Last week’s trading was marked by significant volatility, driven by the release of higher-than-expected CPI and PPI data. Despite slightly elevated CPI, the market rallied after initial selling. Conversely, PPI, which came in even higher, initially saw buying followed by substantial selling.
Tesla experienced a challenging week, with sustained selling throughout, leading to a weekly decline of over 6%.
Bitcoin surged to new all-time highs, providing support to the broader market as strength in the cryptocurrency sector became increasingly correlated with the general market. This week promises more excitement, with the highlight being the Fed Funds Rate announcement on Wednesday.
Here are five key things to watch in the market this week:
Earnings
Earnings season is winding down, with only a few notable names reporting this week. Micron Technologies is set to report on Wednesday, and given the performance of other chip makers like Nvidia and AMD, discussions around AI contracts and advancements are likely.
Two major names reporting on Thursday after the market closes are Nike and FedEx. Nike’s sales numbers will be closely watched amid recent news about consumer spending and rising credit balances. FedEx’s report and outlook will provide insights into online sales trends, as they handle a significant portion of shipping for consumer goods.
Fed Funds Rate
The Federal Reserve’s announcement on Wednesday regarding the Fed Funds Rate is highly anticipated. While the rate is expected to remain unchanged at 5.50%, the market will closely monitor the accompanying conference for any hints of future rate cuts. Powell’s stance on rate cuts could significantly impact market sentiment.
PMI’s
Both the Flash Manufacturing and Services PMI’s are scheduled for release on Thursday morning. These indicators will be closely watched following last week’s tough inflation numbers and weaker retail sales. Positive PMI readings could lead to market drops, signaling a strong but overheated economy, while contraction could prompt buying on hopes of potential rate cuts.
Housing Data
Various housing data releases are scheduled throughout the week, including Building Permits and Housing Starts on Tuesday, and Existing Home Sales on Thursday. Improvements in these metrics could rally the market, indicating a more favorable housing market outlook.
Global Tension
Ongoing global conflicts, such as Russia’s potential for nuclear usage and escalating tensions in the Red Sea, remain significant market-moving factors. Disruptions to global commerce, including longer shipping routes impacting production and goods delivery, continue to pose risks to the market.
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