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: Iraq News, Fed Meeting Speculation To Dominate the Week

By

Today's financial recap and tomorrow's financial outlook.

PrintPRINT
The S&P 500 (INDEXSP:.INX) bounced slightly on Friday after filling the gap down to 1925 at the end of Thursday's session. Some buyers emerged, but investors were generally hesitant about putting too much money to work with the potential for further violence in Iraq over the weekend. The benchmark indices settled just north of unchanged.

The main question for investors over the weekend will be whether the Iraqi government is able to come to some sort of an agreement about how to handle the increasing violence in the northern part of the country. The general thinking is that if Baghdad and its surrounding areas fall to rebels, it would open the door for the rest of the country to fall, and cause serious disruptions to oil production. Iraq accounts for 3.3 million barrels of daily oil production and in excess of 1 million barrels of foreign-produced oil flows through its pipelines.

The main event next week is the culmination of the FOMC meeting on Wednesday at 2:00 p.m. EDT. It is universally expected by economists that the Fed will make another $10 billion reduction to its monthly asset purchases, which would bring the monthly total to $35 billion. However, market participants will be more concerned about the Fed's economic and Fed Funds projections, colloquially called "dots," and Janet Yellen's post-meeting press conference.

The formal addition of Vice Chairman Fischer and Board member Brainard to the FOMC should mean two added "dots" that are near the bottom end of the table, presumably where other dovish members, including Chairman Yellen, put their forecasts. It's expected that the FOMC will reduce its GDP forecasts due to a 1% decline in real growth in the first quarter, which is expected to be revised down even further, to -1.9%. However, in the formal statement and, possibly, in the press conference, Yellen will likely indicate that the committee is seeing signs of improvement in the economy.

There are two notable economic reports next week: the May consumer price index and housing starts/permits. Consumer prices are expected to rise by 0.2% month-on-month to keep pace with the annual gain of 2%. Recent price increases have largely been influenced by rising distributive trade services and food prices. Housing activity increased in April and was confirmed by a big jump in building permits. Investors will be looking for that activity to remain high in May, as interest rates had fallen further during the month.

No global economic reports stand out for the coming week. On Wednesday, the Bank of England will release the minutes of its monetary policy meeting from two weeks ago. Yesterday Governor Mark Carney said that the central bank could raise interest rates faster than the market expects, which caused a considerable selloff in the front end of the UK Gilt market. Chinese property prices, set to be released Tuesday evening, will probably show further deceleration in the Chinese housing market, if recent local reports are any indication.

The first batch of earnings reports that precede the second quarter will be released next week. These include Fedex (NYSE:FDX), Oracle (NYSE:ORCL), Adobe (NASDAQ:ADBE), Darden Restaurants (NYSE:DRI), and Kroger (NYSE:KR)

Monday, June 16

US Economics (Time Zone: EST)
 
08:30 Empire Manufacturing, June, exp. 15, prior 19.01
09:00 Net Long-Term TIC Flows, Apr., exp. $30b, prior $4b
09:15 Industrial Production m/m, May, exp. 0.5%, prior -0.6%
09:15 Capacity Utilization, exp 78.9%, prior 78.6%
10:00 NAHB Housing Market Index, June, exp. 47, prior 45
11:00 Fed to purchase $2.25b-$3b notes in 4-5 year range
11:30 Treasury to sell $25b 3-month bills and $23b 6-month bills
 
Global Economics (Time Zone: GMT)

09:00 EUR Euro-Zone CPI (MAY final)
 
Earnings
 
No major reports scheduled

Tuesday, June 17

US Economics (Time Zone: EST)
 
Fed two-day FOMC meeting opens
08:30 Consumer Price Index YoY, May, exp. 2.0%, prior 2.0%
08:30 CPI Ex Food & Energy YoY, exp 1.8%, prior 1.8%
08:30 Housing Starts, May, exp. 1.040m, prior 1.072m
08:30 Building Permits, exp 1.050m, prior 1.080m
11:00 Fed to purchase $850m-$1.1b bonds in 22-30 year range

Global Economics (Time Zone: GMT)

08:30 GBP CPI & Retail Price Index (MAY)
09:00 EUR Euro-Zone ZEW Survey (JUN)

Earnings

After
Bob Evans Farms (BOBE)
Adobe Systems (ADBE)

Wednesday, June 18

US Economics (Time Zone: EST)

07:00 MBA Mortgage Applications
08:30 Current Account Balance, 1Q, exp. -$96.6b, prior -$81.1b
2:00 FOMC Rate Decision
2:30 Yellen to hold news conference

Global Economics (Time Zone: GMT)

NZD Current Account Balance (1Q)
JPY Trade Balance (MAY)
AUD Conference Board Leading Index (APR)
08:30 GBP Bank of England Minutes
09:00 EUR Euro-Zone Construction Output (APR)

Earnings

Before:
Fedex (FDX)

Thursday, June 19

US Economics (Time Zone: EST)

08:30 Initial Jobless Claims, June 14, exp. 314k, prior 317k
08:30 Continuing Claims, exp 2600k, prior 2614k
10:00 Philadelphia Fed, June, exp. 14, prior 15.4
10:00 Leading Index, May, exp 0.6%, prior 0.4%
11:00 Fed to purchase $2.25b-$2.75b notes in 7 to 10 year range
13:00 Treasury to sell $7b 30-year TIPS in reopening
 
Global Economics (Time Zone: GMT)

NZD GDP (1Q)
04:30 JPY All Industry Activity Index (APR)
05:00 JPY Leading Index (APR F)
07:30 CHF Swiss National Bank Rate Decision (JUN)
08:30 GBP Retail Sales (MAY)

Earnings

After:
Oracle (ORCL)
Smith & Wesson (SWHC)
 
Kroger (KR)
Rite Aid (RAD)

Friday, June 20

US Economics (Time Zone: EST)

No major reports scheduled

Global Economics (Time Zone: GMT)

01:00 NZD ANZ Consumer Confidence (JUN)
12:30 CAD Retail Sales (APR)
12:30 CAD CPI (MAY)
14:00 EUR Euro-Zone Consumer Confidence (JUN)

Earnings

Before
CarMax (KMX)
Darden Restaurants (DRI)

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.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE