Stocks could have a hard time snapping out of their current trading range, which seems to be getting narrower and narrower. * Your First Move for Monday, June 15
In the coming week, there are a few catalysts for markets in inflation and housing data, and in Friday's quadruple expiration of futures and options. Traders are also watching the dollar and the corresponding moves in commodities, particularly oil, which at a 7-month high is beginning to worry stock investors.
The aftermath of the Iranian presidential election; the meeting of G-8 finance ministers in Italy over the weekend, and a meeting between the BRIC countries in Russia Tuesday are also being watched for their potential impact on markets.
Stocks ended the past week barely changed from the prior week's close, but the Dow managed to finish Friday in positive territory for the year. The Dow added just 0.4 percent to 8799, while the S&P 500 added 0.65 percent for the week to finish at 946. Investors, meanwhile, bid up some of the more defensive sectors, with utilities gaining 3.8 percent, as the week's top performer. Telecoms were also a winner, up nearly 2 percent, and energy stocks were up 2.3 percent, rising with the price of oil.
Stocks have defied the conventional view and have paused, but not pulled back, as many traders were expecting. Now that the quarter end approaches, some traders say stocks could be supported by fund managers who still need to show good returns for the quarter but also face pressure as others sell to lock in gains. The result could be continued sideways trading.
"You could have buyers go on strike because they know everyone's waiting for a pull back, and you have sellers not pulling the trigger," said Art Hogan of Jefferies. more...
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