Another week, another bank is on the brink of collapse. This past week Pacific Western Bank (PACW) was in the news for being on the brink of collapse. This had less of an impact on the market than previous rumors of the same magnitude as the S&P 500 ($SPX) (SPY) finished the week down only 0.29%.
In other news, there is a lot of news circling Elon Musk as it's rumored he will be stepping down as the Twitter CEO. This could be beneficial for Tesla Stock (TSLA), a favorite among traders, as he will be able to focus on that and Spacex more effectively.
After Musk bought Twitter in October of last year, Tesla stock started to sell off in a pretty serious way. It was rumored that it was a direct result of his new role at Twitter, so with him stepping down (allegedly), it will be interesting to see how that affects the stock. That is just one of the many things going on this week in the markets though, here are 5 more themes to watch this week in the Market.
Banking
The banking drama continued last week with another regional being on the brink of collapse. Pacific Western was in the news as its stock was halted for volatility several times. These regional banks could still pose a more systemic risk to the system, especially with all of the debt ceiling talk. It’s also possible if a deal is not reached before decision day on the debt ceiling the market could see it as a negative and react sharply. A default could potentially have serious effects across both the markets and the banking system as a whole.
Empire State Manufacturing Index
The Empire State Manufacturing Index is out Monday morning at 8:30 Eastern Time. This is an index that's often used as a leading indicator for business conditions. A reading above 0 is positive and a reading below is negative. The forecasted number is -1.9 for this report.
Other than last month's reading, the last 6 have been negative showing a contraction in manufacturing. On an overall economic level this could have some wide-ranging impacts, and when looked at in conjunction with all of the other financial news can be used to build a larger investing thesis for the coming months.
Building Permits
On Wednesday at 8:30, Eastern are the building permits. In line with the Manufacturing Index, this is often used as a leading indicator of economic activity in the construction sector since permits are integral for building in the US. A miss would mean another contraction in the number of houses being built and large-scale renovations. Housing is often a very large portion of spending so a contraction could be seen as negative for the economy.
Earnings
We are still in the earnings season grind although this week is a lull in the action. With most of the larger names behind us, it's possible that we start to see less impact from earnings on the general market. It will still be important to watch your individual portfolios for reporting names.
Powell Speaks
Friday at 11 am Eastern Fed chair Powell is speaking at a monetary policy conference in Washington DC. While he will more than likely not reveal anything groundbreaking at the conference, there is often volatility when he speaks as traders try to look for clues in every aspect of his speeches. I would expect this to be no different and on a Friday heading into the afternoon almost anything is possible.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
