Job Loss Slow Down Encourages Investors as They Look to the Week Ahead

The summer months have historically proven to be somewhat slow-moving for Wall Street, but analysts agree that there is no reason that markets should not at the very least remain steady in the coming week. Some have even gone so far as to say that that the trend will remain upbeat right through the summer months, mainly as a result of the huge amounts of money the government has pumped into the US financial system in an effort to create a strong foundation to rebuild on.

Following the results of the “stress test” carried out by the government on major US banks, ten of these were instructed to raise additional funds. Monday is the due date for the submission of detailed plans as to how they are going to go about raising the required funds. Morgan Stanley and Bank of America have been at the forefront of cooperating with this requirement, thereby boosting investor confidence. On Tuesday, investors will have the government’s April wholesale inventories report to ponder over. Also of interest to investors, on Tuesday the Joint Economic Committee will review the progress of the bank bailout program, while the House Financial Services Committee will discuss regulating derivatives.

Midweek sees the release of several economic reports, including the Summary of Commentary on Current Economic Conditions, more commonly referred to as the “beige book”, from the Federal Reserve, a compilation of economic activity by sector as measured by each Federal Reserve Bank in its district. The April trade balance will be made available on Wednesday, as will weekly crude oil inventories and the May Treasury budget.

With the exclusion of auto sales, May retail sales are expected to have risen by 0.2 percent, which the report due to be released on Thursday will either confirm or deny. The Labor Department will make weekly jobless claims numbers available on Thursday, and the RealtyTrac foreclosure report will give an indication of the current state of the housing sector. Treasury Secretary Timothy Geithner is expected to address G8 finance ministers in Rome on Friday. Also on Friday, the University of Michigan will release its consumer sentiment index for June and the Labor Department will make May import and export prices public.