Can the stock market continue setting new highs? Is the Federal Reserve about to take away the punch bowl? Will corporate earnings impress investors?
For ticker hounds, there’s no shortage of big stories set to play out this week. Here are the top five stories you need to watch:
Earnings season is coming to an end, but there are still a few important companies due to report. On Monday and Tuesday respectively, technology companies Adobe Systems Incorporated (NASDAQ/ADBE) and Oracle Corporation (NYSE/ORCL) will post their earnings after the closing bell. That will give investors a big insight on technology spending.
Then Tuesday, FedEx Corporation (NYSE/FDX) will report results. The courier delivery service company is widely seen as a barometer of the broader economy, so investors will be watching their numbers closely.
Federal Funds Rate
The Federal Open Market Committee will meet on Wednesday. In the meeting, the Fed will announce the federal funds rate—an interest rate at which banks lend balances held at the Federal Reserve to other banks overnight. There is also a press conference at 2:30 p.m., at which Fed Chair Janet Yellen will answer reporters’ questions.
The rate can have a significant impact on the economy, as it can affect the value of the dollar and the amount of lending going into economic activity. The expectation is that the Federal Reserve will raise rates sometime later this year, or early next year. Market strategists generally expect the central bank will hike rates later this year, which they fear could put the brakes on the economy.
Crude Oil Inventory
The U.S. Energy Information Administration will release its weekly report on crude oil inventory on Wednesday. It will report the change in the number of barrels of crude oil held in inventory by commercial firms during the past week.
Last week, crude oil inventories fell by 6.8 million barrels, a much larger drop than the 1.7 million barrel decline expected by analysts. It was also the sixth consecutive week in which crude inventories declined.
Consumer Price Index
On Thursday, we will get a look at inflation. Last month, the U.S. Bureau of Labor Statistics reported that prices rose by a modest 0.1% month-over-month in April. However, after excluding food and energy, the core CPI increased 0.3% in April—the biggest gain in two years.
Finally, on Thursday, we will get another look at the U.S. weekly jobless claims. Last week, the Department of Labor reported 279,000 people applied for unemployment benefits, marking the 14th consecutive week these figure came in below 300,000. If we see another number below this threshold, it would be one more indication that the U.S. economic recovery is picking up momentum.