The Last Week in Review:

The stock market outlook continues to be decidedly mixed. Market players seem obsessed with guessing whether or not the Fed will raise rates at the June 29 Fed policy meeting. The critical issue, however, is not how many more times the Fed raises rates, but whether the Fed can accurately assess the impact of the rate hikes. The Fed wants slower economic growth, and they will get it. They are trying to curtail demand in order to reduce inflation. The real question is whether or not the Fed makes the mistake of raising rates so much that economic growth stalls too much in the second half of the year.

Many economists feel that the Fed will probably not raise rates at the June 29 meeting. This may not be all that bullish for stocks, as the Fed needs more time to assess how much impact the previous rate hikes will produce. If economic growth remains above the long-term trend of 3%, the Fed will raise rates again later in the year. Real GDP growth is already slowing down. Housing, consumer spending, and even business investment are all showing signs of slower growth.

The Fed's main objective is to keep inflation under control. If inflation continues to trend higher in the months ahead, the Fed may find the need to sharply reduce demand. Therefore, they may need to raise rates at the June 29 meeting, and may be willing to sacrifice short-term economic growth for long-term benefits.

As the economy slows down in the second half of the year, the double-digit growth will end. Huge growth in energy sector profits have helped keep the overall growth rate up and that growth will drop sharply. Technology and financial, the two largest sectors, won't be able to make up the difference.

For the week, the Dow ended lower by 30 points, shrinking its year-to-date gain to 4.9%. The S&P added 8 points to bring its gain for the year to 3.2%. The NASDAQ closed the week up 9 points, putting it a fraction above where it ended 2005. The Russell 2000 rose 7 points, raising its year-to-date gain to 9.5%.

The Week Ahead:

There are few major corporate events this week, but technology investors will be watching what Intel (INTC) has to say during their technology update on Friday. Soon the company will start selling the first newly revamped chips, called the Core 2, that are expected to deliver more performance using less energy. Advanced Micro Devices Inc. (AMD) continues to threaten Intel with their 26% market share of the U.S. server-chip market and 48% market share of multi-core processors. Investors will be looking for statements relating to Intel's gross margins. AMD's gross margins passed Intel's for the first time last quarter at 58.5% versus 55.1%. Hewlett Packard (HPQ) will hold their shareholders meeting on Monday. Novellus Systems (NVLS) holds its mid-quarter update on Wednesday and Texas Instruments (TXN) and Xilinx (XLNX) each host mid-quarter updates on Thursday. This should provide insight into the Semiconductor Sector. EMC Corporation (EMC) will meet with analysts on Wednesday. Homebuilder Toll Brothers (TOL) hosts analysts on Thursday.

The conference schedule for the week is busy with Goldman Sachs holding a two-day Lodging, Gaming, Restaurant and Leisure Conference starting Monday in New York. Also on Monday, JP Morgan hosts their Basics & Industrials Conference in New York. On Tuesday, Piper Jaffray begins its three-day Consumer Conference in New York. Merrill Lynch hosts its Small-Mid Cap One on One Conference in Houston on Tuesday, while Credit Suisse sponsors its Small-Mid Cap Healthcare Day in New York on Wednesday.

The economic calendar is light this week with the non-manufacturing ISM report for May released on Monday. Weekly Crude Inventories will be reported on Wednesday morning along with April Consumer Credit report. Thursday April Wholesale Inventories will be reported and the week ends with the May Import/Export Prices being released on Friday along with the April Trade Balance numbers. The most influential event this week may be when Fed Chairman Bernanke speaks in Washington on Monday and then again at MIT on Friday.

In summary: Investors need to focus on the May ISM Report, Intel and Hewlett Packard's analst meetings, as well as Fed Chairman Bernanke's comments.