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Day Ahead: Top 3 Things to Watch

Investing.com - The market’s focus on interest rates is likely to continue tomorrow with Federal Reserve Chairman Jerome Powell making a public appearance so soon after his post-FOMC press conference.

It’s unlikely there will be anything new in the way of monetary policy, but there may be a few more questions about his tenure after President Donald Trump criticized the Fed again today.

Also on the rate front, the latest new home sales figures may give the market an early sign about whether the recent drop in rates has spurred residential buying.

Here's the top three things that could rock markets tomorrow.

1. New Home Sales Expected to Rebound; Consumer Confidence to Slow

New home sales and consumer confidence will provide investors with further insight into the U.S. economy.

The Commerce Department will report May new home sales at 10:00 AM ET (14:00 GMT).

On average, economists expect that sales rose 2.2% to a seasonally adjusted annual rate of 686,000 in May, from 673,000 in April, according to forecasts compiled by Investing.com. The new-home sales rate has been hovering around 700,000 units for the last year or so and is still 30% below the 1-million-unit sales rate seen before the 2008-09 financial crisis.

Consumer confidence in June, meanwhile, is expected to fall to a reading of 132 from 134. Expectations for a slowdown in consumer confidence come despite a better-than-expected retail sales report last week.

2. Powell in the Spotlight

At a time when expectations are running high that the Federal Reserve will deliver a rate cut as soon as July, remarks from Fed Chairman Jerome Powell on monetary policy and the economic outlook on Tuesday will be closely watched for further confirmation.

Powell will be speaking to the Council on Foreign Relations in New York at 1:00 PM ET (17:00 GMT) on Tuesday.

But many are not expecting Powell to offer any new clues on policy following his press conference less than a week ago, during which he suggested the central bank would be open to easing policy to maintain economic growth.

3. Micron, FedEx Earnings on Deck

Micron Technology (NASDAQ:MU) and FedEx are set to release earnings after U.S. markets close on Tuesday,

Ahead of Micron's earnings, a host of analysts have downgraded their outlook on the company on fears that sanctions on Huawei, which accounts for about 13% of the chipmaker's overall sales, could further dent performance that has taken a knock from slowing memory demand.

“We expect (the) current downturn (in memory) to extend well into 2020,” Baird said in a note.

FedEx (NYSE:FDX), meanwhile, has set the bar pretty low ahead of its report. The shipping company cut its guidance on profit in December last year and more recently in March.

FedEx is expected to generate earnings of $4.85 a share on revenue of $17.8 billion.

As well as its earnings, FedEx’s guidance will likely be under added scrutiny as investors remain nervous that the worst is yet to come amid competition from Amazon (NASDAQ:AMZN) and slowing global economic growth, which has been exacerbated by the ongoing U.S.-China trade war.

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