To say the market will have a lot to digest in the week ahead may be a gross understatement.
President Trump on Saturday declined to endorse a G-7 communique calling for a lowering of tariffs and other barriers to trade. Instead Trump did Trump, taking to Twitter to slam Canadian Prime Minister Justin Trudeau. The exchange heightens the risk on NAFTA talks, and subsequently many industrial stocks such as automakers Ford (F) and General Motors (GM) .
Dow Jones Industrial Average futures fell 19 points, S&P 500 futures dropped 5 points, and Nasdaq Composite futures declined 17 points.
Here’s what is awaiting investors. Get ready.
Mr. Trump Goes to Singapore
The story of the week – and, possibly, of the summer – will take place Tuesday, June 12, when President Donald Trump is set to meet with North Korean President Kim Jong Un in Singapore. The meeting will be the first time an American president meets with a sitting North Korean leader.
Both leaders have already touched down in Singapore.
Trump and Kim are expected to talk about seriously high-level issues, not the least of which being North Korea’s “complete” nuclear arsenal. The two leaders are also expected to discuss sanctions placed on North Korea, diplomatic relationships and military presence in the Korean Peninsula.
Trump is expected to bring a team from the White House including Secretary of State Mike Pompeo, chief of Staff John Kelly and National Security Adviser John Bolton. “I think I’m very well-prepared,” Trump told reporters. “I don’t think I have to prepare very much. It’s about attitude.”
AT&T-Time Warner Verdict Expected
On Tuesday, the verdict is expected in a pending U.S. District Court ruling on AT&T Inc.’s (T) proposed $85 billion acquisition of Time Warner Inc. (TWX) . The decision will come after months of back and forth and a six-week trial. The merger proposal expires June 21.
The decision could have significant implications for media M&A for years to come. The space has been active in recent months, with Walt Disney Co. (DIS) launching a bid for Twenty-First Century Fox Inc. (FOXA) and Comcast Corp. (CMCSA) lurking on the sidelines.
TheStreet went one-on-one with Makan Delrahim, Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice, at The Deal’s Corporate Governance Conference in New York ahead of the decision. Watch below.
Fed, ECB to Meet
On Wednesday, June 13, the Federal Reserve Open Market Committee is expected to raise short term interest rates for the second time this year. The Fed will announce its decision on rates at 2:00 p.m. ET at the conclusion of its two-day meeting, followed by a press conference with Fed Chairman Jerome Powell. Economists polled by FactSet expect short term target rates to increase 0.25% to 2%. This would be the seventh rate hike since December 2015.
Cautions HSBC chief U.S. economist Kevin Logan, “We expect that there will be noticeable changes to the formal policy statement released after the June FOMC meeting. Changing the statement to remove guidance that is no longer appropriate makes sense, but also runs a risk that markets will interpret the modified statement as signaling a change in policy going forward when no such signal is intended.”
The European Central Bank is set to meet in Latvia on Thursday, June 14, in what is expected to be an important discussion about the future of quantitative easing in the region. ECB officials told Bloomberg that the bank’s president, Mario Draghi, will likely treat the meeting as a debate over the strategy of bond-buying. Under current plans, purchases are set to run until at least September.
Jim Cramer’s Action Alerts PLUS Member Call
Investors that think the market could continue to overlook heightened geopolitical risk and slowing global growth are misguided. The market simply cannot stay on autopilot without some form of healthy risk adjustment.
Hence, it’s critical you hop on the line with TheStreet’s founder Jim Cramer for his monthly call with Action Alerts PLUS club members. Being held on June 13, the call will give you the insider knowledge from Cramer and his research team on how to be positioned in this market. Not only will the call educate, it will serve up actionable investing ideas and themes.
And on the Calendar
Monday, June 11, is a data-light day for markets. But Tuesday, June 12, brings the NFIB Small Business Index reading for May at 6:00 a.m. ET. Then, at 8:30 a.m. ET, consumer pricing data for May is expected. FactSet analysts expect consumer pricing to grow 2.7% for the period, up from 2.5% growth in the previous month. At 2:00 p.m. ET on Tuesday, the Treasury Budget will be announced, expected to come in at negative $112.5 billion for May, down from $214.3 billion in April.
At 8:30 a.m. ET on Wednesday, June 13, producer pricing data for May is expected. FactSet economists forecast producer pricing growth of 0.3%, up from 0.1% in the previous month. Fed data will be released later in the day.
On Thursday, June 14, at 8:30 a.m. ET, data is expected on export prices for May. FactSet analysts predict prices to have grown 0,2% in May, down from 0.6% in April. Import prices are expected at the same time – analysts see 0.5% growth, up from 0.3% in April. Retail sales statistics for May are also forecast for Thursday at 8:30 a.m. ET. Economists predict sales to grow 0.4%, up from 0.2% the prior month.
And on Friday, June 15, industrial production for May will be released at 9:15 a.m. ET. FactSet experts predict output to grow 0.3%, down from 0.72% in April. At 10:00 a.m. ET, the University of Michigan is expected to release consumer sentiment data for June. FactSet analysts predict the index reading will come in at 98.9, up from 98 in May.
