Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Trading Radar: The Most Important Market Event of the Year Arrives Next Week


Economics, earnings reports, and market events for the week ahead.

In the week past, the S&P 500 (INDEXSP:.INX) broke out to a new record high, a theme that has been frequent in this article series for the past 12 months. The major indices were led by the recently beaten-down small-cap and tech sectors. Within the tech sector, the cloud software companies outperformed the most.
In the week ahead, a few events that have been on every market participant's radar will finally be front and center. These are, in order of importance, the ECB's meeting on Thursday (June 5), May nonfarm payrolls on Friday (June 6), and the ISM manufacturing survey on Monday (June 2). Of the three, the ECB meeting has the most potential to cause changes in asset prices.
The first report we get is the ISM manufacturing report on Monday morning. Today, the regional Chicago (read: autos) and Milwaukee (read: home appliances) manufacturing surveys showed explosive growth. This leaves the market leaning bullish for the national ISM report.
The ECB's monetary policy decision and President Draghi's accompanying press conference next Thursday (June 5) are far and away the most significant event for the market in the week -- and possibly the entire year. The majority of economists and strategists expect the ECB to lower its deposit and main policy rates by 10 basis points to -0.1% and 0.15%, respectively. This has been telegraphed by at least a dozen media leaks by key ECB officials. As a result, the euro, European peripheral sovereign bonds, and European stocks have all adjusted accordingly. Additionally, we've seen US Treasuries rally as the market anticipates large euro-based deposits leaving the eurozone for the safety of the US dollar and dollar-based assets. This, in theory, leaves little potential upside for any of these trades if and when the ECB acts.
The ECB has floated the idea of issuing direct loans to banks that can only be used to finance loans to small and medium enterprises. That's one potential positive catalyst, but not one the market would react to. Another is the potential for purchases of asset-backed securities, which is, in essence, direct financing to individuals. The last potential catalyst, which the German Bundesbank has effectively kiboshed, is direct purchases of government bonds. The ECB appears to want to hang on to this strategy in case things get materially worse.
How markets react to this event will very likely determine how investors and institutions position their portfolios for the rest of the summer, and likely for the rest of the year.
An outside variable that hasn't garnered much attention is the Swiss National Bank. It has vowed to respond to any measures by the ECB to reduce the value of its currency with similar strong measures. Its next scheduled meeting is June 19, but it may act before then if the ECB takes any extreme measures to weaken the euro.
The other major event for next week is May nonfarm payrolls (NFP), scheduled for Friday morning. Payrolls are expected to grow by 219,000 in the month after rising 288,000 in the month prior. A preview for the government report, ADP's private payrolls, will be released on Wednesday morning. Since ADP revised its survey methods last year, the results have been increasingly close to NFP's. Although last month's report was very strong, spending and wage figures have been showing no increases, which likely means that the payrolls report may have less impact than normal. If there is an impact, it should be limited to interest rates.
Only 14 major US companies are scheduled to report earnings next week. Notable reports include those from FuelCell Energy (NASDAQ:FUEL), Dollar General (NYSE:DG), Joy Global (NYSE:JOY), Ciena (NYSE:CIEN), and VeriFone Systems (NYSE:PAY).
Monday, June 2

US Economics (Time Zone: EDT)
09:45 Markit US Manufacturing PMI, May final, exp. 56.2, prior 56.2
10:00 ISM Manufacturing, May, exp. 55.5, prior 54.9
10:00 ISM Prices Paid, May, exp. 56.9, prior 56.5
10:00 Construction Spending, Apr., exp. 0.7%, prior 0.2%
11:30 Treasury selling $25b 3-month and $23b 6-month bills
03:00am Evans to speak in Istanbul
Global Economics (Time Zone: GMT)

01:30 JPY Manufacturing PMI (MAY F)
07:45 EUR Italy Manufacturing PMI (MAY F)
07:45 EUR France Manufacturing PMI (MAY F)
07:45 EUR Germany Manufacturing PMI (MAY F)
07:45 EUR Euro-zone Manufacturing PMI (MAY F)
08:30 GBP Manufacturing PMI (MAY)
08:30 GBP Mortagage Approvals (APR)
08:30 GBP Net Consumer Credit (APR)
12:00 EUR Germany CPI (MAY P)
13:00 Canada Manufacturing PMI (MAY)
Conn's (CONN)
Quiksilver (ZQK)

