Weekly Plan 5/21
Debt Ceiling part Deux
Hello Traders,
We had an excellent last week with great trades on ES, GC and BOIL(nat-gas).
Moving on, this week as the debt ceiling talks linger on, we will wait and watch how the market unfolds.
The upcoming week in the economic landscape of the United States is bursting with anticipation as it brings a plethora of events that could potentially shape the trajectory of the nation's monetary policy and economic outlook.
Kicking off the week, we have a handful of Federal Reserve representatives, including James Bullard of St. Louis, Mary Daly of San Francisco, Raphael Bostic of Atlanta, and Tom Barkin of Richmond, stepping up to the podium. Their speeches will be closely watched by economists and investors alike, as they may provide hints about the Fed's view on current economic conditions and potential future policy actions. We've seen in the past that these kinds of speeches can contain critical insights that help us better understand the thinking inside the Fed, even if they're not always explicit about future policy decisions.
Next, the focus of Tuesday turns to the release of the S&P flash U.S. services and manufacturing PMIs for May, as well as a speech from Dallas Fed President Lorie Logan. These Purchasing Managers' Indexes (PMIs) provide us with an early indication of where the economy might be headed. They are based on surveys of purchasing managers across the country, and they tend to be pretty good at picking up on trends in the economy before official statistics do. If the PMIs come in stronger than expected, this could indicate that the economy is recovering at a faster pace than previously thought, which could influence Fed policymakers to consider a more hawkish stance.
Wednesday brings another Fed speech, this time from Governor Christopher Waller, coupled with the release of the minutes from the Fed's May Federal Open Market Committee (FOMC) meeting. The minutes of these meetings are always a treasure trove of information, providing a detailed record of the FOMC's policy discussions. While the initial statement released after the meeting gives us a snapshot of their decision, the minutes provide a more in-depth look into the debates and considerations that shaped that decision.
On Thursday, we'll see the second reading of the Q1 GDP, initial jobless claims for the week ending May 20, and April's pending home sales. These data points can help us gauge the health of the U.S. economy. GDP is the broadest measure of economic activity, jobless claims give us a timely insight into the labor market, and pending home sales can be a useful indicator of the health of the housing market. In addition, we have another speech from Richmond Fed President Tom Barkin, who could provide further insights into the Fed's current thinking.
Finally, the week wraps up on Friday with the release of April's durable-goods orders, personal income and spending, and the PCE index, as well as the final reading of May's consumer sentiment. Durable goods orders can give us a sense of business investment trends, while personal income and spending data provide insights into consumer behavior. The PCE index is the Fed's preferred measure of inflation and could have significant implications for monetary policy if it comes in higher than expected. Meanwhile, consumer sentiment can provide a window into how households are feeling about the economy, which can be an important determinant of consumer spending.
Market read: