US stocks to begin pivotal week little changed
NY Fed manufacturing index posts biggest drop on record
Trump “perfectly happy” for further China tariffs
The opening bell will ring out on Wall Street this afternoon for the first time this week, with the large-cap US benchmarks set to begin not far from where they ended last week. Last week was an inside one for the S&P500 and after a bright start to the month, the market now appears to be awaiting further cues before embarking on its next sustained move. The Fed rate decision on Wednesday is arguably the most important since January for stock markets, with high expectations for a dovish message leaving plenty of scope for disappointment.
On the data front today, the only release of note is the empire state manufacturing index, which came in far worse than expected. The print of -8.6 was the lowest since October 2016 and well below the +11.0 expected and the prior reading of +17.8. In fact the drop itself was the largest monthly decline on record and this could be seen as flashing a warning sign on the US economy.
A sharp drop in the NY Empire State index could be seen as a harbinger of things to come for the broader US economy. Source: XTB Macrobond
Trade tensions have been a big theme for equities in the past 9 months and after the Fed decision is done, they will likely become a greater driving force heading into the G-20 meeting at the end of the month. Speaking to CNBC Commerce Secretary Wilbur Ross has played down the chances of a breakthrough in Osaka, Japan on June 28-29 stating that Trump would be “perfectly happy” with more tariffs. He said the G-20 was not a place “where you’re going to negotiate a 2,500 page agreement,” adding that “there may be an agreement on the path forward, but that’s about as far as we can expect it to go.”
Last week was range bound for US stocks with the S&P500 finding support at 2867 and resistance at 2911. Source: xStation