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Stock Market Watch: What To Watch For This Week After The Long Memorial Day Weekend

|Includes:Facebook (FB), JPM

With Memorial Day weekend over with, this week will be an action pack week filled with news and data for investors. Hence, here is a quick summary of the economic and other news along with what stocks or sectors traders need to be watching:

  • Home Prices Keep Falling. According to the S&P/Case-Shiller home price index of 20 major markets, average home prices fell another 2.6% from 12 months earlier. In fact, home prices have not been this low since mid-2002. On the other hand, Bloomberg is reporting that a possible comeback in the housing market could be under way as homebuilders are reporting their most-improved spring selling season in seven years thanks to record-low mortgage rates, some job gains and lower inventories. In other words, keep a watch on homebuilder stocks today.
  • Consumer Confidence Plunges. The Conference Board has announced that its Consumer Confidence Index now stands at 64.9 - down from a revised 68.7 in April. This was its biggest drop since October 2011. Given that consumer spending accounts for 70% of economic activity and a reading of 64.9 is significantly below the 90 reading that indicates a healthy economy (but still well above the 40 level of last October), keep an eye on retail and consumer stocks today.
  • Important Economic Data. On Thursday and Friday, there will be a bunch of economic data to digest. Specifically and on Thursday, weekly jobless claims will be released along with ADP employment data for May along with another Q1 GDP estimate and Chicago PMI. On Friday, the unemployment rate for May along with auto and truck sales will be revealed plus personal spending and construction spending for April. There is no telling what will happen when all of this data is dumped onto the market.
  • JP Morgan's London Whale. Keep an eye on JP Morgan (NYSE:JPM) as there are reports that it sold an estimated $25 billion worth of profitable securities in order to prop up its earnings in the wake of the "London Whale" fiasco. That means JP Morgan (JPM) will increase it taxes and loose out on future profits from those securities.
  • News About Europe. Where do we even begin with Europe? The good news seems to be that Greece is not in the news as much but the bad news is that Spain nationalized one of its biggest banks as investors grow more nervous about the health of the country's banking system. This means is probably not a good time to own European banking stocks.
  • More Facebook IPO Fallout. There is already a feeding frenzy underway after the botched Facebook IPO with fingers pointing in all directions and lawsuits already being prepared or filed. The only good news is perhaps the fact that investor and venture capital attention will be turned away from social media towards tech companies that actually have something of value to offer other than hype or fads.

As you can see, this week could really set the tone for the stock market as we head into summer. Hence, keep a close watch on the news as well as out stock forecasts for all of the stocks you own and trade as it could be a very interesting week indeed.


Stocks: FB, JPM