Get Ready For A Busy 4-Day Week In The Economy - Here's Your Complete Preview

Getty Images / Matt CardyThe hounds of the Heythrop Hunt arrive to greet hunt supporters gathering in town square in Chipping Norton on December 26, 2014 in Oxfordshire, England.

Get ready for another 3 and 1/2-day week. And it'll be a busy one with a stacked line-up of reports on manufacturing, housing, and consumer confidence.

If you were off last week, you missed some big headlines. GDP growth was revised up to a whopping 5.0%. Meanwhile, the S&P 500 hit all-time highs with the Dow crossing 18,000 for the first time ever.

Here's your Monday Scouting Report:

Top Stories

• GDP. There will always be naysayers skeptical of reports as strong as last week's GDP report. For what its worth, BMO Capital's Jennifer Lee notes that all of the popular adjusted GDP metrics still hit multiyear highs. "Real gross domestic purchases (or GDP ex net exports) grew 4.1% annualized (was estimated at 3.0%), the second quarter in a row of 4%-plus gains. Final domestic demand (or GDP ex inventories and net exports) grew 4.1% annualized (was estimated at 3.2%), a four-year high. Final sales (or GDP ex inventories) grew 5.0% annualized (was estimated at 4.1%), an eight-year high."

Economic Calendar

• Dallas Fed Manufacturing Activity (Mon): Economists estimate this regional manufacturing index slipped to 9.0 in December from 10.5 in November. "The headline index in the New York Fed  manufacturing survey fell sharply in December," UBS's Kevin Cummins noted. "The details of the report were also especially weak, except the employment index, which remained positive.  The Philadelphia Fed headline index also fell in December but did not show nearly the same degree of weakness as NY."
  
• S&P/Case-Shiller Home Prices (Tues): Economists estimate home prices climbed by 0.40% month-over-month in October or 4.35% year-over-year. "Figures released by data provider CoreLogic suggest that home selling prices in the 20 major metropolitan areas covered by the S&P/Case-Shiller survey jumped by 1.1% in October - the largest increase in 12 months," Societe Generale economists estimated. "Most of that gain likely reflected seasonal adjustments, however. Indeed, before seasonal adjustment, home prices probably edged just 0.2% higher during the reference period, placing the latest reading of 174.0 an unchanged 4.9% above the level recorded in October 2013. Our forecast, if on the mark, would leave home prices roughly 17% below their pre-Great Recession high."
• Consumer Confidence Index (Tues): Economists estimate this measure of sentiment jumped to 94.0 in December from 88.7 in November. "The index fell to 88.7 last month after hitting a seven-year high of 94.5 in October," Credit Suisse economists noted. "We forecast a December level of 93.0 given significant further declines in gasoline prices and generally positive news on job prospects. Possibly limiting the upside would be the recent financial market volatility sparked by negative news from abroad."
• Initial Jobless Claims (Wed): Economists estimate the weekly jobless claims climbed to 287,000 from 280,000 a week ago. "With jobless claims consistently trending below 300k and withheld income tax receipts growing at a 6%-plus annual pace, the outlook for consumption remains highly positive," Deutsche Bank's Joe LaVorgna said.
• Chicago PMI (Wed): Economists estimate this activity index was unchanged at 60.8 in December. "The Chicago business barometer index has been volatile recently, but has remained over 60 for the past four releases," Nomura economists noted. "The new orders and order backlog sub-indexes remained elevated in November, providing support for future activity."
• Pending Home Sales (Wed): Economists estimate pending sales climbed by 0.5% in November. "MBA applications for purchase rose 4.5% m/m in November, and the NAHB buyer traffic measure rose to 45 (from 41), both indicating a rise in pending home sales on the month," Barclays economists said.
• The US stock markets will close at 2:00 p.m. ET on Wednesday and they'll be closed all day Thursday.
• Markit US Manufacturing PMI (Fri): Economists estimate this index of manufacturing fell to 54.0 in December from 54.8 in November. "Softer output and employment numbers merely represent a cooling in the pace of expansion from unusually strong rates earlier in the year, but also send a warning light to policymakers that the fourth quarter is likely to see a weakening in the pace of economic growth, which is starting to hit hiring," Markit's Chris Williamson said. "We expect this weakening to become evident in the official data early in the new year, meaning rate setters will continue to err on the side of caution in terms of when the economy may be ready for higher interest rates, especially as the survey data also highlight a further drop in inflationary pressures."
• Construction Spending (Fri): Economists estimate construction spending climbed by 0.4% in November. "The stronger than expected housing starts report points to a decent further gain in homebuilding, and our AlphaWise team sees continued positive indications for nonresidential spending, which has been restrained recently by a correction in power plant construction," Morgan Stanley's Ted Wieseman said. "Government spending will likely be a drag in November, though, as the smaller and more volatile federal government component reverses a 19% spike in October."
• ISM Manufacturing (Fri): Economists estimate this manufacturing index fell to 57.5 in December from 58.7 in November. From UBS's Cummins: "Regional manufacturing surveys have been softer so far in December. The Empire State current activity index signalled a contraction in activity and most of the details of the report were uniformly dismal. (The exception was the employment index.) However, the New York Fed measure has been weak relative to other measures of activity in recent months. The Philadelphia Fed headline index also fell in December but did not show nearly the same degree of weakness as NY. The Markit flash PMI, although edging down a point, held on to a fairly healthy level in December. We forecast a modest decline in the ISM index, to 5x-a level that signals a solid trend in output growth."

Market Commentary

Almost every major strategist on Wall Street is telling clients that stocks are going higher in 2015. However, almost all of those strategists are convinced gains will be very modest.

But in the past week, we've heard from a trio of pros who warn bad things could be coming.

"Since 1875, we have never seen the S&P rise for seven calendar years in a row, so an eighth year would seem highly unlikely," Societe Generale's Roland Kaloyan said in a Dec. 17 note to clients. "We assume that the S&P 500 will finish the year slightly down as the strengthening of the US dollar and the new tightening cycle offset the strong US GDP growth already priced-in at the start of the year."

"I have the same kind of feel in '98 and '99; also '05 and '06," Uber bear David Tice told CNBC. "This is going to end badly. I have every confidence in the world."

Tice said that stocks are doomed to plunge by 30%-60%. But, he doesn't have much skin in the game as he's not actually shorting the market.

Appaloosa Management's David Tepper, however, has lots of skin in the game.

"This year rhymes with 1998," Tepper said to CNBC. "Russia goes bad. Easing [is] coming from Europe. Sets up 1999 ... [oops] I mean 2015... You [just] have to be aware of the possibility for some sort of overvaluation of the markets. And they are fair value now."

For more insight about the middle market, visit mid-marketpulse.com.