Looking Ahead: Week of June 4 through 8

The recovery currently is wobbly but still positive. The consumer appears to be more optimistic than businesses as spending is moderately strong even though hiring has slowed to a crawl. Manufacturing and housing are still expanding but at a sluggish pace instead of moderately strong some months ago. But inflation is softer, giving consumers more spending power and the Fed more room to remain very accommodative. After the past week’s deluge of data, the upcoming week is light. Tuesday’s ISM non-manufacturing report likely garners attention for signs of whether the economy is as weak as Friday’s employment report. Similarly, traders will parse Wednesday’s Beige Book for the direction of growth and the possibility of QE3. At week’s end, the international trade report will give indications of the impact of Europe on exports and whether businesses are optimistic enough to boost imports on their shelves and in their showrooms.