Trading was subdued last week, with more focus on earnings. While major stock indices ended flat, some individual stocks had big moves on earnings news. Perhaps the most high profile mover was Facebook (NASDAQ:FB), up 30% on a positive earnings surprise.
For the week, DOW rose 0.1%, S&P 500 declined by 0.03%, and NASDAQ gained 0.7%.
This week on Wall Street could be a summer blockbuster, with the focus primarily on the Fed and unemployment numbers.
While Fed officials are not expected to make any major changes in their statement or policy, investors will be watching for any subtle tweak that could indicate the Fed's views on tapering its bond-buying program. Bernanke's news conference after the FOMC meeting will come in for particular scrutiny for fresh clues over the timetable for phasing-out the Fed's bond buying.
Since jobs are an important metric for the Fed, investors will be closely watching for any change of pace in hiring as a signal of whether the Fed would move sooner or later to lighten up on its quantitative easing.
Following are Sentiment charts for S&P 500 (NYSE:SPY), DOW Jones, and NASDAQ (NASDAQ:QQQ).
Following is an economic overview for the week July 29 - August 02, 2013.
(All times EST)
Monday, July 29
10:00 — US Pending Home Sales:
This report will present changes in pending home sales for June. In May 2013, pending home sales index sharply increased by 6.7% (M-over-M).
Tuesday, July 30
10:00 — CB Consumer Confidence:
In May 2013, consumer confidence index rose to 81.4 (month-over-month). Current expectations are that June index may further rally, which might affect commodities prices including oil and natural gas.
Wednesday, July 31
05:00 — EU CPI Flash Estimate:
This estimate will provide the annual consumer price index for Euro members. Based on the estimate for June, the annual CPI came in at 1.4%, lower than ECB’s target inflation of 2%. If inflation dwindles further, ECB may lower its interest rate, which could affect the direction of the Euro/USD currency pair.
08:15 — ADP estimate of US non-farm payroll:
ADP will report its estimate for non-farm payroll developments for July 2013.
08:30 — Canada GDP (m/m):
Monthly update will present changes in major industrial sectors for May 2013. In April 2013, real GDP increased by 0.1%. This upcoming report may affect the Canadian dollar, which is strongly correlated with major commodities prices.
08:30 — US GDP (q/q):
This will be the first estimate for Q2 2013 real GDP growth. For Q1 2013, real GDP growth came in at 1.8%. If the growth rate from Q1 to Q2 increases it could positively impact the US dollar and commodities prices.
14:00 — FOMC Meeting and Press Conference:
FOMC will convene for the fifth time this year and come out with a statement, which will be followed by a press conference of any changes to its monetary policy. In the last meeting the FOMC left its policy unchanged. But in the press conference that followed, Bernanke hinted that the Fed might scale back on its current asset purchase program in the coming months. Later on, however, Bernanke took a step back in his testimony and suggested the FOMC will keep current Monterey policy in place until data warrants to scale back. Given the uncertainty on the Fed stimulus, the direction of the upcoming press conference could stir up the markets.
21:00 — HSBC China Manufacturing PMI:
In June 2013, Manufacturing PMI was recorded at 48.2 indicating contraction in Chinese manufacturing sectors. If in the upcoming report PMI falls further, it could signal a decline in economic progress which may adversely affect leading commodities prices.
Thursday, August 01
07:00 — ECB Official Bank Rate and Asset Purchase Plan (August 2013):
ECB is expected to keep its rate unchanged at 0.50%. ECB and the Bank of England are also expected to repeat or refine their "forward guidance" that borrowing costs will remain extraordinarily low as long as growth is sub-par and inflation is not a threat.
08:30 — US Unemployment Claims:
Weekly report will pertain to changes in the initial jobless claims for the week ending on July 26, 2013.
10:00 — ISM Manufacturing PMI:
In June, the index increased to 50.9 from 49 in May 2013, indicating growth in the manufacturing sector. A further increase in the upcoming report may positively affect crude oil and natural gas markets.
Friday, Aug 02
08:30 — US Non-Farm Payroll:
In June 2013, non-farm payroll employment increased by 195k. If the upcoming report shows an employment gain of over 150K (in additional jobs), Gold and Silver prices are likely to take a hit.
10:00 — US Factory Orders (m/m):
This report will refer to developments in US factory orders during July 2013.
This commentary is for informational purposes only and does not constitute investment advice. The opinions offered herein are not recommendations to buy, sell or hold securities. Market IQ expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.