Tag: Weekly

The Week Ahead – Look Out For Light Trading and Pre-Holiday Volatility

Posted on by phoffman@channelchek.com

Heading Into the Unofficial End of Summer, Powell Gave the Market a Lot to Think About

The last “unofficial” week of summer will likely be characterized by light trading, which could amplify volatility. This week follows what is viewed by many as a more hawkish tone than expected by Fed Chair Powell on Friday. The next FOMC meeting is not until September 19–20; that is a long time to obsess over every economic number, and there are many key numbers that will be released this week. Investors will be watching the labor report, alongside the PCE price index, personal income and spending data, JOLTS job openings, ISM Manufacturing PMI, and the second estimate of Q2 GDP growth.

Monday 8/28

•              10:30 AM ET, the Dallas Fed Manufacturing Index is expected to post a 16th straight negative number, at a steep minus 21.0 in August versus minus 20.0 in July. The survey asks manufacturers whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month. Responses are aggregated into an index where positive values generally indicate growth while negative values generally indicate contraction.

Tuesday 8/29

•              10:00 AM ET, Consumer Confidence is expected to dip slightly in August, at a consensus 116.5 versus July’s 117.0. This report has exceeded not only the consensus in the last three reports but the full consensus range as well.

•              10:00 AM ET, The JOLTS report consensus for July is 9.559 million near its June’s 9.582 million level. Economist consensus have been fairy accurate for this well monitored indicator. The JOLTS report tracks monthly change in job openings and offers rates on hiring and quits.

Wednesday 8/30

•              8:30 AM ET, GDP (the second estimate of second-quarter) is expected to show no change from 2.4 percent growth in the quarter’s first estimate. Personal Consumption Expenditures (PCE), at 1.6 percent growth in the first estimate, is expected to come in at 1.7 percent in the second estimate.

•              10:00 AM ET,  Pending Home Sales are expected to fall by 0.4% after rising .3% in June. The National Association of Realtors developed the Pending Home Sales report as a leading indicator of housing activity. Specifically, it is a leading indicator of existing home sales, not new home sales. A pending sale is one in which a contract was signed, but not yet closed. It usually takes four to six weeks to close a contracted sale. Home transactions are a harbinger for economic activity.

•              10:00 AM ET,  The State Street Investor Confidence Index measures confidence by looking at actual levels of risk in investment portfolios. This is not an attitude survey. The State Street Investor Confidence Index measures confidence directly by assessing the changes in investor holdings of equities. The prior number (July) was 96.2%.

•              10:30 PM ET, EIA The Energy Information Administration (EIA) provides the Petroleum Status Report weekly with information on petroleum inventories in the US, whether produced in the US or abroad. The level of inventories helps determine prices for petroleum products.

Thursday 8/30

•              7:30 AM ET, The Challenger Job-Cut Report for August will be reported and compared to last months 23,697 job cuts.

•              8:30 AM ET, Jobless claims for the week ended 8/26 are expected to come in at 238,000. The prior week the figure was 230,000.

•              8:30 AM ET, Personal Income is expected to have risen 0.3 percent in July with Consumption Expenditures expected to increase a solid 0.6 percent. These stats will be compared with June’s 0.3 percent increase for income and 0.5 percent increase for consumption.

•              9:45 AM ET, The Chicago PMI is expected to have risen in August to 44.6 versus 42.8 in July which was the eleventh straight month of sub-50 contraction.

•              3:00 PM ET, Farm Prices for July are expected to have risen month over month by 0.4%, however year-on-year declined by 5.3%. Farm prices are a leading indicator of food price changes in the producer and consumer price indices. There is not a one-to-one correlation, but general trends move in tandem. Inflation is a general increase in the prices of goods and services.

•              4:30 PM ET, The Fed’s Balance Sheet totaled $8.139 trillion last week. Further declines in line with the Feds quantitative tightening (QT) is expected.

Friday 9/1

•              8:30 AM ET, the Employment Situation report is expected to show a moderating but still strong 170,000 increase for nonfarm payroll growth in August versus 187,000 in July which was a bit lower than expected. Average hourly earnings in August are expected to rise 0.3 percent on the month for a year-over-year rate of 4.4 percent; these would compare with 0.4 and 4.4 percent in the prior two reports. August’s unemployment rate is expected to hold unchanged at 3.5 percent.

•              10:00 AM ET, The ISM manufacturing index has been in contraction the last nine months. August’s consensus is 46.8 versus July’s 46.4.

•              10:00 AM ET, Construction Spending for July is expected to have risen 0.5% to match June’s 0.5% increase that had benefited from a second strong month for residential spending.

What Else

There is no early close scheduled for the US markets on Friday before the three day Labor Day weekend.

Have you attended an in-person roadshow organized by Noble Capital Markets. Noble has been reaching out to retail and institutional investors and holding these events designed for investors to meet management teams. Investors have been able to discover more about their companies, often enough to make an informed decision. The forum has been getting rave reviews from investors and company management teams. Use this link to see if a roadshow is scheduled near you.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

www.econoday.com

The Week Ahead – Jackson Hole, Johannesburg, Consumer Sentiment

Posted on by phoffman@channelchek.com

 Powell’s Talk at the Jacksonhole Symposium Won’t be Until Friday

The light economic calendar is likely to take a backseat to the annual Jackson Hole Symposium this week and the BRICS summit in Johannesburg, South Africa. In Jackson Hole, the overriding theme is  “Structural Shifts in the Global Economy”. The annual meeting is intended to have an overriding academic tone, but the number of Fed policymakers involved allows the markets to listen for any meaningful interest rate bias. The expected focus is on remarks from those actually conducting monetary policy, US central bankers. Powell is scheduled to give his speech on the “Economic Outlook” at 10:05 ET on Friday. Meanwhile, 9,900 miles away, the BRICS group of major emerging economies – Brazil, Russia, India, China and South Africa – will hold its heads of state and government summit in Johannesburg from Aug. 22-24. South African President Cyril Ramaphosa, Chinese President Xi Jinping, Brazil’s President Luiz Inacio Lula da Silva and Indian Prime Minister Narendra Modi are expected to attend in person. Russian President Vladimir Putin will not attend in person, as there is an arrest warrant out related to the war in Ukraine. He is expected to attend virtually. The markets will be interested to see if the group expands by allowing other countries,also any news related to the New Development Bank (NDB) sometimes called the BRICS bank, and all around economic cooperation.

Stocks may also take their cue from interest rates and the longer end of the yield curve, which has begun adjusting with rising rates for longer-dated maturities.

Monday 8/21

•             There is no key data being released and no expected talks or events with market implications.

