This Week’s Economic Focus Will be on PCE Inflation
It’s the last trading week of the month, quarter, and first half of 2023. The Fed Chair is scheduled to speak on Wednesday at the ECB Forum on Central Bank Policy, and the Fed’s favored inflation gauge will be released on Friday. As we approach the 2023 halfway point, the S&P 500 is up 13.25% YTD. Historically, whenever the S&P 500 is up at least 10% YTD at the end of June, the index ends the year up on the year 82% of the time. However, it gained 7.7% on average for those years, which suggests some gains were given back in the average year.
Monday 6/26
• The ECB Forum on Central Banking 2023 is a three day event beginning Monday. The US Federal Reserve Chairman will take part in a panel discussion Wednesday.
Tuesday 6/27
• 8:30 PM ET, Durable Goods orders are forecasted to have fallen 1.0 percent in May after April’s 1.1 percent rise. Ex-transportation orders are seen unchanged with core capital goods orders, after jumping 1.3 percent in April, rising a further 0.6 percent.
• 10:00 AM ET, Consumer Confidence is expected to rebound slightly in June to 103.7 versus May’s 102.3 which was better than expected but still down 1.4 points from April. The index has sat at depressed levels for the past year.
• 1:00 PM ET, Money Supply, including the closely watched M2 will be released. M2 had stood at $20,673.1 Billion as of the last reporting. The act of the Fed tightening credit conditions, is typically orchestrated by reducing money in the system which can be expected to reduce money supply by its two most watched measures, M1 and M2.
Wednesday 6/28
• 9:30 AM ET, at 2:30 PM in Portugal a panel discussion on policy will be modersated by CNBCs Sara Eisen. The four member panel will include J. Powell, US Federal Reserve, A. Bailey, Bank of England, C. Lagarde, ECB, and K. Ueda, Bank of Japan.
• 10:30 AM ET, The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S., whether produced here or abroad. The level of inventories helps determine prices for petroleum products.
Thursday 6/29
• 8:30 AM ET, First quarter GDP third estimate is expected to show 1.4% growth. While this is not e a strong pace, it indicates the US is not currently in a recession.
• 8:30 AM ET, Jobless Claims for the week ending June 24 are expected to be 270,000 versus a second straight and elevated 264,000 in the two prior weeks and 262,000 the week before.
• 4:30 PM ET, Factors Affecting Reserve Balances, otherwise known as The Fed’s Balance Sheet or the H.4.1 report is a weekly report of a consolidated balance sheet for all 12 Reserve Banks that lists factors supplying reserves into the banking system and factors absorbing reserves from the system. The report is officially named Factors Affecting Reserve Balances, otherwise known as the “H.4.1” report.
Friday 6/30
• 8:30 AM ET, Personal Income and Outlays, including PCE Inflation, will be released as part of a data set. Income is expected to rise 0.4 percent in May, with consumption expenditures expected to increase by 0.2 percent. These would compare with April’s 0.4 percent gain for income and 0.8 percent jump for consumption. PCE Inflation readings for May are expected at monthly increases of 0.1 percent overall and 0.4 percent for the core (versus April’s respective increases of 0.4 percent for both) for annual rates of 3.8 and 4.7 percent (versus April’s 4.4 and 4.7 percent).
• 10:00 AM ET, Consumer Sentiment is expected to end the first half of 2023 at 63.9 for June, this would be up nearly 4 points from May.
What Else
The summer doldrums is a Wall Street term for reduced trading activity between Memorial Day and Labor Day. Many professional investors take time off from work during the summer; this means portfolios are in the hands of the second-string portfolio managers that are there to monitor and maintain but not take big positions or make big decisions. Volume is often reduced, which could cause exaggerated swings in prices.
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Managing Editor, Channelchek