The big, bad Federal Reserve will be the focus again in the coming week as investors try to determine just how soon the next rate hike could come after December's initial liftoff.
A rate hike in June now has a 30% probability, according to CME Group. The likelihood was priced in at less than a 10% chance at the beginning of May.
June's chances spiked after the Fed minutes from April's central bank meeting suggested many members of the Federal Open Market Committee would be comfortable raising rates as soon as next month if the U.S. economy continued to improve as expected. Fed members will next meet on June 14-15.
First up, St. Louis Fed President James Bullard, a voting member of the FOMC, will speak on the economy and monetary policy in Beijing on Monday and in Singapore on Thursday. San Francisco Fed President John C. Williams and Jerome Powell will also speak on monetary policy on Monday in New York and Thursday in Washington, D.C., respectively.
Fed Chair Janet Yellen will cap off the week on Friday. Yellen will be honored at the Radcliffe Institute for Advanced Study at Harvard University, followed by a discussion with Harvard Professor Gregory Mankiw.
It's quieter on the earnings calendar as retailers' quarterly performances continue to trickle in in the tail end of the season. Nearly all S&P 500 companies have already reported earnings so far this season with 67% beating analysts' estimates, above the average success rate of 66%.
The first quarter has seen the same kinds of issues that plagued companies in the final months of 2015. A stronger U.S. dollar, weaker global demand and a prolonged period of lower commodity prices kept investors bearish. S&P 500 companies are expected to report an approximate 6% slide in average earnings in the first quarter, the fourth straight quarter in decline and the worst losing streak since the Great Recession.
Retail, in particular, has seen a challenging start to the year as the U.S. consumer opted to save instead of spend. Market volatility, weaker confidence and slowly increasing fuel prices kept shoppers on the sidelines.
"The first-quarter earnings season is concluding on a softer note with disappointing results from retailers," Bill Northey, chief investment officer at the Private Client Group at U.S. Bank, told TheStreet. "Equity investors should have modest return expectations and a strong stomach for the next quarter given full valuations, modest earnings growth and the summer months ahead littered with multiple FOMC meetings, a Brexit vote and increasing focus on domestic politics."
Retailers Autozone (AZO) , Best Buy (BBY - Get Report) and DSW (DSW) will report on Tuesday; Costco (COST - Get Report) , Guess? (GES - Get Report) , Express (EXPR - Get Report) and Tiffany (TIF - Get Report) are scheduled to issue reports on Wednesday; and Abercrombie & Fitch (ANF - Get Report) , Burlington Stores (BURL - Get Report) , Dollar General (DG - Get Report) , Dollar Tree (DLTR - Get Report) and Gamestop (GME - Get Report) on Thursday.
Outside of retail, Hewlett Packard Enterprises (HPE - Get Report) and Toll Brothers (TOL - Get Report) will report on Tuesday; HP Inc. (HP - Get Report) and LionsGate (LGF) on Wednesday; and Palo Alto Networks (PANW - Get Report) and Splunk (SPLK - Get Report) on Thursday.
The manufacturing sector will be in focus in the coming week with a flash reading of the PMI Manufacturing Index on Tuesday, and international trade and durable goods orders for April released on Wednesday and Thursday, respectively. Orders for long-lasting goods in the U.S. are expected to rise at a healthy 0.3% clip after a 0.8% increase in March.
Elsewhere on the economic calendar, new home sales for April will be released on Tuesday, pending home sales for April on Thursday, and the second estimate of first-quarter GDP and the final reading on consumer sentiment in May on Friday.