US Open – Surveys Eyed for Signs of Turnaround

US futures are pointing lower ahead of the first trading day of this shortened week, as a negative lead from Europe and surprisingly hawkish stance from Fed Chair Janet Yellen weighs on risk appetite.

Yellen’s comments on Friday weren’t entirely surprising as they were consistent with the minutes from the last FOMC meeting that were released earlier in the week. I think investors were expecting her to acknowledge that the poor data had spread beyond the first quarter, potentially contradicting the Fed’s view that it is just “transitory” but Yellen appeared to have no desire to do this. Instead she claimed once again that a rate hike is likely this year which in the absence of strong earnings is harmful for stocks and supports the dollar.

There is plenty of US data being released today that will either support or discredit Yellen’s claims. The fact that these weaker figures have carried on into April should act as a red flag to the Fed that the economy may not necessarily be experiencing the strong recovery that the final three quarters of 2014 suggested. If it continues into May, they may need to accept that the economy is facing stronger headwinds and is slowing as a result, which would suggest rate hike would need to be delayed. I still don’t think this will be the case but a fifth month of poor data would be hard to ignore.

The fact that the economy continued to show signs of slowing in April is old news now, making the April figures today a little less relevant. That’s not to say they’re not important, the core durable goods orders release for example is a great barometer of both current spending habits and confidence in the outlook. We’re expecting to see a 0.4% rise in orders from March which suggests people are not concerned by the slow down and maybe agree that it is just temporary.

Of greater importance in my opinion are the two May surveys for the services sector and consumer confidence. The flash services PMI gives great insight into expectations for the sector when taking into consideration the slower start to the year. I would expect it to fall slightly as the start of the year can’t be completely ignored but if it stays in the high 50’s, it still suggests they are very confident about the outlook.

The CB consumer confidence ready similarly is expected to fall slightly to 95 from 95.2 which despite heading in the wrong direction is still a very strong reading. When paired with the fact that consumers have a little extra cash as a result of lower oil prices and purchasing power has improved as a result of the stronger currency, this would set the US up for a strong consumer driven recovery this summer. Unfortunately, the UoM consumer sentiment reading a couple of weeks ago fell much harder than expected and I fear the same could be reflected in today’s CB reading.

The S&P is expected to open 7 points lower, the Dow 41 points lower and the Nasdaq 19 points lower.

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Former Craig

Former Craig

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.