Week Ahead: Juneteenth, Asian Data & FedEx Earnings

June may be nearing its end, but the economy is still as eventful as ever this week as key events from economic data to earnings and Federal holidays are expected to take place. Here’s what you need to expect on the penultimate week in June:

US Markets Close on Juneteenth 

Today, Monday, June 19th, marks Juneteenth, a federal US holiday that celebrates the abolishment of slavery in the US. As such, US markets from Nasdaq to New York Stock Exchange will be closed on Monday and reopen at 9:30 E.T on Tuesday. 

Juneteenth, otherwise known as Freedom Day, Jubilee Day, Black Independence Day, and Emancipation Day, celebrates and honors the emancipation of African Americans that were enslaved before June 19, 1865. 

This day became a federal holiday not so long ago, back in 2021, and is considered one of the 11 recognized US federal holidays. Furthermore, the US central bank, the Federal Reserve, also recognized Juneteenth as a Bank Holiday, which means that financial institutions and commercial banks are either closed or operate at reduced hours today. 

How Is the US Housing Market Faring?

Today, Monday, the National Association of Home Builders (NAHB), one of the biggest trade associations in the US, is expected to release June’s Housing Market Index (HMI). The HMI is a monthly survey-based index that gauges the sentiment of US homebuilders and is one of the most anticipated indices in the housing sector. 

The HMI is a calculated average intended to span from 0 to 100. When the HMI surpasses 50, it signifies a predominantly positive market sentiment and outlook within the industry. As for the upcoming HMI figures, analysts expect a reading of 48 which is 2% below May’s 50. The predictions also suggest that the HMI had regained its momentum after a tumultuous 2022.

Moreover, in addition to the HMI, on Tuesday, the US Census Bureau is expected to release May’s housing stats and building permits which are expected to have risen slightly to 1.405 million units compared to April’s 1.401 million and January’s 1.34 million. Whether or not these positive predictions hold true is yet to be determined. It would be interesting to see how this data will affect the housing market and what it will reveal about it in light of the latest global economic hurdles. 

Fed Chair Jerome Powell Testifies 

On Wednesday and Thursday, Fed Chair, Jerome Powell, is expected to testify before Congress just less than a week from the FOMC rate decision whereby the Federal Reserve took a pause on rate hikes after a hawkish rate hiking saga.

Traders may be looking for clues on whether or not the Fed Chair will be hawkish or dovish, especially in light of the fact that many Fed members signaled further rate hikes in the near future. One economist commented that “Fed Chair Powell gives House and Senate testimony with focus on whether the July FOMC (Federal Open Market Committee) meeting is truly 'live', and if the Fed dot plot of two more hikes is a true base case depending on the data or more 'aspirational.” (Source:Yahoo Finance)

Key Asian Economic Data Releases

On Tuesday, China’s rate decision will be released and will shed light on the world’s second-biggest economy. In an effort to strengthen China's struggling economy and veer it away from deflation, it is expected that the People's Bank of China will reduce its lending rates for the one- and five-year loan prime rate (LPR) by 10 basis points, resulting in rates of 3.55% and 4.20%, respectively. Aside from that, earlier this month, the Chinese central bank cut its loan rates for the first time in 10 months. This, in turn, may have allowed for cuts in the LPR benchmark rates.

It may also be worth noting that on Sunday, Goldman Sachs (GS) cut its Chinese GDP forecast from 6% to 5.4% hence increasing the uncertainty regarding China’s economic growth. One Goldman Sachs analyst stated that the bank believes “that growth headwinds are likely persistent while policymakers are constrained by economic and political considerations in delivering meaningful stimulus."

Traders may also want to keep an eye out for US Secretary of State, Antony Blinken’s, visit to Beijing whereby he met one of China’s leading diplomats, Wang Yi, and may also meet President Xi Jinping. This visit can be substantial since it would be the first time in five years whereby a top American diplomat visits China. It might be valuable to keep track of any substantial decisions that may affect the tense relations between the world’s largest and most powerful economies. 

Beyond China’s rate decision, this week, Bank Indonesia (BI) and Bangko Sentral ng Pilipinas (BSP) are expected to release their interest rate decisions on Thursday. In addition, Japanese CPI data which are scheduled to be released on Friday, may also usher forth an important impact on the markets. Analysts expect Japanese annual core CPI to come in at 3.1% which would be below April’s 3.4% and might suggest that inflation is easing in the world’s third-largest economy. 

Ahead of the testimony and anticipated Chinese interest rate decision and Asian economic data, Asian stocks fell on Monday after hitting the best weekly run in five months. Japan’s leading index, the Nikkei 225 (Japan 225) fell by 1.3% and the Hang Seng (Hong Kong 50) fell by 1.6% on Monday morning. Whether or not these Asian indices will be able to rebound and return to their recent highs is yet to be seen. 

Will FedEx Deliver This Earnings Season?

Earnings season may be over for many companies, but not for American multinational transportation and delivery giant, FedEx (FDX) which will release its Q4 fiscal 2023 earnings on Tuesday, June 20th after the ring of the bell. 

The company is forecasted to report earnings per share (EPS) of $4.89 which would be below last year’s EPS of $6.87 while its quarterly revenue is expected to reach $22.7 billion. Since the beginning of the year up till now, FedEx’s stock grew by 25.7%, and it would be worth keeping track of it following the upcoming earnings report. 

Other substantial economic events this week include the Eurozone CPI and the Bank of England’s (BoE) rate decision both of which are scheduled to be released on Thursday, June 22nd. 

All in all, the upcoming week appears to be filled with significant events that could greatly impact the economy and potentially shift the course of the market. Traders may want to keep a keen eye on how each of these events unfolds and their potential influence on the future direction of the economy and the market.