Escalating trade tensions will continue to dominate headlines this week as markets try to determine where this issue is headed, Prudential’s Chief Market Strategist Quincy Krosby said Monday in her weekly “Connecting the Dots” outlook.
“For the market, the intent is to try to ascertain where this ends,” Krosby said. “The market is trying to determine how much is reality, how much is bravado from all sides and whether we actually see the implementation of these tariffs.”
“The question for the market is, where do you go, what do you do?” she said.
Also, there will be a parade of Fed speakers this week who will be asked about the path of monetary policy, and whether trade tensions will affect decisions on rates, Krosby said. The market also will be reacting to a heavy calendar of economic data releases, including the final read on first quarter Gross Domestic Product.
Earnings reports this week include Carnival, Lennar, Bed Bath & Beyond, Rite Aid, Accenture, Walgreens Boots Alliance, Conagra Brands and Constellation Brands.
“Lennar is one of biggest builders in the country, and it will be interesting to see what they have to say about higher mortgage rates and whether they have buyers coming in or if they are hesitant,” Krosby said.
This week’s important economic data:
Monday: New home sales; Chicago Federal Reserve national activity report
Tuesday: Conference Board’s consumer confidence report; S&P/Case-Shiller home price index
Wednesday: Durable goods; pending home sales
Thursday: GDP, first quarter; Federal Reserve releases second part of bank stress test report
Friday: Personal income and spending; Chicago PMI; consumer sentiment
Read Quincy Krosby’s full Q2 Market Commentary: Regime Change.
The views and opinions are those of the author at the time of publication and are subject to change at any time due to market or economic conditions. This is solely for informational purposes. This is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.