Scary May Jobs Report Could Still Be a Negative for Stocks
Grohowski said the market has also been moving sideways during a void of corporate news, but when earnings season comes it may not be just positives.
"We do think the momentum behind earnings has peaked and I think it makes sense for investors to be factoring in a more cautious outlook in future earnings," he said.
"When the second-quarter earnings come out, I think we're going to hear some caution. Balance sheets are in great shape, but companies are going to be challenged to do much better than they were able to do last quarter on topline growth. We have a $95 estimate on S&P earnings for this year. Consensus has moved closer to $100. If we're right it's still going to be uncomfortable as the market brings down its earnings expectations."
What to Watch
Three Treasury auctions, totaling $66 billion in 3-year notes, reopened 10-year notes, and reopened 30-years will be held Tuesday through Thursday.
Data is relatively light next week. Consumer credit is reported Tuesday. The Fed's beige book on the economy is released Wednesday. Thursday's highlight is weekly jobless claims, which will be a big focus for traders. There is also international and wholesale trade data for April that day. Friday's number include import prices and a report on the Federal budget is released on Friday.
Fed speakers include Bernanke, who addresses the International Monetary Conference in Atlanta at 3:45 p.m. ET Tuesday. Treasury Secretary Tim Geithner speaks there Monday. Philadelphia Fed President Charles Plosser speaks in Helsinki Monday, and again on the economy in London Thursday. Dallas Fed President Richard Fisher gives an update on monetary policy and financial stability in New York Monday.
New York Fed President William Dudley speaks Tuesday evening in New York, and he gives a speech on the national and regional economy in Brooklyn n Friday. Kansas City Fed President Thomas Hoeing speaks in Colorado Wednesday. Fed Vice Chair Janet Yellen speaks in Cleveland on housing Thursday.
Apple kicks off its developers conference and is expected to make its iCloud offerings announcement Monday.
The annual American Society of Clinical Oncology meeting starts this weekend in Chicago and features about 4,000 papers that could impact biotech and pharma stocks.
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