Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.
Probably one of the most iconic jazz albums of all time is Miles Davis’s Kind of Blue. By chance I had the song Flamenco Sketches on as I was reading through market research over the weekend. If you’re familiar with this track, “melancholy” would be the best description. As I continued to listen, I read over a list of company names such as American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding, Laclede Gas, National Lead, North American, Tennessee Coal and Iron, U.S. Leather, U.S. Rubber and finally, General Electric. Why so melancholy? Those twelve companies were the original Dow Jones Industrial Average index created back in 1896. On Tuesday we bid adieu to the last of the original twelve as General Electric will be removed from the Dow Jones Industrial Average after being a constant member since 1907. As one of the most innovative companies since its founding in 1892 (hello, Thomas Edison!) we will have to see if they can re-establish themselves and hopefully be re-instated back into the Dow. ExxonMobil is now the oldest running component of the Dow, originally entering as Standard Oil of New Jersey in 1928.
As Flamenco Sketches is a good nine minutes long, it’s fitting that over the length of the song I pondered over the latest in the trade war saber rattling. Clearly it has continued to weigh on investors’ minds as we saw the S&P 500 trend downward for the second straight week. All we can do at this point is to wait for more details to emerge to help clarify between rhetorical bluster and actionable threats.
The week ahead will bring the second quarter of 2018 to a close. Investors will be reviewing the third estimate for U.S. GDP for the first quarter as well as another inflation reading via the Core PCE. A reading at or above the current 2.2% level for first quarter GDP will be well-received by investors and a tick up in the Core PCE will further affirm the Fed’s target of four rate hikes this year. For those watching the World Cup, cheers to your favorite team as the initial group stage wraps up this week!
Data deck for June 23 – June 29:
|
Date |
Indicator |
Period |
|
June 25 |
New Home Sales |
May |
|
June 26 |
S&P Case-Shiller Home Price Index |
April |
|
June 26 |
Consumer Confidence |
June |
|
June 26 |
Richmond Fed Survey |
June |
|
June 27 |
Durable Goods Orders |
May |
|
June 28 |
Initial Jobless Claims |
---- |
|
June 28 |
GDP (Third estimate) |
1Q18 |
|
June 29 |
Core PCE |
May |
|
June 29 |
Chicago Purchasing Managers |
June |
|
June 29 |
University of Michigan Consumer Sentiment |
June |