Bulls back from the beach

Wall Streeters return from three-day holiday weekend to face onslaught of news on economy, jobs.

May 29, 2005: 8:20 AM EDT
By Alexandra Twin, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Bulls staggering back to work Tuesday after a long holiday weekend may be hoping for a gentle transition from beach to boardroom. No such luck.

Markets are closed Monday in honor of Memorial Day, but investors are apt to hit the ground running Tuesday. Reports are due throughout the week on manufacturing, consumer confidence, construction spending, factory orders, and Friday's behemoth, the May jobs report.

After sporting the best week of gains for 2005 two weeks ago, stock markets meandered last week, ultimately ending with only modest gains. Investors continued to bet that inflation is well contained and the Federal Reserve doesn't have to increase the pace of its interest-rate hiking campaign. Yet, a spike in oil prices and some jitters after the rally kept investors from extending it much.

With little or no earnings news on tap, and volume apt to be light early in the week as traders return from vacation, the week ahead is likely to be determined by the economic news, analysts said.

"The technical trends of the market and the sentiment has improved over the last few weeks, plus there are seasonal factors working in the market's favor," said Michael Sheldon, chief market strategist at Spencer Clarke, citing the tendency for the week after Memorial Day to be pretty decent for stocks.

However, economic numbers that vary sharply from forecasts could throw investors off next week.

"A further rise in oil prices and a retreat in Treasury yields could also create more headwinds for the market," Sheldon added.

Gearing up for payrolls
"The May payrolls report will be the celebrated one next week, and there may be some controversy around it," said Ned Riley, chief investment strategist at Riley Asset Management.

In April, employers added a surprisingly robust 274,000 to their payrolls in the month, and there is some concern that the number may have been inflated and could be downwardly revised this time, Riley said. Or at the very least, that the May number will be weaker and therefore feel like a bit of a letdown.

Economists surveyed by Briefing.com currently expect employers to have added 180,000 jobs to their payrolls in May.

"The report will give investors some feeling in terms of wage trends, and inflation," Riley added.

He said next week is also likely to be influenced by a continuing rotation out of commodity and economically-sensitive stocks and into consumer and healthcare issues, as well as the tech sector, which has bounced lately.

Among other potential market movers in the week ahead, Spencer Clarke's Sheldon cites Tuesday's Chicago PMI, in that it's a preview of the national manufacturing report due the following day.

Key events in the week ahead

Monday is Memorial Day and all financial markets are closed.

The Chicago Purchasing Managers' index, which measures manufacturing in the Midwest region, is due Tuesday. PMI is expected to have fallen to 62.0 in May, according to a consensus of economists surveyed by Briefing.com. PMI stood at 65.6 in April.


Also due Tuesday: consumer confidence for May. The index is expected to have dipped to 96.0 from 97.7 in April, economists predict.


The April read on construction spending is due Wednesday. Spending is expected to have risen 0.7 percent in the month after rising 0.5 percent in March.


The Institute for Supply Management (ISM)'s manufacturing index, due Wednesday, is expected to slip to 52.2 in May from 53.3 in April.


Ciena (Research) reports earnings Thursday. The telecom gear maker is expected to have lost 5 cents per share, after having lost 9 cents a year earlier.


The read on first-quarter productivity, due Thursday, is expected to be revised up to 3.0 percent from an initial read of 2.6 percent.


April factory orders likely rose 0.7 percent, analysts forecast, after rising 0.1 percent in March. That report is due Thursday.


Friday brings the May employment report. Employers are expected to have added 180,000 to their payrolls, after adding 274,000 in April. The unemployment rate, generated by a separate survey, is expected to hold steady at 5.2 percent.


Friday also brings the non-manufacturing index from the ISM. The index is expected to have fallen to 60.5 in May from 61.7 in April, according to economists' forecasts.

Vamos lá puxar isto para cima, porque hoje já temos acção do outro lado do Atlântico.


dados de hoje:

- The Chicago Purchasing Managers' index, which measures manufacturing in the Midwest region, is due Tuesday. PMI is expected to have fallen to 62.0 in May, according to a consensus of economists surveyed by Briefing.com. PMI stood at 65.6 in April.


Also due Tuesday: consumer confidence for May. The index is expected to have dipped to 96.0 from 97.7 in April, economists predict.

The April read on construction spending is due Wednesday. Spending is expected to have risen 0.7 percent in the month after rising 0.5 percent in March.


The Institute for Supply Management (ISM)'s manufacturing index, due Wednesday, is expected to slip to 52.2 in May from 53.3 in April.

Friday brings the May employment report. Employers are expected to have added 180,000 to their payrolls, after adding 274,000 in April. The unemployment rate, generated by a separate survey, is expected to hold steady at 5.2 percent.


Friday also brings the non-manufacturing index from the ISM. The index is expected to have fallen to 60.5 in May from 61.7 in April, according to economists' forecasts.