Tuesday 8/22

•             7:30 AM ET, Richmond Fed President Thomas Barkin is scheduled to speak. Recent comments from Barkin have been hopeful. Barkin recently said the greater-than-expected easing in inflation in June may be an indication that the US economy can have a “soft landing,” returning to price stability without a damaging recession.

•             10:00 AM ET, the Existing Home Sales annual rate for July is to be at the same level as it was in June, 4.16 million. The National Association of Realtors has been citing a lack of available inventory for the slow pace of sales as existing homeowners are choosing to keep their lower mortgage rates.

•             2:30 PM ET, Chicago Fed President Austan Goolsbee is scheduled to speak. Goolsbee has made it clear he is on the fence as to whether tightening at the September meeting is warranted.

Wednesday 8/23

•             9:45 AM ET, Purchasing Managers Index (PMI) composite for services is expected to show that the number holds above 50 in July, as it has for the last six PMI releases. As for manufacturing,  the consensus is 48.8, which would be down a bit from the  49 reported in June.

•             10:00 AM ET,  New Home Sales in July, a month before mortgage rates began their recent spike, is expected to move higher to a 702,000 annual rate after slowing to 697,000 in June which, though lower than expected, was still the second highest rate in more than a year.

•             10:30 PM ET, EIA The Energy Information Administration (EIA) provides the Petroleum Status Report weekly with information on petroleum inventories in the US, whether produced in the US or abroad. The level of inventories helps determine prices for petroleum products.

•             8:30 PM ET, BRICS Summit.

•            11:00 PM ET, Jackson Hole Symposium.

Thursday 8/24

•             8:30 AM ET, Durable Goods Orders are forecast to fall 4% for August after a 4.6% increase in July, pushed higher by aircraft orders. Ex-transportation orders are forecast to be up 0.2%, with core capital goods orders unchanged.

•             4:30 AM ET, The Fed’s Balance Sheet is expected to have decreased by $31.208 billion to $8.146 trillion for the seven day period ending August 23. This would be a $61.5 billion decline. Market participants and Fed watchers look to this weekly set of numbers to determine, among other things if the Fed is on track with its stated quantitative tightening (QT) plan.

Friday 8/25

•             10:00 AM ET, Consumer Sentiment is expected to end August at 71.2, unchanged from August’s mid-month flash with year-ahead inflation expectations also expected to be unchanged at 3.3%.

•             10:05 AM ET, US Federal Reserve Chairman is expected to give his address at Jackson Hole.

What Else

Have you attended an in-person roadshow organized by Noble Capital Markets? Noble has been reaching out to retail and institutional investors and holding these events designed for investors to meet management teams. Investors have been able to discover more about their companies, often enough to make an informed decision. The forum has been getting rave reviews from investors and company management teams. Use this link to see if a roadshow is scheduled near you.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://tradingeconomics.com/calendar

https://us.econoday.com/byweek.asp?cust=us

The Week Ahead –  SEC 13-F Filings, FOMC Minutes, Housing Numbers

Posted on by phoffman@channelchek.com

The Trading Week Ahead Could See Investors Continuing to Adjust to the Flattening Yield Curve

Bill Ackman says he’s short the U.S. Treasury long bond. Michael Burry, who tends to see things before others, had been short a derivative of Treasuries two summers ago, was he involved in interest rates this most recent quarter-end? We will get a glimpse into what these two, plus Warren Buffett and a host of others, as time runs out on their 13-F filing as of the close of business on Monday.

Last week many investors went from betting on a soft-landing a few weeks ago to now thinking interest rates along the curve are too low. The impetus for the shift was the CPI and PPI reports last week had provided nothing for the Fed to stop or slow down tightening. This concerns stock market investors. Higher rates, at a minimum, are beginning to provide an attractive alternative to a stock market that has already run up above average. This is because investors can now be choosier as their cash is far more productive, even after inflation, than it has been in years. Individual companies that have great prospects, rather index ETFs where you hold the good with the bad, would seem more prudent in the current scenario.

Monday 8/14

•             13-F Day is the SEC deadline for funds that manage more than $100 million in assets, that they must divulge positions held as of the end of the previous quarter. For example, Michael Burry’s Scion Asset Management hedge fund, Warren Buffett’s Berkshire Capital Holdings, and all U.S. asset managers of size have 45 days from quarter-end to file. A very large percentage choose to file on the 45th day, August 14th is 45 days from June 30th. Investors pour through the 13_f filings of top investors looking for insights.

Tuesday 8/15

•             8:30 AM ET, The consensus for Retail Sales for July is up 0.4% after an unexpectedly poor showing in June of a gain of 0.2%. Retail sales measure the total receipts at stores that sell merchandise and related services to final consumers. Sales are by retail and food services stores.

•             8:30 AM ET, Import and Export Prices are expected to show that import prices increased 0.2% in July after falling 0.2% in June. Export prices are expected to have increased 0.1% after dropping 0.9% in June. The underlying value of this report is the measure of global inflationary trends. Import price indexes are compiled for the prices of goods that are bought in the United States but produced abroad and export price indexes are compiled for the prices of goods sold abroad but produced within the U.S.

•             4:00 AM ET, Treasury International Capital is the tracking of who holds U.S. securities, or put another way, where in the world are U.S. Stocks, U.S. Treasuries, Agencies, and Corporate Bonds. TIC has recently been watched by a wider group as it is a measure of foreign demand for our assets. The prior number (May) showed net long-term transactions abroad of U.S. securities at $25.8 billion.

Wednesday 8/16

•             7:00 AM ET, The Mortgage Bankers Association (MBA) compiles data which indicates demand for mortgages. Data from the previous week indicate a drop in their Purchasing index of 2.7%, and a decline in its Refinance index of 4.0%.

•             8:30 AM ET, Housing Starts month over month for July are expected to have increased to 1.464 million from 1.44 million in June.

•             9:15 AM ET, Industrial Production had fallen 0.5 percent for two straight months; forecasters expect a rebound of 0.3 percent in July. After falling 0.3 and 0.2 percent, manufacturing output is seen as unchanged. Capacity utilization is expected to rise to 79.1 from 78.9 percent, still below what is considered inflationary.

•             10:30 PM ET,  The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S., whether produced here or abroad. The inventory level impacts prices for petroleum products.

•             2:00 PM ET,  FOMC minutes are from the meeting three weeks ago, where the Fed adjusted the overnight target upward. This report has recently been market-moving as it details the issues of debate and consensus among policymakers.

Thursday 8/17

•             8:30 AM ET, Initial Jobless Claims are expected to have fallen the week ended August 12th to 240,000 following a 21,000 jump to 248,000 last week, in the absence of inflation data, the market places adds emphasis on unexpected results in the labor market.

•             10:00 AM ET, E-Commerce Retail Sales for the second quarter are scheduled for release. During the first quarter, online retail transactions had increased by 3%.

