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.
Managing Editor, Channelchek