If the gains from Monday can hold through Friday, the Nasdaq will see its ninth straight week of gains. The decisive day will be Friday, as markets will be digesting the Thursday afternoon results of the Stress Tests just as the official Employment Statistics are posted for April.
Tuesday shouldn’t be ignored though, as a key survey of the service sector is released at 10 am, just as the chairman of the Federal Reserve testifies to Congress. The day also includes speeches from two Fed presidents, and once markets close the weekly ABC Consumer Comfort Survey is released.
Further Details:
The biggest data point for Tuesday markets is the April release of the ISM Non-Manufacturing Index (10 am), a nationwide survey of the services, financial, and construction industries. Analysts are looking for some improvement this month to 42.2, a reading well below the 50-level required for growth, but an improvement from the 40.8 reading in March.
Over the last 12 months, the index has averaged a 45.8 reading; its lowest point was a 37.4 in November.
Aside from the headline, the survey’s employment component will be closely looked at to forecast Friday’s Nonfarm Payrolls numbers. In March the employment component sunk 5 points to an abysmal 32.3. If the component drops any more, it could breach the record low 31.1 score.
When Ben Bernanke testifies at 10 am, it will be the first word from the Fed chairman since the monetary policy meeting last week, when the FOMC decided to maintain its expansionary policy. Congress will apparently question Bernanke on the Fed’s stance regarding transparency and oversight.
Half an hour later, San Francisco Fed President Janet Yellen will give a talk entitled “Issues Raised by the Credit Crunch and Recession.”
When Yellen spoke in mid-April, she questioned the central bank’s hands-off relationship with asset bubbles. "I can now imagine circumstances that would justify leaning against a bubble with tighter monetary policy," Yellen said.
At 1:15 pm, Minneapolis Fed President Gary Stern will also speak on the economy.