•             4:30 AM ET, the weekly report on the Fed’s Balance Sheet is now awaited each week as it provides statistics on whether the Fed is fulfilling its quantitative tightening promise on schedule. It also  could provide an early tip-off if there is a problem within the banking system. The report from the week prior showed $8.208 trillion in assets, and bank reserve credit declining $18,685 billion.

Friday 8/18

•             10:00 AM ET, The Quarterly Services Survey is not usually a large focus, but it is the only economic number printing on what may very well be a lightly traded late summer Friday. The report includes industry information; professional, scientific, and technical services; administrative & support services; and waste management (NAICS 51, 54, and 56). Last quarter, these industries experienced 2.9% growth, or 9.7% year-on-year.

What Else

A press release dated Friday, August 11th, stated that Greg Steube, a Representative from Florida’s 17th district had filed “Articles of Impeachment Against Joseph Robinette Biden, Jr., President of the United States, For High Crimes and Misdemeanors.” What this could mean for markets, if the past is an indicator, is very little. There could be days where traders are largely distracted by news stories that may come from this, but the soundness of the U.S. or the global economy is not likely to be hanging in the balance on any outcome from the proceedings.

Paul Hoffman

Managing Editor, Channelchek

Sources

Steube.house.gov

https://www.econoday.com/articles/high-points-for-economic-data-scheduled-for-august-14-week/

https://thehill.com/homenews/house/4150478-florida-republican-rep-files-articles-of-impeachment-against-biden/

Steube.house.gov

The Week Ahead – Earnings, Interest Rates, and US Dollar

Posted on by phoffman@channelchek.com

This Trading Week – Earnings Reports are Likely to Set the Tone

Just over half of the companies in the S&P 500 have now reported second-quarter earnings. Of these companies, 80% have surprised on the high side with actual EPS above the average estimate – 4% have reported earnings equal to the average expectations. The reporting sectors beating estimates by the most are Information Technology at 93%, and Communication Services, which beat average estimates 92% of the time. Of sectors that beat the least often, Utilities and Financials were at the bottom of the list at 67% and 70%, respectively, surpassing average estimates. These are also above 50%, supporting strong stock markets.

The weaker US dollar has helped companies with more international exposure as these have had improved year-over-year earnings above those companies with a higher percentage of domestic revenue.

The markets are likely to focus on the earnings reports this week as economic releases will be slow. Stocks may also take its cue from interest rates that have been rising for longer duration US Treasuries.

Monday 7/31

•             9:45 AM ET, The Chicago Purchasing Managers Report is expected to improve 2 points in July to a still very weak 43.5 versus 41.5 in June, which was the tenth straight month of sub-50 contraction. Readings above 50 indicate an expanding business sector.

•             10:30 AM ET, The Dallas Fed Manufacturing Survey is expected to post a 15th straight negative score, at a consensus minus 22.5 in July versus minus 23.2 in June. The Dallas Survey gives a detailed look at Texas’ manufacturing sector, how busy it is, and where it is headed. Since manufacturing is a major sector of the economy, this report can greatly influence the markets.

Tuesday 8/1

•             9:45 AM ET, the final Purchasing Managers Index (PMI) for manufacturing for July is expected to come in at 49.0, unchanged from the mid-month flash to indicate marginal contraction (above 50 indicates expansion).

•             10:00 AM ET, Construction Spending for June is expected to rise a further 0.6 percent following May’s 0.9 percent increase that benefited from a sharp jump in residential spending.

•             10:00 AM ET, JOLTS (Job Openings and Labor Turnover Survey) still strong but slowing is the consensus for June as it is expected to ease 9.650 million from 9.824 million.

Wednesday 8/2

•             10:00 AM ET, New Home Sales are expected to slow after a much higher-than-expected 763,000 annualized rate in May. Junes are expected to have slowed to 727,000.

•             10:30 AM ET,  The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the US, whether produced here or abroad. The inventory level impacts prices for petroleum products.

Thursday 8/3

•             8:30 AM ET, Jobless Claims for the week ended July 30, 2023, are expected to come in at 225,000 versus 221,000 in the prior week. Claims have been moving lower in recent weeks. This is a classic case of where what might otherwise be considered worsening news (increased jobless claims) may be taken well by the market as tight labor markets are considered additive to inflation pressures.

•             8:30 AM ET, Productivity and Costs (nonfarm) is expected to rise at a 1.3 percent annualized rate in the second quarter versus 2.1 percent contraction in the first quarter. Unit labor costs, which rose 4.2 percent in the first quarter, are expected to rise to a 2.6 percent rate in the second quarter.

•             9:45 AM ET, PMI Services. Following Tuesday’s PMI Composite Final for manufacturing, which has been contracting, the Services Purchasing Managers Index is expected to indicate no change at 52.4 as the July final.

•             10:00 AM ET, Factory Orders are expected to rise 1.7 percent in June versus May’s 0.3 percent gain. Factory Orders is a leading indicator that economists and investors watch as it has been a fairly reliable indicator of future economic activity.

•             10:00 AM ET, The Institute for Supply Management (ISM) gauge is expected to have slowed to 53 from June’s 53.9 level. An ISM reading above 50 percent indicates that the services economy is generally expanding; below 50 percent indicates that it is generally declining.

•             4:30 AM ET, The Fed’s Balance Sheet is expected to have decreased by $31.208 billion to $8.243 trillion. Market participants and Fed watchers look to this weekly set of numbers to determine, among other things if the Fed is on track with its stated quantitative tightening (QT) plan.

Friday 8/4

•             8:30 AM ET, Employment Situation is expected to show that the unemployment rate unchanged at 3.6%, with a consensus for payrolls at 200,000 versus the 209,000 reported in June.

What Else

On Thursday quarterly results will be reported on Apple (AAPL) and Amazon (AMZN). The week will be the busiest one of the earnings season. About 30% of the S&P 500 will give their financial updates during the week, including Alphabet (GOOGL), Microsoft (MSFT), Meta (META), and Robinhood (HOOD). Several big pharma companies are getting ready to report, and it’s a big week for industrial companies and big oil as well.

We’re near the halfway point for Summer 2023. Have you signed up to receive Channelchek market-related news and analysis in your inbox?  Now is a good time to make sure you don’t miss anything!

Paul Hoffman

Managing Editor, Channelchek

Learn more about NobleCon19 here

Sources

https://tradingeconomics.com/calendar

https://us.econoday.com/byweek.asp?cust=us

https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_072823.pdf

The Week Ahead –  FOMC Meeting and Earnings Reports Will Shape the Mood

Posted on by phoffman@channelchek.com

This Trading Week May be Pivotal in the Push and Pull Between Bulls and Bears

The overwhelming focus this week is on the FOMC meeting Tuesday and Wednesday. There is widespread expectation that after skipping a chance to raise rates in June, the Federal Reserve will bump the overnight lending rate up by 25 bp. This would push the target to 5.25%-5.50%. Policymakers have been clear that they don’t believe they are finished in their battle against inflation but have always maintained their actions are data-dependent. Data on inflation over the past month indicate previous moves could be having the desired impact. If the FOMC determines inflation is trending toward its goal of 2% and is expected to stay on the path, it may not find another hike prudent. However, the Fed won’t see a June reading on its preferred inflation indicator, the PCE deflator, until after the FOMC meeting.

Monday 7/24

•             8:30 AM ET, The Chicago Fed National Activity Index in June is expected to have risen to just above neutral at 0.03 (zero equals historical average growth). This would be up from a lower-than-expected minus 0.15 in May.

•             9:45 AM ET, The Purchasing Managers Index Composite flash reading has been above 50 in the last five reports with the consensus for July at 54.0 versus June’s 54.4. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting).

Tuesday 7/25

•             9:00 AM ET, The Federal Open Market Committee meeting to decide the direction of monetary policy begins.

•             1:00 PM ET, Money Supply is forecast to show that M2 for the month of June rose 0.6% to $20,805.5 billion. The markets resumed focusing on money supply as a way to view the progress and impact of quantitative easing. It helps decipher how the Fed’s actions are filtering through the economy.

Wednesday 7/26

•             10:00 AM ET, New Home Sales are expected to slow after a much higher-than-expected 763,000 annualized rate in May. Junes are expected to have slowed to 727,000.

•             10:30 AM ET,  The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the US, whether produced here or abroad. The inventory level impacts prices for petroleum products.

•             2:00 PM ET, The FOMC announcement. After holding steady in June, the Fed is expected to raise its policy rate by 25 basis points to a range of 5.25 to 5.50 percent.

•             2:30 PM ET, The post FOMC Chair Powell press conference helps market participants understand the Fed’s decision(s), if any, during their two-day meeting.

Thursday 7/27

•             8:30 AM ET, Durable Goods Orders are forecast to have risen 0.5 percent in July following June’s 1.8 percent jump. Ex-transportation orders are expected to edge 0.1 percent lower as are core capital goods orders, after also coming in high the previous reporting period.

•             8:30 AM ET, Second-quarter GDP is expected to slow to 1.5 percent annualized growth versus first-quarter growth of 2.0 percent. Personal consumption expenditures, after the first quarter’s burst higher to plus 4.2 percent, are again expected to rise but by only 1.5 percent. Whether or not the US has entered a recession is substantially hinged on whether GDP is negative for a prolonged period (typically two quarters).

•             4:30 AM ET, The Fed’s Balance Sheet is expected to have decreased by $22.371 billion to $8.275 trillion. Market participants and Fed watchers look to this weekly set of numbers to determine, among other things if the Fed is on track with its stated quantitative tightening (QT) plan.

Friday 7/28

•             8:30 AM ET, Jobless Claims Jobless for the week ended July 22 are expected to come in at 235,000 versus 228,000 in the prior week.

•             8:30 AM ET, Wholesale Inventories are expected to increase 0.1 percent (advance report) for June, it was unchanged in May.  

 •            10:00 AM ET, Consumer Sentiment is expected to end July at 72.6, unchanged from July’s mid-month flash and more than 8 points higher from June. Year-ahead inflation expectations are expected to hold at the mid-month’s 3.4 percent which was one tenth higher than June.

What Else

The week ahead is also set to be the busiest one of earnings season. Thursday will be the most intense day. About 30% of the S&P 500 will give their financial updates during the week, including Alphabet, Microsoft and Meta. Several big pharma companies are getting ready to report and it’s a big week for industrial companies and big oil as well.

Sign up for Channelchek updates on this week’s FOMC meeting as announcements unfold, and to be updated on other critical information.

There will be a number of Roadshows held during the week in South Florida and St. Louis. Learn more about who’s presenting and how to attend by clicking here.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.federalreserve.gov/newsevents/calendar.htm

https://us.econoday.com/byweek.asp?cust=us

The Week Ahead –  With Few Economic Stats, Earnings Reports Will Take on Added Importance

Posted on by phoffman@channelchek.com

The Trading Week is Light on Data and Heavy On Quarterly Earnings Reports

After last week’s lower-than-expected CPI and PPI inflation readings, the markets are far less certain what the FOMC will decide at their policy meeting July 25-26. Clarity is not going to come from addresses by any Fed Presidents as they enter a blackout period where they are forbidden to speak on the subject between July 15 and July 27. One report that the markets will be focused on during the week involves unemployment, which, if up, may cause the markets to rally – remember we are still in a period where bad economic news causes a positive stock market reaction.

Investors looking for direction may find it in the earnings reports as major banks, metals producers, and closely followed tech companies will be releasing their quarterly earnings reports.

Monday 7/17

•             8:30 AM ET, The New York State Manufacturing Index is expected to drop to negative 7 for June after unexpectedly climbing 38 points to +6.6 in May 2023, from a four-month low of -31.8 in May.

Tuesday 7/18

•             8:30 AM ET, The consensus for Retail Sales for June is up 0.4% after unexpectedly rising 0.3% month-over-month in May, following a 0.4% increase in April, which beat forecasts of a 0.1% decline. It’s clear the ability to forecast has been economic numbers, especially consumer activity has been difficult.

•             8:55 AM ET, The Johnson Redbook Index is forecast to show a year-over-year, same week, increase of 1.1%, for the week ending July 15. This would follow a 1.6% increase the prior reading. The Redbook is a sample of large US general merchandise retailers representing about 9,000 stores. By dollar value, the Index represents over 80% of the equivalent ‘official’ retail sales series collected and published by the US Department of Commerce.

•             9:15 AM ET, Industrial Production is expected to have risen by 0.1% in June, after declining by 0.2% from a month earlier in May.

•             9:15 AM ET, Manufacturing Production is expected to be flat month over month for June after rising 0.1% in May.

•             9:15 AM ET, Capacity Utilization is expected to have remained in a non-inflationary low 79.5% rate during June. When industries are bumping up against capacity, costs will increase as operations become less efficient because less effective resources are called on to produce, thus increasing the cost of each unit of production.

•             10:00 AM ET, Federal Reserve Vice Chair for Supervision Michael S. Barr will be speaking on fair lending practices at the National Fair Housing Alliance National Conference. The Fed is in a blackout period this week, so it is expected that there will be no discussion of monetary policy.

Wednesday 7/19

•             8:30 AM ET, Building permits consensus forecast for June is for 1.505 million after May’s strong 1.486 million.

•             8:30 AM ET, Housing Starts month over month for May increased by 21.7%, the forecast is for a decline of 10.2% for June.

