The Advance: 10th – 14th June 2013
It has been a week of much uncertainty once again in the US, with stocks struggling to hold onto their recent gains. The big factor of the week eventually became the US non-farm payroll data that was released on Friday, which came in better than expected. Analysts had predicted that 170,000 jobs would be created in May but the Labor Department announced that it had actually added 175,000. How this will affect trading over the next week is open to debate but there are numerous factors that will also need to be weighed by investors.
Some of the catalysts to look out for next week include the retail sales data from May, which is due to be released on Thursday and June consumer sentiment which will be released on Friday. While both of these pieces of data would normally be given their respect under normal circumstances, the Federal Reserve will be looking for signs of economic growth so they can make their decision on the continuation of their $85bn a month bond purchasing program. This will leave investors in a state of heightened vigilance.
If the data appears to be too positive, concerns will be raised as to whether it will be the grain of rice that tipped the Fed’s scale, drawing their quantitative easing to a close. If the data is too weak then it would be a sign of economic decline, which would obviously have a negative effect on the markets directly. In short, investors will be looking for a balance, just as they saw from the US jobs data.
The final piece of data to be released next week will be based around inflation. The PPI is expected to have risen 0.1% last month, following April’s decline of 0.7%.
While there are a few points of interest next week, it is expected to be a typically slow summer week. Only two of the S&P 500’s constituents are to release their quarterly results, so investors aren’t expecting too many surprises on that front. Any movement in the indices are likely to be small, unless someone throws a spanner in the works with further comments regarding the Federal Reserve’s policies or something of an equally high profile.