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: FOMC Set to Make Most Important Decision Yet (Until the Next Decision)


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

Friday probably had more than a few market participants scratching their heads after the notorious Fed leaker Jon Hilsenrath said that the Fed would "fight fire with fire," and that the market's expectations of rising rates were unfounded given the recent data. US equities continued to tumble with the S&P 500 (INDEXSP:.INX) down two-thirds of a percent in afternoon trading while the 10-year Treasury yield declined by 2 basis points to 2.1259%.

This past week was the slowest of the month in terms of economic data. Thankfully that will change this coming week. Highlights of the week include the consumer price index, housing starts, building permits, the Empire (NY) manufacturing index, the Philadelphia regional manufacturing survey, the NAHB housing market survey, and existing home sales.

Before getting into the manufacturing data, of course, the major event for the week will be the FOMC decision on Wednesday, which will be the most important one yet -- until the next one. A few non-voting officials have hinted over the last two months that the Fed is looking to pull back on purchases, but that seems unlikely given the trends in employment and inflation. It is possible, however, that the Fed has been trying to talk down market as some asset classes have reached extreme levels and may taper based off of this decision alone. Commentary over the last four months has hinted as much. Chairman Ben Bernanke will hold a press conference 30 minutes after the 2 p.m. ET statement and will iterate the formal direction of the FOMC's outlook.

Tuesday's release of the consumer price index should see consumer inflation increase on a year-over-year basis as Friday's producer price index increased to 1.7% from 0.6% the month prior. Unleaded gas prices rose 2.36% on average in May so this will provide the major boost to the index. Food prices for products such as wheat and corn have remained relatively stable. The "cleaner" core index is estimated to remain unchanged at 1.7%.

Manufacturing data should be better in June as producer prices and inventories fell far enough to become attractive to manufacturers. In May, we started to see slight rebuilding and upticks in producer prices; this should continue into June. The higher inflation and manufacturing growth should be a minor headwind to any Treasury rallies as nominal growth expectations trend a little higher. The New York and Philadelphia regional manufacturing surveys are the two most significant surveys in the US so keep an eye on their direction.

The housing data from the week will be a highly watched stat as purchases and refinancing activity fell during May due to higher interest rates. The MBA purchase index fell 3.81% while refinancing activity fell by 40%. However, Toll Brothers Inc's (NYSE:TOL) CEO said earlier today that purchase activity was picking up as homebuyers rushed to buy houses due to the fear of higher interest rates. Lastly, existing home sales inventory reached a 13-year low earlier this year and has been a boon for building activity as purchases continue to increase.

Global economic data will be on the lighter side for the week. The eurozone will release May new car registrations on Tuesday after last month showed the first positive monthly grow after 17 straight months of declines. Other economic releases include economic sentiment surveys from Europe, retail sales from the UK, and manufacturing indexes out of China.

Earnings reports won't start in earnest until the second week of July, but transportation bellwether FedEx Corporation (NYSE:FDX) is set to report on Tuesday. Other reports for the week include Oracle Corporation (NASDAQ:ORCL), Darden Restaurants, Inc. (NYSE:DRI), Adobe Systems Incorporated (NASDAQ:ADBE), and Carnival Corporation (NYSE:CCL)

Monday, June 17

US Economics (Time Zone: EDT)

08:30 Empire Manufacturing – consensus 0.00, prior -1.43
10:00 NAHB Housing Market Index – consensus 45, prior 44
11:00 Fed buying $4.75b-$5.75b notes in 5 to 6-year range
11:30 Treasury selling $30b 3-month bills, $25b 6-month bills

Global Economics (Time Zone: GMT)

01:30 AUD New Car Sales
10:00 EUR Eurozone Trade Balance


No major earnings scheduled

Tuesday, June 18

US Economics (Time Zone: EDT)

08:30 Consumer Price Index YoY – consensus 1.4%, prior 1.1%
08:30 CPI Ex Food & Energy YoY – consensus 1.7%, prior 1.7%
08:30 Housing Starts – consensus 952K, prior 853K
08:30 Housing Starts MoM – consensus 11.5%, prior -16.5%
08:30 Building Permits – consensus 975K, prior expected to be revised down to 1005K from 1017K
08:30 Building Permits MoM – consensus -3.0%, prior expected to be revised down to 12.9% from 14.3%
11:00 Fed buying $1.25b-$1.75b notes in 23 to 30-year range
11:30 Treasury selling 4-week bills

Global Economics (Time Zone: GMT)

CNY Leading Economic Indicators
01:30 AUD RBA June Minutes
07:00 EUR Eurozone May New Car Registrations
09:30 GBP UK PPI
10:00 EUR Eurozone ZEW Economic Sentiment Survey
10:00 EUR German ZEW Economic Sentiment Survey
07:00 Draghi speaking in Jerusalem


Adobe (ADBE)

Wednesday, June 19

US Economics (Time Zone: EDT)

07:00 MBA Mortgage Index
2:00 FOMC Rate Decision

Global Economics (Time Zone: GMT)

10:00 CHF Swiss ZEW Economic Expectations Survey
11:00 EUR Eurozone Construction Output
10:30 Germany selling EUR5b in 10-year notes


FedEx (FDX)

Micron Tech (MU)
Red Hat (RHT)

Thursday, June 20

US Economics (Time Zone: EDT)

08:30 Initial Claims – consensus 340K, prior 334K
08:30 Continuing Claims – prior 2973K
08:58 Markit Preliminary US PMI – consensus 52.5
10:00 Philly Fed – consensus -1.0, prior -5.2
10:00 Existing Home Sales – consensus 5.00M, prior 4.97M, MoM% up 0.6% from 0.6%
10:00 Leading Indicators up 0.2%, prior 0.6%
11:00 Fed purchasing $2.75b-$3.5b bonds in 7 to 10-year range
1:00 Treasury selling $7b in 30-year TIPS (reopening)

Global Economics (Time Zone: GMT)

01:45 CNY HSBC Manufacturing PMI
09:00 EUR Eurozone Manufacturing and Services PMI (1st estimate June)
09:30 GBP Retail Sales
3:00 EUR Eurozone Consumer Confidence
Spain selling bonds


Oracle (ORCL)
Kroger (KR)
Rite Aid (RAD)

Friday, June 21

US Economics (Time Zone: EDT)

No major economic reports
11:00 Fed buying $1.25b-$1.75b notes in 23 to 30-year sector

Global Economics (Time Zone: GMT)

09:30 GBP UK Public Sector Net Borrowing
12:30 CAD CPI
12:30 CAD Retail Sales


Darden Restaurants (DRI)
Carnival (CCL)

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