The transition from June to July offers a packed schedule for investors. No data comes out Monday and Friday is a holiday, but the three days in between present key data and numerous speeches covering all fronts of the economy. 

The S&P 500 has gained 43% since its low in early March, and while some are calling a plateau inevitable, others believe positive data could convince investors that genuine recovery is on the horizon. 

The biggest release this week will be the Employment figures on Thursday, but all eyes will also be on the ISM Manufacturing survey on Wednesday. Those in real estate will want to check out if prices are stabilizing in the Case-Shiller Home Price Index, and then see how demand is holding up in the Pending Home Sales Index.

Key Releases:

Tuesday: 

9:00 ― In the S&P Case Schiller Home Price Index for March, the press release stated there was “no evidence that a recovery in home prices has begun.” There’s little reason to believe that sentiment will have changed in April. Prices have fallen 32% since the housing bubble burst, and economists still look for median prices to deflate 10 - 15% over the next year.

9:45 ― The ISM Chicago Business Barometer is the final regional manufacturing report to be released each month, ahead of the nationwide study to be posted Wednesday. 

The Chicago index came in with a weak 34.9 reading in May, with new orders dropping 5 points to 37.3, but analysts are optimistic this month: the consensus looks for a 40.0 score. That’s still a far cry from the 50-level indicating growth, but it gives hope that recovery could well be on its way in the final quarter.

10:00 ― The Conference Board’s measure of Consumer Confidence saw a massive jump to 54.9 from 40.8 in May. Analysts look for the upward trend to continue this month with a 57.0 print. The expectations component has been leading the way recently, rising more than 40 points in the past two months.

12:00 ― Jim Bullard, president of the St. Louis Fed, speaks from Philadelphia; a Q&A is expected.

21:00 ― Janet Yellen, president of the San Francisco Fed, speaks on the economy from California.

22:00 ― Thomas Hoenig, president of the Kansas City Fed, speaks on the economic crisis to NYU’s Stern School of Business.

Wednesday:  

8:15 ― The ADP Employment survey reported private-sector losses of 532,000 jobs in May, therefore failing to anticipate the sharp reduction in the official figures. This month employers are anticipated to have cut another 363,000 jobs, but it’s unclear if the ADP numbers can do more than simply hint at the official figures.

10:00 ― Until hard data is released in the Industrial Production report, the key index for U.S. Manufacturing is the ISM survey. Last month the index improved from 40.1 to 42.8, and the consensus looks for the index to hit 45.0 in June, just 5 points below the 50-threshold indicating growth. Forecasts are optimistic in part because the new orders component broke into growth mode last month.

Michael Feroli from JPMorgan Economics looks for 47.0 score this month. He noted that manufacturing output declined more than 15% in the 12 months ending in March, but a recent rebound in Asia points to a simultaneous recovery in the months ahead. 

“We expect this recovery to take off with a bang,” he wrote in a client note. “Global industry is projected to retrace roughly one-third of its recession losses by the end of the year, a development that would produce roughly 8% annualized growth during 2H09, rivaling the fastest pace of global output gains during the past two decades.”

10:00 ― It was unexpected when Construction Spending soared 0.8% in April, building on a 0.4% advance in March. Analysts expect some those gains to be pared back in May, with the consensus looking for a drop of 0.5%. However, forecasts range widely from -1.2% to +0.2%.

10:00 ― Pending Home Sales track home resales that have been signed but not finalized, thereby offering an advance look at the existing home sales index. However, not all sales get finalized, and last week the National Association of Realtors issued a press release condemning faulty appraisals, which they blamed for halting a recovery in real estate. The index is set to rise 1.1% in May following a 6.7% gain in April. 

Thursday:

8:30 ― The biggest data release each month is the Nonfarm Payrolls / Employment Situation report, which this month should lift the unemployment rate up two-tenths to 9.6%. Last month’s drop in payrolls was 345,000 ― significantly lower than expectations ― and since that time analysts have come to believe that the months of half-million job losses are behind us. 

The consensus looks for 350,000 jobs to have vanished this month, with forecasts ranging as low as 225,000 and only as high as 435,000.

“The markets’ collective view of the state of the U.S. economy is driven, above all else, by the payroll numbers,” said HFE economist Ian Shepherdson, who forecasts a -250k print. “Other data can point unanimously up, down, or sideways, but experience shows that the markets won’t be convinced until the message is validated by the employment data.”

8:30 ― Jobless claims will receive significantly less attention this week due to its rare simultaneous release with Nonfarm Payrolls, but if the two studies report consistent data than this weekly report could bolster near-term forecasts. 

Initial claims have been above the 600k mark for 21 straight weeks, and in the final week of June another 619k Americans are expected to have filed for first-time employment benefits. Meanwhile, continuing claims rose to 6.738 million in the last report, disappointing those hoping for a back-to-back moderation.

11:00 Treasury announces 3-, 10-, 30 year and 10 yr TIPS auctions

Friday:

Markets closed to Independence Day

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