Market Analysis

Bonds improved Friday afternoon and then deteriorated this morning as the stock market continues to improve on signs that the situation in Europe may not be as dismal as some were projecting. A report on industrial production in Europe this morning came in better than expected and concerns about a Greek default and about Greece leaving the EU are easing. Investors remain skittish, and as such we haven’t seen a stampede yet away from bonds, which remain at levels that many analysts would describe as “over-bought.” However, if it becomes more certain that the situation in Europe may be managed to avert catastrophe for the European Union and their shared currency, then we could see US long term rates move up from their near record low levels.

Below is a recap of the economic calendar for this week:

Monday, June 14, 2010 – economic calendar vacant

Tuesday, June 15, 2010

• June Empire State (NY) Manufacturing Survey – expected index value of 20.0 vs May value of 19.11.

Wednesday, June 16, 2010

• May Housing Starts and Building Permits – Starts expected down 17,000 to an annualized pace of 655,000. Permits expected up 21,000 to an annualized pace of 631,000.
• May Producer Price Index – expected down .5% vs a .1% decline in April. The core PPI (excluding food and energy) expected up .1% vs up .2% in April
• May Industrial Production and Capacity Utilization – Production expected up .8% , a similar increase as in April. Utilization expected to be up to 74.4% vs 73.75% in April.

Thursday, June 17, 2010

• Initial Jobless Claims week Ended 6/12/10 – expected down 2,000 to 450,000
• Continuing Jobless Claims week Ended 6/5/10 – expected up 13,000 to 4.475 million
• May Consumer Price Index - expected down .1% , a similar decline as in April. The core CPI expected up .1% vs no change in April
• May Conference Board Leading Indicators – expected up .5% vs down .1% in April.
• June Philadelphia Fed Survey – expected index value of 20.0 vs 21.4 in May.

Friday, June 18, 2010 – economic calendar vacant