The Market is Deciding if the Fed is Finished or Not, Here’s How this Week Will Help
Two key inflation reports and quite a few Fed governors are coming out of the blackout period, removing the gag and sharing their thoughts on the state of the economy and monetary policy. Last Friday’s strong US Jobs report has left many market participants looking for a clearer sign that the Fed will take a neutral stance. The two inflation reports and Fed governor addresses may help make clear the Fed’s next “data dependent” step.
Monday 5/8
• 10:00 AM ET, Wholesale Inventories (preliminary), this is the second estimate for March wholesale inventories. It is expected to print at a 0.1 percent build-up, unchanged from the first estimate. The report measures the dollar value of sales made and inventories held by wholesalers.
Tuesday 5/9
• House Speaker Kevin McCarthy will meet with President Joe Biden to discuss the debt limit. The meeting comes three weeks before the U.S. is projected to run out of money to pay its bills.
• 6:00 AM ET, The Small Business Optimism Index has been below, at times deeply below, the historical average of 98. The April consensus is 89.7 versus 90.1 in March.
• 8:30 AM ET, Phillip Jefferson took office as a member of the Board of Governors of the Federal Reserve System in May 2022. While he is relatively unknown, he may begin to play a larger part as he is considered a favorite for Fed Vice Chair, with Biden set to nominate Jefferson for the seat vacated by Lael Brainard seat.
• 12:05 AM ET, John Williams is the President of the New York Federal Reserve. The New York Fed President takes the role of Vice Chair of the FOMC, the seat is a permanent voting member (outside the rotation).
Wednesday 5/10
• 8:30 AM ET, Consumer Price Index (CPI) for April is expected to show that core prices are continuing at the same pace of a monthly increase of 0.4 percent. The headline number is also expected to rise 0.4 percent after March’s 0.1 percent increase, which was below expectations – remember, energy prices spiked last month. Annual rates, which in March were 5.0 percent headline and 5.6 percent for the core, are expected at 5.0 and 5.5 percent, showing little or no improvement.
• 2:00 PM, the Treasury Statement for April is expected to show a $410.0 billion surplus. That would compare with a $308.2 billion surplus in April a year-ago and a deficit in March this year of $378.1 billion. April, tax month, is the seventh month of the government’s fiscal year.
Thursday 5/11
• 8:30 AM ET, the Producer Price Index (PPI), after falling 0.5 percent in March, is expected to rise 0.3 percent in April. The annual rate ending April is forecast to be 2.5 percent, down slightly from March’s 2.7 percent. April’s ex-food ex-energy rate is seen at 0.2 percent on the month and 3.3 percent on the year versus March’s monthly 0.1 percent decline and plus 3.4 percent yearly rate.
• 7:45 AM ET, Christopher Waller is a member of the St. Louis Federal Reserve Board of Governors. He is a CBDC advocate. Along with Bullard and Mester, Waller is considered to be among the Fed hawks.
• 4:30 AM ET, The Fed’s balance sheet is a weekly report presenting a consolidated balance sheet for all 12 Reserve Banks. It lists factors supplying reserves into the banking system and factors absorbing reserves from the system. The official name for the report is Factors Affecting Reserve Balances, otherwise known as the “H.4.1” report. This report has taken on renewed interest as it is the only place to get information on quantitative tightening moves, and the impact of new measures taken to secure troubled banks.
Friday 5/12
• 8:30 PM ET, Import/Export Prices. Import Prices, an inflation harbinger is expected to rise 0.3 percent for April, this would end nine straight declines. Export prices are expected to rise 0.2 percent.
• 10:00 PM ET, Consumer Sentiment looking at the first indication for May, which in April fell 1.5 points to 63.5, is expected to fall another half point to 63.0.
• 7:45 PM ET, a late day address by St. Louis Fed Chair James Bullard.
What Else
Investment roadshows are like getting a front-row seat to information direct from management’s mouth. The most useful investor information often comes from the unplanned responses to questions during the roadshow – either asked by you, or other interested investors.
Noble Capital Markets has a growing, interesting calendar of roadshows during the week and month. Some are in cities that are paid less attention to. These include Entravision in Kansas City, MO, on May 9 (lunch). Entravision will again be presenting on May 10 in ST. Louis (lunch). Also on May 10, Salem Media will be in New York (lunch). For more details, and a complete list of roadshows and cities, Click here.
Managing Editor, Channelchek
Sources:
https://www.federalreserve.gov/newsevents/calendar.htm