There's A Boatload Of Big Economic Events This Week - Here's Your Complete Preview

REUTERS/Bruno KellyVillagers from the Rumao Island community paddle their canoes loaded with arapaima or pirarucu.

The surprisingly strong November jobs report, the surprisingly strong November retail sales report, and the earlier-than-expected U.S. budget deal are just a few of the things that have people feeling pretty good America's economic prospects.

The Federal Reserve's Federal Open Market Committee (FOMC) will surely be talking about it when they meet on Tuesday and Wednesday to discuss the path of monetary policy.

Here's your Monday Scouting Report:

Top Story

• Taper? I Hardly-: Thanks to better-than-expected economic data in recent weeks, experts have increased their odds that the Federal Reserve will begin tapering its monthly purchases of $85 billion worth of Treasury and mortgage bonds this month. Still, the consensus' baseline continues to be that the Fed will taper in either January or March. The most commonly cited reason is surprisingly low inflation.
  
  However, there is a tiny minority of economists who believe the Fed will announce tapering this Wednesday when the Fed concludes its FOMC meeting.
  
  "Their credibility is starting to be questioned as is the ultimate goal of their policy if they don't start exiting these hyper-active interventionist policies soon with the unemployment rate at 7%," said Bank of Tokyo-Mitsubishi's Chris Rupkey. "We are optimistic the FOMC decides to taper at the December meeting, even if it is only cutting back the $85 billion monthly purchases to $70 billion."

Economic Calendar

• Empire Manufacturing Index (Monday): Economists expect this regional index rebounded to 5.0 in December from -2.21 in November. "This would reflect, in part, our view that manufacturing employment will pick up through the end of 2013 and into 2014 as stronger demand provides a tailwind for hiring," said Barclays' economists.
• Markit US PMI (Wednesday): Economists estimate that the preliminary reading of PMI climbed to 55.0 in December from 54.3 last month.
• Industrial Production (Monday): Economists estimate industrial production climbed 0.6% in November as capacity utilization increased to 78.4%. "Manufacturing employment picked up considerably in the month, and the average weekly hours of production workers also advanced," noted Wells Fargo's John Silvia. "In addition, the ISM manufacturing index continues to trend upward."
• Consumer Price Index (Tuesday): Economists estimate CPI and CPI excluding food and energy prices climbed by just 0.1%. "Gasoline should depress headline, as the 10 cent decline in nationwide gas prices was slightly more than seasonal norms," said Credit Suisse's economics team. "Persistent weakness in goods prices (four straight months without an increase) should restrain core."
• NAHB Housing Market Index (Tuesday): Economists estimate the homebuilder confidence index climbed to 55 in December from 54 last month. "The NAHB housing index has remained above 50, suggesting builders remain optimistic despite the rise in mortgage rates," said Bank of America Merrill Lynch economists. "This is a good sign for the prospects of housing construction in the coming year."
• Housing Starts (Wednesday): Due to the government shutdown, the Census will be releasing three months worth of data. Economists estimate an annualized pace of 950,000 starts in November. "Relatively weak home sales likely have tempered the momentum of new construction," said Wells Fargo's John Silvia.
• FOMC Rate Decision (Wednesday): Economists expect the Fed to keep rates and its large-scale asset purchase program unchanged.
• Initial Jobless Claims (Thursday): Economists estimate claims fell to 332,000 from 368,000 last week. "Watch for another substantial move in jobless claims on Thursday as the series continues to be buffeted by holiday/technical issues," said Deutsche Bank's Joe LaVorgna.
• Philadelphia Fed Business Index (Thursday): Economists estimate the Philly Fed index climbed to 10.0 in December from 6.5 a month ago. Here's Citi's Peter D'Antonio: "The Philly Fed index has been completely out of step with real activity nationwide in recent months. Index readings in the 20 range, like we've seen in the past six months, are rare and generally associated with booming or newly recovering economies. Neither would describe recent activity though. Until a tighter correlation with real activity can be established, we are not inclined to focus on this report."
• Existing Home Sales (Thursday): Economists estimate that sales fell 2.0% to an annualized rate of 5.02 million. "Pending home sales have fallen sharply while mortgage purchase applications have remained weak," noted Bank of America Merrill Lynch. "Since there is a lag between signed and closed contracts, the weakness in existing home sales in the fall reflects the rise in mortgage rates during the summer. We think this is transitory and look for existing home sales to recover early next year."
• Q3 GDP (Friday): Economists estimate GDP jumped 3.6% in Q3. "Monthly data since the second estimate suggest only small, and offsetting, revisions to the main components," noted Barclays' economists. "As such, Q3 is likely to continue to be characterized by soft growth in domestic final demand but a very sharp increase in inventory accumulation."

Market Commentary

According to strategists followed by Business Insider, the S&P 500 will head to 1,950 in 2014. This will come on EPS of $116.

On Friday, JP Morgan's Tom Lee predicted the S&P 500 would head all the way to 2,075 on $132.00 of EPS. This call makes him the most bullish strategist on Wall Street.

"Historically, bull markets lasting at least 4 years (since 1897) have only ended with a recession-that is, they typically do not end just because "everyone is too bullish," said Lee.

"The bull market, which began in March 2009, is acting like a "classic" secular bull market," he added. "History says we could see a 20% gain in 2014."