U.S. indexes finished the week with gains even though the mid-week rally, which pushed the S&P 500 (SPX) upward to its year-to-date high, was cut short on Friday by a breakdown in debt-ceiling negotiations. This week the markets will be watching for any sign of progress on the issue, as the days left until a technical default are numbered. Investors will also be closely following the economic news, as some of the FDIC members said they are not convinced that their inflation-fighting efforts are paying off.
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Here are three economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» May’s S&P Global Manufacturing PMI and Services PMI (preliminary readings) – Tuesday, 05/23 – The Manufacturing PMI captures business conditions in the manufacturing sector, which contributes a significant part of total GDP; thus, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the U.S. Services PMI captures business conditions in the services sector; it is a crucial indicator since the services sector is responsible for over 77% of total U.S. GDP. Stronger-than-expected PMI readings would be inflationary, while weaker-than-expected data would suggest that the economy is cooling.
» April’s Core Personal Consumption Expenditures – Friday, 05/26 – Core PCE provides a measure of the prices paid by people for domestic purchases of goods and services, excluding the prices of food and energy. The core PCE is the Fed’s preferred inflation measure. The central bank has a 2% target. If the data point comes in higher than expected, it could weaken the case for the Fed’s pause in rate increases in June.
» April’s Durable Goods Orders – Friday, 05/26 – this gauge measures the cost of orders received by manufacturers for durable goods such as motor vehicles and appliances. As those durable products often involve large investments, they are sensitive to the economic situation. The final figure shows the state of U.S. production activity; a higher-than-expected reading may point to a greater degree of economic resilience than anticipated, while a lower reading may suggest a weakening economy.
