Daily Agenda: The Week Ahead, May 2 – 6, 2016

Car sales and employment data lend insight into health of the U.S. economy; hedge funders convene for Sohn Conference in New York.


Daniel Acker

U.S. investors have some reason to take cheer this lusty month of May with equity markets nearly recovered for the year, an earnings season that has proven to be better than forecast so far and economic indicators that continue to suggest that the U.S. is faring better than the rest of the world. Of course, this does not mean that the macro and geopolitical storm clouds have passed. A number of key data points are scheduled for release this coming week for the coming days that will test bullish narratives.

Monday, May 2: GAMCO Investors reports first-quarter 2016 results. Despite the firm’s relatively modest market capitalization, CEO Mario Gabelli is among the highest paid executives on Wall Street, with a 2015 payout of $75 million despite a decline of more than 30 percent in the firm’s share price. As a point of comparison, JPMorgan Chase & Co. CEO Jamie Dimon earned $27 million during the same period. Gabelli is compensated a flat percentage of the firm’s gross revenues and receives no salary or stock incentives.

Tuesday, May 3: Total vehicle sales data slated for release by Autodata is expected to show steady growth in units moved as low interest rates and low fuel costs keep the automotive sector among the brightest spots in the U.S. consumer segment. After Ford Motor Co. reported record sales for the first quarter this past week on strong demand for trucks and SUVs, the trend appears likely to extend. Among the beneficiaries from the uptick in automobile sales is Sirius XM Holdings, which reported a double-digit year-over-year gain in revenues as more new satellite radio-equipped cars roll off the assembly line.

Wednesday, May 4: The annual Sohn Conference kicks off in New York, bringing some of the leading luminaries in the hedge fund world together to share investment ideas in the name of funding pediatric cancer treatment research. With both Muddy Waters Research Group founder Carson Block and Kynikos Associates president Jim Chanos presenting on the first day attendees, are likely to be on the receiving end bearish insights on Chinese companies.

Thursday, May 5: Cinco de Mayo is the celebration of the Mexican Army’s victory over French occupiers at the Battle of Pueblo on May 5, 1862, securing independence for the nation of Mexico. Today, the Latin American nation has free-trade agreements with 46 countries; however some 80 percent of its annual exports are bound for the U.S. Despite the Mexican peso’s 24 percent depreciation in the U.S. dollar over the past 18 months, exports of Mexican manufactured goods fell 6.5 percent year-on-year in March.

Friday, May 6: The U.S. Department of Labor April Employment Situation Report is expected to show more signals of strength, following up on the initial jobless claims report this past week, which included a four-week average reading of 256,000 employment seekers, the lowest reading since 1973. The Federal Reserve offered little guidance over the future pace of rate hikes this past week, however, as concerns over international growth offset improving employment conditions.