This week’s watch list:
China / US Relations U.S. Secretary of State Antony Blinken is in Beijing meeting with Chinese Foreign Minister Qin Gang, in an effort to ease tensions between the two nations amidst months of escalating negative rhetoric. Interesting that China is open to meeting with U.S. officials now that its economy is under pressure. Last week, China cut interest rates and floated some fiscal policy initiatives to revive its struggling economy.
Key Earnings Reports Earnings from Accenture, FedEx and Darden Restaurant Group this week will provide incremental clues on the health of business and consumer spending trends.
Global Economic Outlook Germany’s economy is wobbling and appears to be in recession as inflation has hurt consumption, following the lagged negative impact of the Black Seas conflict. Key question = what country is next? Recommended reading: Wall Street Journal entitled “The Global Economy Looks Like It’s Out of Sync.”
Weather Volatility: A series of tornadoes recently inflected property damage and power outages in several southern states, a concerning occurrence as we enter several very important months of the growing season.
Numbers of Interest
4.0% & 5.3% As reported last week, CPI was up 4.0% y/y in May vs. 4.9% in April, while Core CPI (excluding food and energy) came in at 5.3% down from 5.5%.
23.0% YTD change in feed cattle prices.
5.6% Year-end 2023 projected Federal Funds rate.
2.6% Last week, the S&P rose by 2.6% as markets digested the “Fed Pause,” while the DJIA and Nasdaq indices gained 1.3% and 3.2%, respectively.
13.54 Current reading of the CBOE Volatility Index, which is at a 52-week low. Key question: is low stock market fear reasonable if the Fed could raise rates later in the summer or fall?
Events, Reports, Catalysts
- June 19 Juneteenth holiday, all markets are closed
- June 20 Housing Starts, New York Fed President John Williams speaks; USDA Crop Progress report.
- June 21 Fed Chair Powell testifies to House panel; Senate nomination hearing for Fed Govs. Jefferson and Cook and nominee Kugler, House Oversight and Accountability subcommittee hearing on EPA’s proposed emission standards for motor vehicles and power plants.
- June 22 Initial Jobless Claims, Fed Chair Powell testifies to Senate panel, Existing Home Sales, U.S. Leading Economic Indicators
- June 23 S&P Flash Services and Manufacturing PMI; Weekly Export Sales, USDA Cattle on Feed and Food Price Outlook reports
- June 27 Durable Goods Orders, S&P Case-Shiller Home Price Index (20 cities), Consumer Confidence
- June 27-28 The InfoAg Conference (St. Louis, MO)
- June 30 May PCE Report, Personal Income and Spending, June Consumer Sentiment
USDA Annual Acreage Report and Grain Stocks reports
