Market Analysis

Bonds edged slightly higher today on a weaker opening equity market.  Stocks have since moved into positive territory and bonWhile some are speculating that things will get worse  for equities in the US, others are speculating that stocks may have bottomed and that the current environment represents a buying opportunity.  Within this context, this Friday's May Non Farm Payroll Report will take on additional importance.  Analysts are forecasting the payrolls will be higher by 500,000, with approx 100,000 of the growth coming from temporary census workers.  If the number hits that mark, some are projecting a rally in stocks at the expense of bonds, assuming that there is not significant further deterioration in the European debt crisis.

Below is a recap of this week's economic calendar:

Tuesday, June 01, 2010

April Construction Spending - expected up .1%, actual up 2.7% compared to March increase of .4% (revised up from .2%).

May Institute of Supply Management Manufacturing Index - expected 59.4 reading, actual 59.7, compared to 60.4 value in April

Wednesday, June 02, 2010

April Pending Home Sales - expected up 4.3% compared to 5.3% increase in March.

Thursday, June 03, 2010

May ADP Employment Change Report - expected increase of 56,000 in private sector payrolls compared to 32,000 increase in April.

Initial Jobless Claims week ended 5/29/10 - expected drop of 5,000 to 455,000 from 460,000 prior week.

Continuing Jobless Claims week ended 5/22/10 - expected drop of 7,000 to 4.6 million from 4.607 million the prior week.

April Factory Orders - expected up 1.7% vs up 1.3% in March.

May Institute of Supply Management Service Sector Index - expected 55.6 reading vs 55.4 in April.

Friday, June 04, 2010

May Non Farm Payroll Report - expected 500,000 increase in payrolls compared to 290,000 increase in April.  Unemployment rate expected to drop from 9.9% to 9.8%.