It was a bit of a rough week for the market last week, with the S&P 500 ($SPX) (SPY) finishing down over 2%. Other stocks fared better with Apple (AAPL) being up 0.36% on the week.
This upcoming week looks relatively quiet, which is probably a good thing with another earnings season kicking off at the beginning of July. Here are 5 things to watch this week in the market:
Consumer Confidence:
Consumer confidence drops at 10 am On Tuesday. With the Fed pausing rates, there was what seemed like a collective sigh of relief in the markets. It's possible this shows if that was felt by the consumer or not. With rates paused at 5+% a beat on confidence will really show how resilient the consumer is and could be a positive signal for the market. On the other side of that, if the consumer is feeling the pain for the sustained higher rates then it is possible the market flinches and we see some selling pressure. It should be noted this is a smaller sample size of only 3,000 households.
New Home Sales
New Home Sales are also out at 10 am Eastern on Tuesday. Typically this is an indicator of construction activity and consumer appetite for larger purchases, but with all of the talk of inventory issues, it's possible this is no longer as relevant as an overall indicator for the broader economy. It's possible this number keeps hovering around where it has been as people with lower rates often don’t want to sell and pick up a new higher rate. This is pushing people that do need to purchase a home into the higher priced newer ones.
Powell Speaks
I think Powell has spoken each week for the last 3, which may be a new record. Either way, he is speaking again this Wednesday at an ECB conference along with the heads of the other central banks. This usually causes some short-term volatility in the market, and it's possible this is magnified by what the other heads are saying. On the plus side, it's possible to cause some tradable moves in the market.
Final Q/Q GDP
With all of the talk about recession lately and whether we are in one or not, this would be a good indicator of it. This is severely lagging data, being released about 90 days after the reported quarter ends. The last reading was both a miss on the estimates and a contraction from the previous release, so it's possible all eyes are on this report. The estimates for this release are significantly lower than the last one which could produce two possible outcomes, either there is a stellar report and it looks like a huge beat, or it's expected to be a rough report and they are prepping expectations.
Core PCE
Finally this week on Friday we have core PCE coming out before the market opens. Given the GDP data and Consumer confidence earlier in the week it's possible this is a very telling number to end with. This is the prices paid but only on consumer products, so if this is a monthly raise it will show continued price pressure on consumer goods. Conversely, if it's 0 or negative it will show a decrease in consumer prices paid. While this number is usually positive, the market often looks for a lower number to show that prices aren’t growing too fast.
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.
