Markets expect a calmer week ahead

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Published Date 6/17/2024

It is a short week with markets closed on Wednesday for Juneteenth. The calendar is light this week after a heavy week last week.

Yesterday another Fed official mumbling about a rate cut. Minneapolis Fed President Kashkari said on Sunday it is a 'reasonable prediction' that the Fed will cut rates once this year likely toward the end of the year. “We need to see more evidence to convince us that inflation is well on our way back down to 2%. He said he is surprised how strong the labor market is given the high interest rates. Kashkari is no more surprised than the rest of Fed officials including Powell who wishy-washed his way through his press conference at the FOMC last week saying nothing of substance. He was non-committal when addressing questions about the economic outlook, inflation or rate outlooks.

This morning the not-so important NY Empire state manufacturing index, expected at -10.5 reported -6.0 and up from -15.6 in May.

At 9:30 am the DJIA opened -138, NASDAQ +10, S&P -7. 10 year note 4.28% +5 bp. FNMA 6.0 30 year coupon -14 bps from Friday’s close and -15 bp from 9:30 am Friday.

Fed officials out this week after having to be quiet leading into the FOMC last week. It would be surprising if any of them will have any news of substance that hasn’t been said numerous time recently. Waiting to get a sense about inflation outlooks.

This Week’s Economic Calendar:

Tuesday,

8:30 am May retail sales (month/month +0.3%, ex vehicles +0.3%)

9:15 an May industrial production and capacity utilization (production +0.3% from 0.0%, cap utilization 78.6% from 78.4%)

10 am April business inventories (+0.3%)

1 pm 20 year bond auction

Wednesday

ALL MARKETS CLOSED

10 am June NAHB housing market index (45, unch from May)

Thursday,

7 am weekly MBA mortgage applications

8:30 am weekly jobless claims (235K from 242K the prior week)

May housing starts and permits (starts 1.373 million from 1.360 million; permits 1.450 million from 1.440 million)

June Philadelphia Fed manufacturing index (5.2 from 4.5)

Q1 current account deficit (-$205.5B from -$194.8B)

Friday,

9:15 am June FLASH PMI (manufacturing 51.0 from 51.3, services 53.7 from 54.8)

10 am May existing home sales (4.10 million from 4.14 million annually)

Source: TBWS

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