•             10:30 AM ET,  The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the US, whether produced here or abroad. The inventory level impacts prices for petroleum products.

Thursday 7/20

•             8:30 AM ET, Initial Jobless Claims are expected to have increased the week ended July 15 to 245,000 from 237,000 the prior week. Employment data ahead of the July 25-26 FOMC meeting, in the absence of any fresh inflation data until the 28th has the potential to move markets.

•             10:00 AM ET, Existing home sales in the US, which include completed transactions of single-family homes, townhomes, condominiums, and co-ops, is expected to decline by 1.2% month over month for June. This would follow a small increase of 0,2% the previous reading.

Friday 7/21

•             No major economic releases scheduled.

What Else

The FOMC meeting is Tuesday and Wednesday during the last full week in July. The Fed can do one of three things, lower rates, raise rates, keep rates unchanged. Like all good multiple choice questions, one of these answers can be eliminated. On Thursday of last week (July 13), Federal Reserve Board Gov. Christopher Waller said he was not swayed by June’s benign consumer inflation data and said he wants the central bank to go ahead with two more 25-basis-point rate hikes this year. “I see two more 25-basis-point hikes in the target range over the four remaining meetings this year as necessary to keep inflation moving toward our target,” Waller said this in an address to The Money Marketeers on NYU, a bond market club with some of the most powerful fixed income professionals as members. If the Fed is data dependent and there is little new data since the last inflation readings, Waller’s position is not likely to change.

Paul Hoffman

Managing Editor, Channelchek

The Week Ahead –  Beige Book, Inflation Numbers, FOMC Minutes, Employment

Posted on by phoffman@channelchek.com

This Full Trading Week May Decide the Direction of the Markets for the Rest of 2023

Inflation will be a big focus this week as the CPI, PPI, and import and export prices for June will be released in this order at 8:30 on the last three days of the week. These economic reports are the final inflation readings the Federal Reserve will get before its July 25-26 meeting. The Beige Book also has the ability to alter market sentiment as this is a large part of the data and discussions used at the FOMC meeting. The Beige Book, which is information from each Fed reporting district, is released on Wednesday afternoon.

Monday 7/10

•             10:00 AM ET, The second estimate of Wholesale Inventories is a 0.1 percent draw, unchanged from the first estimate.

•             10:00 AM ET, Mary Daley the President of the San Francisco Fed, will be speaking.

•             3:00 PM ET, Consumer Credit is expected to show that consumers borrowed $20 billion more in May. This compares to a $23 billion increase in April.

Tuesday 7/11

•             6:00 AM ET, The National Federation of Independent Business (NFIB) optimism index has been below, and often far below, the historical average of 98 for the past 17 months. June’s consensus is 89.8 versus 89.4 in May.

Wednesday 7/12

•             8:30 AM ET, The Consumer Price Index, or CPI, is expected to show that core prices in June are slowed to a modest 0.3 percent on the month versus May’s 0.4 percent. Overall prices are also expected to rise 0.3 percent. Annual rates are expected to slow sharply at the headline level, to 3.1 from 4.0 percent, and also for the core, to 5.0 from 5.3 percent.

•             10:00 AM ET, The Atlanta Fed Business Inflation Expectations is not one of the more widely watched inflation reports. But in these times of the markets grasping on anything that may foretell where inflation is headed, this number has the potential to be impactful.

•             10:30 AM ET,  The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the US, whether produced here or abroad. The inventory level impacts prices for petroleum products.

•             2:00 PM ET,  The Beige Book is a report on economic conditions used at FOMC meetings. This publication is produced roughly two weeks before the monetary policy meetings of the FOMC.

Thursday 7/13

•             8:30 AM ET, Employment numbers seemed to be the new razor-sharp focus among Fed watchers. Initial claims for the prior week are expected to be at the 248,000 level.

•             8:30 AM ET, Producer prices in June are expected to rise 0.2 percent on the month versus a 0.3 percent fall in May. The annual rate in June is seen at plus 0.4 percent versus May’s plus 1.1 percent. June’s ex-food ex-energy rate is seen at 0.2 percent on the month and 2.8 percent on the year which would exactly match May’s results.

•             4:00 PM ET, Fed’s Balance Sheet data is expected to show that the Fed holds $8.98 trillion in US debt. The total assets are forecast to drop by $42,602 billion.

Friday 7/14

•             10:00 AM ET, the Consumer SentIment first indication for July, is expected to rise to 65.0 from June’s surprisingly high 64.4.

What Else

Last week the BLS reported the US economy added 209,000 jobs in June. This helped cause the unemployment rate to fall to 3.6%, near its 50-year low. This spurred inflation worries and spooked the bond market, which in turn impacted the broader stock market. Looking at the make-up of the numbers may be less worrisome. It seems the US government has been the last to begin hiring after the pandemic. Excluding government hiring, private sector payrolls grew by only 149,000 in June. This is the slowest since December 2019 and below the 166,000 monthly average in 2017-19.

So the reaction may have been more of a reason for the market to take a breather after a strong June, than increased concern over a hot job market.  

Paul Hoffman

Managing Editor, Channelchek

The Week Ahead –  FOMC Minutes and Thin Markets Could Mean Fireworks

Posted on by phoffman@channelchek.com

This Week’s Focus Will be Defining More Precisely What the Fed’s Bias Is

A holiday-shortened week, coupled with the expected lighter trading volume, has the potential to create a situation where markets or individual stocks overreact to news, then stock prices settle back closer to the starting point after a short period. This is a bigger than normal risk on Wednesday, the first regular trading day of the week, as the Federal Reserve releases the FOMC minutes from the  June 13-14 meeting.

Monday 7/03

•             * Abbreviated trading session US markets. NYSE 1 PM close, US bond market 2 PM close.  

•             9:45 AM ET, The final Manufacturing PMI for June is expected to come in at 46.3, unchanged from the mid-month advanced read. This is below 50 and indicates significant contraction.

•             10:00 AM ET, The ISM Manufacturing Index has contracted for the last seven months. June’s consensus is 47.3 which would be a slight increase from May’s 46.9.

•             10:00 AM ET, Construction Spending for May is expected to continue to rise by 0.5 percent. This follows a strong 1.2 percent in April.

Tuesday 7/04

•             * Independence Day USA. Markets and government offices closed.

Wednesday 7/05

•             10:00 AM ET, Factory Orders are expected to rise 0.9 percent in May versus April’s 0.4 percent gain. Factory Orders are a favorite leading indicator of many economists when determining if the activity is likely to pick up or slow.

•             2:00 PM ET, FOMC Minutes from the most recent meeting when the Fed left rates unchanged will be poured over by Fed watchers and market participants to evaluate any bias beyond what is already known.

