Wall Street slides into summer with a light economic calendar but lots of Fed speakers in the week ahead.
Market focus will remain on the technology stocks, which steadied Friday but were mixed after another bout of weakness. The S&P technology sector was the worst performing, down 1.1 percent for the week.
There could also be more fallout from the big $13.7 billion Amazon bid for Whole Foods, which rattled stocks of retailers and food companies alike, wiping tens of billions from their market capitalization. There was speculation another buyer could emerge for Whole Foods, and its stock finished slightly above the $42 offered by Amazon.
The Fed speakers will be important because of market concerns that the Fed is going forward with rate hikes at a time when inflation and other data are not quite up to expectations. Housing starts, retail sales, consumer inflation and consumer sentiment all missed forecasts in the past week, even though the Fed sounded confident in the economy and held onto its forecast for another rate hike this year and three in 2018.
"It is a pretty light week in terms of news. People are probably still digesting the Fed meeting a little bit; the ultimate effect of that is likely to be a positive one, whether that shows up next week, I'm not sure. We have another rate hike under our belt," said Aaron Anderson, senior vice president, research at Fisher Investments.
In the coming week, existing home sales will be important Wednesday, as will Friday's new home sales and manufacturing data from Markit. The half dozen Fed speakers, starting with New York Fed President William Dudley on Monday, will also be key, if they express any concern about recent economic weakness or suggest the Fed could slow down in any way.
The price of oil could also be a factor, as traders watch to see whether it holds in the $45 per barrel level or falls closer to $40, considered a negative for stocks. West Texas Intermediate crude futures finished the week at $44.74 per barrel, off 2.4 percent for the week.
Important for markets next week is MSCI's decision whether to include a group of China's mainland stocks in the MSCI Indexes, which underpin some large ETFs, such as the MSCI Emerging Markets ETF EEM. If approved, it would give investors easier access to investing in the mainland markets and create more liquidity for the shares.
"It's very likely it could happen compared to last year. MSCI has lowered the bar for A share inclusion, and the big driver of this is the stock connect programs," said Peter Donisanu, Wells Fargo global market strategist. The stock connect programs link the Chinese mainland exchanges to the Hong Kong exchange, providing a way for foreign investors to trade stocks from the Shanghai and Shenzhen stock exchanges.
Stocks were mixed in the past week, with the ending up 0.1 percent at 2,433 but the Nasdaq down 0.9 percent at 6,151, on the weakness in tech.
What to Watch
Monday
8:00 a.m. New York Fed President William Dudley
7:00 p.m. Chicago Fed President Charles Evans
Tuesday
Earnings: Lennar, Adobe, FedEx
8:30 a.m. Current account
8:30 a.m. Philadelphia Fed
3:00 p.m. Dallas Fed President Robert Kaplan
Wednesday
Earnings: Oracle, Winnebago, CarMax
10:00 a.m. Existing home sales
Thursday
Earnings: Bed, Bath and Beyond, Barnes and Noble, Sonic, Accenture
8:30 a.m. Initial claims
9:00 a.m. FHFA home prices
10:00 a.m. Fed Gov. Jay Powell at Senate Banking
Friday
Earnings: Blackberry, Finish Line
9:45 a.m. Manufacturing PMI
10:00 a.m. New home sales
10:15 a.m. St. Louis Fed President James Bullard
12:40 p.m. Cleveland Fed President Loretta Mester
2:15 p.m. Fed Gov. Powell
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