U.S. stocks in the next week will run a gauntlet of data expected to indicate a slowing economic recovery. Investors will start the market week with the release of the Chicago purchasing managers index and the Conference Board’s consumer confidence data for May. Wednesday brings the Institute for Supply Management’s manufacturing activity report for May. Weekly jobless claims data will be released on Thursday. Then, on Friday, the ISM will release its services sector activity report for May, and the Labor Department will release nonfarm payrolls data for May.
A lot of factors are going to play into that report — tornadoes, flooding, supply problems from Japan — all of that can factor, just like earlier in the month when winter storms were blamed for bad jobs data. Economists expect fewer nonfarm payrolls added in May compared with the 244,000 added in April, and a decline in the Chicago PMI. US car makers will release of May U.S. vehicle sales data with an expected net decline of about a million vehicles from 13.2 million in the year-ago period, owing mostly to Japan’s supply problems. With earnings season drawing to a close, only two S&P 500 companies will release results in the coming week. While the first quarter was regarded as a strong season for earnings, the trend may not continue with 59 companies in the S&P 500 issuing a negative earnings outlook for the second quarter, compared with 33 companies issuing a positive outlook. Meanwhile, in Asia, India’s January to March gross domestic product will be in the Asian spotlight next week, as will two key reports on China’s manufacturing and industrial output and employment data from Japan. India will release its growth figures Tuesday for the quarter through March. According to a local media survey of economists, GDP is likely to have grown 8.1%, down slightly from 8.2% in the past quarter due to a slowdown in investments and manufacturing. Also Tuesday, Japan will report its April employment and production figures, which are likely to show the continuing effects of the March 11 earthquake and tsunami. In March, output fell 15.3% from February — the biggest drop on record — as the disaster brought factories and deliveries to a halt. Manufacturers surveyed that month said they expected a small recovery in production in the months ahead, with a 3.9% rise seen in April and a 2.7% gain in May. On Wednesday, China’ s official purchasing managers index, as well as a second index compiled by HSBC, are likely to show that manufacturing activity continued to expand in May. But the pace of growth probably continued to slow, from the effects of the government’s tightening measures. An early reading of HSBC’s May data suggested that more of the same is on the way. The so-called flash PMI, based on the early responses to the survey, came in at 51.1, which would be a 10-month low. '+'
