Oil is down again this morning. The World Bank has lowered its growth projections for the global economy. In March, the World Bank was calling for a 1.7% contraction in global GDP. Now, it says the global economy will shrink by 2.7%. That’s a pretty big revision.
The forecasts for China and India are about the only bright spots.
Traders are taking profits on oil stocks, which suggests they don’t see a lot of upside for oil prices right now. Demand is still down, and we’re not seeing a runaway economic recovery.
*****Here’s your look ahead at the economic data for the week. Tomorrow, June 24, we get existing home sales.
We get new home sales on Wednesday as well as durable goods orders, oil inventories and the Fed will tell us that they aren’t changing the overnight lending rate.
Durable goods orders will be a market mover. Last month, you’ll recall, the number came in above expectations. Another strong reading would be great, but I have my doubts that it will happen. We should be expecting month to month swings in data like durable goods orders. It seems too early to establish a trend higher.
Thursday, we get initial jobless claims and the final First Quarter GDP number. The initial report is that the economy contracted at a 5.7% annualized rate. There may be an upward revision but I doubt that would be significant. Investors want to believe that the economy bottomed in the First Quarter, so this number gets a pass.
Finally on Friday, we get personal income and spending, the Michigan sentiment review.
*****Jason Cimpl, technical analyst at TradeMaster Daily Stock Alerts, gave us his weekly forecast for the major indices on Friday. If you missed it, here’s the LINK. Jason’s forecast was near perfect last week. We’ll see how he does this week.
*****We’ll be discussing our bullish outlook for commodity stocks in next Wednesday’s Video Conference. It’s titled Inflation Busters: Discover the Stocks to Grow and Protect Your Wealth and will air on Wednesday, June 24 at 6 pm. It’s free to attend, you can sign up HERE.