Market Preview: Slow Start to a Big Week

Updated to correct the timing of economic data reports.

NEW YORK (TheStreet) -- Wall Street reconvenes on Monday after yet another ugly week and the end of QE2 is looming larger than ever.

"After the Federal Reserve spends about $60 billion later this month to buy Treasuries, it will stop expanding its balance sheet to prop up asset prices," wrote TrimTabs in its weekly flow report on Sunday. "At that point, the market will have to stand on its own two feet, which does not bode well for stock prices."

As a result, the research firm switched to neutral (0% long) on U.S. equities from cautiously bullish (50%), noting: "[T]he S&P 500 is down 6.8% from its interim closing high on April 29, and we expect market action to get even uglier this summer."

There's no significant economic data on Monday but the rest of the week will make up the difference. Tuesday's economic data will feature retail sales for May, which Briefing.com expects to be down 1%, while the consensus estimate is for a slighter decline of 0.7%. Excluding autos, the expectation is for an increase of 0.2%, a sequential slide from April's rise of 0.6%.

Then there's the producer price index for last month, which is anticipated to edge up 0.1% on both a regular and core basis. Business inventories for April are due at 8:30 a.m. ET as well, and the consensus is for a 1% rise, flat with March's increase.

The corporate earnings calendar is light this week. Among the few notable names due to report are Best Buy(BBY) on Tuesday, executive recruiter Korn/Ferry International(KFY) on Wednesday, and Kroger(KR) and Research In Motion(RIMM) on Thursday.

The change in sentiment at TrimTabs means the firm's model portfolio going into tomorrow is 100% in cash, as in completely on the sidelines, but it plans to take a position once the Federal Reserve's $600-billion bond-buying binge officially wraps up.

"We continue to advise investors to hold some precious metals, commodities, or inflation-protected bonds in their portfolios to protect against the effects of the Fed's extremely loose monetary policy," TrimTabs said. "All else being equal, we will probably turn cautiously bearish (50% short) once QE2 ends."

--Written by Michael Baron in New York.