This Week Will Feature Few Economic Releases and a Focus on Next Weeks FOMC
The week ahead is quiet on the economic release front. And there won’t be any market moving Fed president addresses to keep the market on its toes; the Fed members are in a blackout period leading up to next week’s June 13-14 FOMC meeting.
The markets can also stop talking about whether the US will default on debt as the short end of the fixed-income market will have to adjust to a sudden but short-lived increase in US Treasury bills.
Monday 6/5
- 10:00 AM ET, Factory Orders are expected to have risen 0.8 percent in April versus March’s 0.9 percent rise. Durable Goods Orders for April, which have already been released and are one of two major components of this report, rose 1.1 percent on the month. Factory Orders are a leading indicator, it represents the dollar level of new orders for both durable and nondurable goods.
- 10:00 AM ET, The Institute for Supply Management Services (ISM Services) is expected to be relatively steady at 52 for May after a 51.9 print in April.
Tuesday 6/6
- Nothing Scheduled
Wednesday 6/7
- 8:30 PM ET, International Trade in Goods and Services is expected to show a deficit of $75.4 billion for April for total goods and services trade which would compare with a $64.2 billion deficit in March. Advance data on the goods side of April’s report showed a very large $12.1 billion deepening in the deficit.
- 10:30 AM ET, The Energy Information Administration (EIA) will be providing its scheduled weekly information on petroleum inventories, whether produced in the US or abroad. The level of inventories helps determine prices for petroleum products.
- 3:00 PM ET, Consumer Credit is expected to have increased by $21.0 billion in April versus an increase of $26.5 billion in March. This report has surprised on the high side the last three months.
Thursday 6/8
- 8:30 AM ET, Jobless claims for the week ending June 3 are expected to have increased to 240,000 versus 232,000 in the prior week. This has been a very closely watched report as it is expected it has indicated the Fed has room to tighten further if other data remain too strong.
- 10:00 AM ET, Wholesale Inventories will be released as a second estimate before the final. The second estimate for April is expected to be a 0.2 percent decline, unchanged from the first estimate. Wholesale trade measures the dollar value of sales made and inventories held by merchant wholesalers. It is a component of business sales and inventories Corporate Profits are pulled from the national income and product accounts (NIPA) and are presented in different forms.
- 4:30 PM ET, The Federal Reserve’s Balance Sheet has attracted additional attention as it is a good indicator of whether it is following its quantitative tightening plan, and whether there has been a significant change in banks looking to the Fed, which may mean trouble in the sector. For the week ending June 7, the Federal Reserve is expected to hold assets worth $8.386 trillion. This would be a week-on-week decline of $50.4 billion. All non-cash assets can be viewed as money that at one time was injected into the economy as stimulation.
Friday 6/9
- 10:00 AM ET, The Quarterly Services Survey focuses on information and technology-related service industries. These include information; professional, scientific and technical services; administrative & support services; and waste management and remediation services. Services revenue is expected to have increased by 2.9%.
What Else
The key factors that the Fed will consider when making their decision next week at the FOMC meeting are the pace and trend of economic growth, the level of inflation, the strength of the labor market, and the risk of recession.
Additionally, the FOMC will have to determine if the moves to date will have a more substantial impact over time. Currently, inflation is not coming down, jobs are abundant relative to job seekers, and the risk of a recession over the next two quarters seems low. For these reasons, some believe the Fed will remain hawkish yet pause for this meeting. However, next week during the first day of the two-day meeting CPI (consumer inflation) will be released. It would be premature to forecast a Fed decision until the contents of that report are known.
Managing Editor, Channelchek
