After taking the day off on Monday to remember the men and women who lost their lives while serving in the U.S. Armed Forces, the doors on Wall Street and Washington re-opened on Tuesday. The Dow, S&P 500 and Nasdaq all closed red last week with the driver mainly being a fear that the Federal Reserve will be exiting its monetary stimulus plans sooner than later. It was the first down week for the major indexes in the past five. With the buzz about the Fed, investors and economists will be monitoring the economic data that is delivered this week, including GDP data on Thursday and some key info on consumer’s money on Friday.
Here’s what to look for on the economic plate this week:
Given the volatility that came in last week, traders may be more sensitive to some information that is generally not considered “market moving,” but does merit some extra attention. Today, that will mean looking for the Conference Board’s Consumer Confidence Index, the S&P/Case-Shiller Home Price Index and the Dallas Federal Reserve’s Manufacturing Survey.
Gross Domestic Product for Q1 – The advanced estimate for Q1 GDP showed the U.S. economy grew by 2.5 percent, following a sluggish 0.4 percent growth in the fourth quarter. This will be the first revision of that reading with economists largely expecting little change, if any, to the 2.5 percent growth.
Initial Jobless Claims for the Week Ended May 25 – Last week, the Labor Department reported that filings for first time jobless for the week ended May 18 dropped by 23,000 to 340,000, beating economist predictions. The four-week moving average was lower by 500 at 339,500 to hold near five-year lows. Economists are calling for an essentially flat week for this week’s report, with the average consensus for total claims of 341,000.
To a lesser extent, investors will also be watching for the Pending Home Sales Index, a measure of signed contracts that have not yet closed, by the National Association of Realtors.
Personal Income and Outlays for April – Last month, the Commerce Department said personal income was a little less than expected with a 0.2 percent rise in March, while personal spending increased the same amount for the month, topping predictions of a flat month. Higher incomes have helped offset increases in payroll taxes that went into effect at the beginning of the year. In the first quarter, consumer spending increased at its fastest rate in more than two years, although a portion of the increase was attributable to unseasonably cold weather that caused Americans to spend more on energy to heat their homes. For April, economists are predicting another 0.15 percent increase in personal income and a no increase (0.0%) in consumer spending.
While consumer spending will take the front seat on Friday, investors will also have their eyes on the Chicago PMI for May from the Institute for Supply Management as well as the final reading of the Reuters/University of Michigan Consumer Sentiment Index for May.