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Now fully in the summer trading weeks, we expect to move a little more slowly. We do have some key economic data and even some important earnings reports expected by the end of this week, but nothing of note today — aside from some Fed-speak from Chicago President Austan Goolsbee, San Francisco President Mary Daly and Fed Governor Christopher Waller. An hour before the opening bell, the Dow is currently up +88 points, the S&P 500 is +2 and the Nasdaq is -20 points.
The Housing sector will see some important reports this week. Both the Case-Shiller Home Price Index for April on Tuesday and New and Pending Home Sales for May on Wednesday and Thursday, respectively, will help color in some of the lines on this important segment of the economy. One of the big reasons the Fed is reluctant to lower interest rates is because housing still has such pent-up demand, and lowering mortgage rates — which would likely be one result of lowering the Fed funds rate — would likely result in a new ramp-up of housing prices, which would help increase inflation.
Thus, with a wide two-month spread of home sales data, these reports may carry added importance. It’s become pretty hard to argue, in the face of other inflation figures over the past month or so, that a 5.25-5.50% interest rate is too low, or even in-line with what this economy needs. But if we continue to see housing numbers climb this wall of 7 1/2% mortgage rates — which still, incidentally, are not that historically astronomical — it may force the Fed to keep the funds rate higher than it otherwise might.
The biggest economic print this week, however, comes out Friday morning. This would be Personal Consumption Expenditures (PCE), the Fed’s preferred metric for inflation. Both Income and Spending are expected to tick up slightly month over month, but the year-over-year expectations are where we should pay special attention: a forecast of +2.6% on both headline and core year over year would be -10 basis points (bps) lower on the former and -20 bps on the latter — and would obviously put the Fed’s optimal +2% inflation rate closer than it’s been in years.
Our earnings calendar is slight, but contains several household names reporting this week. This starts after the bell with FedEx (FDX - Free Report) , which not only gives a clear view of one of the top delivery firms in the world, but also gives us glimpse of what’s going on with consumer demand in a more general sense. We follow that up with General Mills (GIS - Free Report) on Wednesday morning and Micron (MU - Free Report) after the close, with NIKE (NKE - Free Report) continuing to inform the consumer space.
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Key Economic Data to Deluge Market This week
Now fully in the summer trading weeks, we expect to move a little more slowly. We do have some key economic data and even some important earnings reports expected by the end of this week, but nothing of note today — aside from some Fed-speak from Chicago President Austan Goolsbee, San Francisco President Mary Daly and Fed Governor Christopher Waller. An hour before the opening bell, the Dow is currently up +88 points, the S&P 500 is +2 and the Nasdaq is -20 points.
The Housing sector will see some important reports this week. Both the Case-Shiller Home Price Index for April on Tuesday and New and Pending Home Sales for May on Wednesday and Thursday, respectively, will help color in some of the lines on this important segment of the economy. One of the big reasons the Fed is reluctant to lower interest rates is because housing still has such pent-up demand, and lowering mortgage rates — which would likely be one result of lowering the Fed funds rate — would likely result in a new ramp-up of housing prices, which would help increase inflation.
Thus, with a wide two-month spread of home sales data, these reports may carry added importance. It’s become pretty hard to argue, in the face of other inflation figures over the past month or so, that a 5.25-5.50% interest rate is too low, or even in-line with what this economy needs. But if we continue to see housing numbers climb this wall of 7 1/2% mortgage rates — which still, incidentally, are not that historically astronomical — it may force the Fed to keep the funds rate higher than it otherwise might.
The biggest economic print this week, however, comes out Friday morning. This would be Personal Consumption Expenditures (PCE), the Fed’s preferred metric for inflation. Both Income and Spending are expected to tick up slightly month over month, but the year-over-year expectations are where we should pay special attention: a forecast of +2.6% on both headline and core year over year would be -10 basis points (bps) lower on the former and -20 bps on the latter — and would obviously put the Fed’s optimal +2% inflation rate closer than it’s been in years.
Our earnings calendar is slight, but contains several household names reporting this week. This starts after the bell with FedEx (FDX - Free Report) , which not only gives a clear view of one of the top delivery firms in the world, but also gives us glimpse of what’s going on with consumer demand in a more general sense. We follow that up with General Mills (GIS - Free Report) on Wednesday morning and Micron (MU - Free Report) after the close, with NIKE (NKE - Free Report) continuing to inform the consumer space.