What do Amazon’s and Walmart’s deals mean for you?
Amazon is buying Whole Foods, and Walmart bought Bonobos. CBS News business analyst Jill Schlesinger explains the logic behind the deals.CBS News
White House announces changes to Cuba travel, trade policy
The US will tighten travel restrictions and block business with Cuba’s military regime, Pres. Trump announced in Miami on Friday.NBC News
Pentagon agrees to F-15 fighter deal worth $12 billion with Qatar
Amid the ongoing diplomatic crisis between Qatar and a number of its Gulf neighbors, the US has agreed to sell $12 billion worth of American F-15 fighters to the country. The sale of US combat aircraft represents a major signal of US support for Qatar as it faces regional isolation and the severing of travel and trade links. The announcement comes after a week of somewhat mixed messages from the Trump administration regarding the spat between Doha and number of Arab nations. After three Sunni Gulf countries — Saudi Arabia, Bahrain and the UAE — along with Egypt moved to cut off diplomatic ties with Qatar, host to the one of the Pentagon’s largest military bases in the Middle East and a linchpin in the fight against ISIS, President Donald Trump seemed to back the move, saying last week that Qatar had to do more to combat the funding of terrorism. But other officials in the administration including Secretary of State Rex Tillerson have called for the situation to be deescalated and on Wednesday while appearing before the House foreign affairs committee Tillerson played down any suggestion the President is on a different page stating: “there is no daylight between he and I” on the issue of Qatar. Speaking to the House armed services committee Monday, Mattis called the diplomatic situation “very complex,” acknowledging the large US military presence and close US-Qatar military relationship.Wochit News
Wall Street slides into summer with a light economic calendar but lots of Fed speakers in the week ahead.
Market focus will remain on the technology stocks, which steadied Friday but were mixed after another bout of weakness. The S&P technology sector was the worst performing, down 1.1 percent for the week.
There could also be more fallout from the big $13.7 billion Amazon bid for Whole Foods (WFM), which rattled stocks of retailers and food companies alike, wiping tens of billions from their market capitalization. There was speculation another buyer could emerge for Whole Foods, and its stock finished slightly above the $42 offered by Amazon (AMZN).
The Fed speakers will be important because of market concerns that the Fed is going forward with rate hikes at a time when inflation and other data are not quite up to expectations. Housing starts, retail sales, consumer inflation and consumer sentiment all missed forecasts in the past week, even though the Fed sounded confident in the economy and held onto its forecast for another rate hike this year and three in 2018.
“It is a pretty light week in terms of news. People are probably still digesting the Fed meeting a little bit; the ultimate effect of that is likely to be a positive one, whether that shows up next week, I’m not sure. We have another rate hike under our belt,” said Aaron Anderson, senior vice president, research at Fisher Investments.
In the coming week, existing home sales will be important Wednesday, as will Friday’s new home sales and manufacturing data from Markit. The half dozen Fed speakers, starting with New York Fed President William Dudley on Monday, will also be key, if they express any concern about recent economic weakness or suggest the Fed could slow down in any way.
The price of oil could also be a factor, as traders watch to see whether it holds in the $45 per barrel level or falls closer to $40, considered a negative for stocks. West Texas Intermediate crude futures finished the week at $44.74 per barrel, off 2.4 percent for the week.
Important for markets next week is MSCI’s decision whether to include a group of China’s mainland stocks in the MSCI Indexes, which underpin some large ETFs, such as the MSCI Emerging Markets ETF (EEM) EEM. If approved, it would give investors easier access to investing in the mainland markets and create more liquidity for the shares.
“It’s very likely it could happen compared to last year. MSCI has lowered the bar for A share inclusion, and the big driver of this is the stock connect programs,” said Peter Donisanu, Wells Fargo global market strategist. The stock connect programs link the Chinese mainland exchanges to the Hong Kong exchange, providing a way for foreign investors to trade stocks from the Shanghai and Shenzhen stock exchanges.
Stocks were mixed in the past week, with the S&P 500 (.SPX)ending up 0.1 percent at 2,433 but the Nasdaq (.IXIC) down 0.9 percent at 6,151, on the weakness in tech.
What to Watch
8:00 a.m. New York Fed President William Dudley
7:00 p.m. Chicago Fed President Charles Evans
Earnings: Lennar, Adobe (ADBE), FedEx (FDX)
8:30 a.m. Current account
8:30 a.m. Philadelphia Fed
3:00 p.m. Dallas Fed President Robert Kaplan
Earnings: Oracle, (ORCL) Winnebago, CarMax
10:00 a.m. Existing home sales
Earnings: Bed, Bath and Beyond, (BBBY) Barnes and Noble, Sonic (SONC), Accenture
8:30 a.m. Initial claims
9:00 a.m. FHFA home prices
10:00 a.m. Fed Gov. Jay Powell at Senate Banking
Earnings: Blackberry, Finish Line
9:45 a.m. Manufacturing PMI
10:00 a.m. New home sales
10:15 a.m. St. Louis Fed President James Bullard
12:40 p.m. Cleveland Fed President Loretta Mester
2:15 p.m. Fed Gov. Powell