By Wallace Witkowski, MarketWatch
Coming week heavy on economic data, earnings reports
Investors face a fire hose of possible stock-market catalysts
during another heavy week of earnings reports as the Federal
Reserve holds its May policy meeting and a wealth of economic data
is released, topped off by the April jobs report on Friday.
The Dow Jones Industrial Average , the S&P 500 index , and
the Nasdaq Composite Index all finished higher for the week and for
month of April
(http://www.marketwatch.com/story/us-stocks-face-a-muted-start-even-as-amazon-alphabet-get-set-to-roar-2017-04-28)as
the benchmarks closed slightly lower on Friday. The Nasdaq closed
less than 2 points away from its closing record while both the Dow
industrials and S&P 500 are less than 1% away from their own
record highs.
With a of potential market-moving events ahead and the wild card
of a geopolitical flare-up
(http://www.marketwatch.com/story/north-koreas-latest-ballistic-missile-launch-failed-report-2017-04-28),
investors will find themselves busy deciding on whether stocks are
to push past those levels or to prepare the groundwork for a
pullback.
"The next week is unusual in that there's a mix of everything
that's important," said Peter Boockvar, chief market analyst at The
Lindsey Group, in an interview.
Will April data ease anxiety about first-quarter weakness?
That torrent of data and events come on the heels of the latest
read on economy, which showed the weakest GDP growth in three years
(http://www.marketwatch.com/story/us-economy-posts-slowest-growth-in-three-years-first-quarter-gdp-shows-2017-04-28).
While there's a fair amount of first-quarter data from March,
much of the data is going to be from April, so investors will get a
glimpse of whether a second-quarter turnaround is in the cards,
Boockvar said.
"In the context of growth that was 'punked' in the first
quarter, a lot of April data is going to show to what extent we can
see a rebound," he said.
To that end, Boockvar believes the Institute for Supply
Management manufacturing data for April, due out on Monday, along
with services data on Wednesday, will be the most important data
points on the week, ending with April jobs figures on Friday.
Other April data due out are motor vehicle sales on Tuesday, ADP
employment data on Wednesday, as well as Markit's final
manufacturing data out on Monday and services data on
Wednesday.
Will anything come out of the May Fed policy meeting?
Another important metric will be the inflation reading for
March, said Randy Frederick, managing director of Trading &
Derivatives at Schwab Center for Financial Research.
"That's the thing the Fed looks at the most with the probability
of an interest-rate increase in June," Frederick said in an
interview. Core inflation data also comes out the day before the
Fed begins its two-day policy meeting on Tuesday.
Not much is expected in the way of a rate hike from the May FOMC
meeting with a less than 5% probability of a hike, according to CME
Group's FedWatch Tool
(http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html).
If anything, investors will be looking at Fed language for a read
on an expected June rate hike.
Are consumers going to put up, or shut up?
One strategist, however, thinks that the FOMC meeting, ISM data,
and inflation data are not likely to rollick markets, but data on
whether consumers are putting their money where their mouth is
(http://www.marketwatch.com/story/what-gives-sentiment-is-through-the-roof-but-sales-are-in-the-basement-2017-04-20)
will.
March personal spending data coming out on Monday is going to be
a primary focus for Brad McMillan, chief investment officer for
Commonwealth Financial Network.
"One big gap has been consumer sentiment and people opening
their wallets," McMillan said in an interview. "It'll be a real
signal if [consumer spending] disappoints one more time. We've seen
several months where spending didn't match sentiment and each
additional month raises the possibility it's not going to catch
up."
Congress averted a government shutdown....for a week
Then there's what develops, or doesn't develop, in Congress.
Investors will be following if there is a vote on another
health-care bill in the House on the heels of Congress kicking the
government-shutdown can a week down the road
(http://www.marketwatch.com/story/house-passes-one-week-funding-bill-to-avert-government-shutdown-2017-04-28-111035055).
While a government shutdown appears ominous, those in the past
tend to be more damaging to politicians than to markets, notes
Schwab's Frederick. Of the 17 government shutdowns since 1976, only
three of them -- three of the eight that lasted for more than a
week -- resulted in percentage declines in the S&P 500 of 3% or
more, he said.
On top of everything else, earnings season is still in full
swing
Apple Inc.(AAPL) earnings
(http://www.marketwatch.com/story/apple-services-likely-to-top-7-billion-this-quarter-2017-04-26)will
be the most watched on Tuesday, along with quarterly results from
two other Dow components Pfizer Inc.(PFE) and Merck & Co.
(MRK). Facebook Inc.(FB) and Tesla Inc
(http://www.marketwatch.com/story/tesla-earnings-its-all-about-the-model-3-amid-a-record-run-for-the-stock-2017-04-25).(TSLA)
results will come on Wednesday.
So far, the S&P 500 index is on track for its first
year-over-year double-digit earnings gain since 2011, with a 12.5%
gain for the first quarter, according to John Butters, senior
earnings analyst for FactSet.
(END) Dow Jones Newswires
April 29, 2017 08:01 ET (12:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.