Differentiate noise from signal when it comes to jobless claims
WEEKLY MARKET COMMENTARY |
The upcoming week will see a light economic calendar and feature six Federal Reserve (Fed) speakers, including a discussion of the economic outlook in New York by Fed Governor Jerome Powell. He will likely continue to talk up the economy and set expectations on the next rate hike, which may occur at the June meeting.
The U.S. Congress is on recess this week so without major economic data on the docket, the market could be vulnerable to policy pronouncements coming from the White House. While the recent melt up in the markets has been impressive, in our estimation the market lacks direction, conviction and is without the type of volume and depth that would imply further strong gains. The U.S. Treasury will issue a $13 billion two-year floating rate note reopening on Wednesday, a $34 billion five-year note and a $28 billion seven-year note. In the euro area, there will be a series of flash purchase managers index reports across the economy and the first estimate of U.K. Q4 2016 gross domestic product.