the lowest in over a year after the scare from the near-term peaks in October and November 2018.
Some home buying has been constrained by the lack of supply, especially in the more moderate price ranges. Housing starts in February felt the pinch of winter weather, but recent sales data suggest that the March report at 8:30 ET on Friday will see new construction, especially in the single-family sector. Permits-issued were down somewhat in February. However, the underlying trend has been hovering around the 1.300 million (SAAR) mark and March should better that as consumer demand for new housing firms.
There will be early looks at conditions in the factory sector in April with the New York Fed’s Empire State Survey at 8:30 ET on Monday and the Philadelphia Fed’s Manufacturing Business Outlook at 8:30 ET on Thursday. Since the abrupt downturn in manufacturing activity at the end of 2018, the first quarter readings for the District Bank surveys have been see-sawing between softer and firmer readings, although by-and-large modest expansion remains in place. Some of it was impacts from the partial federal government shutdown, and some of it has been uncertainty about trade and tariff policy. Underlying conditions should be clearer in April and should remain aligned with modest-to-moderate growth.
Industrial production and capacity utilization for March at 9:15 ET on Tuesday may show that manufacturing has managed to shake off the declines of the prior two months and post a gain. However, mining output could remain lackluster and utilities are likely to fall after the big increase in the prior month due to severe weather.
The New York Fed’s Business Leaders Survey for April at 8:30 ET on Tuesday not be much different than the 10.8 in March. The District’s service sector took a hit in January with the government shutdown and then rebounded solidly in February. March levels out to what is likely near the fundamental middling expansion for the sector.
The report on international trade in goods and services for February at 8:30 ET on Wednesday will help fill out assumptions for first quarter GDP when that number is released at 8:30 ET on Friday, April 26.
Initial jobless claims for the week ended April 13 at 8:30 ET on Thursday should remain in line with recent reports, although another week below the 200,000 mark would be unusual. Nonetheless, the number should not hint at any softening in labor market conditions.
The Conference Board’s Leading Economic Index for March at 10:00 ET on Thursday will likely continue to signal modest-to-moderate growth in the months ahead. Stock prices improved, as had confidence in the next six months.
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