This Week; last week markets had a lot of economic data to think about, most of which was more confirmation the economy has slowed after a short burst of growth. Two key indexes on manufacturing and business (NY Fed manufacturing and Philly Fed both now in contraction levels). Retail sales in May were down however less than what was thought, housing starts and permits better but the NAHB housing market index at its worst level in many many months. The DJIA managed some improvement ending its six week slide but will likely open weaker on Monday.
This week the economic calendar doesn't offer much other than May home sales. This week debt problems in Europe continue to dominate with increasing debate whether the EU will remain in tact and how much more Germany and France will take in holding the Union together. The main event this week is the FOMC meeting concluding on Wednesday with Bernanke's press conference after the meeting. The Fed will likely continue to try to put lipstick on the economic recovery and will continue to keep interest rates low through the rest of this year and into next. QE 2 is for the most part over, officially at the end of the month but most buying has already occurred. Expect continued questions about whether the fed will do more easing; anymore easing from the Fed is wasted efforts and money. The Fed has little left in its quiver that can directly impact the economy.
TBWS
