By Bill Hornbarger, Chief Investment Officer
Three Things to Watch
- The showdown in Washington over the debt ceiling and the politics surrounding it should heat up this week. There is no consistent pattern historically of the impact on the S&P 500 when this has happened previously, and the current situation has been well advertised in this time of the yawning divide between the two parties.
- The Federal Reserve will stay on the radar with Fed Chairman Jerome Powell to speak in front of Congress twice on the pandemic and monetary policy. Treasury Secretary and former Fed Chair Janet Yellen will join him at his appearances Tuesday and Thursday.
- Economic data this week includes consumer confidence from the Conference Board and consumer sentiment from the University of Michigan, pending home sales, second-quarter GDP and the personal consumption expenditure (PCE) deflator as well as the Institute of Supply Management manufacturing survey. The data is expected to continue to show the economy growing at a healthy clip and inflation remaining elevated. The PCE deflator and core PCXE deflator are expected at 4.2% and 3.5% year-over-year, respectively. Second-quarter GDP forecasts have been revised down in recent weeks, but the consensus view is for 6.6% growth (annualized quarter-over-quarter).
Three Things to Know
- The list of companies deriving more than 95% of their income from government contracts that could be most affected by a government shutdown includes Huntington Ingalls Industries, Mercury Systems, Lockheed Martin, Oak Street Health, Northrop Grumman, Science Applications International Corp., Booz Allen Hamilton Holding and CACI International. (Source: Seeking Alpha)
- Fueled globally by the Delta variant, the pandemic has infected more than 230 million people worldwide, and the death toll has passed 4.7 million. More than six billion vaccines have been administered. (Source: Bloomberg)
- China is a large driver of global economic growth, accounting for more than 1/3 of world GDP growth in recent years. (Source: The Market Ear)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.