A data deluge

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After a short data drought, investors get a look at critical reports from Europe and the United States Tuesday.

The Bureau of Labor Statistics said the consumer price index remained steady at 2.3 percent for April, right in line with expectations, and down from 2.7 percent from the previous report.

There were hints, however, from producer price and import price reports. In April, core prices, which excludes food and energy items, rose 0.2 percent month to month and 2.4 percent on an annual basis, both figures close to expectations.

The expectations angle is critical. If estimates from economists are off, investors have to scramble to reshape their portfolios. Those endless forecasts are a way to anticipate trends, and keep them from turning into jolts.

Retail sales rose in April, but less than expected – half what was expected, not to put too fine a point on it. Sales rose 0.1 percent, not the 0.2 percent, that was anticipated. The month prior, March, saw retail gain 0.7 percent, as shopping kept in step with the modest burst of early seasonal hiring this year.

With the early spring, jobs usually added at the end of summer came early. The same goes for retail sales. There was a shopping spree that lasted a month or more early in the spring as consumers sprang for air conditioners, gardening equipment and supplies for their swimming pools earlier than usual.

The first estimate of the first quarter gross domestic product for Europe came in flat for the 17-member eurozone compared to the first quarter of 2011. For the 27-member European Union, the GDP rose 0.1 percent in the quarter in the flash estimate.

The implications there are as obvious as they are far-reaching. Europeans are canceling orders for imports from Asia and the United States.

That implies that the U.S. trade balance, already a national embarrassment, cannot find any relief from a major trading partner. Those dollars from Europe to buy cars and computers are likely to shrink.

China is turning its focus on its domestic market, looking to see if they can sustain growth and raise the middle class at the same time. U.S. companies would rather play by a different set of rules, but when push comes to shove, they play along with China's protectionist polices, anyway.

Later in the week, a leading index on private construction, building permits, will be released. A U.S. industrial production report for April is due Wednesday, as is Japan's gross domestic product report covering the first quarter.

U.S. leading indicators issued by the Conference Board are due Thursday. Economists are expecting marginal growth of 0.1 percent, compared to 0.3 percent in March.

In international markets Tuesday, the Nikkei 225 index in Japan lost 0.81 percent, while the Shanghai composite index in China slipped 0.25 percent. The Hang Seng index in Hong Kong gained 0.82 percent, while the Sensex in India rose 0.69 percent.

The S&P/ASX 200 in Australia gave up 0.71 percent.

In midday trading in Europe, the FTSE 100 index in Britain dropped 0.4 percent, while the DAX 30 in Germany fell 0.42 percent. The CAC 40 in France lost 0.47 percent, while the Stoxx Europe 600 dropped 0.56 percent.