Investors have a quiet week ahead as summer continues, but “hold my beer” moments are never far away. On the economic front, we have Existing Home Sales and New Home Sales.
Fed Members Speak: This week, we have 4 FOMC members scheduled to give speeches across the country. After the second rate hike of 2017, investors will be listening to clues to see If they are still on track for another rate hike later this year, and additional details as to the exact start of the unwinding of the balance sheet. Markets in reaction from the latest out of the Fed have gone lower. We shall see if additional talking from the Fed drives markets lower.
Brexit Talks Begin: On Monday (6/19) Divorce talks between the United Kingdom and the European Union are set to begin. Investors will likely see the British Pound go up on a softer Brexit while if negotiations are going bad, expect a weakening of the British Pound. Please note that these divorce proceedings could take up to 2 years.
Slumping Oil: Oil has continued its downward spiral with West Texas and Brent crude hitting 7 month lows last week. We have also seen 4 straight weeks of losses. With OPEC already coming to a supply cut agreement (that will definitely not hold), the near term has few catalysts to push the commodity higher. The Saudis may even temporary cut exports to the US so the weekly US inventory level looks less just to try to drive the price higher (why do we consider the Saudi’s our friends????). Investors will watch to see if any catalysts can drive the price higher or if the global glut level pushes prices even lower. Expect to see energy companies and shippers of oil react with the price.
Manufacturing PMI: PMI readings from across the globe are due out this week. Traders will watch these readings as to see if the Trump rhetoric around protectionist policies resonates. Any unanticipated jump in a reading could send the markets higher and their respective currency stronger.
I will be recovering from a visit to Plant Hoth (Iceland) next week so this blog will take a break and start up again in 2 weeks. 2 Weeks.