•             4:00 PM ET,  New York Federal Reserve president John C. Williams is the President will be speaking. Williams serves on the Federal Open Market Committee; his addresses reflect the Fed’s Twelfth District’s perspective on monetary policy.

Thursday 7/06

•             7:30 AM ET, Challenger Job Cut Report was 80,089 in May. The monthly report counts and categorizes announcements of corporate layoffs based on mass layoff data from state labor departments.

•             8:45 AM ET, Lorie Logan is the President of the Dallas Federal Reserve, she will be giving an address pre-market opening.  

•             9:45 AM ET, The PMI Composite Final is expected to confirm advanced reads of the purchasing managers survey.

•             10:00 AM ET, JOLTS, the report on job openings is expected to read 9.9 million for May. The PMI Composite Final is expected to confirm advanced reads of the purchasing managers survey. April’s 10.103 million was much higher than expected and pointed to strong resilience in labor demand.

•             11:00 AM ET, EIA Petroleum Status Report (EIA) provides weekly information on petroleum inventories in the US, whether produced here or abroad. The level of inventories helps determine prices for petroleum products.

Friday 7/07

•             8:30 AM ET, Employment is expected to have risen 213,000 for nonfarm payroll in June versus 339,000 in May, which was much higher than expected. Average hourly earnings in June are expected to rise 0.3 percent for the month with a year-over-year rate of 4.2 percent; these would represent very little change. June’s unemployment rate is expected to hold unchanged at 3.7 percent.

•             11:00 AM ET, EIA Petroleum Status Report (EIA) provides weekly information on petroleum inventories in the US, whether produced here or abroad. The level of inventories helps determine prices for petroleum products.

What Else

This is a popular vacation week among professional traders and investment managers. Any direction that may seem to take shape may not have legs as the month progresses.

Happy Independence Day to the United States; may it have many more.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.econoday.com/

The Week Ahead –  Powell is Back, PCE Report, and Summer Trading Activity

Posted on by phoffman@channelchek.com

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.

Lifeway Foods, Inc. (LWAY), which has been recognized as one of Forbes’ Best Small Companies, is America’s leading supplier of the probiotic fermented beverages. Wherever you are on Monday, you can attend the virtual roadshow and better understand directly from management the many intricacies of the probiotic food business as it relates to Lifeway. Should you have a question for management, there will be an ample Q&A period for participants to get their questions answered.  

Paul Hoffman

Managing Editor, Channelchek

The Week Ahead –  Fed Chairman Jerome Powell Will Again be the Focus

Posted on by phoffman@channelchek.com

This Week We’ll See if the Small-Cap Rally Continues, and Which Individual Stocks Move from the Russell Reconstitution

The FOMC interest rate pause at 5.00-5.25% last week created investor uncertainty as there was little forward guidance as the policymakers insist they remain data dependent. Chair Jerome Powell was emphatic in his comments to the press on Wednesday that getting inflation down to the 2 percent average inflation target is the FOMC’s unanimous goal – although there may be differences on the speed or level at which rates need to be adjusted.

Powell will have the spotlight again this week as he gives two testimony’s, the first on Wednesday before the House Financial Services Panel, and then on Thursday before the Senate Banking Committee.

While the mood of markets is still apprehensive, this did not stop the S&P 500 from rallying and reaching the highest weekly close since April 2022.

Monday 6/19

•             US Markets closed in celebration of the Juneteenth holiday.

Tuesday 6/20

•             8:30 PM ET, May Housing starts are expected to hold steady after experiencing a bounce in April. Exonomists expect May’s starts to have been 1.433 million, they were 1.416 million in April.

Wednesday 6/21

•             10:00 AM ET, Federal Reserve Chairman Powell will appear before House Financial Services Panel.

•             10:00 AM – 4:00 PM ET, While Fed Chair Powell will be getting the attention as he reads prepared remarks and answers question, the day will be filled with other FOMC members speaking and sharing their view and outlook for the first time since the June FOMC meeting concluded. This includes Lisa Cook at 10:00 AM ET, Philip Jefferson also at 10:00 AM ET, Austan Goolsbee at 12:25 PM ET, and Loretta Mester at 4:00 PM ET.

Thursday 6/22

•             8:30 AM ET, Jobless Claims for the June 17 week, is expected to remain near the previous weeks level. The consensus is 261,000 versus 262,000 last week.  

•             10:00 AM ET, Existing Home sales for May are expected to slip slightly to a 4.25 million rate. The National Association of Realtors described sales as “bouncing back and forth” but remaining “above recent cyclical lows.”

•             10:00 AM ET, Federal Reserve Chairman Powell will again be the focus as he appears before the Senate Banking Panel.

•             10:00 AM ET, The Index of Leading Indicators was down by 0.6 percent in April, for May it is expected to post a 14th straight decline, the consensus is down 0.7 percent. This index has been in sharp decline and has long been a trendline toward slow or no economic growth. signaling a pending recession.

•             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 6/23

•             9:45 AM ET, The Purchasing Managers Index (PMI) is not expected to show significant change in June compared to May; manufacturing underperformed at 48.5 and services even though services were strong at 53.5.

What Else

On Friday the Russell Indexes will have new components beginning the moment the market closes. The following Monday morning the indexes will reflect these changes, and index funds that are designed to match the performance of the funds will hopefully have gotten their trades off in time. Expect some interesting moves of a few stocks on Friday as a result.  

Small-cap stocks have joined the stock market rally in June and, according to an article in Morningstar, “trouncing the larger indexes.”

Noble Capital Markets has been hosting road shows of interesting small-cap companies in various cities and towns throughout the US. This week features a very busy week with company’s speaking to potential investors in St. Louis and Florida. Also there will be two virtual events, so that no one is excluded by geography. Become informed here.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.bing.com/search?q=small+cap+stocks+on+a+rolll&filters=ex1%3a%22ez2%22&pglt=41&cvid=480e1d5e96354e0f85be232f12f9721e&aqs=edge..69i57j0l8.5031j0j1&FORM=000017&PC=LCTS&qpvt=small+cap+stocks+on+a+rolll

https://www.zerohedge.com/economics/key-events-week-no-data-releases-fed-speakers-galore-including-powell-twice

https://us.econoday.com/byshoweventfull.aspx?fid=562858&cust=us&year=2023&lid=0&prev=/byweek.asp#top

The Week Ahead –  FOMC Meet, Quadruple Witching Hour, Consumer Inflation

Posted on by phoffman@channelchek.com

This Week’s Events are Sure to Keep Investors on Their Toes

I wouldn’t want to be Fed Chair Jerome Powell this week. The June 13-14 FOMC meeting may be the first meeting of the Committee that sets monetary policy, since January 2022, when a tightening of monetary targets doesn’t occur. The decision will come down to the wire as very important inflation data won’t be released until the first day of the meeting on Tuesday. While most on the Committee have expressed seeing current inflation data as problematic, there usually is a delay between when the Fed first alters policy, and the impact it creates.


