This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Global Macro: Important Data on Tap This Week

NEW YORK (TheStreet) -- This week marks an important turning point for the U.S. economy and financial markets. Earnings remain in full swing, and due to mixed results, investors have been wary to push equities above all-time highs.



On the economics front, data from the Federal Reserve and labor market take the spotlight. There were reports last week that the Fed is leaning toward a more dovish stance than had been expected. That pushed the U.S. dollar lower and assets responded as if the end of quantitative easing would be delayed.



The Fed convenes this week, and if the reports prove true and monetary policy remains accommodative, risky assets will get bid higher.



Nonfarm payrolls will be released on Friday. That will be a good indicator of whether the economy is truly improving. If the number comes in at an extreme on either end of the spectrum, markets will adjust their rates hike horizon.

The first chart below is of Guggenheim S&P 500 Equal Weight (RSP) over SPDR S&P 500 (SPY). This pair measures market breadth, or the amount of participation in equity index moves. If the pair goes up, then a majority of the stocks in the index are following suit.

This pair has recently spiraled lower off yearly highs and begun a trend lower. That is a bearish signal that will either be confirmed or adjusted after this week's events. Expectations for higher rates will surely push the pair further into a downward trend.



The next chart is of iShares Barclays 1-3 Year Treasury Bond (SHY)over iShares Barclays 20+ Year Treasury Bond (TLT). This pair measures the Treasury yield curve. As the pair moves higher, long-term rates move up faster than short-term rates, thus steepening the curve.

The chart shows that the yield curve has continued higher since the beginning of May. Markets are pricing in an end to accommodative policy; the only question that lies ahead is how quickly.

The uptrend seems to be weakening, and if the Fed presents a dovish tone this week, then the strong rise will surely correct lower.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,091.58 +12.01 0.07%
S&P 500 2,002.72 +5.98 0.30%
NASDAQ 4,578.5770 +20.8820 0.46%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs