European markets are called to open negative this morning.
European governments failed to agree on releasing a loan payment to spare Greece from default, ramping up pressure on Prime Minister George Papandreou to first deliver budget cuts in the face of domestic opposition.
On the eve of a confidence vote that may bring down Papandreou’s government, euro-area finance ministers pushed Greece to pass laws to cut the deficit and sell state assets. They left open whether the country will get the full 12 billion euros ($17.1 billion) promised for July as part of last year’s 110 billion-euro lifeline. “We forcefully reminded the Greek government that by the end of this month they have to see to it that we are all convinced that all the commitments they made are fulfilled,” Luxembourg Prime Minister Jean-Claude Juncker told reporters early today after chairing a euro-crisis meeting in Luxembourg.
Decisions on the next payout and a three-year follow-up package were put off until early July, prolonging Greece’s fiscal agony and heightening the brinksmanship that has marked Europe’s handling of the unprecedented debt crisis. The euro fell 0.6 percent to $1.4228 at 8 a.m. in Frankfurt. The seven-hour finance ministers’ meeting coincided with the start of a three-day Greek parliamentary debate in Athens over a confidence vote in a new cabinet at what Papandreou called a “critical crossroads.” Papandreou has 155 seats in the 300-seat parliament.
Asian stocks fell, extending a seventh straight weekly decline, as oil prices fell to a five- month low after European governments failed to agree a loan payout to spare Greece from default. Japanese nuclear-power generators advanced.
BHP Billiton Ltd. (BHP), Australia’s biggest oil producer slid 1.1 percent in Sydney. Sun Hung Kai Properties Ltd. (16), the world’s biggest developer by market value, lost 2.1 percent in Hong Kong after Walter Kwok, a former chairman, said the city’s property prices may fall as much as 15 percent by the end of the year. Japanese power companies advanced after the government said it may allow atomic reactors to restart following the worst nuclear accident in 25 years.
Wall Street will remain on edge this week as investors continue their search for more signs that the economy isn’t heading toward another recession.
The economic data this week will provide insight on multiple aspects of the economy, including housing, durable goods and the labor market. The biggest event of the week will be the Federal Reserve’ two-day Federal Open Market Committee meeting on Tuesday and Wednesday.
“It’ less about the individual data points and more the overall collection of numbers next week,” said Liz Ann Sonders, chief investment strategist with Charles Schwab. “We have hit a soft spot, but we do not think the economy is at a significant risk of a second recession.”
Events this week
Monday – There are no economic data or company earnings scheduled for release on Monday.
Tuesday – Wall Street will get May existing home sales from the National Association of Realtors at 10 a.m. ET. Economists surveyed by Briefing.com expect the pace of existing home buying to slow to 4.78 million annualized units, down from 5.05 million units in April.
Bookseller Barnes & Noble (BKS, Fortune 500) will report before the market open on Tuesday, with media software giant Adobe (ADBE) reporting after the close. Analysts expect Barnes & Noble to post a loss of 91 cents a share according to Thomson Reuters, while Adobe is expected to earn 51 cents a share.
Wednesday – The Federal Reserve will conclude its two-day meeting on Wednesday, with the interest rate decision being announced at 12:30 p.m. ET. Fed Chairman Ben Bernanke’ press conference starts at roughly 2 p.m. ET.
In earnings, shipping company FedEx (FDX, Fortune 500) is scheduled to report its results before the market open, with analysts expecting the company to earn $1.72 a share. Also reporting on Wednesday is home decor retailer Bed Bath & Beyond (BBBY, Fortune 500).
0:00 / 3:18 BullHorn: Safe stocks for a wacky market
Thursday — Investors will get weekly jobless claims from the Labor Department at 8:30 a.m. ET followed later by May new home sales from the Census Department at 10 a.m. ET.
Economists are looking for weekly claims to rise to 418,000 from last week’ 414,000 claims, while new home sales are expected to fall to 305,000 annualized units from April’ 323,000 annualized units.
Software giant Oracle (ORCL, Fortune 500) will report its earnings after the market open on Thursday. Analysts expect Oracle to earn 71 cents a share. Investors will also get earnings from ConAgra Foods (CAG, Fortune 500), H&R Block (HRB) and homebuilder Lennar (LEN).
Friday — The Commerce Department will release its third reading on first-quarter gross domestic product at 8:30 a.m. ET, as well as May durable goods orders.
First quarter GDP is expected to remain steady at 1.8% growth according to economists’ estimates. Durable goods orders are expected to rise 1% compared with April’ 3.6% decline in orders.