Whether the Fed again acts to slow the economy, or takes a breather, announced at 2:00 on Wednesday, Powell will face reporters having to explain the Fed’s action or inaction. With likely less personal conviction than at previous press briefings, his responses may be more general than usual.

Monday 6/12


• 2:00 PM ET, The Treasury Statement is the U.S. Treasury’s release of a monthly accounting of the surplus or deficit of the government. Changes in the budget balance reflect Federal policy on spending and taxation. Forecasters see a $205.0 billion deficit in May that would compare with a $66.2 billion deficit in May one year ago, and a surplus of $176.2 billion in April this year.

Tuesday 6/13


• The June FOMC Meeting begins day one of two.


• 6:00 AM ET, NFIB Small Business Optimism Index has been below the historical average of 98 for the past 16 months in a row. May’s consensus is for a decline to 88.4 versus 89.0 in April.


• 8:30 AM ET, The Consumer Price Index this month could move markets significantly if there is a significant change in the data from the previous month. Core price increases in May are not expected to have slowed. They are expected to keep their pace of April’s 0.4 percent monthly increase. The core’s year-over-year rate is seen easing to 5.3 from 5.5 percent. Overall price increases are expected to halve to 0.2 percent on the month from 0.4 percent and 4.1 percent on the year from 4.9 percent.

Wednesday 6/14

• 8:30 PM ET, The Producer Price Index – Final Demand number is another important inflation index that the FOMC members may want to peak at before voting Wednesday on any policy shift. After rising 0.2 percent in April, producer prices in May are expected to fall 0.1 percent. The annual rate in May is seen at 1.6 percent versus April’s plus 2.3 percent. May’s ex-food ex-energy rate is seen up 0.2 percent on the month and up 2.9 percent on the year, matching April’s 0.2 percent monthly rise and just below the month’s 3.2 percent yearly rate.


• 10:30 AM ET, The Energy Information Administration (EIA) will be providing its scheduled weekly information on petroleum inventories, whether produced in the US or abroad. The level of inventories helps determine prices for petroleum products.


• 2:00 PM ET, The FOMC Announcement is when the world gets to learn what the Fed decision is on interest rates, and why.


• 2:30 PM ET, The FOMC Chair press briefing provides additional context to the just announced direction of the FOMC’s policy decision. The questions and answers with the media can shed far more light of the intentions of the Committee than the carefully worded statement released at 2PM.

Thursday 6/15


• 8:30 AM ET, Jobless Claims for the June 10 week are expected to ease back to 250,000 versus the prior week’s large 28,000 jobs jump to 261,000. This has been a very closely watched report. If as expected, it would indicate the Fed has room to tighten further if other data remain strong.


• 8:30 AM ET, May Retail Sales are expected to be unchanged, matching April’s 0.4 percent rise.


• 8:30 PM ET, The Philadelphia Fed (Philly Fed) manufacturing index has been in contraction for the last ten reports. At minus 10.4 in May, with June’s consensus is at minus 13.2.


• 9:15 PM ET, Industrial Production is expected to push 0.1 percent higher in May after April’s 0.5 percent increase that was boosted by manufacturing output which jumped a surprising 1.0 percent. Manufacturing in May is seen up 0.2 percent.


• 4:30 PM ET, The Fed’s Balance Sheet is a weekly report presenting 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. This has ben getting more attention as it indicates if the fed is on track with its announced quantitative tightening and if any bank borrowing has dramatically increased.

Friday 6/16


• 10:00 AM ET, Consumer Sentiment will be the first indication for June. It fell by 4.3 points to 59.2 last month, it is expected to inch up and report 60.5.


• Quadruple Witching is a phrase used to refer to the expiration of four different derivative contracts: Stock index futures, Stock index options, Single-stock options, Single-stock futures. Quadruple witching happens four times a year, on the third Friday of March, June, September, and December. It is a time of heightened volatility in the markets, as traders adjust their positions in anticipation of the expiration of these contracts.

What Else


The key factors that the Fed will consider when making its decision are the pace and trend of economic growth, the level of inflation, the strength of the labor market, and the risk of recession.
Additionally, the FOMC will have to determine if the moves to date will have a more substantial impact if allowed to have more time to have an impact.


While OPEC is cutting output and it seems like we are on a path of oil and natural gas prices again inching up, Alvopetro Energy (ALVOF), an enviable gas company, headquartered in Canada, operating in Brazil, will be conducting roadshows in New York and St. Louis. Learn more about attending here.
Paul Hoffman
Managing Editor, Channelchek

The Week Ahead –  Debt Limit Clouds Lift

Posted on by phoffman@channelchek.com

This Week Will Feature Few Economic Releases and a Focus on Next Weeks FOMC

The week ahead is quiet on the economic release front. And there won’t be any market moving Fed president addresses to keep the market on its toes; the Fed members are in a blackout period leading up to next week’s June 13-14 FOMC meeting.

The markets can also stop talking about whether the US will default on debt as the short end of the fixed-income market will have to adjust to a sudden but short-lived increase in US Treasury bills.

Monday 6/5

  • 10:00 AM ET, Factory Orders are expected to have risen 0.8 percent in April versus March’s 0.9 percent rise. Durable Goods Orders for April, which have already been released and are one of two major components of this report, rose 1.1 percent on the month. Factory Orders are a leading indicator, it represents the dollar level of new orders for both durable and nondurable goods.
  • 10:00 AM ET, The Institute for Supply Management Services (ISM Services) is expected to be relatively steady at 52 for May after a 51.9 print in April.

Tuesday 6/6

  • Nothing Scheduled

Wednesday 6/7

  • 8:30 PM ET, International Trade in Goods and Services is expected to show a deficit of $75.4 billion for April for total goods and services trade which would compare with a $64.2 billion deficit in March. Advance data on the goods side of April’s report showed a very large $12.1 billion deepening in the deficit.
  • 10:30 AM ET, The Energy Information Administration (EIA) will be providing its scheduled weekly information on petroleum inventories, whether produced in the US or abroad. The level of inventories helps determine prices for petroleum products.
  • 3:00 PM ET, Consumer Credit is expected to have increased by $21.0 billion in April versus an increase of $26.5 billion in March. This report has surprised on the high side the last three months.

