This Week in Business: Earnings Reports, Bank Stress Tests, and Economic Data

It’s a busy week for businesses as a number of high-profile companies are scheduled to report their earnings. In addition to these reports, there are a few other key events to keep an eye on.

Bank Stress Tests

On Wednesday, the Federal Reserve will reveal the results of its annual stress test of the U.S.’s largest banks. This will determine how much banks are able to return to shareholders via stock buybacks and dividends.

Economic Data

Economic data out this week will include:

  • Tuesday: The Census Bureau’s release of the durable goods report for May, with economists forecasting that new orders for manufactured durable goods declined 1% from April to $280 billion.

  • Tuesday: New-home sales data for May.

  • Friday: The Bureau of Economic Analysis’s report on personal income and expenditures data for May. Economists are expecting to see a 0.4% rise in income and a 0.3% increase in spending last month. The Federal Reserve’s preferred inflation measure, the core personal-consumption expenditures price index, is forecast to be up 4.7% from a year earlier, matching April.

Earnings Reports

Monday 6/26: Carnival reports second-quarter fiscal-2023 results.

Tuesday 6/27: Jefferies Financial Group and Walgreens Boots Alliance announce earnings.

Delta Air Lines will also be holding its 2023 investor day.

Stay tuned for updates on these events.

Upcoming Economic Events

May New-Home Sales Data

The Census Bureau will report new-home sales data for May. The consensus estimate is for a seasonally adjusted annual rate of 659,000 new single-family homes sold, which is 24,000 fewer compared to the previous month. However, in April, the median sales price was $420,800, which had gone down by 15.3% from the record high of nearly $500,000 last October.

Third-Quarter Fiscal 2023 Results

Micron Technology will announce its third-quarter fiscal 2023 results. It’s expected to lose $1.58 per share on sales of $3.7 billion, compared with a profit of $2.59 a share on $8.6 billion of revenue a year earlier. Despite this, Micron stock is up 31% this year, buoyed by hopes that demand has bottomed out.

Fourth-Quarter Fiscal 2023 Results

General Mills will release its fourth-quarter fiscal 2023 results.

Annual Stress Test Results

The Federal Reserve will release the results of its annual stress test of the nation’s largest lenders. The test is a pivotal factor that determines how much banks can return to shareholders via stock buybacks and dividends. It sets the capital cushion that banks must maintain in order to withstand a series of market and economic shocks. Banks with $100 billion or more in assets are subject to the stress test annually, and larger banks need to participate every year, while smaller ones with $100 to $250 billion in assets are required every other year.

Conference Calls

On Thursday 6/29, McCormick, Nike, and Paychex will host conference calls to discuss their earnings.

Economic Indicators to Watch Out For

The Bureau of Economic Analysis is set to release the third and final estimate of gross-domestic-product growth for Q1. Expectations are that GDP will have increased by 1.4%, which is slightly higher than the BEA’s second estimate in May.

On Friday, Constellation Brands reports first-quarter fiscal-2024 earnings.

In addition, the BEA will also be reporting personal income and expenditures for May. Income is expected to rise by 0.4% month over month, matching April data, while spending is anticipated to increase by 0.3%, following a 0.8% gain in April. The core personal-consumption expenditures price index, which is considered to be the Federal Reserve’s favored inflation gauge, is expected to remain unchanged from April at 4.7% year over year.

Furthermore, the Institute for Supply Management is set to release the Chicago Business Barometer for June. Economists forecast a 44.2 reading, nearly four points higher than May. Despite this, the index has remained below the expansionary level of 50 for nine consecutive readings.

Stay tuned for more economic updates in the days to come.

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