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.
Managing Editor, Channelchek
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