Coming Up On Wall Street

Good morning. It is 67 degrees and cloudy with a thunderstorm logo here in Upstate NY. Saturday was gorgeous in these parts. Outside was the place to be. Up to this point Summer has been marked by relatively mild temperatures, little to no humidity, and lots of rain. July and August usually bring in the Dog Days of Summer. We are ready, loins are girded.

The upcoming week on Wall Street will be shortened because of Monday's July 4th holiday. One also expects there to be lighter trading volume as the real meat and potatoes, Q2 reports, begins with Alcoa on Monday July 11th. That means there's an extra week in Switzerland.

One major looming piece of data will be Friday's grand government report on employment or lack there of in June. With the economy "hitting a soft patch" throughout the second quarter, and with weekly first time unemployment claims floating over the desired 400,000 number, do not expect Friday's data to be the stuff of smiles and happiness. It will be about the severity of the bad numbers, how bad are they as it were. The spin will be to aim opinion towards the better side of bad if you know what I mean. I expect to hear the term "soft patch" many many times. Words will be used to lighten an otherwise miserable reality.

Recapping, the second quarter was hit by rising fuels costs that pinched everybody's pocket and the major nuclear disaster of Fukushima which in turn disrupted the world's third largest economy. As a result production throughout the globe was down and employment already in a fragile state got shredded again. Right now oil is down roughly $20 per barrel over highs of a few months ago. Gas prices should come down as the higher priced stocks deplete - at least that's how it should work.

A friend of mine who is extremely careful with their budget, told me they dropped their membership in a gym because they needed the money for the higher gas prices. Multiply that way of pragmatic thinking by millions of people and a noticeable contraction in discretionary spending seems like the likely outcome.

Reuters: Rally could spell pullback for stocks

...the June jobs report...


Data expected for next week includes factory orders for May, the ISM services index and several indicators on the labor market, including Friday's report.


...the focus has shifted to the rapidly approaching deadline for Congress to reach an agreement on the debt limit, presenting another headwind for stocks.


...earnings season begins with Alcoa Inc's earnings on July 11.