The Market Week Ahead: May 6 – May 10

 

May 6 – We began last week perfectly content to talk about earnings, economic data and the Federal Reserve. We ended last week focused mostly on earnings and economic data. 

While earnings reports continue to flow this week, it seems the market will be distracted for at least some portion of this hebdomad by trade. Specifically, trade with China. 

Yes, those seemingly interminable yet “productive” talks have apparently hit a snag. After a report late last week that a deal could be finalized as soon as then end of this week, a pair of tweets from the president over the weekend cast doubt about whether a deal can be reached at all. 

Trump tweeted that talks are taking too long and he wants to raise tariffs on $200 billion in goods being imported from China to 25% from the current 10% by Friday. Trump also wants to impose a new 25% duty on $325 billion in imports that are currently duty-free. 

These new threats reportedly come after the Chinese delegation has been pushing to renegotiate items that the U.S. considered to be settled, so the escalation of rhetoric is perhaps not entirely unprovoked. We’ll see if China’s leaders want to keep negotiating given the escalation of tensions, or if they’ll walk away. For now it seems talks are still scheduled to resume on Wednesday. 

The escalation with China comes right as the White House is reach a May 18 deadline to make a decision about imposing tariffs on imported automobiles. Auto tariffs are an issue of particular importance when it comes to trade with Europe and Japan. We have no inside information, but have some suspicions about where someone who has repeatedly complained about seeing foreign cars on the streets of New York and even described himself as “Tariff Man” might come down on the issue.

Economic Events this Week

Inflation data later in the week is the highlight, especially in light of recent discussions about how hard the Federal Reserve should try to hit it’s 2% inflation target.

  • Wednesday
    • 10:30 a.m. – EIA Crude Oil Inventories
  • Thursday
    • 8:30 a.m. – PPI
    • 8:30 a.m. – Trade Balance
  • Friday
    • 8:30 a.m. – CPI

Earnings Reports this Week

We’re past the peak of earnings season, but there are still lots of big names on the calendar this week.  

Tuesday:

  • Before the bell: BUD, AGN, EMR, REGN, SRE
  • After the bell: EA, FLT, S, LYFT, MTCH

Wednesday:

  • Before the bell: HMC, MPC, KHC, TRI, MCK
  • After the bell: DIS, ET, SLF, MCHP, FOXA

Thursday:

  • Before the bell: DUK, BDX, KDP, CNQ, MT
  • After the bell: BKNG, NTR, MT, MTD, SYMC

Friday:

  • Before the bell: ENB, MAR, JD, VIAB, BPL

Sector Analysis 

Strong Sectors past Month

These sectors are up 5% or more in the last 20 trading days:

  • Insurance
  • Banks
  • Regional Banks
  • Solar
  • Broker-Dealers

Weak sectors past month

These sectors are down 5% or more in the last 20 trading days:

  • Junior Gold Miners
  • Gold Miners
  • Steel
  • Oil Services
  • Metals & Mining

Strong sectors past five trading days

No sectors are up more than 3% in the last five days.\

Weak sectors past five trading days

These sectors are down 3% or more in the last five trading days.

  • Oil Services
  • Junior Gold Miners
  • Gold Miners
  • Oil & Gas Exploration
  • Energy

Bobby Raines

Bobby Raines

Bobby Raines is the Managing Editor of the Market Intelligence Center. He has degrees in Mass Communications and History from Emory & Henry College. Bobby worked at a mid-sized daily newspaper before making a switch to covering the financial industry full time in the years leading up to the financial crisis. He has been a member of the Fresh Brewed Media team since 2011 and has served as a writer and analyst. You can write to him at braines@marketintelligencecenter.com or follow him on Twitter: @BRatMICenter.

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