Tuesday, June 3

US Economics (Time Zone: EDT)
09:45 ISM New York, May, prior 50.6%
10:00 Factory Orders, April, exp. 0.5%, prior 1.1%
10:00 IBD/TIPP Economic Optimism, June, exp. 46.5%, prior 45.8%
11:30 Treasury selling 4-week bills and 14-day cash management bills
5:00 Domestic Vehicle Sales, May, exp. $12.65m, prior $12.65m
5:00 Total Vehicle Sales, May, exp. $16.1m, prior $15.98m
8:10pm George to speak in Breckenridge, CO

Global Economics (Time Zone: GMT)

01:00 China Non-manufacturing PMI (MAY)
01:30 Australia Retail Sales (APR)
01:45 China HSBC Manufacturing PMI (MAY F)
04:30 Australia Reserve Bank Rate Decision
08:00 EUR Italy Unemployment Rate (APR P)
09:00 EUR Eurozone CPI (May)
09:00 EUR Eurozone Unemployment Rate (APR)


Fuelcell Energy (FUEL)
Dollar General (DG)

Wednesday, June 4

US Economics (Time Zone: EDT)

07:00 MBA Mortgage Applications, May 30, prior -1.2%
08:15 ADP Employment Change, May, exp. 215k, prior 220k
08:30 Trade Balance, Apr. exp. -$40.6b, prior -$40.4b
08:30 Annual benchmark revisions to trade data
08:30 Nonfarm Productivity, 1Q final, exp. -2.6%, prior -1.7%
08:30 Unit Labor Costs, 1Q final, exp 4.8%, prior 4.2%
09:45 Markit US Services PMI, May final, prior 58.6
09:45 Markit US Composite PMI, May final, prior 58.6
10:00 ISM Non-Manufacturing, May, exp. 55.5, prior 55.2
2:00pm Fed issues Beige Book

Global Economics (Time Zone: GMT)

01:30 Australia GDP (1Q)
01:35 Japan Services PMI (MAY)
07:45 EUR Italy Services PMI (MAY)
07:50 EUR France Services PMI (MAY F)
07:55 EUR Germany Services PMI (MAY F)
08:00 EUR Eurozone Services PMI (MAY F)
08:30 GBP Services PMI (MAY)
09:00 EUR Eurozone GDP (1Q P)
09:00 EUR Eurozone PPI (APR)
14:00 Canada Bank Rate Decision


PVH Corp (PVH)

Thursday, June 5

US Economics (Time Zone: EDT)

07:30 Challenger Job cuts y/y, May, prior 5.7%
07:30 RBC Consumer Outlook Index, June, prior 50.1
08:30 Initial Jobless Claims, May 31, exp. 313k, prior 300k
08:30 Continuing Claims, May 24, prior 2.631m
12:00 Household Change in Net Worth, 1Q, prior $2.95t
1:30pm Kocherlakota to speak in Boston
Global Economics (Time Zone: GMT)

01:30 Australia Trade Balance (APR)
01:45 China HSBC Services PMI (MAY)
06:00 EUR Germany Factory Orders (APR)
07:30 EUR Germany Construction PMI (MAY)
09:00 EUR Eurozone Retail Sales (APR)
11:00 Bank of England Rate Decision
11:45 EUR ECB Rate Decision
14:00 Canada Ivey PMI (MAY)


Joy Global (JOY)
Ciena (CIEN)

Vail Resorts (MTN)
Verifone Systems (PAY)

Friday, June 6

US Economics (Time Zone: EST)

08:30 Change in Nonfarm Payrolls, May, exp. 219k, prior 288k
08:30 Change in Private Payrolls, May, exp. 215k, prior 273k
08:30 Change in Manufacturing Payrolls, May, exp. 10k, prior 12k
08:30 Unemployment Rate, May, exp. 6.4%, prior 6.3%
08:30 Average Hourly Earnings, May, exp. 0.2% m/m, prior 0.0%, exp. 2% y/y, prior 1.9%
08:30 Average Weekly Hours All Employees, May, exp 34.5, prior 34.5
08:30 Underemployment Rate, May, prior 12.3%
3:00 Consumer Credit, Apr., exp. $16b, prior $17.529b

Global Economics (Time Zone: GMT)

05:00 Japan Leading Index (APR P)
06:00 EUR Germany Industrial Production (APR)
06:00 EUR Germany Trade Balance (APR)
07:15 CHF CPI (MAY)
08:30 GBP Trade Balance (APR)
12:30 Canada Employment Change (MAY)


No major reports

Twitter: @MichaelSedacca

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Featured Videos