The Week Ahead: We Are Still in Camp Transitory Advisorpedia's The Week Ahead Podcast, Powered by Tematica Research

Join Tematica Research's Chief Macro Strategist, Lenore Hawkins, and Chief Investment Officer, Chris Versace, as they discuss and debate what's driving the market and the economy this week.

Markets last week

This week’s theme… fade the cover story. WSJ cover story, Inflation at 13-year high

Markets were unconcerned by the slightly hotter than expected inflation numbers. 


Last Thursday, after the hotter-than-expected CPI data came in, the S&P 500 rose 0.5% to close at a new all-time high
The Nasdaq Composite rose 0.8% and the Nasdaq 100 gained 1.1%, 
In a testament to 2021 word of the year, “Transitory,” in the hours after the CPI data came out, the 10-year Treasury yield dropped 5 basis points


Over the prior 5 days ending Thursday’s close


TLT up 3.3% - LT BONDS STRONGEST PERFORMERS
Nasdaq staging a comeback with Nasdaq 100 up 3.2% and Composite up 3.0%
Russell 2000 - up 1.8%
S&P 500 up 1.1%
DJIA down -0.3%
VIX down more than 10%
Bitcoin down 4%


Key Economic Data and Related Events LAST WEEK

Consumer Credit in the US rose by $18.6 billion in April after a downwardly revised $18.6 billion gain in March, well below expectations for a $22 billion increase. Revolving credit fell by $2.0 billion while non-revolving rose by $20.7 million.

Mortgage applications in the US declined 3.1% during the week ended June 4. This was the third consecutive weekly decline with refinancing down 5.1%, pushing the index to its lowest level since February 2020 while purchases rose 0.3%. 

Economic Data to Watch THIS WEEK

Tuesday, June 15: 


May Retail Sales - We’ve talked before 

Homeowners pulled out $49 billion in equity in Q1
That’s the highest level since 2007 (up nearly 80% YoY
That was A LOT of cashflow support in Q1. Now for Q2, no more stimulus and will HELOCs or refis continue at this pace for cash outs?


May Producer Price Index

Likely to be hot


May Industrial Production & Capacity Utilization

How is capacity - we suspect given supply challenges, it won’t be heating up much


June Empire State Manufacturing Index
June NAHB Housing Market Index - any cooling?
April Business Inventories - 


Wednesday, June 16: 


Weekly MBA Mortgage Applications Index

Last week mortgage applications came out for the June 4th week and fell 3.1% on top of a 4.0% turndown the prior week  and  slipping  now  in  five  of  the  past  seven  weeks.  Over  this interval, they have plunged 11% and are down at an annual rate of 41% year-to-date. And the level? Dialed all the way back to where it was when the pandemic broke back on February 14th, 2020.


May Housing Starts & Building Permits
May Import-Export Prices
June FOMC Rate Decision


Thursday, June 17: 


Weekly and Continuing Jobless Claims 
June Philly Fed Index


Earnings of NOTE THIS WEEK

Tuesday, June 15


Oracle (ORCL) - Barometer of enterprise spending and we’ll see if the cloud capacity constraints it discussed in March have abated or persisted amid unprescedented demand


Wednesday, June 16 


Lennar (LEN) - housing demand, pricepoints, comments on whether pricing is boxing potential buyers out; lumber and other pricing comments


Thursday, June 17


Kroger (KR) - trends during the quarter as well as its guidance will tell us to what degree consumers are still focused on eating at home vs. dining  out; we’ll also want an update on its private label business that has been pivoting more and more with our Cleaner Living investing theme
Adobe (ADBE) - With companies adopting a digital first mind set, which productivity tools have benefitted and which ones does the company see gaining momentum in the back half of 2021? One area of interest for us will be electronic signatures…
Smith & Wesson Brands (SWBI) - FBI NICS Firearm background checks are up 17% YoY for the 3-months ending in May; while firearm stocks may not be everyone’s cup of tea, the company is likel