By Scott J. Brown, Ph.D., Raymond James
A Somber Tone – In his May 13 webcast on the economic outlook, Federal Reserve Chairman Jerome Powell struck a cautious tone. That mood was reinforced by the economic data reports that followed. The economic outlook depends on the virus and efforts to contain it. There’s hope that monetary and fiscal support will carry us through and the virus will be checked. However, economic improvement may take time and fall short of a full recovery. Many will fall through the cracks and deep recessions create long-lasting damage.
This Week – Jobless claims will remain the key real-time indicator to watch, but the other data reports are unlikely to be market-moving. Residential construction figures are expected to reflect a sharp decline in homebuilding. Fed Chair Powell will testify on the CARES Act on Tuesday, where he’s likely to prod lawmakers to provide more support. The bond market will close early on Friday ahead of the three-day weekend.