There will be some Stormy Economic News This Week.

Trying to sail thru this week's economic reports will be a bit like sailing in a storm.  This weeks scheduled economic news will most likely include another Federal Reserve rate cut too.  Current market expectation is that the rate cut will occur regardless of the stock market's performance. Economic reports due out this week include:

• Today, Monday, we had the December's New Home Sales along with a $24 billion 2-yr Treasury auction.  New home sales posted the biggest drop on record in 2007 according to the government's latest look at the housing market.  2007 was a year that saw a meltdown in the mortgage market and a drop in home values ended with yet more signs of weakness. December sales came in at an annual rate of 604,000, the Census Bureau report showed, down from 634,000 in November, which was also revised lower.  These statistics were well below forecasts of 645,000.
• Tuesday we'll see Durable Goods orders (expected +2.0%), Consumer Confidence (expected at 87), a 5-year T-note auction, and the start of the Fed meeting
• Wednesday: GDP for the 4^th quarter (expected +1.2%), and the FOMC interest rate decision. Market expectation is still for a 0.5% rate reduction.  Be prepared for some market volitility.
• Thursday Jobless Claims, the Q4 employment cost index, PCE deflator, and the Chicago Purchasing manager's index.
• Friday, the employment report (expected 5.0% with non-farm payrolls expanding 55k.  This is a high impact report), Univ. of Michigan's Consumer Confidence number ISM manufacturing index, and Construction Spending.

Look for Wednesday or Friday to be potentially the most volatile days affecting the market and/or the 10 Year Treasury Bond.  Wednesday's GDP & Fed move, and Friday's Employment and ISM reports are the most important pieces of data reflecting the health of our economy. But we may see movement in rates Tuesday or Thursday also after those economic reports are released too.