Watching Wall Street in the Weeks Ahead

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Retail sales figures on Sept. 14 may show the trend in consumer spending. "If that holds up, then businesses are going to have to start hiring again," says Peter Morici, a professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission.

Also coming soon are consumer confidence numbers on Sept. 11, mortgage application figures on Sept. 12, and initial jobless claims data on Sept. 13. On Sept. 14, data on export and import prices and industrial production are reported.

Look for the most recent data, Hembre says. The credit crisis is a relatively recent development and has only begun to show its effects. Therefore, data on industrial product or retail sales in August might not predict results for September.

Finally, Wait for More Shoes to Drop

In only a few weeks, the credit crisis has hit nearly every corner of the world. The financial instruments affected, especially mortgage-backed assets, are complex, hard to value, and widely owned. That's why, weeks after the crisis began, few have a handle on its true impact. European hedge funds, Asian banks, and Wall Street brokers have all reported losses.

"I'm watching for every data point and every piece of information we get," Peta says. Wait for more embarrassing press releases from some of the world's savviest financial institutions. More news should get investors closer to understanding the size and severity of the problem with toxic debt.

A key moment will be the third week of September, when four of Wall Street's biggest investment banks report earnings. Lehman Brothers Holdings (LEH) goes first on Sept. 18, then Morgan Stanley (MS) on Sept. 19, followed by Goldman Sachs Group (GS) and Bear Stearns (BSC) on Sept. 20.

Analysts will be pressing the big banks, which are usually vague and evasive about their holdings, for a full damage assessment.

Unfortunately, a fuller picture of the financial sector will have to wait until mid-October. That's when hundreds of insurance companies, banks, and asset managers will report on their third-quarter results.

Steverman is a reporter for BusinessWeek's Investing channel.