Thursday 6/8

  • 8:30 AM ET, Jobless claims for the week ending June 3 are expected to have increased to 240,000 versus 232,000 in the prior week. This has been a very closely watched report as it is expected it has indicated the Fed has room to tighten further if other data remain too strong.
  • 10:00 AM ET, Wholesale Inventories will be released as a second estimate before the final. The second estimate for April is expected to be a 0.2 percent decline, unchanged from the first estimate. Wholesale trade measures the dollar value of sales made and inventories held by merchant wholesalers. It is a component of business sales and inventories  Corporate Profits are pulled from the national income and product accounts (NIPA) and are presented in different forms.
  • 4:30 PM ET, The Federal Reserve’s  Balance Sheet has attracted additional attention as it is a good indicator of whether it is following its quantitative tightening plan, and whether there has been a significant change in banks looking to the Fed, which may mean trouble in the sector. For the week ending June 7, the Federal Reserve is expected to hold assets worth $8.386 trillion. This would be a week-on-week decline of $50.4 billion. All non-cash assets can be viewed as money that at one time was  injected into the economy as stimulation.            

Friday 6/9

  • 10:00 AM ET, The Quarterly Services Survey focuses on information and technology-related service industries. These include information; professional, scientific and technical services; administrative & support services; and waste management and remediation services. Services revenue is expected to have increased by 2.9%.

What Else

The key factors that the Fed will consider when making their decision next week at the FOMC meeting are the pace and trend of economic growth, the level of inflation, the strength of the labor market, and the risk of recession.

Additionally, the FOMC will have to determine if the moves to date will have a more substantial impact over time. Currently, inflation is not coming down, jobs are abundant relative to job seekers, and the risk of a recession over the next two quarters seems low. For these reasons, some believe the Fed will remain hawkish yet pause for this meeting. However, next week during the first day of the two-day meeting CPI (consumer inflation) will be released. It would be premature to forecast a Fed decision until the contents of that report are known.

Paul Hoffman

Managing Editor, Channelchek

The Week Ahead – Debt Ceiling, Beige Book, and Employment

Posted on by phoffman@channelchek.com

The Holiday Shortened Trading Week Started with Positive Market News

It’s a four-day trading week in the US as the calendar changes from May to June. The US stock and bond markets will open on Tuesday knowing a government debt default is now likely averted as President Biden and House Speaker McCarthy reached an agreement Sunday on a deal to raise the nation’s debt ceiling. They have ensured the citizenry they have enough support in Congress to pass the measure this coming week. As far as economic reports, jobs and the labor market will be in the spotlight.

The market is focused on the labor market because Fed policymakers are paying attention to jobs numbers to determine if conditions are so strong they may indicate wage inflation or if they weakened and not strong enough to withstand another rate hike at the June 13-14 FOMC meeting.

Tuesday 5/30

•             9:00 AM ET, FHFA House Price Index. While interest rates have risen, housing prices have been flat to up. Continued demand caused prices to increase by .5% in February, it is expected prices rose again in March by a .3%.

•             10:00 AM ET, the Consumer Confidence index has been sinking and is expected to sink further in May to 100.0 from April’s 101.3. If you recall, April was much weaker than expected, reflecting a sharp decline in job and income expectations.

•             1:00 PM ET, Thomas Barkin is the CEO of the Richmond Federal Reserve district. In light of the PCE inflation indicator late last week and statements by Fed Chair Powell the Friday before, insight into thinking from FOMC members could move market sentiment.

Wednesday 5/31

•             8:50 AM ET, Susan Collins is the CEO of the Richmond Federal Reserve District. Comments by Fed district CEOs may get heightened attention this week as the market looks for clues as to what monetary policy changes may occur from the FOMC meeting in two weeks.

•             9:45 AM ET, The Chicago PMI is expected to fall in May to 47.0 versus 48.6 in April which was the eighth straight month of sub-50 contraction. Above 50 indicates economic expansion, and below 50 reflects a receding economy.

•             10:00 AM ET, Job Openings and Labor Turnover (JOLTS) have been declining. Forecasters put April’s openings at 9.35 million.

•             1:30 PM ET, Patrick Harker is the CEO of the Federal Reserve Bank of Philadelphia. He will be speaking. 

•             2:00 PM ET, If volatility sets in for the last two hours of trading on Wednesday, it may be because the Fed’s Beige Book is released. This report outlines the economic conditions in each of the Federal Reserve Districts. The FOMC uses the contents as a basis for its decision-making.

•             3:00 PM ET, Farm Prices may not be the most awaited for inflation indicator, but it is important as it is a leading inflation indicator. Agricultural prices for April are expected to have risen by 1.3% month-over-month. These increases will work their way into the Producer Price Index (PPI) and the Consumer Price Index (CPI).

Thursday 6/1

•            8:30 AM ET, Jobless claims for the May 27 week are expected to come in at 235,000 versus 229,000 in the May 20 week, which was lower than expected but followed 248,000 in the prior week.•             

•             8:30 AM ET, Released will be the second estimate for first-quarter Nonfarm Productivity. It is expected to remain the same as the first estimate, at minus 2.7 percent.

•             10:00 AM ET, The Institute for Supply Management (ISM) Manufacturing Index has been contracting over the last six months. May’s consensus is 47.0 versus April’s 47.1.

•             11:00 AM ET, The Energy Information Administration’s weekly update on petroleum inventories in the US is expected to show a decline of 12.5 million barrels.

•             1:00 PM ET, Patrick Harker is the CEO of the Federal Reserve Bank of Philadelphia. He will be speaking. 

•             4:30 PM ET, The Fed’s Balance Sheet report tells unveils if the Fed has been on track with monetary policy initiatives like quantitative Tightening (QT) and if the troubled bank outlets are getting more or less use. Obviously, this has been getting much more scrutiny by investors.

Friday 6/2

•             8:30 AM ET, The Employment Situation report is supposed to show a 180,000 rise is the call for nonfarm payroll growth in May versus 253,000 in April. Average hourly earnings in May are expected to rise 0.3 percent on the month for a year-over-year rate of 4.4 percent; these would compare with 0.5 and 4.4 percent in April, which were higher than expected. May’s unemployment rate is expected to edge higher to 3.5 percent versus April’s 3.4 percent, which was two-tenths lower than expected.

What Else

Look for a vote on the debt ceiling that is likely to pass both houses of Congress and be signed into law quickly this week.

Artificial intelligence, or AI, has been in the news at an escalating pace. While most agree it can make life better, there are also fears that if not governed, it can cause devastating problems. The White House is asking for input and comments before 5pm July 7. Get more information here.

On Tuesday May 30th and Wednesday May 31st, Tonix Pharmaceutical Holdings will be in South Florida presenting to investors as part of our Meet the Management Series. If you’d like to attend one of these roadshows, presented by Senior Management of Tonix, go here for more information.

Paul Hoffman

Managing Editor, Channelchek

Sources:

https://us.econoday.com/byweek.asp?cust=us

https://www.whitehouse.gov/wp-content/uploads/2023/05/OSTP-Request-for-Information-National-Priorities-for-Artificial-Intelligence.pdf

Noble/Channelchek  “Meet the Management” Roadshow Schedule